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Bitcoin Encryption Privacy The Almighty Buck

Researcher Spots a Drug Buy In Bitcoin's Blockchain 78

Sparrowvsrevolution writes "It should come as no surprise to Bitcoin users that despite the pseudonymity the cryptocurrency offers, its transactions can be tracked. But University of California at San Diego researcher Sarah Meiklejohn proved that privacy problem more clearly than ever by showing a reporter that she could detect a specific point in Bitcoin's blockchain record of transactions where he had spent Bitcoins in exchange for marijuana on the Silk Road, the most popular online Bitcoin-based black market for drugs. To simulate a law enforcement subpoena, the reporter for Forbes began by giving Meiklejohn a Bitcoin address associated with Forbes' account. But with just that information, Meiklejohn was able to draw on a "clustering" analysis she had performed to identify Silk Road addresses and match them with the one used in the .3 BTC drug buy. She admits that a user who took more efforts to obscure his or her Bitcoin address through a laundering service or other unidentified Bitcoin wallets would be harder to track."
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Researcher Spots a Drug Buy In Bitcoin's Blockchain

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  • by stewsters ( 1406737 ) on Monday September 09, 2013 @08:23AM (#44796165)
    A cryptocurency where everyone has a record of every transaction can be used to find a transaction between twoknown addresses? Is anyone surprised?
  • huh? (Score:3, Insightful)

    by Anonymous Coward on Monday September 09, 2013 @08:33AM (#44796217)

    He knew the exact time he made the transaction. He knew the amount. He knew other details.

    So, really, wtf?

    I am not going to read the article. This is some sort of fear mongering.

  • by Thanshin ( 1188877 ) on Monday September 09, 2013 @08:37AM (#44796235)

    Lobby your representatives to make them legal in your state.

    If you have the money required to have a representative, you don't need to follow such small laws.

  • Re: Why? (Score:2, Insightful)

    by Anonymous Coward on Monday September 09, 2013 @09:29AM (#44796601)

    Idiot. I'd rather someone points out the mistaken assumptions *publicly* than have people live in ignorance. She didn't create the problem, she's just pointing it out. This is straight up full disclosure security. If you have a problem with that, then you haven't been paying attention to security for the past decade.

  • by DrYak ( 748999 ) on Monday September 09, 2013 @09:40AM (#44796679) Homepage

    Indeed, you're right: lots of idiots seem not to grasp the difference between "Pseudonymous" and "Anonymous".

    And don't understand the whole purpose of bitcoin (although it's usually clearly stated on all promotionnal material).

    Bitcoin isn't done to be hidden and secret. (Nobody could know about a transaction beyond the two transacting parties). In fact that's the exact opposite: bitcoin are broadcasted widely accross the whole network, so the whole network works as a trusted witness of the transaction and no single malevolent entity could fake or falsify transaction (unless they control at least 51% of the whole network, which is rather difficult due to the computing power deployed by all mining participant).

    Bitcoin simply doesn't dirrectly advertise actual full name and identifications for each transaction, bitcoin simply attaches a (still traceable - and thus most importantly for the whole service - still verifiable) public key to each transaction.

    Bitcoin is done to be *out-of-reach* / *out-of-control*. Yes, it's not impossible to track down the identities behind a transaction. BUT even if government got the names, it can't go and knock at some banks door with order to freeze accounts. There are no accounts, there are no banks. Nobody can't force anything nor falsify anything (at least not without the necessary 51% control mentionned above. Which is currently even out of reach of the NSA). There's no goverment who could suddenly start manipulating exchange rates/inflation/etc.

    Bitcoin has been designed so there's nothing that could be done beyond what the 2 participant of a transaction decide.

    Don't use Bitcoin to hide. Use bitcoin to be the only in charge with what happens with your money.

How many NASA managers does it take to screw in a lightbulb? "That's a known problem... don't worry about it."