Topic: 2013-01-09 nzz.ch - Vorsicht vor Bitcoins / Beware of Bitcoins (Read 1895 times)

I'm amused by the irony of such a statement coming out of Switzerland

I'm amused by the irony of such a statement coming out of Switzerland

However, it has one big problem, namely the anonymity.

I don't recall reading anything like this in Christin's paper, but I remember another paper about payment systems (unrelated to Bitcoin, a bit older) which made arguments like these.

Also, the article is kind of funny because its title is "Beware of Bitcoins", but it doesn't actually present any argument why one should be worried. It's not like someone's going to force you to come into contact with drugs if you become interested in Bitcoin. That's the domain of fiat cash: http://www.sciencedaily.com/releases/2007/01/070116093548.htm

Attacking the financial infrastructure. Another possible disruption strategy is to attack the financial infrastructure
supporting Silk Road. Bitcoin has shown, in the past, to be a very volatile currency. The June 2011
theft of a large number of Bitcoins from the Mt.Gox exchange [4] actually caused an abrupt collapse of the
currency. Certain users have been complaining in forums of the uncertainty on the prices they end up paying
due to the instability of Bitcoin and the various commissions they have to pay to purchase Bitcoins, and then
to purchase items on Silk Road [6].
Disrupting the Bitcoin network appears, compared to attacking the Tor network, to be a more actionable
possibility. In fact, in the aforementioned Gawker article [10] one of the Bitcoin developers argued that
Bitcoin was not providing the level of security Silk Road and other anonymous marketplace operators would
desire. More precisely, recent research [30] has shown that Bitcoin transactions are partially vulnerable to
traffic analysis. Indeed, the history of all transactions is publicly available and network analysis can allow
to map sets of public keys to individual users and transactions.
Since currency exchanges like Mt.Gox where users redeem Bitcoins for cash bind public keys to actual
identities, Bitcoin anonymity guarantees are weaker than most Silk Road users seem to assume, even though
additional intermediaries (tumblers) are in place. In particular, large Silk Road sellers withdrawing massive
amounts of Bitcoins at once may be relatively easily identified.

Also, I would like to know if there is something on to this?
Or is this just FUD?

but wow, if this one does one thing is it makes readers more than curious.

about time, the last FUD article's been a while. 

But ehi, i suppose Switzerland is the universe now. Something is prohibited there?

They think  the easiest thing to do to prevent illegal drug sales is to disrupt the trade of the virtual currency. For this reason, one must probably expect turbulence on this international market in the coming months.

prohibited drugs

The trading of marijuana led to peak sales

The economic and financial crisis has resuscitated the interest in alternative currencies. This includes Bitcoins. Due to their relation to dealing in illicit drugs their are watched more and more suspicious.

The economic and financial crisis has enhanced the interest in alternative currencies. This includes Bitcoins. The digital cash is distributed on the internet since early 2009. Since its introdution it has faced varios scandals. This led to the fact that the virtual currency has always been considered suspicious, but it has survived. The course has risen recent months and it has left all the other currencies of the world behind. On Friday, 22 December, Fri 12:34 were required to purchase a unit of the artificial currency. In the beginning of the year not even full 4 Fr where needed.

Bitcoin may be a brilliant idea, a currency independent of governments and central banks in parallel to introduce other means of payment and use. However, it has one big problem, namely the anonymity. The fact that transactions can not be traced, seduces to all sorts of illegal activities. Thus, for example on the website "Silk Road" - it is not freely available, but only on private, encrypted networks - one can buy products that may be paid exclusively with Bitcoins. There, various goods are traded, among other prohibited drugs and intoxicants.

A study by Carnegie Mellon University shows that in the first half of this year, nearly 2 million dollars have been exchanced on the platform. The trading of marijuana led to peak sales. Finally, the drug has a market share of just under 14% of the popular products.

The analysis also revealed a remarkable correlation between the demand for illegal drugs and the performance of Bitcoins in comparison with regular currencies.the scientists from the American University explained pragmatically "The increasing demand for drugs on the "Silk Road" have assumed quasi-inflationary character and driven the price of the currency used there up". They think  the easiest thing to do to prevent illegal drug sales is to disrupt the trade of the virtual currency. For this reason, one must probably expect turbulence on this international market in the coming months.