Topic: A Treatise on Bitcoin and Privacy (Read 675 times)

I don't know what you expected to see with Dutch government that not long ago announced a war against it's own citizens with attempts to hijack land from farmers.
Whole world is going crazy towards new totalitarian control, and they will not tolerate any privacy whatsoever, that is IF people choose to obey everything.
I am against arresting anyone who made some code for whatever, but we also have examples of someone getting arrested and sentenced for life, after making a website  

PS
It would be interesting to see Vitalik Buterin arrested  

Upping this thread again because it is critical to understand the importance of privacy while a developer of a fundamental privacy tool is being arrested by Dutch Police.

First, a brief recap of the story:
Netherlands Arrests Suspected Tornado Cash Developer

A good read here:

U.S. Treasury sanction of privacy tools places sweeping restrictions on all Americans

This is worrisome on multiple levels.

Just one example:

The point is that we should be able to protect our privacy, even before consideration about he fact that it could harm the public interest in preventing some illegal activities.
Our individual right of privacy on our small sphere comes first than an indefinite, general interest about preventing crimes.
Things can change in case of specific charges, but the heuristic link between using certain privacy friendly techniques and the actual commission of a crime is a logical fallacy we cannot ignore.

These short term set backs can be helpful towards focusing all of us on potential issues that have moved beyond potentiality and into actual practice of some govt. entities.

Sure, the strength of seemingly draconian measures could scare some folks away from bitcoin, but I am sure that others are inspired to both develop and attempt to use the kinds of tools and wallets that help to cause difficulties for any third parties, whether governments, financial institutions or potential private actors from abilities to monitor, to freeze or to scare holders from being able to use their funds in ways that they deem appropriate - and for sure there are a large number of instances in which there are going to be differences of opinions regarding whether some kind of activity is legal or illegal or rising to the level of something like terrorism or jeopardizing national security - even if some government might have labeled activities in those kinds of aggressive (and sometimes seemingly desperate) ways.

For sure, I am not personally anti-government because I believe that there are several public interests matters that go beyond mere national security in which having governments is useful - especially since I do not believe that people are going to sufficiently contribute towards such projects on a voluntary basis (even if individuals say they will or even if various theories suggest they will), but history is replete with examples of various govt entities engaging in quite questionable activities that seem to go quite contrary to the public interest and then getting shown for what they were doing and then going after the whistle blower with quite strong vengeance...

Abilities to fund potentially controversial project and abilities to use funds in potentially controversial ways can be threatening.. and we are not always going to agree on those kinds of ways to fund.. .and of course, in the case of bitcoin, many of us are quite skeptical of various governments and status quo financial institutions and maybe even some of the status quo rich (whether individuals or companies) who have already shown a lot of irresponsibilities (and self-interest and narrow interest) in terms of their engaging in various bad practices when it comes to money - and even if we might not concede that individuals should be able to engage in "evil" uses of their money, there money still can be one of those tools that can be used to battle the various evils of status quo rich that is otherwise likely to get worse and worse if gone unchecked.

Maybe some of the recent events with the freezing and blacklisting of accounts/addresses is going to inspire some of us in terms of what measures/actions we take?...

Due to recent events, apparently this guide is still relevant.



Something that we thought could happen only in dystopian realities, or in dictatorships, is actually happening on a western, supposedly civilised democracy.

I cannot help but to respond to your 18-month old post  (does not hurt to bump this still relevant and interesting thread, either, right?)

Some things we already knew, but with bitcoin sometimes we have to learn some variations on the angles of knowledge that we already had... sure game theory could be related to politics, but politics is a different topic.  

Sure, we might have already had some ideas about personal financial management, but the nature of bitcoin (likely never having invested into this kind of an asset because nothing like it really has previously existed) likely forces you into considering a variety of other aspects of investment portfolio management and considering the value of potentially employing more sophisticated financial tools to the extent that they have come available.

Of course, the topic of this thread that might include BTC holdings management that goes beyond our prior experiences but also our own considerations of balancing the extent to which we might have already fucked up aspects of our privacy (and security) and if there might be some remedial measures going forward.

Ways of holding coins has also been a somewhat dynamic field.. and of course, lightning network has been becoming more popular (and used) too... and surely, if you hold only a few thousand in value, there might NOT be as much concern if that value is held through exchanges...  but there still might be some desires to hold coins in a variety of ways.. and striving to figure out the way some coins might have histories that are O.k. to mix together.. and other coins might fit some other kind of category.. .and there might end up being a lot of different categories of coins, and then wondering if your wallets can be helpful in sorting that out, and can anyone else see notes that you make about the coins (if you have those capabilities in your wallet.. or if you do not have too many addresses - not likely the longer you have been in - then you might have some on-the-side ways of keeping track that is not attached to the actual wallet/addresses).

Not going to mention any names, but I have heard that some people had considered that they were going to just be mediocre well off (and comfortable), but through HODLing bitcoin their status has changed, so subsequently, they have to learn how to be richer than expected and to spend way more money than expected (does not sound like a bad problem to have.. but sometimes spending way more money can create situations in which the spender has to learn things)...   By the way, on a personal level.. not sure if I should say anything, but I recently made a purchase that ended up being a kind of purchase from hell.. and maybe my initial attitude of I don't really give too many shits about how much it cost created some of my subsequent problems... because the situation is ongoing and continues to cause me a lot of issues that go way beyond just the money aspects.. and I am having to spend way more time to attempt to salvage from a situation that probably should not have happened in the first place, and I attribute such situation from my having had way more money at my disposal than I had historically been accustomed to handling and transacting.

There are ONLY so many hours in the day.  What to learn next?  or what to get involved in next?  

Not used to traveling to X, Y and Z locations, have to learn right?  an ever changing world, too.. some locations are not really too friendly to foreigners.. especially in recent times.  Learn how to deal with those kinds of potentially new situations, no?

As per Coinjoin Flagging activity, there is this nice website:

CoinJoin Flagging



Also fount a few interesting infographics:







https://twitter.com/6102bitcoin/status/1367604222473175041?s=20

I just saw this on Twitter:


https://twitter.com/6102bitcoin/status/1367376460214853632?s=21

Beware of those exchanges behaving in a privacy-aggressive way toward their users, and chose wisely which shall see your transactions.

Thank you for pointing out the broken link, It has been fixed now.

Nice site, it is possible to read everything step by step. For newbies, this is a huge help in not rushing from side to side for information. The absence of distracting advertisements and pictures makes it possible to focus on incomprehensible moments. I will not say that this site completely covers all the information, but it is perfect for the first steps of acquaintance. Link redirects also provide meaningful information.
The site is quite new, and I want to believe that all the information that is published on it will be updated on time.


Thank you, Fillippone

Gives an error here


http://bitcoin%20privacy%20guide/

This is awesome. I wish I had this website back when I started using BTC, or that such info would be available on the bitcoin.org website somewhere very easy to find.

The resources on BPG are great; I like how the website is very simplistic, requires no JS for fancy visuals yet you can still get the information you need. One particular thing I love about it is that it shows steps easy to understand for complete beginners or more advanced users. Privacy and Bitcoin should be like a married couple, and I'm happy to see that some people care.

A very interesting resource on privacy and why it matters for bitcoin:





A really interesting collection of resources and thought provoking guidelines to preserve your most precious assets: Bitcoin and Privacy.

I spent countless night hours to study the Bitcoin protocol, I know what you mean. Elliptic-curve cryptography, economics, game theory, distributed systems, networking etc. are only a few of the topics I had to put my head on
Everybody will approach bitcoin from their respective angle but, sure as hell, I am here for freedom! 

Bitcoin is a difficult topic at the crossroad of many different fields of human knowledge. Everyone approach this subject from their favourite angle (be it investment opportunity, scalping tool, un correlated financial asset, privacy MoE, Fiat collapse hedge or any other use thesis).

So I think it is legitimate people approach bitcoin in what could look to “us” as a naive way. This is a “static” picture of the situation. What is relevant to me is the “dynamic picture”: the important thing is how many people stay on the surface of bitcoin (like leaving their coins on the exchange, for example) compared to how many are actually going down in the rabbit hole.
Bitcoin needs spreading of knowledge to empower each user the full array of possibilities granted by bitcoin for he first time in history. Ths is the ultimate goal.

Do you know what's the real issue here? People are in for the money, not the tool. Tell me how many average Joes you know that could explain you how Bitcoin works in details. If you are lucky, they probably have bought their first btc on coinbase or else and they keep them in there.
I think that privacy and freedom are two of the main reasons I am here but not everyone sees bitcoin that way. At least this is the way I see it.

I know.
This is the core point of the question: exchanges are required by a law to do forensic analytics on your transaction before the transaction with them, or even after you exchange with them.

This is detrimental to everyone right of privacy.
What would happen if everyone would use coinjoin or pay join while using their wallet? Those requirements would be inapplicable and the government would stop, for the sake of business, asking stupid or dangerous questions.

 

In Europe, under AMLD5, if one has to use whatever exchange to go in and out of fiat then expect to be asked for the infamous source of funds.
If we are talking peanuts there shouldn't be many problems but for large sums expect to be scrutinized like hell.
I believe all our privacy tools are good only into the bitcoin world: if we do real p2p btc txs or if we use the LN, for instance. The moment we link that to the fiat world, unfortunately, all those checks are inevitable.
Exchanges do real-time monitoring nowadays and every tx is flagged: they mixed analytics services and chain analysis tools to understand where your btc have originated in the past. If there's no link between your documentation and their analysis, game over.

tl;dr Privacy tools are fantastic, but don't expect them to be useful when you want to cash out from exchanges.


You can find more in the thread where this got discussed https://bitcointalksearch.org/topic/m.54587031

Gentle reminder by Giacomo Zucco:

https://twitter.com/giacomozucco/status/1308136387338739713?s=20

https://twitter.com/giacomozucco/status/1308137147346628608?s=20

Privacy is important.
Don't be lazy and don't do the error of facilitating weak heuristic enforced by chain analysis company using sub-par practises.

The article also highlights this:
That is to say, it's not only about knowing the technicalities, but how large a chunk of Bitcoin users are ready to use, implement and manage it, I agree with the "privacy loves company" quote, imo, for the importance of privacy to be chiseled in the minds of a lot of Bitcoin users, there has to be quite a large number of users taking the responsibility of not losing their privacy. But atm, the larger number seems to be okay with the "red herring" that it's fine if their identities are linked through KYC and their banks, as they aren't scammers per se.

Financial sovereignty requires responsibility.
It is your precise responsibility to choose the intermediaries, both exchanges and banks, that interfere the least with your private interests. Otherwise you are allowing government to spy on your private affairs, and letting them doing so "because you have nothing to hide" is like giving up the free speech because you have nothing to say.
Of course this is a issue for mass adoption, but having the choice is important. Choice to retain your right to privacy, that comes first, logically and temporarily, than (mass) adoption.

Having read through both articles (actually, it’s not that long a read), I keep falling back to reflect on the technicalities one needs to know and manage, in order to (try to) comply with Bitcoin Privacy best practices. This escapes the scope of reach of many that have entered the Bitcoin sphere, and a certain hope is placed on those solutions that are coming, the ease of use they should have, and the broadness of usage they should reach on order to mitigate the traditional KYC related paths many of us follow or have followed in the past.

What’s more, by the time one reaches a certain awareness, he is probable already KYC linked here and there (normally to a bank as a point of entry or exit), and whilst direct usage remains relatively marginal in the world, people will need to still hop through a conversion gateway which, more often than not, is composed by the Exchange/Bank account pair.

Recently I’ve been reading about how banks here and there are blocking customer accounts that have interacted with any of exchanges, mixers, coinjoin based wallets, or gambling sites. Cases do not (yet) seem to be bulk in volume, but they introduce a high degree of uncertainty when pondering the usage of a bank account as an entry/exit point. That is only the first derivative. The second will be the potential hassle given by the pertinent taxation office. Both of these entities can apply greater choking strength at will, often with seemingly arbitrary rules and varying in resolution depending who is on the other end of the counter.

Whilst the "solutions that are coming" (reference from the second article), I wonder how many holders are being holders due to the above.

I still always will not even trust services or thridparty proving to encrypt my data and save it, their database can still be hacked, and there are possibilities that the encrypted data can be decrypted. What even tells us some thridparty encrypted any data as there are many that do not encrypt anything. Some people would have received many phishing attack just because of data breaches somewhere.

Also, the governments are made up of people, people are the thieves, I do not see any differences. The best is to truly maintain high level of privacy. That is why I only trust my noncustodial wallet, noncustodial exchange and myself alone.

Thanks for the links on this treatise on Bitcoin and privacy, I've spent the last hour reading the two parts (1&2), and it's really educative to say the least; there's a particular excerpt I love in the part 1, that underscores how important privacy is:
After reading the articles, I couldn't agree with you more, there are quite a lot of forms and "red herrings" introduced to eliminate our privacy when we spend or buy Bitcoin, but users need to know how possible it is to still maintain their privacy notwithstanding and how important it is to do so. This treatise provides such knowledge in a form that is very easy to understand and implement.

A few times ago, my fellow italian Bitcoin maximalist Giacomo Zucco published a two part Treatise on Bitcoin and Privacy on the Bitcoin Magazine.

I immediately translated in italian and posted on the italian board (Un trattato su Bitcoin e la Privacy).

I am opening this thread to discuss it, because I see on many occasion that privacy is not a well understood concept, and above all, the very specific nature of this feature make "privacy related stuff" very "dangerous" to handle:
Privacy is a very strange good: once you let it go, you cannot claim it back.

So I am here to suggest the read of this article:

A Treatise On Bitcoin And Privacy Part 1: A Match Made In The Whitepaper


A Treatise On Bitcoin And Privacy Part 2: Don’t Be Misled By Red Herrings

In the past months I made a few privacy related posts:
Coinbase the most anti-Bitcoin organisation. Make #DeleteCoinbase great again
Dust Attack, what it is, why it is dangerous and how to prevent falling to it
[Total privacy Bitcoin]: off grid Transactions LoRaWan/goTenna
Comprare Bitcoin senza KYC: Bitcoin bancomat a Milano rispettoso della Privacy (in Italian).

I think that treatise is a good "framework" to understand why all the above actions are important while dealing with your financial sovereignty.