Topic: DEA agent discusses Bitcoin in class today - page 3. (Read 8573 times)

My speculation is based upon the assumption that there is a lot of top secret stuff that some extremely intelligent people are working on.  If they can process the human genome, they can find some dude that leaves definitive traces of his actions through a computer.

Having worked as a defense contractor I would say the capabilities of the US govt are often over estimated.

It is more like:
The govt contracts to have a machine that locates pennies built.  It takes a couple years and millions of dollars but finally a contract is secured for $128M to have DOD penny locating machines mission ready in 5 years. 4 years into the project the administration will change and the new Secretary of Defense will make significant changes to the scope of the project (they now want it to locate dimes also).  Significant work will need to be scrapped and redesigned pushing the timeline back 7 years.  A couple years into the new project the CBO will report that prior estimates were invalid and the project cost has exploded to $1.3B.  Shortly before the project is completed major components will be completely redesigned and a new contractor will take over because now there is a "need" for penny locating machines to be "stealth".  Our enemies might be using stealth so we need to also.  Now nobody even knows what this vague requirement for "stealth" means so the project will be put on hold (but still burning $24M in taxpayer funds each year) while a separate project is launched to develop "stealth" technology.  Some years later (now two decades after original proposal) the stealth technology will be ready but it is incompatible with existing penny locating components.  Since that was outside the original contract it will be an additional cost.  A side note contractors are much better at writing contracts than the federal government.  The good news is integration will "only" cost $12M and take 18 months.  However ironically this is where Congress decides to put their foot down.  They end up spending $50M over 3 years in investigations, outside analysis, and contracts for alternative designs before concluding that while mistakes were made no laws were broken.

Finally the penny locating machines are deployed nationwide however 5 years prior the US mint had already stopped minting pennies and they are out of circulation.  A final contractor gets a juicy contract to securely remove the penny locating machines, dismantle them, and store the parts in case they are needed at some point in the future.  All together the project will take nearly 3 decades, cost $2.2B and never locate a single penny outside of testing.

My guess is that with the resources the US government has at their disposal (both manual and fiscal), not only could they probably find any silk road user if they really wanted to, but they could also probably locate the 1934 s penny that the user lost in a Walgreens parking lot on May 14, 1996.

I believe the DEA are more interested in determining who the administrators of silkroad are at this point. If they can't figure it out, then they'll start targeting domestic dealers.

Anyone else notice the feds harsher stance on California since the debut of SR?

I'm not sure what exactly you mean by this, but my impression is that you mean that the blockchain retains more "traceable" information than cash does.  And you refer to the example that cash could have passed through the hands of an unidentified entity before reaching an identified destination, while bitcoin cannot (without leaving "evidence" of that in the blockchain).  And that this situation gives "plausible deniability" to anyone (for cash), while it does not (for bitcoin).

If that is what you meant, I disagree.

The blockchain tracks all transfers of bitcoin from one address to another.  However that is not the only, single, exclusive, way of transferring bitcoins.  I can just as well have bitcoins in a wallet and give you an USB stick with the wallet file.  Now the bitcoins are yours and you can spend them on things that I (and maybe the law) disagree with.  However, YOU are the responsible one, not me.   Yet there is no trace in the blockchain of me transferring the coins to you.

This example shows that your argument (or what I assume yours is), is wrong.  I can pausibly deny the responsibility, pointing to you (the icecream vendor), just like in the cash example.  All this in a world where icecream vendors accept bitcoins on a USB stick, which is probably also the world where LEAs want to raid your home for bitcoin transactions.

PS: Of course I know that my example has side implications, like the risk of me (double-)spending the coins quickly before you can, and also that I must have had the precaution to fraction my coins beforehand so that I can "offline-"assemble an arbitrary amount just by arranging a wallet for you (without recurring to the blockchain), etc.

Agreed. If was in any of the exchanges shoes I would also comply, probably even with informal requests for cooperation, at least if I wanted to keep my liitle unregulated financial service going
I just wouldn't say it's naive to expect the exchanges to keep users anonymous, i would say it's EXTREMELY naive.

IM perfectly fine with them "cooperating" with the DEA or any other law enforcement agency. Cooperating doesnt mean handing out private data without appropriate legal request. Just explaining them how it works is a form of cooperation. For all I know, it might even be illegal for Mt Gox to give that information to the DEA or anyone else without court order.

But this is irrelevant to the discussion; anyone dealing in drugs is going to have to assume a court order will be given. Assuming anything else, and relying on Mt Gox or other exchanges to protect your privacy when you are committing crimes, thats whats naive.

And since when does an exchange owned by a japanese company need to comply with a US warrant?
They offered their colaboration, they went to DEA, it was not DEA who went to them to ask for help... that says it all. Or can't you add 2+2?

Where does it say they hand out private information without court order?
Regardless, that is not the issue, when it comes to drug trafficking or other illegal activities, its usually not a bright idea to hide behind a need for a court order.

It would require a court order if MtGox didn't offered already to hand your head in a silver platter the minute they ask for it... And Britcoin/Intersango will do the same...

http://in.reuters.com/article/2011/06/15/financial-bitcoin-idINN1510930920110615

You guys are really clueless sometimes.

You are assuming the buyer purchased the goods straight from his Mt Gox account. Im not even sure if you can do that, without transferring the funds to your private wallet, but even if you can, you would have to be drop dead stupid to do that to buy drugs. Moreover, it would require a court order for Mt Gox to hand over his personal details (assuming they even have them). Its not impossible, but its unlikely and assuming utter stupity.

Thats not to say bitcoin is untraceable if your paint a more realistic scenario where the bitcoins are sent from mt gox to a private wallet and then to the seller, but it will become orders of magnitude more difficult, and damn near impossible if you use some precautions.

If you want to catch silk road buyers, the obvious way to do that is to pretend being a drugs seller on Silk Road. Not sure about the legality of that tactic though, where I live I think that would not be legal but IANAL.

Which still only gives you the names of a bunch of potheads who don't actually sell anything, just like tens of millions of others in the country. You could get the same by asking around at a jam band festival.

Why would you limit it to financial transactions?

Google and Facebook provide "free" services in return for data-mining your life an pushing you targeted advertising.

The customers of Google and Facebook are actually the advertisers. The users are the product being sold.

I think what I would say to law enforcement is this: money is information and as such can be sent anywhere on Earth instantly, with almost no cost, and in complete privacy.  Bitcoin or no bitcoin, this ability exists.  There was a time, not that long ago, when it was nearly impossible to track criminal activity using the financial system.  Law enforcement needs to understand that it's becoming increasingly difficult (if not impossible) to track criminals using the financial system and they need to adapt to that reality.  There are aspects of the legal code I don't agree with (in particular, I believe the war on drugs does more harm than good...and locking up people for prostitution is beyond ridiculous), but I do believe that we need a system of laws and law enforcement.  I want our legal system and law enforcement to be effective while at the same time respecting and protecting human liberty.

We need to recognize that honest people have a right to private transactions and that this right is essential to our liberty.  I believe that the founders of the United States could not comprehend a day where it was practically impossible for two parties to engage in a private transaction, yet that day is upon us.  Had they conceived of such a possibility, I am sure they would have taken measures to protect this right.  I find it ironic that a tool such as a computer and the internet affords us so many freedoms of communication and yet, it poses such a dangerous threat to this most very basic human right.  I believe that the next amendment to the US constitution should be one that protects the right to freedom and privacy in financial transactions.

I don't for one minute deny that one could partake in other activities to increase the anonymity factor of btc transactions.  What I'm trying to illustrate is that the model of anonymity of btc is different than cash.  People who intricately understand what kind of information is stored in the block chain will understand all of this.  Many people don't understand all of this very well (get use to it) including 99.999% of law enforcement at this time.

Why would you do that?

How about:
* You buy BTC from a guy in my neighborhood by handing him some cash.
* You buy BTC from an exchange outside the US that says frak off United States our nation doesn't give a shit.
* You mine your own BTC
* You buy some BTC and pass it through an anonymizing service a dozen or so times.
* You buy some BTC deposit it on a online poker site, periodically adding and withdrawing funds from a pooled account.

Just because you aren't smart/creative enough to think of ways to protect your privacy doesn't mean other's can't.

I gave this analogy a few months ago.  Bitcoin is NOT anonymous.  Bitcoin simply has different anonymity traits versus cash in your pocket.

You take 100 usd bill from a ATM
You go and buy something illegal from a house using that 100 usd
Later that day the Law kicks in the door of the house in which you acquired your illegal object
They find 1000 usd in 100 usd bills and in some super advanced government DB are able to link one of the 100usd bills serial number to the ATM transaction you made earlier in the day.
Law knocks at your door looking to understand
You tell them that you purchased ice cream for your daughter from a street vendor earlier in the day (got lots of change in 20s).  "I have no idea what that guy did with my bejamin after I gave it to him mr officer"


You buy 100 btc from a, "fully compliant with the law," trading site in which your name and address is registered, and available to the SEC
You go and buy something illegal from a house (website) using that 100 btc
Later that day the Law kicks in the door of the house (website [1]) in which you acquired your illegal object
They find 1000 btc on a laptop after a forensic review of the computers contents (they can do this).  Looking at the block chain they find that 100 btc came from the trading site to your wallet and then to the illegal item sellers computer
Law kicks in your door, because it is NOT possible that you didn't buy the illegal item unless you can forensically prove that you got hacked, and even then the hacker would have been taking directly from your wallet to the illegal item seller, rather to some, "holding," account

I'm in no means discouraging the use of bitcoin, but I do believe it is important for people to understand the traits associated with it.  There are other traits about btc that make it revolutionary to the idea of individual liberty, but casually buying illegal items with it isn't one of them.





[1] in the case of silk road it would be a a seller who had been moving a lot of product (via tor) and his neighbors notice a lot of cars coming and going.  During thanksgiving the neighbors new son-in-law (DEA guy) is told about all the, "traffic from that house."  Point here is that no matter how anonymous a seller is in some perfect anonymous market, they still can draw attention from their buying activities.

OMFG such a fail!

There are some really computer savvy people who decided to become rat and work in law enforcement and other 3 letter agencies, but majority of cops are dumb in computers just as general public. The nerds and hackers will win in long-term. I'm positive about it!

i've told this story before but i have a friend who's a DEA agent here locally who goes out on busts and works in the surveillance division where you'd think they'd know alot about Bitcoin, Tor, and PGP encryption.  Nope.  no clue.  he's says the difficult stuff gets sent back to Washington.

As long as there is no obvious corellation between adress transfering unusal amoun of coins and your real life identiy, you are safe. Speaking of Silk Road, most dangerous is cops busting some seller and using his SR seller account to gather information about buyers.

Use different recieving adress each time you recieve coins. Additionally you might want to run it trough Tor network. Bitcoin is meant for anonimity. And Internet is for porn and Tor hidden services is for drugs and CP.