Topic: My N00b plan to make an anonymous purchase--will it work? I bet not exactly. - page 2. (Read 3042 times)

Thanks.  I know Tor, and am a bit of a geek, but it's too slow and I will not use it.  I like your bitcoin mixing service Bitcoinfog, you recommend them?  For various reasons my internet address is not really a concern, as I pay in cash here and records are poor, but I like the obfuscation of a mixing service.  But I'm hesitant to use one unless: (1) I keep my volume low, so no big incentive to steal say $100 in bitcoins (I would not trust $10k with them however), and, (2) I get a recommendation from at least one person, like yourself, who is a power user on this forum (which is becoming a very powerful way of checking bitcoin company integrity btw).

TonyT

Thanks for the reply torusJKL. 

Re. #1--I plan to buy bitcoins using this escrow service: Bitcoin-Brokers, see this thread, https://bitcointalk.org/index.php?topic=237164.360 , and they seem legit (going through the thread now).

Re. #2 - I am using a 'heavy' client Armory, which needs to download about 20 GB of blockchain (taking forever as my internet connection is a bit slow) but it's OK as I am a bit of a geek

Re. #3 - I love this idea, but if anybody can pick a Mixing Service they have used or heard is OK, from this list, please do: https://en.bitcoin.it/wiki/Category:Mixing_Services

Re. #4 - OK!  Sounds good.  But, as pointed out by others, bitcoin is not anonymous.  Forbes magazine has an article on this, Google: Forbes Follow The Bitcoins: How We Got Busted Buying Drugs.  (BTW I don't plan to buy drugs using bitcoin, or do anything criminal).  I think what happens is that people reuse addresses when getting paid, and this creates a 'black list' of places accepting bitcoin that can be used to trace where your money went (I think, but am not sure, as the Forbes article, written for non-geeks, is vague).

TonyT

Both Coinbase and WordPress can follow your bitcoins, but they only know the addresses. WordPress has no way of knowing you got them from Coinbase, and Coinbase has no way of knowing you sent them to WordPress.

We provide anonymous service depending on volume. More than $1,000 worth of Bitcoins in a single day requires ID.

I would just buy from a local seller on Localbitcoins.com, in cash.  Then NO ONE has your details to start with.

coinbase is nicer and less cost then some options, but they do know who you are.

As far as anonymous a place such as localbitcoins does not need near as much info.  You could essentially buy from there for a prepaid card refill.  Just be careful on using a good seller.

Coinbase (A) knows to what address (B) they have sent your bitcoins and thus they know to what address (C) you sent them afterwards.
A -> B -> C
Knowing this it is possible to trace everything back to you.

You need to break the chain by using a mixer and send the bitcoins to a completely unlinked address (X).
A -> B -> Mixer

Mixer -> X

This way it will not be possible to trace the bitcoins back to you.

Answering your questions directly:

1. Coinbase will know who you are and what address you sent your bitcoins to. They might give that information, but probably not without a U.S. subpoena. There is little risk unless you are investigated for breaking U.S. laws. LocalBitcoins is more anonymous because you don't have to give any identifying information. You meet someone locally face-to-face to exchange cash, so it is not 100% anonymous.

2. Coinbase doesn't know where you are sending your bitcoins, unless it is in a list of addresses that they know about. An address on your PC won't be in that list.
 

3. There are many good wallets. For new users and light users, Bitcoin Core (aka Bitcoin Qt) is not a good choice. Pick something simple and easy to use at bitcoin.org.

4. Coinbase and WordPress can see the addresses that your bitcoins went through, but neither will know who owns addresses (other than theirs). Everyone else can see the addresses, but they have even less information. IP addresses and MAC addresses cannot be associated with bitcoin transactions or addresses.

5. Wordpress is unlikely to cave into a complaint and even if they do, they don't know who owns the address that sent the bitcoins. A person might guess that the coins originated at Coinbase, but I doubt that is sufficient for some kind of subpoena.

To make it difficult to follow the bitcoins, use a different address to receive bitcoins from Coinbase (or LocalBitcoins) every time, and send them to WordPress using Blockchain.info's shared coin feature.

Are you familiar with Tor?

Before you do any of the below steps do a full virus scan and malware scan on your PC to make sure nothing is listening for keystrokes/bitcoin keys etc

Steps:

1. Buy BTC from any exchange (it doesn't matter if they know your real name/bank details)

2. Download and install Tor Browser Bundle.

3. Load Tor Browser to obscure your IP address and go to Bitcoinfog. The darknet .onion address is listed on their clearnet info page. It should be http://fogcore5n3ov3tui.onion.

4. Click on the Bitcoinfog .onion link on their page to access the secure Tor version of Bitcoinfog. Create a new Bitcoinfog account with a decent password and write it down. Send your BTC to one of the generated addresses they supply.

5. Leave your money in Bitcoinfog a few hours whilst you complete steps 6 to 9.

6. Download the HTML file from bitaddress.org (click file>save as...).

7. Reboot your PC with your internet disconnected/unplugged and load up the bitaddress.org HTML file in your normal web browser.

8. Create a new paper wallet with the bitddress.org HTML file and print it out whilst disconnected from the internet.

9. Reboot PC with internet switched back on and load up Tor Browser.

10. Login to Bitcoinfog and withdraw your BTC to your paper wallet, which has never been online.

You now have anonymous BTC in your paper wallet, since Bitcoinfog mixes your original coins in a pool of thousands of other coins. There is practically no link between your bank account and the BTC in your paper wallet. It works better if you wait an hour or two before withdrawing, since Bitcoinfog has longer to "mix" your BTC with their other clients.

This is by no means a perfect guide, but it is a reasonably sensible and secure way to keep your coins safe and anonymous.

If you pay the web service with the bitcoins you received from coinbase then you could still be identified via coinbase.
What you should do is

1. buy bitcoins (doesn't matter where)
2. transfer them to your wallet
3. use a mixing service (https://en.bitcoin.it/wiki/Mixing_service)
4. pay the web host with coins received from 3.

BTW
As a noob I would recommend you use a light client like Electrum and not the Bitcoin Core wallet.

1) I believe you don't need to do ID verification on btc-e, unless you are going to fund your account with bank wire.

2) All exchanges would allow you to send your bitcoin to any bitcoin address, unless you are using a scamming one like mtgox.

3) Please visit https://bitcoin.org/en/choose-your-wallet to find a long list of bitcoin wallets together with pros and cons.

I found an answer to my question 2)(a):  Coinbase is actually an online wallet, but you can send bitcoins to somebody else, see:  https://support.coinbase.com/customer/portal/articles/971437-how-do-i-send-bitcoin-to-somebody-else-

In my scenario, I would send bitcoins to myself, to a PC online wallet, then from my PC online wallet I would pay the web host provider.

It still does not answer the other questions however.

TonyT

Here is my plan to make an anonymous purchase and stay anonymous.  I ask you guys to see if this plan makes sense.  I am a technical person and I know from experience almost no idea in first draft stage, as is this one, turns out to be 100% true hence my reaching out to you, more experienced reader!

Background:   I wish to set up a forum with WordPress that deals with political corruption in developing countries, so I wish to be anonymous in case I get sued for defamation, as is common in this area. I found a US-based webhost that accepts bitcoin.  I plan to pay them from an online wallet, and use a fake name, but first I need to buy some bitcoin.  Here is what I will do (tell me if I'm right or wrong about this plan, does it preserve my anonymity?):

1)  I will log into a US-based bitcoin exchange, like say Coinbase, and buy bitcoin using US dollars.  I will become 'verified' so they really know who I am (I think this is a requirement now pretty much world-wide, but, if not, does anybody know if there's a "truly anonymous" exchange where you can buy bitcoin 100% anonymously, without verification?  I probably will NOT do this however, because of the below steps which I *think* will protect my anonymity.  However, if my plan below is not sound, I might have to do this, so if possible please answer this question too).

2) once I buy bitcoins on say Coinbase, using dollars from my US bank account, I will hopefully, be able to withdraw these bitcoins from the exchange into my digital bitcoin wallet that lives on my PC. 
     
     2(a):  question and first potential problem:  does Coinbase allow you to withdraw bitcoin into a digital bitcoin wallet that's on your PC?  Or, do they insist you keep all bitcoins with them?  What about other bitcoin exchanges?  It would not surprise me if some of these exchanges, so they maintain a nice 'pool' of bitcoins, mandate that you keep all your bitcoin with them, and forbid you from withdrawing bitcoin.  True?

3) If I can withdraw bitcoin from say Coinbase into my online wallet, I will then pay the US-based web host provider in bitcoin and set up my Wordpress forum using a fake name and address. 

     3(a) : what is a good digital wallet?  Here is a list I rely on for 'recommended' bitcoin services, please pick one from this list if possible:  http://coinindex.org/

4) OK, so far so good.   Coinbase and/or some other bitcoin exchange knows I withdrew some bitcoin, and knows what my real name is.  But they don't know where I spent this bitcoin, or am I wrong?  Can the blockchain be traced from the internet web host provider, back to my MAC address of my PC (the PC that holds the online bitcoin digital wallet), and then back to Coinbase?  I don't think so but I could well be wrong.  Something I recall I read tells me I'm wrong actually.  So a question here would be let's say I withdraw $200 in bitcoin from Coinbase, but only spend $100 at the web host provider, does that make it harder to trace back to Coinbase?  I suspect not.

5) Let's say that some Papua New Guinea (PNG) official accused of corruption on the US-based WordPress forum I set up decides to sue me for defamation (this is actually a very common tactic to silence critics in political cases.  Nowadays only crude and unsophisticated and/or mafia types use physical force; it's much easier to just sue somebody and force them to spend money defending themselves).  Can they find out my real identity?  I posit no.  Here would be the hypothetical scenario:  the PNG official allegedly defamed finds out who is the US-based web host provider of the WordPress forum, they write a complaining letter, threaten legal action, the provider to save themselves (as is common) caves in and says 'this user paid in bitcoin, and here is their name and address', and after investigation by the PNG official it is discovered this name and address are fake.  Then is the PNG official is at a dead end in finding out my real identity?  Or, do they hire a computer geek, who then traces the blockchain all the way back to Coinbase?  Coinbase then gets a subpoena, and gives away my real identity, and I get sued?  Very very unlikely this will result in anything bad, even if true, since they have to sue me in the USA which is much more friendly to free speech than other places, but I want to know if it's hypothetically possible.

I think I have spelled out my concerns fairly well.  I appreciate any and all responses. 

Thanks,

TonyT