Topic: Survey: gauging community opinion regarding criminal transactions (Read 4212 times)

Internet is for porn!
Bitcoins is for all sorts of criminal activities. Suck it government and get used to it!

I understand what you mean, and you're correct, I am writing, researching and living from the point of view of someone in the western world, that pays taxes (as much as students have to pay) and does my shopping at the local Sainsbury's. In the UK at least, I believe that these large corporations will act as gatekeepers, and should a paradigm shift come, which "forces" them to change, I don't honestly believe it will be portrayed in that way - I think it will be portrayed as "we've got some new research suggesting this isn't THAT bad, so we'll make a new legislation for it." I don't believe they will admit defeat and just let it happen, they will grudgingly, in the face of research an public outcry, concede that they need to legislate and accept it.

You are right though, I do need to bear in mind the large portion of the world which do not consider or believe in the legal system of their jurisdiction. I've never really thought of the benefits of Bitcoin for such people - suppose potential long term cause of academic research may not be of direct benefit to them. It is sometimes cited as an inherent pitfall with the nature of higher education that research conducted is typically going to be in favour or at least from the eyes of those that support the legal system or government in some way.

But I stand by my belief that the "average joe" (who is probably better off than the majority of the world) isn't going to be able to go down to his local Tesco and spend his Bitcoin in all its free, pseudonymous, unregulated glory without some some legal confusion or some legal formalisation at it. I don't think it's totally impossible, more improbable. There's the example of the up and coming BitInstant credit card, but that requires formal identification of yourself and a small fee  to get (justified by the cost of the card - understandable) which sort of goes against the concepts of privacy and free money management that Bitcoin tries to advocate. I'm aware there's more to Bitcoin than just privacy and free money management though.


Brilliant, there tends to be quite a lot of web relevant conferences in the states - if I go to one over the next 3 years, I'll try swing by:) thanks.


Whilst my research is influenced and partly informed by the media, as any research on not-very-well-documented things is inherently going to be, I've seen (probably the very tip of) some of the sort of forums your talking about, I've seen the adverts selling batches 1000+ credit cards. You seem to be making a great amount of assumptions based on the little information I've provided about my research. I'm aware that my research doesn't include all kinds of crime - as with any research, nothing is perfect. As with any good research, I also have to critically analyse my own results - as well as that, I have to analyse my own methodology and the flaws, including  specifying exactly what my research can and cannot be applied to - which would include corporate scale money laundering. I will be have to acknowledge the limitations of approaching crime and from the outside position of a researcher with a time limit, e.g. I'm not going to be able to get right down to the big players in 6 weeks of practical work.

Silkroad has an estimated monthly revenue of over $1million. You're right, even if you scale it up for other sites and boards like SR, it's still a drop in the ocean compared to corporate theft, but it's still an amount, a large amount for some. But just because there are bigger crimes out there, does that mean we should ignore the smaller ones? Stop trying to catch the drink drivers because there are serial killers out there? You're correct the AML/KYC are probably just a tiny blip on the radar of skilled blackhats, but something like that with Bitcoin would pose a big problem to the majority of casual users of SR. (Just for the record, I'm not necessarily supporting AML/KYC laws for Bitcoin.)

It's funny you should mention HSBC. When chatting to one of my colleague about my research in trying to understand what people use to pay for illegal things - he pointed out that I know longer need to do it because the stuff in the news suggests they all use HSBC:)


I'm not entirely sure I understand. Surely it depends on which way the regulation goes. E.g. if the government were to endorse use of Bitcoin through legislation and keeping Bitcoin in it's current form, all the big chains would jump on it. I believe that's very unlikely to happen, but it's not an impossibility. But assuming it did happen, it would pickup millions of users over night - millions of people otherwise unaware of Bitcoin, would be enjoying the same benefits as you by using Bitcoin. I believe there is such a thing as "good legislation" - I'm not so sure how good legislation of Bitcoin will be when it does come around though.


That's a very good point, and in hindsight, should have really been addressed - I should have really sent it out to more places. But it's an inherent problem with an sample - you can't sample anyone. You're right though, I definitely could have got a wider sample in retrospect. I'll be sure to mention that in the analysis.

Thanks for the input - extremely useful and appreciated:)


I appreciate the support:) I discovered Bitcoin out of my own interests. I like it - I don't want to see an end to it. I've committed to spending at least 4 years of my life to formally researching around it (along with other things.)

Despite it being mainly critical, the feedback you're all providing in this thread is incredibly useful and I do welcome it. Valuable input and feedback here will help shape the way I conduct future research, hopefully with you folk:)

I have not seen Bitcoin used for any criminal acts such as taxation and the initiation of force.

That currency lies in government power.

I think the biggest problem with this thread is the conflation of bitcointalk.org with the Bitcoin community as a whole.

I routinely meet with and trade with people who are using Bitcoin but post here either rarely or never. Attempting to paint all Bitcoin users with the results of a survey of some random forum readers is intellectually illegitimate.

You have it backwards. The heavier the regulation, the more comparative advantage there is in using alternatives such as Bitcoin in the regulated areas. Legislative liberalisation would slow down Bitcoin adoption.

Your research must be limited to reading media hype. Clearly you haven't logged into several of the major criminal blackhat and carding forums or you'd realize bitcoin is a drop in the ocean of so-called "cyber crime". Bitcoin only appears to be the leading payment method for "illegal" transactions, because the media has seized upon it as the boogey-man du jour. Seems you've done no independent research on how criminal networks work outside of reading gawker or CNN.

I would wager that bank transfers using business accounts registered under shell corps, are the most used for 'illegal' transactions, followed by Western Union, followed by Web Money and maybe Liberty Reserve.  Fraud teams have dozens of employees with fistfulls of fake IDs to go pick up WU transactions all day long. How do I know this? Cuz they advertise their services everywhere. The shady world of ponzi schemes is all financed with LR and Perfect Money. Sure there was a big ponzi here, but it's miniscule in comparison to the thousand or so ponzi's going on at HYIP investment forums all around the world. Silk Road may be using bitcoin, but there's been a black market for big $$$ bulk narcotics well before SR was around and all of that is done through cash in the mail or shell corporations.

Real criminals exploit the regular payments system because it's easy. Just register a corporation with phantom directors and open up business accounts anywhere you want. One glance at any carding forum cash out services for hire and you wouldn't have bothered with this survey here. You'd already know what they're using. This isn't for a petty few grams of drugs being peddled over Tor, they're cashing out millions in stolen funds every day since the late 1990s.

AML/KYC rules only frustrate legitimate transactions and don't even phase a modern blackhat or pro criminal. Web Money has perhaps, the most restrictive AML system I've ever seen, like requiring you to show up in person to get certain passports for their system to increase your limit yet blackhats are selling unlimited Web Money passports and ATM cards anyways.

More proof that bitcoin isn't the leading choice for criminals is the massive HSBC, UBS, and Standard Charter laundering that was being done for Iran's oil business and Mexican cartels. No bitcoins were involved. You should be writing a thesis on why absolutely nothing happened to these banks besides a fine, whereas if any individual were to do what they did on even a micro scale, they'd be serving life in prison. Prapaharan Thambithurai of Canada was given a prison sentence for raising just $2,000 for the Tamils. These banks laundered untold billions for the ultra violent Zetas and assisted in funding Iran's nuclear program yet it was quietly swept under the rug.

Not only will I have no issues, it would be my pleasure to.

We have JD students, masters students, and people that are generally interested stop in the office all the time to pick our brains.

-Charlie

According to at least one study the fastest growing economy in the world operates outsides the bounds of legislation http://www.foreignpolicy.com/articles/2011/10/28/black_market_global_economy?page=full so the question remains, how do we know that the legislators, policy makers, and corporations which are currently dominant will continue to remain relevant in the future?

You appear to be operating under the assumption that these organizations will be able to forever act as gatekeepers but it could also be the case that they will be forced either to adapt to a new paradigm or else cease to exist.

Things may or not play out that way, but you appear to be dismissing that possibility entirely.

I started the survey but got scared away and did not finish after seeing how biased and one-sided the questions were.

Hi,

I'm aware it has a significant amount of momentum and there is a possibility of a paradigm shift as a result. However, most organizations at the moment, are at the mercy of their banks, which are in turn (supposedly) at the mercy of the policy and legislations. I personally believe the majority of corporations that use a bank, and have a legal team and legitimately declare their money and tax will not accept Bitcoin without some form of legislation change. I have no evidence to backup this claim, although the EFF is an example instance. So there maybe a paradigm shift, but for large scale adoption (e.g. your local tesco's accepting it) there's going to have to be a legislation change.

It's definitely possible that a potential paradigm shift created by Bitcoin could lead to a change in legislation, which could then lead to larger scale adoption. But that would still require a legislation change, which I personally believe should be informed by academic research. Most large corporations should (an typically do) do what the law says and the law says very little about Bitcoin, so I believe they will do very little about it.

When online publishing changed the media business, when legislation and policy making was attempted without any academic input or evidence, the US government came up with SOPA... I'd like to do research into Bitcoin to stop something like that happening.

Thanks,

Dom.

I would call that begging the question.

Bitcoin has achieved a signifigant amount of momentum without any recognition from legislators and policy makers, and I am unaware of any evidence that their participation is required to continue Bitcoin's present trajectory. There is a distinct possibility that Bitcoin represents a paragigm shift which renders those individuals you are referring to and their acceptance irrelevant in the same way that online publishing made old media business models irrelevant.

Hi,

I apologize for not making myself clear, however, the discussion on these forum leads me to believe that people here already understand the pro's and con's of Bitcoin legislation. Personally, I thought the first sentence talking about legislation and policy making clearly implies that the people I'm talking about are the legislation and policy makers. I'm neither a legislation nor policy maker. I'm not necessarily saying academic research will make them listen, just that I believe in an ideal world, academic research should at least have some influence on legislation/policy making (although I would say that - academic research is my job!)

Making Bitcoin accepted by legislation and policy makers (and it therefore being legislated etc.) is hugely relevant to Bitcoin users. A key reason why a lot of organizations don't use Bitcoin is because it's not seen as legal tender. This causes legal issues with tax and general money management. E.g. the EFF don't accept donations in Bitcoin any more for this exact reason.

Thanks again for the input and feedback, communication has never been my strong point:)

Dom.

Another casuality of passive grammar.

The OP said academic research into Bitcoin is a must for it to be accepted as a currency but neglected to mention who he was talking about.

Who won't accept Bitcoin as a currency without academic research, and why is their acceptance relevent to Bitcoin users?

A "must"?  Bitcoin is already accepted as a currency!  The services of normative academia are not required.

So in your 'ideal world', you are the de facto ruling class. Nice.

Hi Yankee,

Thanks for your input. Over the next 3 years, I will most likely be contacting different people and approaching the problem from different angles. The aim of this survey is to assess the community opinion.

As I stated earlier, this is effectively preliminary, exploratory research. There is very little formal research on the issue of crime with ecurrencies, so this is an attempted start. There is more to my research than just a survey - it will hopefully be available to be released, along with some information on how it was received (E.g. what mark I get - this is my Master dissertation.)

I chose to post here directly on community forums, as opposed to individually contacting bodies such as yourself and mtgox for a few reasons:

• This is a relatively short project, with relatively tight time and budget constraints
• I'm aware the Bitcoin community is relatively active, this community includes bodies such as yourself
• There's no guarantee that the biggest source of knowledge is contained in you, mtgox or any other big companies - particularly in such a large community
• The community opinion and the opinion of the users is, to me, just as valid when gauging the opinion of a community, as the opinion of the big players like yourself
• I'd like this survey to reach a wide range of people in the community. Contacting big players would give an inherently biased result: e.g. it's a possibility the big players have less direct association with crime, whereas some respondents on here will have first hand experience in buying/selling illegal things online.

For future reference, would have any issues with me contacting you over the next 3 years in the interest of research - maybe for something like an interview? As you pointed out, people like you are on the front line and therefore have a very valuable insight and domain of knowledge.

I'm aware of big parties within Bitcoin such as yourself are working with authorities. I wasn't at all implying that there aren't attempts by the community and such to curb criminal transactions. I can also appreciate why you perceive bias within the questions, I can understand how the questions can be interpreted as me implying that a lot of criminal transactions take place on Bitcoin. This is because the first part of the research has found strong evidence that Bitcoin is a primary payment system for a lot of illegal products and services bought and sold online, when compared to things such as western union, liberty reserve etc.

This survey isn't meant to assess the amount of crime within the community, or to even support the idea that there is crime in the community; it's purely to gauge community views and get some informal starting points for future approaches and research. As I said, hopefully, I'll be able to publicise the full research when it is complete.

Thanks again for taking the time to look at the survey and for your feedback - it would be good to talk further with you at some point:)

Dom.

Instead of looking for answers in a survey that any joe shmoe can fill out, the better way of getting your answers and analyses is contacting companies like mine who process over 3m per month, MtGox, and the other exchanges.

We are on the front line stopping these types of transactions and working with all governments directly.

In fact, Im flying to Brazil next week to make a presentation for the Central Bank of Brazil.

I feel like you are just looking for people to give you answers to your questions in this survey.

However, if you dont ask the right questions, you wont get the right answers...and your questions are flawed and biased.

-Charlie 

You seem to both be taking a similar point here: it's not a crime if you don't get caught, and why should it be a criminal problem if both parties are fine with it - if they wern't fine, someone would call the police.

I think this is a big contributing factor as to why Bitcoin in it's current state wont be accepted. Through no fault of it's own, if someone does want to contact the police to inform them they're not happy with, there is no real means to. This isn't just a problem with Bitcoin, but with the internet at large. If someone sees something dodgy on the internet, typically they don't know who to call. But because Bitcoin isn't seen as a currency, when people do call because they have an issue, then authorities will be reluctant to step in. It's the same argument someone raised previously - the authorities need to accept the value of virtual goods.

I think the argument that both parties are happy with a transaction so it's not a problem, is a little short sighted. A portion of the criminal transactions with Bitcoin include weapons. I'm sure the person selling the weapon was happy, I'm sure the person buying the weapon was happy, but what about the person or people then murdered with said weapons? There's also evidence of people selling hacking services - e.g. botnets, tutorials on hacking, doxing, framing services. Again, I'm sure the hacker selling his services with Bitcoin is happy, and I'm sure the person buying them is happy, but what about, for example, the system admins and the other people trying to access a resource such as an eprints repository that was taken offline temporarily because of a DDoS?

I don't think the solution personally is to try and stop all criminal transactions or shutdown Bitcoin. I don't think it's as straight forward as saying people shouldn't be able to trade weapons. But the measures need to be in place so that should someone buy a weapon, use it in a way which is indisputably criminal (whatever that means?) then there needs to be measures in place to ensure that person can be caught. Knowing that a person has just bought that weapon might provide the crucial bit of evidence required to give a fair and honest trial that may result in the restricting a truly sick or criminal individual.

Personally, I think all people should be allowed freedom, but I don't personally believe it's possible for everyone to be totally free, because some persons idea of freedom will involve oppressing or impeding someone else's idea of freedom.

Thanks for at least taking a look at the survey though - you're time, input and feedback is hugely appreciated:)

Dom.

The currency used to conduct a consensual transaction between two parties is not the issue.  This can be done in Euros, Francs, USD, CAD, etc.  Whether the government considers the transaction to be legal is another story, but as long as all parties involved in the transaction are pleased, what's the real problem?  It's just job of government to ensure rights are upheld equally, meaning if one of the stakeholders in the transaction was wronged, he/she could use the legal system to make things right. 

There are grey areas like prostitution, but that's largely caused by its association with the black market.  Since prostitutes can't use police protection, just like drug dealers can't, they have to use pimps and thugs which come with their own problems. 

Bitcoin should stay legal until cash is made illegal.  US dollars are traded on the black market all the time, and no one seems to care about that.

I started this survey and then decided I couldn't continue.

There is no such thing as a 'criminal act' until someone calls the police, the police investigate, there is an arrest and someone is convicted - all else is innocence in the eyes of the law.

Criminality is not discovered by opinion, but by legal processes. If I'm doing something illegal why aren't the police banging on my door?

The moment someone is convicted then I will accept that a criminal act has taken place - as far as I know no one has been convicted of a criminal act using bitcoin (ie Bitcoin is not being used for criminal transactions beyond hearsay).

Clearly everyone using bitcoin is behaving in a totally legal way (since no one has been found guilty of anything criminal).  

If you (or anyone else) believe people are breaking the law then you need to call the police.

Excellent response:)


 I agree - that's one of the things I'm having to learn. I found computing science to be largely logical, and found it relatively easy. Social sciences, and human based sciences to me require a lot more of something that doesn't seem like straight forward logic - like an art form as you say. One thing I've definitely learned from this survey on these forums, is that in future, I will try and approach the community with a problem or question before or at the same time as considering the methodology. Something I've been very aware of, which I think is hugely underestimated by governments etc, is the amount of knowledge and intellect present in communities, particularly open source ones.

The points you listed regarding features are things that I already planned on discussing. As part of integrating the computing science approach with the social/criminological approach, I'll be talking about the technical side behind the features, and how then some of these features work as a doubled edged sword, providing and excellent, free, distributed anonymous service for the everyday individual, as well as providing a good platform for more nefarious intentions. I'll also ensure I emphasize that this double edged sword isn't necessarily a unique feature to Bitcoin, and is present in recognized countries because of cash.

I appreciate defining crime and such is a problem, and that a lot of large corporations get away with things that done on a smaller scale by less powerful people would be considered a crime. This is something I must address briefly, but at the same time, this research is slightly higher level (but obviously still affected) than the lower level criminological issues such as what is crime? It's the same way in computing science research, you typically don't have to talk in too much depth about how semi conductors come together to form logic gates if you're doing research on say, efficient compiler engineering.

Thanks again for the feedback, responses and discussion. This is all proving to be a really valuable learning experience for me. As I said, I intend on doing more research into Bitcoin, so even if I learn nothing else, just conducting this survey is helping me understand better how to approach the community.

Dom.