- Bitcoin software: It's open-source. How would anybody compromise it with so many eyes watching?
- Bitcoin trail: Solved using Tor and adding noirc='1' to bitcoin.conf file. Also you need to earn your bitcoins anonymously. Anyway, Bitcoin isn't supposed to be anonymous. It can be anonymous if you do it right, like you can browse the web anonymously if you do it right.
- Bitcoin public data: Same as with bitcoin trail.
- Bitcoin exchange: Right, but you can buy bitcoins from someone without revealing him/her your name.
It seems your article analyzes if Bitcoin is good for money laundering. It can be used for that, but I don't care. It isn't what makes Bitcoin interesting. Bitcoin is an alternative to payment methods like paypal, to currencies like the dollar or the euro, to payment transfers like ACH or Western Union, and to bank accounts. That is what makes it an awesome currency. That is what makes it disruptive.
It can be used for money laundering just like cash and offshore bank accounts can be used for money laundering. Way more people are using cash than bitcoins for money laundering. And that isn't what makes Bitcoin disruptive, because money laundering already exists.
Open source code tends to give a false sense of security. Many people assume others will check the code, yet few do. In addition, it is possible to spread malicious code throughout a code base to prevent detection. (mentioned in article).
To use TOR you still connect through an ISP. That can be tracked and deep packet analysis can be done. TOR is not a magic bullet.
Exchange - Correct. That was coming in part 2 of the article covering methods around each point, but unlikely to find the time to write it up at this point.
I leave the question: Why else would one use an anonymous currency unless they don't want to be detected? From there, who does not want to be detected? Usually those doing things they shouldn't. Otherwise, you'd just use a credit card or normal payment service as an everyday citizen would.
Open source code tends to give a false sense of security. Many people assume others will check the code, yet few do. In addition, it is possible to spread malicious code throughout a code base to prevent detection.
Those few who do are usually enough. Closed-source code gives a false sense of security. There are way more exploits for closed source code and they tend to take longer to fix.
To use TOR you still connect through an ISP. That can be tracked and deep packet analysis can be done. TOR is not a magic bullet.
Untrue. Deep packet won't see anything besides an encrypted connection. If you use Tor bridges nobody will know you're connecting to Tor.
Why else would one use an anonymous currency unless they don't want to be detected?
It isn't an anonymous currency. That's the main misconception about Bitcoin. Bitcoin can be anonymous using Tor. Just like the web can be anonymous using Tor. But the web isn't anonymous per se, and so isn't Bitcoin.
Again, the main point of Bitcoin is how disruptive it is for the banking industry. It makes micropayments easy, it makes transactions among individuals easy and decentralized, etc. It disrupts their business models based on an oligopoly.
Why would you use Bitcoin? Because you can:
- Be anonymous if you want, but you don't have to.
- Transfer money to someone, overseas, without any fees.
- Charge money for your business without paying horrendous credit card or Paypal fees.
- Stash your money securely in case of Government collapse (think Argentina 10 years ago, Belarus 2 weeks ago, or Greece very soon)
- Make confiscation impossible if you leave in a corrupt country.
- Make micropayments (like tips) without fees.
- Buy stuff online from overseas (people are doing this with a NewEgg proxy that accept bitcoins)
And there are many more use cases that I'm probably forgetting right now.
1. Apologies for the misunderstanding. I didn't mean to say the code will be open to exploits, I meant the code will intentionally contain a backdoor at an agencies behest. Exploits are another matter entirly and open source has its pros and cons for that purpose.
2. Then TOR bridges could be blocked at ISP level or made illegal. We're starting to see censorship arise on the internet and it's possible.
3. Many of these use cases are of course valid, But I will add their exist transaction fees which are paid when bitcoin are transferred, plus exchange fees when bitcoin is exchanged for real currency. It's not a fee free currency as suggested. I would add (and this is of course a guess) that most users will have illegal purposes and intent in mind. If only because they have most to gain from Bitcoin use. Most average folk don't ever see a 2% Visa fee as business absorbs this cost, so for a user purchase fees for everyday goods is not a value driver. I can see it being used for tax avoidance, money laundering and payment for nefarious purposes. Other use cases do not stand up to value analysis.
1. If it had a backdoor, other programmers would see it, because it's open source.
2. Tor bridges can't be blocked because the ISP won't know the IP of them. Please inform yourself about what a Tor bridge is.
3. Have you used Bitcoin? Transaction fees are voluntary. You pay them if you want the transaction to be faster. Compare that with the fees you pay with Paypal even for sending money to a friend. Or compare it with the slowness of an ACH. A Bitcoin transaction without fee still beats an ACH transaction for several days. About money laundering and illegal activities, Bitcoin is as anonymous as having an offshore account in a tax haven: it's usually possible to trace down who the person is. If you dig in the Bitcoin community you'll see one of the most repeated questions in the forums is how to report to the IRS the money earned in Bitcoins. Right now most users of Bitcoin are partly ideological, like GNU/Linux users 10 or 15 years ago. It's about freedom. About having a currency not manipulated (inflated) by Governments.
I think you're believing the FUD spread by some people about Bitcoin.
