Comment by paxys
2 days ago
Isn't this like the #1 use case for crypto?
Everyone wants an untrackable unblockable currency that is out of government control until the day it is used for things they don't like, then suddenly "government please control this!"
I thought the #1 use case for crypto was ransomware, followed by shitcoin rug-pulls, and the ability to commit theft without recourse.
Sending money to Iran is just a minor edge case.
That's a rather narrow view of crypto's uses. What about subverting democracy by bribing the President?
Has the lack of crypto ever stopped this from happening? Look up cases of gold bars being found in senators houses, those are actually MUCH less tracable.
Shitcoins and Shitstocks(some SPACs) do allow of a legal way to "give" others money through the transfer of value in a way that is technically legal. This again is not crypto specific though.
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For me it was buying a computer from newegg but I confess I'm not playing in the same league.
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There are a dozen better ways than Crypto to bribe politicians.
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Well, you could also use it to buy a pizza and find out it that your pizza cost a billion dollars a few years later.
Literally - this is my friend =(
For him, it was something like a ~$30m pizza at peak. We're asked not to bring it up.
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Conversely, buying pizza with MELANIA has left me with zero regrets.
Sixteen years! If that pizza were still around, it would be dreaming of going to prom, maybe college, figuring out life.
Money laundering has always been a core feature of cryptocurrency, not an edge case.
When I think about it, I know people that have been involved in all of those areas (always on the wrong non-criminal end). However, I'm not sure I know a single person that has made a regular transaction in some cryptocoin.
The currency part of cryptocurrency was always a lie.
I did once. Even after setting up a wallet and buying BTC (this was back in the mid-2010s), it still took 15 minutes to pay for two glasses of wine at a cafe. I could have just tossed down €5 and been done with it in 20 seconds.
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You forgot gambling on crypto exchanges.
Crypto is just temporary regulatory arbitrage. Same as BNPL which is totally not just payday loans.
Isn't it just a subset of #3?
I just want to exploit over worked border security by buying semi legal drugs they dont have the capacity to follow up prescriptions for.
I like to amuse myself that if Robert Preston had lived another 20 years that Stephen Colbert or John Oliver would have paid him a heap of money to explain cryptocurrency to us all and it never would have happened.
Back in 2011 I remember a lot of people talking about how the Chinese oligarchs were using it to evade currency controls and funnel their wealth out of China.
Yes but we should be reminded that this also allows people to be protected from government overreach.
If you say something the Chinese government does not agree with they can choose to take all your money and control of your company instantly. Not just oligarchs although those are the bigger targets due to the high value.
Even a small business owner could THEORETICALLY have their assets and equity seized for saying something which goes against the current ruling party, and this is not specific to China it could happen in any modern country.
Crypto allow someone to distribute their wealth in a way where they can be free to speak their mind and still protected even if the country which their business is based out of decides to take action against them.
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Not that snark isn't warranted in this situation but you have to consider that the ability to turn energy into globally accepted (but notably not-actually-untraceable) cash-equivalent is a key piece of the corrupt bitcoin puzzle. It offer opportunities to everyone from third world oligarchs and pariahs to those who happen to be able to tap an electrical grid. Technically, this is indeed "theft without recourse" but you're reply seems to imply this kind is marginal.
Moreover, the chances are the reason Binance nixed the investigation of bitcoin going to Iran is because so much of the bitcoin economy is driven by entities like Iran (google AI say they have 4.5% of global mining plus random search link [1]).
Edit: Iran also wants bitcoin sent to it because bitcoin isn't actually untraceable so getting clean money for dirty matters.
[1] https://www.chainalysis.com/blog/iranian-crypto-activity-geo...
I think you missed buying illegal goods over the internet and making absolutely inane videos and comment about crypto-shit that you spew all over the internet.
What a deeply troubling and cynical comment.
As far as I know, nowhere in the Bitcoin white paper or the original code base. Does it say anything about what you seem to think it's use cases are.
Bitcoin has one main use, digital cash, that can be sent instantly and for free or a very low fee.
Edit: I would agree though, that anything other than that is probably a scam.
It seems entirely accurate to me, at least in a POSIWID sense.
The original theory of Bitcoin was, as described in the paper, decentralized digital cash. But in practice it was never optimized for what normal people use cash for. As system like that would be something like M-PESA.
Even at the time, cash was declining in usage. In the 18 years since, it has declined a lot more. And for good reason, because what most people want for most things isn't digital cash, but digital money. E.g., debit cards and Venmo.
So pretty naturally Bitcoin has value only for a few niche use cases that are not well served by more effective systems. Various sorts of crime, mostly. Digital cash, sure, but the kind that's transferred in unmarked envelopes slid quietly across the table. The kind that is delivered in a briefcase.
As a side note, it also failed in its goal of being decentralized. The mining power is very concentrated. Much more so than the banking industry, for example. And most users keep their Bitcoin on deposit in centralized services. So it's again basically banking but worse.
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Men of principles often mistake the experience and observations of others for cynicism when it does not align with said principles.
This applies to a great deal, not just bitcoin.
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What? "Instantly and for a very low fee"?
Fees have historically gone up above $100 per transaction. They've since added hacks on top of the original Bitcoin protocol to get the price back down again, but the original design was not good for low fees.
And transactions can take 30 minutes or more to settle, that's hardly instant. If you accept a transaction instantly, it's relatively easy for someone to scam you by double spending.
So, no, Bitcoin doesn't make a great digital cash. Maybe a better wire transfer. But the biggest benefit of it is to be unblockable and unrefundable, which makes it great for scames and illegal activity, plus the speculative nature of the pricing, which is great for gambling on.
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the problem is as a means of cash it’s inferior to existing systems in pretty much every dimension. more expensive, slower, more risk, higher volatility. the cash story for crypto is not good.
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It's also the #1 use case for $100 US dollar bills. Most US $100 bills, in fact, are not even in the US.[a][b]
US $100 bills are the currency of choice for small-time crooks and evildoers around the world.
They are also the currency of choice for big-time crooks and evildoers. Briefcases of US $100 bills have long been used for illicit payments, as depicted in numerous books and movies.
Just because crooks and evildoers use US $100 bills doesn't mean they are not useful and valuable to honest people too.
What Binance did was wrong, no doubt, but Binance ≠ crypto.
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[a] https://www.stlouisfed.org/on-the-economy/2022/oct/innocent-...
[b] https://www.npr.org/sections/money/2013/04/12/177051690/most...
There's a major distinction, however, in that it's a heck of a lot harder to safely and reliably lug briefcases or suitcases full of $100 bills from Chicago to Tehran, than it is to click and transfer some Bitcoin. Which is the whole point.
Yeah, crypto is a safer, more reliable alternative for many use cases, including those that are fundamentally honest. For instance, if you're an honest person trapped as a citizen in a despotic authoritarian state that doesn't respect your property rights, crypto may be the safest, most reliable alternative for storing and transferring your hard-earned savings.
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Yes, mostly they are distributed via pallets out the back of C130s
(Definitely in Iraq and Afghanistan, I don't know if there's any back channel deals at the moment paying off Iranians in 100$ bills but I wouldn't be surprised if we were nudging for regime change by funding revolutionaries)
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It's not hard even for Iran to trade gold and oil in USD.
> The Wall Street Journal reported, saying the hidden conduit enabled Tehran to receive up to $8.4 billion last year.
[1]: https://www.iranintl.com/en/202510060867
> Just because criminals and evildoers use US $100 bills doesn't mean they are not useful and valuable to honest people too.
Like all of the ATMs near a dispensary that was always out of cash because 20 individual $20 bills runs out a lot faster than 4 $100 bills. Until dispensaries became legal, it was rare for me to see an ATM with anything other than $20s. Now, I see $20, $50, $100 dispensing machines regularly.
> Now, I see $20, $50, $100 dispensing machines regularly.
There's also been a lot of inflation.
If you held a $50 bill in 1997, or a $20 bill in 1978, then you held a note worth more than a $100 bill today.
I knew someone who ran an exchange house (like the kind you find in airports)
He said that euros are very popular because there are 500 euro bills.
I guess they stopped making them.
A briefcase of $100 notes is just around 1 million. That's like a tip you give to a waiter these days in the world of crypto.
At the scale of cryptocrime, you'd be looking at trucks filled with $100 notes.
It's clearly not untrackable. It's never been untrackable. That's how they know it went to Iran.
Only because in this case they used a centralized exchange. The amount of actual circulation to countries like Iran and North Korea is likely many orders of magnitude higher that what is knowable.
I know some pretty sharp folks who fork for various police departments chasing illicit crypto related activity. The amount of stuff they can track including timing of transactions, entry and exit points, etc, and so over a long period of time means that most of the traditional anyonmization methods like tumblers simply do not work. Eventually someone, somewhere makes a mistake and the transactions and wallets can be traced.
If you have dirty money to hide, it's much better to hide it in a bank in Panama, or fill a sports bag with gold bars and fly it out on your private jet than use crypto.
Anything you can do from your bedroom, police can track from theirs.
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Bitcoin is traceable by design. That's how a public ledger works. It is merely pseudonymous. But it leaves complete public money trail. If your Bitcoin ever associate with your real identity, which they tend to do when you actually use them, your anonymity is gone.
There is a reason why Monero exists.
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I don’t understand the point of this. It is no different than traditional finance.
People do and did transfer drug money before and they will keep transferring drug money. I don’t see what blockchain has to do with that.
On the other hand, I use blockchain personally for completely legal purposes and find it very useful.
Easy to do international transfers, easy to buy different currencies even if local government is trying to make it hard. Also I have more trust in it compared to countries that I live in or travel to.
Another big aspect of it is no hidden costs and borderline scamming behavior I get from credit card companies or banks when doing international spending or transfers. This is not even about the insane prices, the feeling of getting scammed is even worse.
Also it is literally governments reason of existence to preserve order and catch criminals. Banning everything used by criminals is insanely stupid.
Same idea with cryptography, same with internet, same with cash.
Every single transaction is public information. If you carry a wallet into Iran, and it's coins are used through 20 different transactions to purchase weapons, all of those can be traced back to their origin.
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Could someone explain to me where the myth of "crypto = untrackable" comes from, and why it's still being perpetuated?
Storing a record of every single transaction on a publicly accessible blockchain sounds trackable by design
In the case of bitcoin, surely.
Some other coins not so much trackable, and that's the reason some countries don't like them: https://finance.yahoo.com/news/binance-delist-monero-zcash-4...
Also not true in the case of bitcoin. If I want to transfer money to you I don't have to do it on the chain. I can send you the private key of my wallet in whatever way I want and now you have the bitcoin, zero tracking.
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Fascinating, I didn't know that Zcash / Monero worked that way. Thanks!
I think it’s part of the Origin Story.
Bitcoin was created by Satoshi Nakamoto almost 20 years ago. There are a number of wallets that people believe belong to Satoshi (have they proven they belong to SN?)
Yet the identification of Satoshi has eluded a global hunt to identify him. Maybe law enforcement has not been involved, but the mystery definitely suggests that BitCoin can help mask identity.
The wallets attributed to Satoshi have not seen any coin movement so it only shows that one can publish code pseudonymously, not that one can use BTC anonymously.
Bitcoin ist pseudonymous. If you never attach your real identity to your Bitcoin you remain pseudonymous. Now that's a very big if and why states heavily try to enforce KYC for exchanges.
The reality is a lot more messy. Different chains have different properties. Things like CoinJoins for Bitcoin or TornadoCash for Ethereum exist which aim to break the money trail. Mixers are a thing which are a trusted entity doing the same on a "trust me bro" basis.
Monero seeks to be untracable by design using zero knowledge proofs and ring signatures over multiple possible sources for every transaction.
Even with standard Bitcoin it's more complicated. One time change addresses make tracking harder. Say I send you 1 BTC in a transaction. Now you want to spend 0.5 of these Bitcoin. However with Bitcoin you can only ever use an incoming transaction in full. Every transaction has a number of inputs (a previous incoming transaction) that it spends and a number of outputs. An output can only be unspent or spent. The amount of the outputs must match the amount of inputs. So what you do is you use that input of 1 BTC and create two output of 0.5 BTC each. One is to the recipient address and one is to an address of your own (the change address). If you create a new change address for every transaction nobody but the recipient can know which output belongs to the recipient and which is your change address.
In reality that is a weak defense and there are many usage patterns (e.g. one output being a round number and the other one not) that can give away which one the change address is.
First time I've heard of a change address - that's clever and I see how it obfuscates the flow of cryptocurrency, but it ultimately still seems traceable
The truth is there are some currencies that are by design untrackable—monero and zcash, for example, which use privacy preserving techniques to avoid tracking. (IMO zcash is a better implementation than monero, but shrug.)
Bitcoin and ethereum and most other crypto currencies are absolutely traceable in the sense that anyone can see who you send your money to. And all of the implementations have the core challenge of getting back to fiat—at some point, you withdraw cash or otherwise pay a real person to do something for you. There’s no way around that.
It's the overconfidence of 90s kids who knew how to program the VCR and use the modem.
Unblockable yes, untrackable no. Also portable is the main ability of crypto.
The reason that this could be found out is because every transaction is recorded so it can be linked back through the chain once it hits another exchange that is KYC'd.
If I have a gold watch and I wear it through the airport go to turkey melt it down and give it to an iranian, then buy a fake watch and return home noone will every know that this transaction took place.
This would be 100% impossible to track in any reasonable manner. If I went to an exchange transfered bitcoin to a person then they spent this bitcoin in a way that linked it to their identity this would provide a full audit trail that would link me to that person. Also this audit trail could NEVER be removed or altered.
There are ways to use bitcoin in an untracable manner just like gold, you can have a cold wallet and transfer the keys to someone else. The cold wallet password could be only memorized and thus have no physical trace and no transaction record could take place whatsoever, but this is the OPPOSITE of what an exchange does.
Also cash and bank systems are not as resistant, they can fail, be hacked, be altered, people can use shell companies and fake identities.
Some cryptos like monero try and hide the transaction path but even this crypto has some vulnerabilities making linking it to people possible in some cases.
The #1 use case for crypto is that it's anonymous like cash. And yes, this enables people to use it for crime... just like they use cash. The unavoidable cost of freedom has always been that some people will misuse it. Personally, I would rather have freedom even if it gets misused than not have freedom even if it means crime is over.
> The #1 use case for crypto is that it's anonymous like cash. And yes, this enables people to use it for crime... just like they use cash.
Not quite like cash: collecting and transferring US$1.7B in cash—actual physical paper—is probably more logistically challenging than BTC.
I understand the argument for freedom, but depending on the scale/dosage many things that could be fine in small quantities aren't as good in large ones.
I'll bet $100 that the percentage of crypto used for crime is higher than the percentage of cash used for crime.
Mmh... What do you mean by percentage? Over the amount transacted per day, or over the total supply?
Yes it's the #1 use case, in the same sense that the #1 use case of a free and open internet is criminal activity.
It’s 100% trackable. It’s anonymous but there are many datapoints that could be used to deanonymize if the transaction parties are not extremely careful
Exchanges are not anonymous at all though. They are directly linked to your identity as required by US law, but physical btc can be traded anonymously as its technically just a string of letters and numbers. You could transact with it through just telling someone this string if you trust them enough.
Money laundering is only good when our people are doing it.
What's funny is that Bitcoin/Ethereum are now the most tracked ledgers on the planet. If I wanted to do some shady value exchange it would be my last choice.
It seems to me that the people who want the unblockable currency out of government control are not the same people who want to block money transfers to countries like Iran.
Can't anyone basically sanction entire wallets, and mark them, and make some legislation that any transaction involving coins originating from those wallets be rejected by all payment processors and exchanges in regulated markets?
I mean, they obviously can, but probably they have elected not to do so. But if crypto becomes a tool in the hands of enemy nation states, such regulation can't be soo far off.
Though that would create a secondary market for these 'tainted' coins, and would probably have far-reaching consequences into the crypto ecosystem.
OFAC already sanctions crypto wallets. https://ofac.treasury.gov/faqs/594
You can't track individual coins, so you'd have to "taint" entire wallets. Using a mixer would taint the mixer and every wallet it sent to. I'd think this would end up tainting almost everything before too long.
Bitcoin also doesn't require the receiver to authorize a transaction, so if you had control of a tainted wallet, you could taint other wallets at will, wielding it like a weapon.
Doesn't seem feasible. Not that this always stops legislators.
> Using a mixer would taint the mixer and every wallet it sent to. I'd think this would end up tainting almost everything before too long.
Is that actually an issue? I am looking for it but I can't see a downside.
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Certainly in the top 5 along with child pornography, illegal gambling, drug pedalling and ransomware.
> Everyone wants an untrackable unblockable currency
What are you talking about? Crypto is defined by its trackability (immutable, permission-less, verifiable ledger of every transaction in history). Please refrain from commenting on things you're unfamiliar with.
That's not universally true, there is a class of privacy coins whose txs are not (at least in theory) traceable.
I'd argue that's actually a more anarchist original view and transparent ledger is a bug of the first implementation, not a feature, and creates problem of the original money people are trying to solve (i.e. have electronic money without a government overreach, US using modern banking system as a political pressure tool, etc)
you mean its not used for the Paul brothers latest meme coin rug pulls?
I'd argue the #1 use case is ransomware and scamming, but this has to be a close second. Honestly the journey from "The blockchain is the future, everyone must see that" to where we are now really feels like the one we're taking with 'AI'.
In the end it will still exist, but the use case is going to be so much less inspiring than people want to believe, outside of medical and fundamental research at least.
> Isn't this like the #1 use case for crypto?
What is even the point of crypto if you can't commit crimes with it?
Not just the #1 use case, the only use case. Real money is better in every scenario other than crime.