Comment by ericbuildsio
18 hours ago
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.
That's not transferring the bitcoin, that's giving potentially temporary shared access to the bitcoin.
The other party then needs to transfer the bitcoin to make sure the original party doesn't use it.
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.