Criminals Abandon Bitcoin As Privacy Weakens

While the establishment would like the world to believe that only criminal masterminds and people with something to hide would prefer the decentralized freedom of Bitcoin (as opposed to the 'under government watch' banking system that floats Washington's boat), the truth is that the biggest cryptocurrency is considerably less 'anonymous' than is commonly exclaimed.

In fact, as more and more criminals become aware of the real privacy concerns of Bitcoin, they are increasingly turning to other - more private - coins.

 

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As Bloomberg reports, privacy coins such as monero, designed to avoid tracking, have climbed faster over the past two months as law enforcers adopt software tools to monitor people using bitcoin. A slew of analytic firms such as Chainalysis are getting better at flagging digital hoards linked to crime or money laundering, alerting exchanges and preventing conversion into traditional cash.

 

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The European Union’s law-enforcement agency, Europol, raised alarms three months ago, writing in a report that “other cryptocurrencies such as monero, ethereum and Zcash are gaining popularity within the digital underground.” Online extortionists, who use ransomware to lock victims’ computers until they fork over a payment, have begun demanding those currencies instead. On Dec. 18 hackers attacked up to 190,000 WordPress sites per hour to get them to produce monero, according to security company Wordfence.

For ransomware attacks, monero is now “one of the favorites, if not the favorite,” Matt Suiche, founder of Dubai-based security firm Comae Technologies, said in a phone interview.

Monero quadrupled in value to $349 in the final two months of 2017, according to coinmarketcap.com, placing it among a number of upstart coins that rose faster than bitcoin, the world’s most valuable digital currency. Bitcoin roughly doubled in the same period, data compiled by Bloomberg show. Monero’s price has climbed another 7 percent so far this year, according to coinmarketcap.com.

 

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In monero’s case, Bloomberg explains, criminals are snapping it up because bitcoin’s underlying technology can work against them. Called blockchain, the digital ledger meticulously records which addresses send and receive transactions, including the exact time and amount -- great data to use as evidence. Match an address to a crime and then watch the bitcoin universe carefully, and you can see the funds disappear and reappear in other locations.

Sleuths have developed databases and techniques for digesting that information to eventually nab wrongdoers. Say, for example, a coffee shop in Berkeley is known to have a certain bitcoin address, and a wallet used by an extortionist transfers the same amount there every morning at 9 a.m. Police can stop by and make an arrest.

Started in 2014, monero is very different. It encrypts the recipient’s address on its blockchain and generates fake addresses to obscure the real sender. It also obscures the amount of the transaction.

The techniques are so potent that software that flags coins suspected of being obtained through crime now tags just about anything converted into or out of monero as high risk, according to Pawel Kuskowski, chief executive officer of Coinfirm, which helps exchanges and other companies avoid tainted money. That compares with only about 10 percent of bitcoin, he said.

“What we treat ‘high risk’ is something that’s anonymizing funds,” he said in a phone interview. “How are you going to prove that these funds are not coming from illegal sources?”

Developers behind monero say they simply created a coin that protects privacy. Most people use it legitimately -- they just don’t want others to know whether they’re buying a coffee or a car, Riccardo Spagni, core developer at monero, said in a phone interview.

“As a community, we certainly don’t advocate for monero’s use by criminals,” Spagni said.

“At the same time if you have a decentralized currency, it’s not like you can prevent someone from using it. I imagine that monero provides massive advantages for criminals over bitcoin, so they would use monero.”

Comments

bill1102inf FreeShitter Jan 6, 2018 6:33 PM

Bitcoin is a bunch of children trading garbage pale kid cards without the cards. Anyone with $100.00 can move the price of BTC upwards.  It was touted as being 'limited' to what? 21 million coins?  EXCEPT that in reality it is broken down by the penny and therefore is NOT limited whatsoever.  LIE #1.  Second, it was touted as being "anonymous", but that is a fabrication, with the PUBLIC LEDGER every transaction of every partial coin can be traced back to its mining. LIE #2

 

Those two things, plus the fact that again, you are 'trading' garbage pale kids cards, without the actual cards should be enough to bring it to ZERO.

In reply to by FreeShitter

swampmanlives USA USA Jan 6, 2018 9:00 PM

How is that the dumbest thing you have read? You can buy any amount of Bitcoin at any price. Buying $1 worth of Bitcoin at market price supports it at the price per coin of $17k. Do you not understand that if you actually had to fork out $20k for a whole coin that no one would be able to afford it?

In reply to by USA USA

Mr_Potatohead FreeShitter Jan 6, 2018 6:53 PM

LoL for sure.  If I'm not mistaken, the definition of being a criminal is actually being convicted of something.  Otherwise you're just exercising your rights under the rule of law to break any law that you wish provided that you're willing to pay the potential consequences for getting caught.  Somehow I suspect that real potential criminals know what their doing- whether they used crypto or not.  In contrast, the average crypto HODLer, who thinks they're going to be secure and able to avoid the tax man, definitely is likely to become a criminal.

In reply to by FreeShitter

LOL123 Jan 6, 2018 6:06 PM

Bitcoin got ruined as soon as stupid Rothschilds invested in it... They always mess up a good thing.... Greedy bas-turds!

Gobble D. Goop Jan 6, 2018 6:09 PM

Seems they've pegged the wrong folk as criminals.  Let's start with Central Banks, The TBTF banks, The MIC, National "Law Enforcement" agency leadership, and most of Congress.  Now.  Straightened that out for youse.

Yellow_Snow Jan 6, 2018 6:09 PM

Now the truth comes out as the demonization attempt FAILED...

BITCOIN WAS NEVER USED BY CRIMINALS SINCE IT IS A PUBLIC LEDGER

Son of Captain Nemo Jan 6, 2018 6:11 PM

Which criminals are we talking about?...

The drug dealers that launder on behalf of HSBC with their crypto wallets?... 

Or...

The Jamie Dimon(s) and Lloyd Blankfein(s) who say it's a racket that keep telling you  DON'T BUY IT knowing of course that you will do the opposite thanks to their controlled opposition (on the payroll) urging you on as "Anonymous" aka Jim Rogers, Max Kesier and Reggie Middleton as it goes from "$1,000" to $20,000 in less than 5 months, that collectively have probably better then 70% of the actual wealth across all of the crypto spaces?...

I'll say it again...

Won't be a real gig until you put that store of value into it that only Russia, China and Iran can give it!  Unless or until the engineering task force with core mining servers are run out of those 3 places -it's a Black Swan full of buckshot!!!

P.S.

Had we done the opposite of everything we've done since this (http://www.ae911truth.org/) that bankrupted U.S. with NO RETURN... I would NO DOUBT be the proud owner of many BTC, Ethereum and Lite Coin wallets run out of CONUS!

Son of Captain Nemo Hope Copy Jan 6, 2018 6:35 PM

low energy cost???...

Lower than this

https://www.zerohedge.com/news/2018-01-03/new-pipeline-doubles-russian-…

https://www.zerohedge.com/news/2018-01-03/russia-boosts-2017-crude-oil-…

Guess we'll never know for certain now whether that operation was outside of Taipei and Hong Kong or not?... But what difference does it make when Chairman Satoshi the "biggest holder of of his gig" doesn't have a address? And no one can tell us after 5 years where the operation(s) were being run "in China" for something as significant as a medium of exchange and a store of value?

Go back to your crack pipe!

 

In reply to by Hope Copy

lester1 Jan 6, 2018 6:30 PM

There's there's too much competition now in the cryptocurrency space. Bitcoin will continue to slowly decline as people take their gains and put them in something else. I sold some my Bitcoin and bought HEMP stock.

HRClinton lester1 Jan 6, 2018 7:14 PM

I keep "rebalancing" my CC portfolio, that started out with HODLed BTC and mined LTC.

When I transfer BTC out of CCs entirely, I opt for other "libertarian assets" that are decentralized, untrackable and unhackable:

AU, Gems, offshore RE.

Last month I bought a very nice condo in Switzerland. I won't say how I paid for it, but you can use your libertarian imagination.  :-)

My attitude is: Once my fiats leave the fiat (((Plantation))) and become "Free Assets", they don't look back or go back. No "profit taking". Profit taking in the fiat sense is for Debt Niggers (of all races). Being Free Assets, means staying Free... 4ver!

Free Assets in the Free/Parallel Economy, BiTChez!

In reply to by lester1

LetThemEatRand Jan 6, 2018 6:31 PM

Here's a question -- did they catch those "hackers" who demanded bitcoin as ransom a few months back?  Obviously they could.   One truly anonymous dollar bill says the supposed hacking is all part of the narrative to justify shutting down cryptos to keep the children safe from criminals and terr'ists.

Hope Copy Jan 6, 2018 7:00 PM

 

Actually it is that security is ramping up with the Intel bugs being worked on.  Making a safe proxy in an unknowing manner is getting harder.  Exchanging for real value good next to impossible and playing the market like Soros at the absurd height that it is at and getting the right move improbable.

logicalman Jan 6, 2018 7:01 PM

AAARRRRGGGGHHHHH!!!!!!

Seashells, paper, whatever are all based on humans agreeing on a method of trading.

Problems arise when a small group can manipulate the agreed upon exchange method.

It's not that hard to understand.

Utopia Planitia Jan 6, 2018 7:08 PM

While we are at it let's outlaw cell phones, all coins and bills (fiat currency), checks, money orders, Zip-loc bags, paintings, precious metals, nail clippers, etc. etc. etc.  Anything that might be used by a criminal.  There, that's solves everything!  /s

Surging Chaos Jan 6, 2018 7:21 PM

Monero is fucking legit. It's one of the very few legitimate cryptocurrencies out there, and IMO it's the only one that can actually be called a cryptocurrency.

It is 100% untraceable. When AlphaBay got shut down by the Feds, they were unable to determine how much Monero was present in their operations. The feds seized "an unknown amount of Monero", while they were able to account for the exact amounts of Bitcoin, Ethereum, and ZCash that were used.

JibjeResearch Jan 6, 2018 7:21 PM

Unless you trade P2P, there's no privacy in business!

Cryptos without privacy is not bad...

Cryptos with decentralization is good.  Cryptos with centralization (gov/private) is BAD!