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Thread: Dark Wallet about to be introduced; allows for anonymity in BTC

  1. #1

    Lightbulb Dark Wallet about to be introduced; allows for anonymity in BTC

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    "A politician will do almost anything to keep their job, even become a patriot" - Hearst



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    ‘Dark Wallet’ Is About to Make Bitcoin Money Laundering Easier Than Ever

    Government regulators around the world have spent the last year scrambling to prevent bitcoin from becoming the currency of choice for money launderers and black marketeers. Now their worst fears may be about to materialize in a single piece of software.
    On Thursday, a collective of politically radical coders that calls itself unSystem plans to release the first version of Dark Wallet: a bitcoin application designed to protect its users’ identities far more strongly than the partial privacy protections bitcoin offers in its current form. If the program works as promised, it could neuter impending bitcoin regulations that seek to tie individuals’ identities to bitcoin ownership. By encrypting and mixing together its users’ payments, Dark Wallet seeks to enable practically untraceable flows of money online that add new fuel to the Web’s burgeoning black markets.
    “This is a way of using bitcoin that mocks every attempt to sprinkle it with regulation,” says Cody Wilson, one of Dark Wallet’s two 26-year-old organizers. “It’s a way to say to the government ‘You’ve set yourself up to regulate bitcoin. Regulate this.’”
    Here’s a teaser video the group posted earlier last week ahead of the software’s release:

    Dark Wallet was conceived last summer by Wilson and Amir Taaki. Wilson first gained notoriety by creating the world’s first entirely 3D-printed gun; Taaki is an Iranian-British free-market anarchist and developer of high-profile bitcoin projects like the decentralized online marketplace prototype DarkMarket. Together they launched a crowdfunding campaign on Indiegogo in October that raised $50,000, along with tens of thousands more in bitcoin. The accompanying video promised what Wilson described as “a line in the sand” in the struggle over bitcoin’s political future. At a debate at New York’s Museum of Modern Art in March, Wilson described his intentions for Dark Wallet more directly: “It’s just money laundering software.”

    Despite those provocations, financial regulators have kept mum about the project. The New York Department of Financial Services, which held hearings about bitcoin in January and says it plans to create a “bitlicense” for some bitcoin-based businesses, didn’t respond to a request for comment. In a statement to WIRED, the Financial Crimes Enforcement Network wrote only that it’s “well aware of the many emerging technological efforts designed to subvert financial transparency. It’s certainly our business to be interested and vigilant with respect to any activities that may assist money laundering and other financial crimes.”
    Wilson’s and Taaki’s money-laundering app is politically incendiary, but it’s not necessarily illegal, and they argue that the code is protected by First Amendment safeguards on free speech. But Wilson states plainly that he intends Dark Wallet to be used for anonymous online black markets like the Silk Road, the bitcoin-based drug bazaar seized by the FBI in October. “I want a private means for black market transactions,” says Wilson, “whether they’re for non-prescribed medical inhalers, MDMA for drug enthusiasts, or weapons.”
    Nor does he deny that Dark Wallet might enable heinous crimes like child pornography, murder-for-hire, and terrorism. “Well, yes, bad things are going to happen on these marketplaces,” Wilson says. “Liberty is a dangerous thing.”
    But as dangerous as Wilson’s vision may be, Dark Wallet also fills a real need for privacy in the bitcoin economy. Despite its reputation as an anonymous currency, bitcoin transactions are in some ways nakedly public–even more so than those made with traditional money. Every bitcoin payment is recorded in the public ledger known as the blockchain, copied to thousands of users’ computers and checked to prevent forgery and fraud in the Bitcoin network. If bitcoiners don’t take special pains to anonymize their coins, all of their spending can potentially be traced back to their bitcoin addresses by any corporation or government agency that cares to look.
    Dark Wallet avoids those privacy and trust problems by integrating laundering by default into every payment its users make. Its central tool is a technique called CoinJoin: Every time a user spends bitcoins, his or her transaction is combined with that of another user chosen at random who’s making a payment around the same time. If, say, Alice is buying alpaca socks from an online sock seller and Bob is buying LSD on the Silk Road, Dark Wallet will combine their transactions so that the blockchain records only a single movement of funds. The bitcoins simultaneously leave Alice’s and Bob’s addresses and are paid to the sock seller and the Silk Road. The negotiation of that multi-party transaction is encrypted, so no eavesdropper on the network can easily determine whose coins went where. To mix their coins further, users can also run CoinJoin on their bitcoins when they’re not making a real payment, instead sending them to another address they own.
    One bitcoin privacy issue CoinJoin solves relates to what are known as “change addresses.” When bitcoins from any single address are spent, the unspent fraction of coins are sent back to a change address that the spender controls. Future transactions from that change address can be tied to the same user. But with each successive CoinJoin transaction, the coins are mixed with another new user’s payment, and the likelihood of guessing which change address belongs to which user is cut in half again. “When you start to join transactions, it muddles them,” says Taaki. “As you start to go down the chain, you can only be 50 percent sure the coins belong to any one person, then 25 percent, then one out of eight and then one out of sixteen. The conditional probability drops very fast.”
    To protect the identity of the user receiving coins instead of spending them, Dark Wallet offers a different technique known as a stealth address. Any user can ask Dark Wallet to generate a stealth address along with a secret key and then publish the stealth address online as his or her bitcoin receiving address. When another Dark Wallet user sends payment to that address, Dark Wallet is programmed to instead send the coins to another address that represents a random encryption of the stealth address. The recipient’s Dark Wallet client then scans the blockchain for any address it can decrypt with the user’s secret key, finds the stealth payment, and claims it for the user. “The important thing is that when someone pastes your stealth address into [blockchain search tool] blockchain.info, absolutely nothing shows up,” says Peter Todd, a bitcoin consultant who advised Dark Wallet on the stealth address feature. “The payment is entirely hidden.”
    Dark Wallet’s developers admit it’s still at an early stage, and that, like any cryptography project, it will only prove itself and patch its bugs over time. Taaki says, for instance, that the software will eventually combine more than two users’ payments in every CoinJoin transaction, and also integrate the anonymity software Tor to better protect users’ IP addresses. In its current form, Taaki says Dark Wallet protects IPs only by obscuring them behind the server that negotiates CoinJoin transactions, which may still leave users vulnerable to identification by sophisticated traffic analysis. “It’s not foolproof, but it’s a strong tool,” says Taaki. “And it’s going to get better.”
    In the meantime, the group isn’t shying from a confrontation with regulators. Even its name is chosen specifically to reference the FBI’s repeated warnings about the Internet “going dark“–that encryption tools could effectively turn off law enforcement’s ability to surveil criminal and terrorist suspects online.

    “Dark Wallet is a way to reify that nightmare and give it back to them,” says Wilson. “There is a ‘go dark’ problem, and we’re going to have it with bitcoin. That’s what bitcoin is for. That’s what we want to see.”



    A couple of screenshots of the app also at the link in the OP
    "Sorry, fellows, the rebellion is off. We couldn't get a rebellion permit."

  6. #5
    There is no such thing as anonymity. None. Especially in terms of electronic finance clearing.

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    how is it going to be any more anonymous than it already is?

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    Coinjoin built-in. Awesome. Probably cheaper than Shared Coin on Blockchain.info

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    Why not start with Congress $#@!s?

    In a statement to WIRED, the Financial Crimes Enforcement Network wrote only that it’s “well aware of the many emerging technological efforts designed to subvert financial transparency. It’s certainly our business to be interested and vigilant with respect to any activities that may assist money laundering and other financial crimes.”
    “…I believe that at this point in history, the greatest danger to our freedom and way of life comes from the reasonable fear of omniscient State powers kept in check by nothing more than policy documents.”



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  11. #9
    Quote Originally Posted by Natural Citizen View Post
    There is no such thing as anonymity. None. Especially in terms of electronic finance clearing.
    Amazes me people still don't get this...

    All we heard about from the beginning was how BTC was already anonymous... guess not? This also doesn't prevent it from being hacked. I would only use BTC to buy more PMs.
    It's just an opinion... man...

  12. #10
    Quote Originally Posted by NoOneButPaul View Post
    Amazes me people still don't get this...

    All we heard about from the beginning was how BTC was already anonymous... guess not? This also doesn't prevent it from being hacked. I would only use BTC to buy more PMs.
    Amazes me you still think Bitcoin can be hacked.

    Research more about open-source and "forking" as it relates to P2P technology.

  13. #11
    Quote Originally Posted by NoOneButPaul View Post
    Amazes me people still don't get this...

    All we heard about from the beginning was how BTC was already anonymous... guess not?
    This also doesn't prevent it from being hacked. I would only use BTC to buy more PMs.
    No, you're wrong. What people said was that bitcoin has the ability to be used anonymously, not that all usage of bitcoin is anonymous.
    "He's talkin' to his gut like it's a person!!" -me
    "dumpster diving isn't professional." - angelatc
    "You don't need a medical degree to spot obvious bullshit, that's actually a separate skill." -Scott Adams
    "When you are divided, and angry, and controlled, you target those 'different' from you, not those responsible [controllers]" -Q

    "Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing." - Ron Paul

    "Paul said "the wave of the future" is a coalition of anti-authoritarian progressive Democrats and libertarian Republicans in Congress opposed to domestic surveillance, opposed to starting new wars and in favor of ending the so-called War on Drugs."

  14. #12
    Next up is the Silent Circle's Black Phones and Dark Mail (encrypted on the phone itself, so no Keys can be used to backdoor the calls and data).

    https://silentcircle.com/

    http://reason.com/reasontv/2014/02/2...snowden-why-he

    http://reason.com/blog/2014/02/26/bl...acy-minded-tel
    Quote Originally Posted by Xerographica View Post

    Yes, I want to force consumers to buy trampolines, popcorn, environmental protection and national defense whether or not they really demand them. And I definitely want to outlaw all alternatives. Nobody should be allowed to compete with the state. Private security companies, private healthcare, private package delivery, private education, private disaster relief, private militias...should all be outlawed.
    ^Minimalist state socialism (minarchy) taken to its logical conclusions; communism.

  15. #13
    Quote Originally Posted by NoOneButPaul View Post
    Amazes me people still don't get this...

    All we heard about from the beginning was how BTC was already anonymous... guess not? This also doesn't prevent it from being hacked. I would only use BTC to buy more PMs.
    Amazes me that you think ONLY BTC can be hacked and yet all the other financial institutions out there somehow can't be.

  16. #14
    Quote Originally Posted by twomp View Post
    Amazes me that you think ONLY BTC can be hacked and yet all the other financial institutions out there somehow can't be.
    No need to "hack" the financial institutes. A piece of old sushi is enough to change libor.
    “…let us teach them that all who draw breath are of equal worth, and that those who seek to press heel upon the throat of liberty, will fall to the cry of FREEDOM!!!” – Spartacus, War of the Damned

    BTC: 1AFbCLYU3G1dkbsSJnk3spWeEwpqYVC2Pq

  17. #15
    Quote Originally Posted by twomp View Post
    Amazes me that you think ONLY BTC can be hacked and yet all the other financial institutions out there somehow can't be.
    He likes the FDIC. It makes him all warm and fuzzy inside.

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    __________________________________________________ ________________
    "A politician will do almost anything to keep their job, even become a patriot" - Hearst



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