
The Criminal Underworld Is Dropping Bitcoin for Monero - elmar
https://www.bloomberg.com/news/articles/2018-01-02/criminal-underworld-is-dropping-bitcoin-for-another-currency
======
jatsign
Monero's big problem, right now, is that the fees are high - around $3.
They're working on "Bulletproofs" that will reduce the size of transactions,
and hopefully fees, by 80%.

Zcash has more advanced crypto, but it takes nearly a minute to generate a
private transaction on a normal computer.

My favorite "privacy" coin is PIVX. It uses the zerocoin protocol and is fast
with low fees. Die-hard privacy advocates don't like it because it uses
Masternodes, but I consider that a plus from an adoption point of view.

Here's a privacy coin comparison of these & others, if anyone is interested.

[https://www.bitcoinbeginner.com/blog/privacy-coin-
comparison](https://www.bitcoinbeginner.com/blog/privacy-coin-comparison)

~~~
indescions_2018
The other competitor being mentioned on dark markets is XVG:

[https://vergecurrency.com/](https://vergecurrency.com/)

~~~
jatsign
Can you show a dark market actually discussing it? Verge has got to be the
worst privacy coin.

------
vadimberman
A question to the experts: why don't the criminals use smart contract
platforms like Ethereum?

My amateurish take is that, for instance, a smart contract could work as an
untraceable distributed Silk Road with escrow and everything else. Because
there is no one machine where everything runs, it's impossible to shut down
the server; there is nothing that links these transactions together, except
for the commonly used Solidity code.

~~~
apo
It's sad to see the "Bitcoin doesn't do smart contracts" line repeated so
faithfully - even implicitly as in your question. It's rubbish.

Bitcoin supports smart contracts, and has done so since launched in 2009. Even
the simplest Alice-pays-Bob transaction is actually running a smart contract
written in Script, a Forth-like language custom built for Bitcoin.

Bitcoin also supports metacoin protocols that create tradeable tokens, and has
done so for a long time (e.g., ColoredCoins and MasterCoin).

Only a fraction of Bitcoin's full range of features are used today. This leads
me to suspect that Ethereum's much-hyped VM will turn out to be mostly unused.

And, the majority of the interesting use cases for smart contracts require
extrinsic (non-blockchain) state to operate. The price per barrel of Brent.
Whether it rained over a piece of farmland. Randomness. Notice of the
publication of a death certificate. All of these applications rely on a
trusted server (or a federated system of them) for input. And they can be
corrupted or shut down by a powerful adversary. Ethereum might be able to free
itself from oracles to a small degree, but the difference will be negligible
for many practical purposes.

In other words, Ethereum offers little more for day-to-day use than Bitcoin
does. Ethereum does, however, enjoy a massive marketing advantage.

~~~
zeroxfe
The difference is that Bitcoin supports a limited number of smart contract
types (due to limitations in its scripting language.) To create new types, it
requires changes to the Bitcoin scripting language, protocol, and runtime,
followed by a coordinated soft fork. This is a pretty heavyweight process.

Ethereum is effectively a generalized distributed computer -- so new types of
contracts can be written, tested, and iterated on readily, without requiring a
change to Ethereum itself.

> Ethereum does, however, enjoy a massive marketing advantage.

I really don't think that's true. I'd wager that the majority of the public
that is aware of Bitcoin has no idea what Ethereum is.

~~~
apo
Bitcoin smart contracts are based on the language Script:

[https://en.bitcoin.it/wiki/Script](https://en.bitcoin.it/wiki/Script)

Opcodes and values can be combined to yield a vast array of possible
contracts, just like any programming language.

Templates are not used, except to activate the full language capabilities
(i.e., P2SH).

 _Ethereum is effectively a generalized distributed computer -- so new types
of contracts can be written, tested, and iterated on readily, without
requiring a change to Ethereum itself._

Bitcoin is not a generalized distributed computer, but it does allow new types
of contracts to be written, tested, and iterated on readily, without requiring
a change to Bitcoin itself.

 _I really don 't think that's true. I'd wager that the majority of the public
that is aware of Bitcoin has no idea what Ethereum is._

Nevertheless, Ethereum - through the Ethereum Foundation and is sizable war
chest, has a far more concerted marketing effort.

~~~
vadimberman
> Opcodes and values can be combined to yield a vast array of possible
> contracts, just like any programming language.

It's not Turing-complete and doesn't even have loops (or goto to provide an
alternative). Definitely not "like any programming language", you could as
well try to use Brainfuck (which is, BTW, Turing-complete).

------
tribby
monero has become popular in this space, but the average (illicit) user is
still probably making operational mistakes while buying, using, and selling
it. in the case of monero a lot of people like to skip the step where they
download a 30GB+ blockchain over tor, and I can't blame them. when the
privacy-oriented cryptocurrencies are effortlessly private, that's when they
will have arrived so to speak. I'm fairly optimistic about moxie & co's
recently-announced mobilecoin ([https://www.mobilecoin.com/whitepaper-
en.pdf](https://www.mobilecoin.com/whitepaper-en.pdf)) for that reason -- if
it's going to get adopted by whatsapp, the user experience will necessarily be
pretty darned simple.

~~~
catamorphismic
Why would you need to download the blockchain over Tor? There are many people
downloading the blockchain and that in itself does not incriminate you. It
seems sufficient to only send out transactions using Tor.

~~~
phpnode
A relatively tiny number of people will ever download the blockchain, a
relatively tiny number of people use Tor, how many bits of information does a
state level adversary need to deanonymize someone?

------
thisisit
> Its main competitor, Zcash -- which isn’t known to have a significant
> criminal following -- _can offer even better privacy protection_.

On zcash, there was this discussion:

[http://jeffq.com/blog/on-the-linkability-of-zcash-
transactio...](http://jeffq.com/blog/on-the-linkability-of-zcash-
transactions/)

which suggested that nearly 31.5% of the hidden transactions in Zcash has some
transparent parts to it.

~~~
paulmd
re: only 3.5% of traffic using z-addrs:

The dirty secret of crypto is that there is almost no economy that exists for
any of the altcoins, and relatively little even for Bitcoin (which functions
as the reserve currency due to its lions' share of the economy).

Effectively, by volume most altcoins are held by either miners (who sell
immediately), or daytraders who will pump and dump. A very small fraction is
held by true believers (who will HODL under all circumstances), but they don't
contribute to the economy either.

Such people don't care about anonymity, they're not actually using the
currency, they're just traders, and traders mostly don't need to be anonymous.

~~~
blueprint
You're making big generalizations about lack of usage and economy, and you've
provided no citations or verifyable grounds. For example, did you know about
[https://www.projectcoralreef.com](https://www.projectcoralreef.com)?

~~~
htormey
In regards to bitcoin I believe he is correct. About 97% of the activity
appears to be people on exchanges:

[https://seekingalpha.com/amp/article/4122695-bitcoin-
series-...](https://seekingalpha.com/amp/article/4122695-bitcoin-
series-2-usage)

This mainly appears to be due to transaction times and high fees.

I’d be interested to see a similar analysis for monero but that’s probably not
easily doable due to its privacy features.

------
allworknoplay
“How are you going to prove that these funds are not coming from illegal
sources?”

Funny, here I was thinking the burden of proof was on the state.*

* at least in most countries

~~~
syrrim
In the US I believe any cash you hold (incl. prepaid credit cards) can be
seized by the state if they even suspect it was gained through illicit means.
Getting the money back would require you to prove that you gained it
legitimately. This is not considered to breach due process since it is not a
person being incarcerated, but rather money being incarcerated, and due
process does not apply to money. This is referred to as civil forfeiture.

------
stephen123
How long was the criminal underworld using bitcoin before they learnt it was a
public ledger.

~~~
DaiPlusPlus
Only accept coins that were directly mined by the originating wallet's holder,
use a new receiving address for each transaction, and sell BTC for cash in
real-life parking-lot transactions.

~~~
tobltobs
> and sell BTC for cash in real-life parking-lot transactions.

Doesn't sound practicable.

~~~
jameskegel
This is all we had in the beginning; I did all my meets on a basketball court
next to a police station because I was a teenager, and that’s where I would
meet people from forums to sell my other stuff online like X-men cards and MTG
cards.

~~~
harlanji
Walmart/Target parking lot or Caribou Coffee here. Craigslist was (is) the
best. People are still good, our "social" media just tells us otherwise. You
have to be street smart to be able to do this stuff... if you go to meet
afraid, a maybe-mugging is a sure-thing-mugging. Most people just wanna do
business and be done, some of them may take an opportunity if it's there so
don't give one beyond doing business. This is true in all of life, so meet in
courts by the police stations "and stuff"... be smart. I've used CL as
recently as last year in SF, and in 3+ cities over 10 years. No free lunch, if
it looks too good to be true it probably is, don't take free candy from
strangers, tell a friend where you're going, etc...

------
forgingahead
Off-topic but related, any way to block/disable their stupid auto-play videos?

~~~
ivanche
In Firefox, about:config and then set media.autoplay.enabled to false.

------
nickthemagicman
It also has some cool stuff regarding block size as well. It's a variable
block size where am miner can pick a block size they want to mine instead of
the fixed blocksize issues of btc.

------
justboxing
> Some coins post fake blockchain entries to hamper surveillance

I don't get this. How do you post fake entries? Wouldn't the ledger be out of
balance, or unbalanced or whatever the correct term for that is?

And how are fake transactions identified by the faker?

~~~
thisisit
I guess the writer got an ELIF and hence the whole thing was simplified a lot.

Here's my understanding of Monero - It has the concept of ring signatures. I
guess this is what the author is referring to. When a transaction is posted to
blockchain it is assigns coins to a public key (generally known as the
address). Now what Monero does is that it obscures the end address and hides
who the transaction went to.

That said, blockchain doesn't exactly use the concept of double boook keeping.
So, you don't really have things going to out of balance. I am writing an
article on how cryptocurrency transactions work. It it still WIP.

~~~
justboxing
Thanks! LMK when you publish your article.

------
bluedino
Isn't the hard part getting the <whatever coin> with real money?

Let's say I was going to try to launder a million dollars in cash. How do you
get that into an exchange and out of an exchange without setting off a million
red flags, at least in the United States?

~~~
55555
Darknet vendors have the opposite problem. You can swap with them, sell cash
on darknet, or swap with others on localbitcoins.

------
ben_mann
Tldr: Monero

------
zerostar07
Good PR for bitcoin

~~~
JohnJamesRambo
Isn't it the opposite?

~~~
ghostbrainalpha
Bad for short term Bitcoin price speculators.

Good for long term investors and enthusiasts hoping for a grown up Bitcoin to
achieve mass adoption and legitimacy as the worlds most standard digital
currency.

------
sametmax
Thank you, bloomberg.com, for giving us news from 6 months ago. I'm glad I
have serious traditional media with professionals working to provide me with
fresh information and insight.

Tomorrow, they will tell us the amazing discovery on about how the economy of
crypto is now influenced by massive master nodes holdings.

Next month: the impact of Macafee tweeting.

Seriouly, how are they still doing money when bloggers give better, fresher,
stuff than them ?

~~~
corey_moncure
Knowing that the general media and public are six months behind us is, itself,
priceless information.

~~~
sametmax
It is isn't it ? Especially with crypto currencies.

------
phs318u
Called it (in a rather verbose comment 11 days ago).

TLDR: BTC - the mob came, the mob went - XMR

[https://news.ycombinator.com/item?id=15993110](https://news.ycombinator.com/item?id=15993110)

~~~
phs318u
Interesting... two downvotes, no comments. I'd love to know why. Did I come
across as snarky? If so, didn't mean to. It's just the timing of this article
is so close to my prior speculation on this that I thought it warranted a
mention.

~~~
acover
I didn't downvote you.

Your comment provides little new information and looks like bullshit. Lots of
people are predicting bitcoin's fall. For lots of reasons. People can rarely
time the markets, I'd expect strong evidence otherwise.

Do you track all your predictions?

~~~
zeep
/speculation: If Bitcoin doesn't implement the lightning network or something
else withing 3 months, they will die, eventually.

~~~
greyman
It will not. A lot of people, even very rich, use Bitcoin as a store of value,
something like an electronic version of gold.

