
New Digital Currency Spikes as Drug Dealers Get More Secrecy - uptown
https://www.bloomberg.com/news/articles/2016-08-29/new-digital-currency-spikes-after-giving-criminals-more-secrecy
======
apeace
An exciting sub-project within Monero is the possibility of using I2P[0] as a
transport layer[1].

I2P is an onion-routing network overlay similar to Tor, but different in that:

\- It focuses on internal services, rather than proxying out to the regular
internet (though outproxies are available).

\- Tor is designed primarily for TCP-based use-cases (proxying to the web).
I2P natively carries both TCP and UDP.

\- In I2P, _every_ node is a router, unlike Tor where most nodes are just
clients. Last time I checked, Tor had in the neighborhood of 6k routing nodes,
and I2P had around 20k.

I2P is a fascinating project with a hard-working team that has been
maintaining and growing the network for a decade. It's worth checking out.

[0] [https://geti2p.net/](https://geti2p.net/)

[1] [https://forum.getmonero.org/1/news-announcements-and-
editori...](https://forum.getmonero.org/1/news-announcements-and-
editorials/208/why-we-chose-i2p-over-tor)

~~~
droffel
Okay, not exactly true. I'm involved with the Monero project, and currently,
the Kovri plugin (I2P Daemon in C++ as opposed to Java) is under development,
and not in action yet. As of currently, connections are not run through I2P
(though the plan is to integrate I2P communications in the wallet via Kovri
soon™).

If anyone wants more info on the integration of I2P into the Monero daemon,
feel free to come over to #monero-dev, #kovri-dev, or #kovri on Freenode, and
we would be happy to answer any questions that you have.

~~~
apeace
My apologies! Didn't realize this integration hadn't been completed. I'll
correct the original comment.

~~~
plasticmachine
Just chiming in here: Kovri is still a work in progress, and there is still
some work to be done before it can be used more broadly or as a replacement
for the Java router: [https://github.com/monero-
project/kovri](https://github.com/monero-project/kovri)

------
zizzles
That advent of cryptocurrency such as Monero are a god-send to the
underground. It is almost bread & butter. They serve their purpose of being a
difficult-to-trace decentralized currency very well. Did any of you oldies
imagine that in 2016, you would be able to have recreational drugs of your
choice shipped to your doorway, anonymously? Paid for with a cryptographic
medium of exchange?

Although, there exists a con: Cryptocurrency as a whole is gaining a "dirtier"
reputation thanks in part to it's new-found use as a black market medium of
exchange. People had a vision of Bitcoin being an easy to use, mainstream
currency for the general population (pipe-dream in my opinion) It is clearly
not going in that direction.

Governments can very easily outlaw Bitcoin if they so please at any moment.
Any legitimate exchanges would be shut-down, no LocalBitcoin, no Bitcoin
ATM's, no BitPay, no NewEgg and Overstock accepting Bitcoin payments, banks
ceasing operating with Bitcoin copmanies (good luck converting to fiat)

~~~
blackbagboys
More likely is that governments will allow Bitcoin 'traffic' to be funneled
through exchanges, like Coinbase, that are FinCEN-compliant and responsive to
law enforcement, while cracking down hard on peer-to-peer exchangers and
anyone else who isn't diligent about collecting user data and responding to
subpoenas.

IIRC, collecting information on customer's identities is a legal requirement
of any money-transmitter with a nexus in the U.S., so any Monero exchanges are
either going to need to collect user data (rendering the whole thing kind of
pointless), blacklist all users in the U.S., or accept that they'll probably
be relentlessly hounded by the feds.

~~~
jbpetersen
So what's the next step in the arms race when people move to decentralized
exchanges like Bitsquare?

~~~
blackbagboys
Either Bitsquare makes good with federal law enforcement, it freezes out all
U.S. persons and severs any possible nexus with the U.S. (which would seem to
be impossible without defeating the whole point of the exchange), or the feds
eventually figure out a legal mechanism for shutting it down.

------
hackcasual
_AlphaBay announced on Reddit last week. “We expect this to cause a spike in
the price, so if you are an investor, now is the time to purchase Monero.”_

Bloomberg publishing investing advice from a criminal enterprise

~~~
sushid
They also linked directly to a black market subreddit without a warning. I'm
pretty sure I don't want to be asked by my HR as to why I was visiting an
illegal drug marketplace forum.

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DarkLinkXXXX
Excuse my lack of economic sense, could this be a pump and dump?

~~~
Nursie
On the one hand, yes, on the other.... If so then the market that made the
announcement risks its reputation and its ability to function. But this sort
of reputation leverage could be the people running the market making one last
big hit of cash before leaving the game. Or it could be real.

Very hard to tell.

~~~
gwbas1c
Looks like Monero was created to solve tangible problems in the Bitcoin
experiment.

Remember the phrase "Bitcoin experiment." The initial Bitcoin proposal claimed
that it's an experiment, and implied that it wasn't designed to scale to
general-purpose commerce.

~~~
wyager
It implied that it was an experiment, but it never implied that it wasn't
suitable for general purpose commercial usage. By all reasonable metrics, the
experiment was and continues to be successful.

------
placeybordeaux
Monero is currently ranked 6th in terms of market cap[1]. It seems to be the
highest privacy focused crypto currency beating out dash.

Bitcoin still controls ~80% of the total crypto currency market cap.

[1] [https://coinmarketcap.com/](https://coinmarketcap.com/)

~~~
aminorex
Monero is #2 in volume, right behind bitcoin, turning over about 1/4 to 1/3
the volume of bitcoin on exchanges in the past 24 hours. Coming up fast!

------
shanusmagnus
I wonder if this could serve to make Bitcoin more palatable, via the anchoring
effect -- Monero can be the currency for bad guys, as far as John Q. Public is
concerned, and draw all that heat? Leaving Bitcoin seeming relatively benign
in comparison?

------
dang
Another article about this was posted at
[https://news.ycombinator.com/item?id=12389536](https://news.ycombinator.com/item?id=12389536).

------
gcb0
does monero deals with privacy? last i checked Bitcoin solved the
centralization of currency, not anonymity

~~~
tobias3
Yes, how the amounts paid are kept anonymous is particularily interesting:
[https://people.xiph.org/~greg/confidential_values.txt](https://people.xiph.org/~greg/confidential_values.txt)

The involved parties are kept anonymous by enforced mixing, I think.

~~~
wyldfire
This link is confusing because it describes the proposal to add "Confidential
Transactions" to Bitcoin. Some concepts are related/similar to Monero's but
it's not the same.

~~~
tobias3
Maybe you could point us to a similar (succinct) description of the involved
cryptography? This one e.g.
[https://eprint.iacr.org/2015/1098.pdf](https://eprint.iacr.org/2015/1098.pdf)
?

------
rampage101
A lot of people are only interested in crypto-currencies for use in the black
markets. While probably a majority here are more interested in them from a
computer science or investing perspective.

~~~
pavel_lishin
I wonder how many people are interested in them for their ostensive purpose,
which was to have a non-centralized currency for regular, every-day
transactions.

It seems that they're mostly currently being used for speculative investments
(not a particularly good use for a currency) or for black market transactions.

~~~
mjevans
I'm interested in them from the perspective of eliminating morality police
that charge predatory rates to 'risky' sectors of the economy. I see them as
providing a more level playing field, though I do feel that competition among
escrow providers with clear terms of service for both parties is an element
missing from the equation.

~~~
pavel_lishin
> _I 'm interested in them from the perspective of eliminating morality police
> that charge predatory rates to 'risky' sectors of the economy._

Can you give some examples? I'm not sure what you mean.

~~~
egypturnash
If you make porn/erotica then a lot of payment processors want nothing to do
with you.

Same with marijuana. I live in a US state that's legalized it, and every shop
requires cash payment because no payment processor will talk to them.

~~~
Karunamon
As I understand it, that's less about morality and more about fraud risk.

~~~
conductr
For porn yes, for MJ it's about federal laws and banks wanting to obey them

~~~
woodman
And the federal laws are a result of the morally driven prohibition movement.
They aren't founded on well reasoned logic, just the desire to control others.

~~~
conductr
That becomes pretty circular and more political/philosophical than this
conversation needs to be. From a business perspective, online porn is high
fraud which makes CC's a difficult thing to underwrite and MJ banking in
general is risky because banks need to stay under the government's good
graces. This is the business environment regardless of your moral opinion

~~~
woodman
I disagree, pointing to risk management as the root cause makes it circular. I
certainly don't expect private enterprise to right the state's wrongs, but I
don't think it hurts the conversation to point out the true root cause. It has
been my experience that HN welcomes a little more thought beyond the
utilitarian argument of what makes the trains run on time.

------
s_q_b
Does anyone know if there's a vehicle to short Monero?

~~~
tinkerrr
You can do it on an exchange called Poloniex. Just remember, the market can
remain irrational longer than you can remain solvent. Good luck!

------
kang
Ring Sigs are coming to bitcoin too.

~~~
semiel
Really? I haven't heard about this. I'd love a link if you have one.

~~~
brbsix
I'm curious as to the OP's source as well. I found a recent investigatory
paper at
[https://github.com/AdamISZ/ConfidentialTransactionsDoc/blob/...](https://github.com/AdamISZ/ConfidentialTransactionsDoc/blob/master/essayonCT.pdf?raw=true)
but nothing official.

~~~
tromp
Note that Confidential Transactions (CT) are a different technology. While
ring signatures hides sender/receiver identity, CT hides transaction amounts.

~~~
divbit
Confusingly, plain CT actually uses ring sigs as part of the crypto, but not
the kind that hides sender / receiver, rather as part of the commitment
scheme.

