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North Korea Is Dodging Sanctions with a Secret Bitcoin Stash (bloomberg.com)
77 points by devy 13 days ago | hide | past | web | 46 comments | favorite

I'm sorry, but a country of 25 million people is "dodging sanctions" with tens of millions of dollars in bitcoins?

That's not really an amount of money to dodge much of anything at all.

Per capita statistics are misleading for North Korea. $15 million is 1/1900th its $28.5 billion GDP [1] and nearly 0.5% of its annual budget [2].

[1] https://en.wikipedia.org/wiki/Economy_of_North_Korea

[2] http://www.indexmundi.com/north_korea/economy_profile.html

It's certainly possible that they stole the bitcoins and paid for a few days (a week?) worth of goods.

But 1) the article does not provide any real evidence to support for this theory, 2) it's not a sufficient amount to be a viable strategy, and 3) the evidence even linking the thefts to NK sounds somewhere between non-existent and very flimsy.

When the FireEye report's leading point states: "...there are no clear indications of North Korean involvement", it's not good support for such a broad statement as the title of the article.

Again, it's definitely possible, but too little information appears to be available to draw this conclusion.

I agree. S Korea has currency controls in place. Perhaps that's why they h8 btc

But how are we going to get legislation passed in the US controlling bitcoin if it isnt linked to a major boogeyman like NK?

There are that many people, but I suspect a much, much smaller number of people actually benefit. The overall population probably isn't all that applicable.

Imagine going long - very long - with a stash that big.

The pundits-in-the-know often semi-seriously state they expect 1 BTC to rise to $100,000 USD within 10 years - looking at the past 5 years that's not an unreasonable statement to make. This is based on BTC's deflationary nature, and its increasing prevelance in the world. Imagine if you owned one 28,000,000th of the Internet economy - that would still be a lot of money. What if you owned 10x or 100x of that? In BTC it's still an amount affordable by a large organisation or nation state, but in 10 years' time it would be like having your own Fort Knox.

That's an oxymoron. And I'm not even trying to be cynical. People in-the-know aren't pundits, they're the ones the pundits are talking about. You can tell because pundits suddenly have alot less to say, and are much more circumscribed, when they're discussing topics with which they have contemporaneous, first-hand knowledge--pretty much the complete opposite situation of someone publicly predicting the USD price of BTC 10 years down the road.

There are people like John McAfee who clearly understand Bitcoin and frequently post punditry to their Twitter feeds - and make jokes about BTC's future price: https://twitter.com/officialmcafee/status/887024683379544065...

> looking at the past 5 years

How much it extrapolates in 20 years then? 100 million?

$100,000/BTC isn't a raw extrapolation to my knowledge and I've been in the crypto space since early 2009. It's a popular number chosen that'd represent BTC @ ~1/4 the market cap of Gold.

Which I don't think is that unreasonable if you're evaluating it as a store of value.

> It's a popular number chosen that'd represent BTC @ ~1/4 the market cap of Gold

Is this where "if we only get 1% of the market we'll all be billionaires" goes to summer?

I dunno worked for me.

The difficult part is to stop hodling at the right moment though.

Isn't this a tenet of bitcoin? Not being outright controllable by the will of a government?

Except they still need to be able to spend the bitcoin and ship goods back to NK. If a country is willing to trade with them, then it doesnt matter if its using bitcoin or trading with something else. The important part is that bitcoin is something with monetary value that is able to be stolen easily.

Yes, but some actors might be willing to trade with NK in bitcoin, but not, say USD. The same thing happens with $100 notes.

Huh? Could you explain? Perhaps the exchange is unsafe, but the coin itself is most certainly not.

In the article, it basically talks about NK straling the bitcoin. My point is that to spend the bitcoin has the same hurdles as spending other money or trading something because the other country has to ship NK the physical goods they bought. Its less that nk is using bitcoin to get around sanctions and more its convenient for them to get a hold of.

Have you guys actually read the article? it's not claiming they're mining the bitcoins, they claim they are stealing them

Cross ref with Jaime Dimon's comments on bitcoin ... interesting .

“You’re wasting your time with Bitcoin! Virtual currency, where it’s called a bitcoin vs. a U.S. dollar, that’s going to be stopped,” said Dimon. “No government will ever support a virtual currency that goes around borders and doesn’t have the same controls. It’s not going to happen.”

> "They also breached an English-language bitcoin news website and collected bitcoin ransom payments from global victims of the malware WannaCry, according to the researcher."

the article claims they can steal btc from any wallet. thats preposterous and if they could do that, stealing btc would be the least of my worries because that would prove several cryptography building blocks might be obsolete.

The article says no such thing.

There's a lot of ETH and BTC volume at South Korean exchanges. There's probably a reason for it aside from excitement

Korean exchanges don't have any fees on trades, only withdraw and deposit, so they're used almost exclusively for wash trading and other manipulation.

Mining makes much more sense - if they could acquire mining hardware from China (where it's manufactured) in trade, they could use that to mine cryptos, which they in turn can spend on the (relatively) open market.

Getting funds to agents in foreign territory is particularly easy if you're doing this.

Mining somewhere where electricity is cheap and then sending the coin address to NK where electricity is comparatively more expensive makes more sense to me. Plus it keeps them on a leash to whoever funnels the funds.

I don't think North Korea has the electrical capacity to mine cryptocurrencies. They don't have enough electricity to keep their cities lit at night.

I'm certainly not an expert on the capabilities of North Korea, but my intuition says that if they can build a hydrogen bomb, they can power a few shipping containers full of ASICs.

My impression was that they aren't electrified because it isn't a national priority for them to be, not because they lacked the capable to develop the infrastructure.

Nobody is saying that they don't have the capability. The fact that they're stealing bitcoin I think indicates that it's not as profitable for them to start a mining operation.

A lot of things need to line up to make the unit cost of mining bitcoin work.

On the contrary, it's probably part of their operating plans. Electricity and other creature comforts of modern society give people the free time needed to plan a revolt.

It's in their interests to keep the people alive yet stagnant.

If the NK elite want to continue to live in luxury they will have to do something about their underclass eventually. Bill Gates, et al, wouldn't have their present lifestyles if they didn't have well-educated (and well-nourished) people doing their work.

Serious question: If you're an elite NK party member with your own private home theatre set-up, who do you call when your Plex server stops working?

Kidnap some Japanese techs?

> They don't have enough electricity to keep their cities lit at night.

They certainly don't devote enough capacity to do that, but that could be in part priorities for use.

You assume that "keeping their cities lit at night" is higher priority than "obtaining more cash for covert purchases of equipment for the nuclear program", for example.

And they have to ask themselves that question for every new kilowatt of generating power that they install.

NK is mostly mountains, it has plenty of potential hydro-electricity available. The hard part is building / maintaining the infrastructure and logistics required to get the electricity to each and every building, that's the hard part.

I believe that's infeasible due to the nation's severe energy shortage.

This is indistinguishable from old time FUD to me.

There have been a series of articles in a specific type of media lately trying to link NK or China or Russia with Bitcoin and blockchain technologies.

It reeks of fear. To me this means that Bitcoin is winning.

You should consider reading the article.

The proof they provide is "Fireeye said it." Must be legit, it's not like they're a company run by an Air Force vet with ties to the FBI, and there's no chance they'd make a ton of money off a cyber war with North Korea.

Unfortunate display of the intrinsic value of bitcoin as an anonymous[1], decentralized store of value.

1. Please don't tell me that btc is not anonymous; the fact that I can trace transaction histories is irrelevant, since I still need to deanonymize the initial address.

That's not anonymity, that's pseudonymity.

No, by the conventional definitions of anonymous [1], the protocol is fully anonymous. Saying that it is pseudo anonymous is in my opinion misleading. There is a different word to describe the weakness of a deanonymized address. I dont know what that word is, but we will confuse and possibly turn interested parties and laymen away with the misnomer of pseudoanonymity.

I would compate this mislabeling to claiming that btc is insecure because of the mt. Gox hack; the fact that you can steal bitcoin's from people doesn't mean that bitcoins are insecure. Similarly, the fact that I can trace your transaction trail does not mean that your transactions themselves weren't fully anonymous.

1. Dictionary.com/browse/anonymous

This is HN, not CNN. s/anonymous/random/ and s/pseudonymous/pseudorandom/ and rethink your position. Anyhow, even in a more general forum like CNN pseudonymous is still the better term. See https://en.wikipedia.org/wiki/Pseudonymity

pseudo anonymity != pseudonymity. In laymans terms, "pseudonymity" means "fake name" whereas pseudo anonymity would mean "fake anonymity". shemnon42 is using the exact terminology you are referring to.

In this case, the conventional definition of anonymous is less useful than domain-specific definition of anonymity, since different currencies have different levels of anonymity. Recent HN discussion: https://news.ycombinator.com/item?id=14672691

I have been misreading that word for a few months now. I didnt catch that people were using the root pseudonym.

I didnt even know that pseudonymous was a word until today, thank you.

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