Bitcoin Tumblers, AML, and Retroactive Surveillance

Blockchain analysis has been advertised for years but it looks like law enforcement is now putting it into practice [1,2]. I would guess that their methods are becoming better with time but I cannot assess the current state of the technology since the companies specializing in these services are tight-lipped on details [3,4]. I found https://www.coinfirm.io/ to be a quite disturbing demonstration of blockchain analysis as it relates to AML regulation. I invite you to test the website and inform me if it is successful in linking your pre-tumbled addresses to later activities on DNMs (note that searches are stored and might be linkable to your IP, so please do not put yourself at risk in this fact-finding mission).

Governments have previously been restricted in their law enforcement efforts by having to rely on inefficient methods for collecting incriminating evidence on their suspects. Up until about 2001, agents of the state had to gather eyewitness testimony, rely on confessions (false or otherwise), and collect physical evidence in order to assign guilt for a crime. From 2001 and on, a major shift occurred in that the governments of the world began to store information, a huge amount of information, on what you do, who you talk to, where you go, and what you buy. They built themselves the world's largest DVR that allows them to rewind anyone's life and place them under retroactive surveillance. See what you were doing on [insert date and time].

It requires a complete change of thinking to grasp the far-reaching (and long lasting) ramifications of our overarching surveillance state. Your life is being recorded. This information can and likely will be stored without your consent for a period of time that will appear eternal by the standards of normal human experience. Just like we migrate information from old hard drives onto new ones, so too will our past transgressions be maintained. Perhaps someday your Internet browsing history will find its way into the memory banks of the supreme techno-consciousness as an artifact in the carefully curated data libraries of man's past.

The bottom line is that I do not know where these records will end up or who/what will have access to them. I do not know what these holders of my information will find offensive, now or in fifty years. Will my actions of today be deemed crimes of the future? Bitcoin through its very existence maintains an unalterable record of our financial transactions. Our digital thumbprints are in plain sight for the world to see. Even if blockchain analysis is rudimentary now, that will not always be the case. De-anonymizing efforts by the state will continue in earnest and improvements to existing techniques could be made long into our future.

Is there really any chance of eluding a malevolent state-level actor with vast resources and an abundance of time? We have known all of these facts for a long while, so why are we still relying on tumblers? I guess that the intention is to make it more difficult for someone to track your Bitcoin traffic. However, the effort required to run an automated analysis of the blockchain seems minimal. Have we deluded ourselves into a false sense of security believing that a complicated series of Bitcoin transfers can lead to an untainted coin?


Comments


[1 Points] None:

  1. No
  2. Plausible deniability?
  3. Yes


[1 Points] Selectivescammer1:

Nice post, and yes i think we have deluded ourselves in to a false sense of security.