Bitcoin anonymity – myth or bitter half-truth

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Myth or truth: do you use Bitcoin to Finance terrorism?

Terrorist groups al-Qaeda* ISIL* failed to collect enough money through cryptocurrency. The financing of terrorism through the crypts is gradually eroding, so the opponents of Bitcoin has lost yet another argument in the debate. About it writes .

Terrorists against Bitcoin

About the problems with international terrorist organizations, spoke at a meeting of the Committee of the house of representatives of the United States for financial services. It turns out that terrorist operations are financed by Fiat, not Bitcoin or Ethereum. This was stated by the expert on illicit transactions Yaya’s Fanusa.

As an example of Fanusa led a failed campaign of terrorist fundraising. In 2020 Council meeting of the Mujahideen in Iraq have published a wallet address for donations. The organization received only two transactions with a total value of $ 500.

According to Fanusa, «old Fiat» remains the number one tool for ISIS and al-Qaeda. Cash is relatively easy to hide, and its origin is unknown. Moreover, terrorists often conduct illegal transactions in places where there is not even a proper infrastructure and the Internet.

And yet anonymous cryptocurrencies may soon become the primary means of financing for international criminals. All due to the fact that the U.S. government do not fully understand the principle of operation of the crypts. The terrorists sooner or later will take advantage of this loophole.

Meanwhile, rogue found a good use for the cryptocurrency. Iran, which earlier received the nickname «Axis of Evil» from former President George Bush, thinks about national cryptocurrencies. Domestically, Bitcoin has a huge popularity is the coin to 24 000 dollars in the local stock exchanges.

Is Bitcoin a myth or a reality?

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In my opinion it is both because public or advertising promotion led deception has caused great confusion in the markets.

The original blockchain and Bitcoin concept is real and developing slowly.

It has a genuine competitor in Ethereum that additionally allows contract derivatives on top of financial value transactions.

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But on top of this there are many schemes entirely being used to raise unsolicited finance through ICOs or Initial Coin Offerings. These are rather like the Stock Market where some Entrepreneurs think of a new concept or product, hype it on the market get hundreds of investors.

Bellingcat Busts the Myth of Bitcoin Anonymity (Again)

In This Article

The journalists at Bellingcat showcased how to track down and trace transactions with only minimal data and a little bit of free time.

Anonymity in Blockchain

Since its creation in 2008, Bitcoin BUY NOW has been touted as a great way to move money around while remaining relatively anonymous. The perceived privacy of cryptocurrency transactions proved to be one of the most controversial features of the concept of digital money.

As the identity of Bitcoin senders and receivers is hidden behind their address wallets, anonymity can be a handy tool when someone needs to launder money or cover the tracks of their illegal activity. These assumptions have been the primary concern of governments and regulators all over the world when considering digital currency legislation and regulation.

Despite strong evidence otherwise, many people still believe that Bitcoin and virtual money in general, are the preferred mode of transactions for criminals and tax evaders.

The Myth is Busted

While blockchains contain personal details ciphered in long alphanumerical strings, thus enabling some types of illegal activities, their absolute anonymity is a myth. Each transaction leaves a digital footprint that can be traced in most circumstances.

Experts from an open-source investigation project Bellingcat provided a spectacular example of how Bitcoin transactions can be traced without the need for special tools or an academic degree in computer engineering.

The team tracked down a Bitcoin transaction specified in Robert Mueller’s indictment of 12 Russian agents published in July 2020. By analyzing the chain of blocks and the open source data, they discovered the Bitcoin address the money was sent from and found other transactions performed from the same wallet Unlike the physical wallet in your back pocket, a cryptocurrency wallet doesn’t actually store currency but the keys to a. More .

Want to have some fun over the weekend with blockchain, Bitcoin, and the Mueller indictments?

According to the indictment, 0.026043 BTC was sent from a particular address, allegedly belonging to the agents of the Russian Intelligence Service (GRU), on Feb 1, 2020. With no access to additional information and just a standard blockchain explorer at hand, Bellingcat found the transaction that the Special Council of the investigation into the Russian interference in the 2020 United States elections, had mapped to the hacks of the Democratic National Committee servers.

A How-to for Emerging Blockchain Detectives

Without going into technical details, they spotted the first block mined on Feb 1 — block #396049. They then scanned all blocks of the date looking for a transaction in the amount of 0.026043 BTC. Block #396123 contained the target amount, which was sent from the address 1LQv8aKtQoiY5M5zkaG8RWL7LMwNzVaVqR to 1NZ4MSeYcDKFiPRt8h7VK6XMhShwzhCzCp.

Moreover, the researcher scanned all blocks for Feb 1, as well as Jan 31 and Feb 2 to make sure that there were no other transactions in that exact amount.

1LQv8aKtQoiY5M5zkaG8RWL7LMwNzVaVqR looks very much like a one-off address as it has only received 4.56935047 BTC on Jan 27 and transferred the same amount between two transactions on Feb 1. The wallet address has been inactive with a balance of zero since that time.

Now we know the details of a transaction allegedly used by Russian Intelligence to finance their meddling with the U.S. presidential campaign. While we can only identify the address as a long string of numbers and letters, some tools allow retrieving the names of the real people behind the alphanumerical codes.

Companies like Chainalysis and CipherTrace use dedicated software along with publicly available resources to link transactions and wallets to real people.

That is how the U.S. Treasury managed to spot and sanction two Bitcoin addresses that belonged to Iranian citizens in Nov 2020.

About Bellingcat

Bellingcat is an online resource created by British journalist and blogger Eliot Higgins. It publishes the findings of journalist investigations into wars, high-profile criminal cases, and human rights abuses.

Recently, the chairs of the Commissions for Foreign Affairs in Estonia, Lithuania, and Latvia jointly nominated Bellingcat for Pulitzer Prize in journalism.

Critics of the project often accuse it of data falsification and conclusions based on allegations.

Do you think that cryptocurrencies should be anonymous in order to protect our privacy? What’s your attitude towards attempts to trace down transactions and link them to real people? Let us know your thoughts in the comments below!

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