Re: de-anonymize tor/bitcoin

Jeffrey,

this stuff is a bit heavy but if you care for it here are a couple of links:

1. One obvious technique to de-anonymize tor is to control the 'exit nodes', meaning the nodes that connect Tor to the Internet. If you control enough of them you can de-anonymize a lot of it.

2. A friend of mine (among other people), found ways to de-anonymize a lot of the 'hidden services' (roughly the 'secret' websites inside Tor) much more efficiently. I believe Tor fixed those flaws by now, but it's a pretty ingenious attack:

http://www.ieee-security.org/TC/SP2013/papers/4977a080.pdf The bottom line there is that with roughly $11k you can realistically de-anonymize any hidden service on tor. You do that by 'pretending' to be one of the servers handing out the addresses of the hidden services

3. The third option is to just attack the machine(s) of the 'bad guys', this is for instance what the FBI did a while ago against a network of pedophiles:
   http://www.reddit.com/r/onions/comments/1jmRTa/founder_of_the_freedom_hosting_arrested_held/ This option is targeted but it always works. The trick there was to attack the computer and then have the computer connect to a non-tor website, by doing that they could get the IP address and de-anonymize the user. Of course once you have control over the machine you can do much more that that, but they stuck to that

As for bitcoin itself, I believe I sent you the Bitodine paper. Another very good one is this:
http://cseweb.ucsd.edu/~smeiklejohn/files/imc13.pdf

Now some of these approaches are probabilistic, (3) is not. But I guess my point is: if you really want to figure out what somebody is doing on tor/bitcoin you can do it given enough resources. Not that it matters too much, but well

actually scratch that, magstrips on cards have enough space to fit in whatever token/identifier we want for the crypto currency. It's just a matter of convincing the companies that deploy them to adapt to our standards, but we still need to hand out debit cards to people

http://www.foxnews.com/politics/2014/08/22/food-stamp-fraud-rampant-gao-report/ make food stamps a test bed for transparent crypto? govt on our side

hmm yeah, I like it - it's crazy :-) so, why not?

The problem we have is that we need to create an actual physical network where people on food stamps have some kind of 'debit card' and merchants have a special POS to process those transactions (probably something like a Square reader will be sufficient). Not sure how big of a deal that is in terms of capital, but it's probably the only option unless we want to assume people on food stamps have smartphones..

But the good news is that if we do that and we succeed we obtain the following:

1. A good enough code base to then to the SWIFT thing + a lot more

2. A govt stamp of approval in crypto-currency stuff

3. Once merchants have our POS we can extend the currency to literally everyone

Jeffrey, does the govt on our side comes with money attached?

Joi, what do you think?