Article Image

IPFS News Link • Bitcoin

The Silk Road trial is proof positive that bitcoin is not (and has never been) anonymous

• http://pando.com, BY MICHAEL CARNEY

What crypto-currency insiders have long known, but much of the media, regulators, and general public failed to grasp about bitcoin – that it is not actually anonymous, but rather is only pseudonymous and, if you can connect a digital wallet address to an individual, you can track very transaction ever made to and from that account – was demonstrated in stark detail in a Federal District Court in Manhattan this week.

In the trial of US vs. Ross Ulbricht, the 30-year-old man accused of being the creator of the Silk Road online black market (aka, Dread Pirate Roberts (DPR)), FBI special agent Ilhwan Yum told a judge that he was able to track a series of transactions over a 12 month period in which the seized Silk Road servers, located in Philadelphia and Iceland, sent large sums of virtual currency to digital wallets on Ulbricht's personal laptop.

This analysis was possible because the FBI arrested Ulbricht and seized his laptop while it was in use, meaning it was not at that moment protected by a password or, evidently, sufficient encryption. Subsequent FBI analysis revealed a series of bitcoin wallets in use on Ulbricht's computer that had received a total of 3,760 transaction from the Silk Road servers, totaling more than 700,000 bitcoins (BTC), a sum worth $13.4 million in total at the respective times of each transaction (many of which occurred before bitcoin's 2013 price appreciation). This is far more exhaustive but similar to analysis completed by Nicholas Weaver, a Berlkey computer scientist, who used publicly available information to trace more than 29,000 BTC traveling from Silk Road servers to Ulbricht's laptop.

2 Comments in Response to

Comment by Charlie Patton
Entered on:

The whole scare headline approach is such nonsense. It's like arguing that encryption is "breakable" because your correspondent kept copies of the message you sent him in an insecure place, and got raided. Or that a perfect smuggling method was "flawed" because the cops came across all the stuff you imported. Obviously, if you can establish a vantage point at either end of the transaction (either during or afterward) it will be visible to you.

Comment by Psychictaxi
Entered on:

DARKCOIN!