Thursday, June 18, 2015

HORRIFIC: New Bitcoin Technology Can Tell Banks Where Coins Come From

If you appreciate privacy, Bitcoin is not for you.

Elliptic, a bitcoin analytics and storage startup based in London, thinks it's just made a huge breakthrough that could make Bitcoins even more trackable, reports Business Insider.

The company has created a sophisticated bit of software that it says can identify where a bitcoin has come from.

Says BI, that's a big deal for banks, which have a legal obligation to find out where the money they hold is coming from to ensure they're not holding proceeds of crime.

BI explains:
Bitcoin isn't untraceable — every transaction is recorded on a public ledger called the blockchain. But the digital wallets that carry out transactions are anonymous, making it extremely difficult to actually make sense of the data. You could do some digging around and make a guess, but it's hard and time-consuming.

That means banks have been wary about holding bitcoin — if they take a bitcoin that's just been earned selling drugs in a dark web market like Silk Road 2.0, or that has passed through a known money-laundering service, they could end up in huge trouble with regulators.

Elliptic says its tool, built by 4 PhD holders, can make a hugely accurate guess as to who each wallet belongs to — and it can do so in real-time.

From  Elliptic:
Elliptic has harnessed the underlying technology supporting the visualisation to deliver a full suite of ground-breaking anti-money laundering (AML) services.
Bitcoin is an extremely trackable method of exchange. The idea that it somehow provides anonymity for daily transactions is absurd.


1 comment:

  1. Bitcoin fanboys tend to believe in ham fisted propaganda like the trustworthiness of the founding fathers, the Magna Carta being about the rights of serfs, and that the NSA can't track you if you call out to Tinker Bell three times.