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Comment by waterlesscloud | Hacker News Reader

The anonymity aspect of bitcoin has always been overplayed. It's possible to be anonymous, but you'd have to work at it. And the transactions themselves are in the public record forever, so you've got to never slip up, even years later. Good luck.

The most interesting news today was the interview by American Banker with the head of FinCen. The questions are pretty probing, and they get some interesting answers.

http://www.americanbanker.com/issues/178_104/fincen-chief-q-...

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Bitcoin itself can be used anonymously if one is careful. However, there should never had been any expectation of anonymity when exchanging for another currency that is not anonymous, like a USD bank transfer.

Much like Tor; the weakest link is when you enter or exit.

The entry to Tor is never really an issue, at that point the data is several layers of encryption deep. You are right in that exits are a problem though, unless the target is a a hidden service.

Exit nodes aren't really a problem either, if you realize that Tor's purpose is to protect your anonymity. An exit node may see your traffic, but can't see where it comes from, thus protecting your anonymity. If you need confidentiality in addition, you need to use tools designed for that (such as SSL).

I've always found that interesting. Sometimes you look at a dollar and think "where has this been?" - with bitcoin you can answer that question as far back as "who created this money" (to various degrees of pleasure or dismay.)

But a bitcoin is completely abstract. It hasn't been anywhere, the way a dollar has.

In most cases the question makes no sense, as bitcoins do not have identity.

bitcoin laundering / zerocoin solve that.

Can zerocoin actually be used at this point? Last I heard it wasn't anything more than a proposal yet.

Then you are placing trust on the laundary on not selling you out.

or stealing your bitcoins

Exactly. All a government would need to do is set up a laundry service with the lowest fees and they would be able to track and map a lot of juicy bitcoin usage.

start your own laundry. use several laundries.

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