the_stc

Yep. And then Filecoin doesn't even sell equity! It's gross. With our company we're trying to do right by investors. We're completely in violation of the SEC memo. In fact, that's what galvanized us to 100% offer shares instead. We were going to do it before, but the SEC really set us straight: If we're going to be in violation of regulations we might as well make the most of it.

Yet ignores the founders of zCash saying they can make a backdoor for police and make it too traceable for criminals.

>Green says that he and his fellow researchers are not interested in facilitating criminal activity with Zerocoin. "Zerocoin would give you this incredible privacy guarantee, then we could add on some features which let the police, for instance, to be able to track money laundering. A back door."

https://www.newscientist.com/blogs/onepercent/2013/03/bitcoi...

That alone scares me off of it, and why we're suggesting people use Monero to invest with us. I know that was a while ago, and zerocoin isn't zCash but combined with Zooko's tweets about making zCash too traceable for criminals, no thanks. The crypto is too new, so who knows how they could go about hiding a backdoor.

It's so odd anyone would ever work with these guys given their attitude and statements.

Only when you opt-in to using shielded transactions. Which up until the recent upgrade took a ton of CPU power and RAM to do.

Combine that with two of the founders saying they're OK with backdoors (Green) and making it too traceable for criminals (Zooko) plus a 20% cut of all the currency for years and it starts looking sort of bad. (Yes it's 10% overall, but instead of showing long-term trust in their project, they decided to grab 20% really quick.)

Monero is far from perfect. Their ringsize is pitiful. But it works well, doesn't require heavy hardware, and privacy is mandatory. Plus it feels like a real community effort, not commandeered by a group that's open to making things traceable or demanding a huge cut.

We're not even launched, but have been contacted by one escort-assistant type person that does workshops/classes on how to put yourself through school using sex work. Seeing what academics get paid, I would not be surprised at all that this continues well past the undergrad years.

The best explanation I've found, without getting into the math, is this one on the Monero StackExchange:

https://monero.stackexchange.com/questions/5682/how-do-i-use...

Sending coins to yourself, aka churning, might not work so well after all, according to the latest MRL report. They say:

" We at the Lab previously thought that one possible solution to knacc's described attack would be churning, where one sends funds to oneself multiple times before using at a merchant. Unfortunately, this leads to chains of self-referential transactions, which leave an undesirable and identifiable statistical signal. "

Now the follow-up I've gotten says that this just means you can't churn too quickly. There is still no analysis of how often to churn, how long you need to wait, and on and on, until you're safe. The Monero wallets offer no way to manage your inputs either, so if you ever re-use a wallet (exchange->WalletA->WalletB a couple times) you'll leave even more of an trace.

So the number one idea that springs to mind, Exchange->Monero->Exchange, might be a worst-case scenario where you can easily be linked with a high probability. Especially when the approximate input time is known.

For instance, if you know a target exchanged Bitcoin in a certain transaction, you can simply trace all possible chains from that output and see when one hits an exchange, prioritizing shortest first: if an exchange output goes right back to an exchange, that's probably enough to get a warrant or targeted investigation.

Furthermore, an attacker could make a bunch of transactions so other transactions use known inputs, reducing effective ringsize even more. This wouldn't be very expensive at current volumes.

Even still, Monero still seems far ahead of competition. My biggest concern is that they don't put any sort of disclaimers, and incorrectly state it's untraceable. This will get people into trouble. The Tor Project does a far better job of being clear with the risks and shortcomings. The Monero community, mostly, seems to just advertise as if everything was solved. That plus the ridiculously low ring sizes feel rather irresponsible.

A well designed mixer would not be so easy to detect. In a perfect world, you'd have matching clients all the time, and the only contamination is the fee being siphoned off. If the fee is managed well it could be very difficult to determine coins that went or came from the mixer.

In reality, you probably need to batch a few customers together: 10 customers putting in 1 BTC, 1 customer putting in 10. But these don't need to be long-lived groups, if the mixer has the volume. So "their address" would only be the same for a few customers. An attacker would need to constantly make transactions to determine the addresses involved.

Most mixers give you completely "clean coins": That is there's no transaction chain from your inputs to your outputs. So they are probably doing some sort of system similar to what I describe.

Except no large systems support receiving shielded zcash transactions because of the CPU and RAM involved. They recently made some improvements, but it still takes many seconds of solid CPU time. Maybe in the future it'll be fast enough to be practical and they can make it the default.

ZCash is ideal, theoretically. If they get the performance amped up so that private transactions don't take forever, it could really work cause they could make privacy mandatory. Though a 10% tax of all coins is rather questionable. The CEO of the company did say he felt zcash could be made traceable enough to be uninteresting to money launderers, whatever that means. Sounds like the opposite of fungible.

Monero's less theoretically secure, and indeed, there's no info on how to safely "launder" coins through Monero. Ringsize is very small, at 5. But it seems to be a proper community effort and probably the best contender right now.

Dash is mired in mishaps, from its inception and instamine as Darkcoin. A single user or group of users hold magical keys that can undo 24 hours of blocks. They have centralized nodes and the mixing scheme isn't even theoretically secure.

We are worried about the SEC as much as we're worried about any government action. We're operating very tightly.

It's a travesty that some of these companies raise millions without giving up equity, voting, or dividends.

Even Monero isn't completely private. If you use an exchange to get in an out of Monero, they can probably link your transactions given an approximate timeframe.

Until we have serious ringsizes this will remain an issue.

A few maybe. It's definitely the reason we (Pink) went ICO for funding, to be able to raise money because real-world contacts didn't like the potential link to funding our venture.

Monero is also not quite untraceable with the defaults. It requires understanding Monero a bit, and spending days churning your coins. The idea that Monero is so unlinkable is horrible marketing and is going to get someone busted.

Your account will almost certainly be frozen until you show up and convince the bank you're not a money launderer. Given the complexity of AML laws, you probably actually are at that point. And therefore the conversation with the bank might not go in your favor.

You're totally traceable. Always assume third party records are public.

We're working on a guide for people to invest anonymously with us. It's not so simple. Monero is great, but their current defaults are too low to guarantee the privacy they say they have, and changing the defaults makes your transactions stick out.

What you have to do is:

1. Exchange into Monero.

2. Churn with Monero. This means you'll send your XMR from your wallet to your wallet, over and over again. Probably once every 3-6 hours, randomly. The destination address is private in Monero, so sending to your own wallet is fine.

3. After some time (1-3 days) send to another exchange to get Bitcoin/Ether/etc. Need to look at trade volumes to make sure you don't stick out. And probably not send out the same amount you put in. Keep half or some chunk and slowly leak it back to Bitcoin.

4. Optionally one could stack on a couple of Bitcoin mixers, on the idea that you won't have the bad luck to hit two compromised mixers. But each one will take ~2% so it adds up.

At that point you have coins reasonably unrelated to your earlier identity. Getting them into cash is a whole other guide.

It's telling that the author had to use Ethereum as an example. It's just really hard to find good ICO examples that make sense and have a real business.

Most ICOs have a hard time justifying their token. Some are obviously just speculative investments. I hope ICOs come to an end for the most part.

We're doing something similar to an ICO, except issuing shares. Shares are a known thing, and well established. Share price should grow based on the company's prospects, not pumping schemes. Cryptocurrency fundraising as a whole is still incredibly valuable. In our case, legal risk means we can't raise money from people we know (oh, how that'd be so much easier!). Even without the anonymity issues, I think a lot of companies are going to abandon ICOs after the token bubble pops and stick to traditional share-selling, using tokens as a ledger.

Theoretically you're right. In practice no jurisdictions are actually carrying out a denial of service on escorts. They could. They could buy ads and people to comply and turn over intel and on and on... yet they don't. There's a few busts here and there, mostly when they can take down a whole brother/agency/parlor. Plus low-level arrests, typically against minorities, for prostitution.

It's a lot easier than you think. The basic outline is:

>people want money

>we give them money

We already even have debit cards by hiring other people to set them up.

You're correct, this can be subverted. Though it would not last very long. The thing many people seem to forget when talking to us is that this business is already happening. People are working off classified ad sites, like eros.com. The verification procedures are being used by workers charging from $$$ to $$$$. So while this isn't perfect, it's far better than anything existing.

And in the end, what does LE end up with by doing all this? A few individual prostitution "busts", with no real change.

>If you have no issue with breaking the law

We have no issue breaking an unfair, unjust law that actively hurts people. Example: A judge ruled that the gang-rape of a sex worker was merely "theft of services".

Almost: At first the app will be a PWA so that users can use iOS. But yes, the provider side will eventually end up as Android-only app.

These are not really tokens, they are dividend-generating shares that will optionally be recorded via ERC20 tokens. We are using the term ICO only because saying IPO or Blockchain IPO tended to confuse people.

We want to raise secondary rounds to really expand, and screwing Series A investors sounds like the worst way to achieve that goal.

The vast majority of our contractors are going to be hired in a trustless manner and do not pose a risk to Pink itself. The only people that do are well-known, trusted, people that have been though previous projects.

As far as getting the money out, first, a lot of the business is cash and the providers just keep it, just like today. The profits mostly go to investors, so we're talking anyone who buys an ERC20-tokenshare. Use Tor, tumble coins and then run through ZCash and Monero if you're really concerned.

Look at all the indictments for similar projects. So far there's been no real tracing of money, just huge opsec errors.

We already have a core team, and 2 other trustworthy, known, not-first-time, people to bring on. The rest will be hired in a fully trustless fashion.

Unlike other ICOs[1], we're offering shares with dividends. Plus, we have an actual, real, business model that can generate significant profits.

1: I hate the term ICO for what we're doing, but calling it an IPO generated confusion. We're quick to distinguish the difference, though.

It's not chilling, why do you say that?

As part of the onboarding process, the worker will perform sample services. We will pay them for this (along with referral fees if they were referred). Having sex with people is what a sex worker's job is. It's just that the client in this case will report to us and verify their ID.

Seems like a good way to filter out people that are not serious or have ulterior motives (such as law enforcement).

>The few jurisdictions where it is legal, it is extremely regulated, and they don't mess around with the rules surrounding it.

That is why we are not relying on any specific jurisdiction but operating extrajurisdictionally.

This is not a troll. Two of us have already quit our jobs and have been on this full time for a couple months.

We're only raising a Series A right now. To globally expand, we're going to need to blockchain IPO, aimed at January when the first city is running. We are holding back a chunk of stock for secondary offerings because we may need a future raise. We want to grow fast and big, and that's not cheap. It's a highly profitable business so we won't need billions but still.

We're investigating how we can enforce some of the rules via smart contracts, but there's still likely to be loopholes.

Legalization and regulation. Require a license and periodic reviews. Just having easy, legal, sex available means a lot of the revenue dries up, which makes it harder to run the illegal operations.

The real way to fight trafficking is legalization and regulation, including interviews with sex workers to detect coercion, then followups to help them.

Since fixing the laws is going to take a while, we've taken it upon ourselves. We're building such a superior solution for both sex providers and clients, it'll hurt trafficking like iTunes hurt music piracy.

Yes and they will come down on The Erotic Review and others next. (Which is OK, TER is terrible for sex workers and reduces their safety.)

As for tear-avoidance: https://medium.com/@PinkApp/pink-app-trading-latency-for-ano...

This isn't our first rodeo.

There are few jurisdiction where everything relating to prostitution is legal. And once you operate in countries where it's not, you're opening yourself up to attacks and really relying on some country to not be convinced to extradite you or invent charges.

The core team is much smaller than that. There are a couple advisers/seed investors, but they are not all aware of each other (that's the 5 number). In every person's case, this is not our first rodeo. This is one of the key issues and I feel we have it handled. Everyone else will be hired in a trustless manner and investors have no part in day to day operations.