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[Criptfeind]

That's pretty harsh considering the same could pretty much be said of anything in the long run.

[Reelya]

Cause, for every action you take that increases the bitcoin's value, you increased the value of the criminal's assets as well.

Criminals aren't in bitcoins for the investment, they're in it for the anonymity. When a criminal makes money and decides to invest it, they will invest it in whatever gives the best rate of return. And that's not necessarily going to be bitcoin. If you convince people not to speculate on bitcoins they will speculate on something else, and then that other thing's price will rise whilst bitcoins falls and the criminals will just follow the profits.

I'm pretty sure most proceeds of crime are not stored in something as shaky as bitcoin.

[Bauglir]

If I were a criminal, then any funds would only exist as bitcoins for long enough to carry out the transaction. Not even bitcoin's legendary volatility would have a significant impact on the value, which is exactly the way I want it, because if there's one thing I desperately need, it's for my deals to be reliable. For all its flaws, buying bitcoins supports criminals about as much as buying cash. That said, I don't exactly mind it having the reputation, since maybe some other coin (c'mon, doge) could displace it by having a nicer one.

[Putnam]

...Bitcoin really isn't that anonymous.

[Levi]

The wallets are anonymous, but transferring real money to and from bitcoins tends not to be.

[alway]

So that's one of the biggest misconceptions about bitcoin and these other proof of work systems. By necessity, the protocol is itself built on the fact that you can see every transaction that takes place. There's hardly any more anonymity there than in an IP address. Take for example one of the big robberies of (I think it was) a drug market site. Thousands of bitcoins were stolen. The perp then attempted to launder these, using several bitcoin laundering services. And yet, users were able to track the movement of the coins through various wallets for more than a day, simply by watching the patterns of how money was moving around.

Keep in mind, that's what happens if you do it manually.

The NSA and many other departments have both access to supercomputers and AI algorithms designed for pattern recognition (and in fact, such things can be pretty trivial to write for a narrow domain like this one). Apply that to the bitcoin transaction logs, and you can isolate and track entire criminal networks and everyone they do business with in very short order. The only thing less anonymous than that are legit banks.

Also, in an update to the bit I posted yesterday about MtGox: http://www.dailytech.com/Mt+Gox+Bitcoin+Bank+Run+Intensifies+1+Million+Customers+at+Risk/article34293.htm
It's apparently more or less a full on bank run now.

It certainly wasn't helped by this: https://www.mtgox.com/press_release_20140207.html

[Leafsnail]

Thousands of bitcoins were stolen. The perp then attempted to launder these, using several bitcoin laundering services. And yet, users were able to track the movement of the coins through various wallets for more than a day, simply by watching the patterns of how money was moving around.

Keep in mind, that's what happens if you do it manually.

IIRC this turned out to be false, the account he identified actually belonged to an exchange and he was just watching them shuffle their resources around.

But yeah there's also the problem that you need to cash out at an exchange, and a lot of them require proof of identity.

[Reelya]

Though it can't be that hard to combine identity fraud with bitcoin transactions.

[Leafsnail]

Yeah it's fairly anonymous provided you are a criminal.

[Putnam]

It's still going down.

[Leafsnail]

They've stopped allowing Bitcoin withdrawals altogether, as far as I can tell.  There's a pretty good chance that any money in MtGox is now stuck there forever.

[10ebbor10]

Apparently, someone is trying to start their cryptocurrency by giving a small start capital to everyone.

[alway]

Grab your popcorn, exchanges have dropped over 10% today, and most of that in the past few hours. This in addition to the steady decline over the past month which comes out to an overall 25-30%.

[Putnam]

Oh lordy, it's down almost 50% of what it was over a week ago.

[Bauglir]

I've considered it, and it seems like too much work to buy some. Ah, well. I'll content myself with popcorn.