Something I don't understand. What's the point of obfuscation if ultimately you can be caught when you try to convert it to fiat?
If I have Btc and I convert it to monero to prevent tracking, how do I get it back to money in my bank account without being traceable?
matheusmoreira
The idea is to not convert it into fiat. Create a parallel economy where monero is the actual currency, not some intermediary currency. Price things in monero.
vintermann
Where would the trust come from? I mean the trust that people really do what they say they're going to do in the real world - like ship you the goods, do the work you paid for, don't immediately kick you out of the servers you paid to access etc. A shadow economy doesn't run itself, who's going to stick their neck out to even try to make it work?
miki123211
Crypto lets you decouple trust from ownership, that's one of its main selling points.
You can have a Visa-like network that supports chargebacks, but design it in a way that the dispute arbitrators cannot seize your money. If you report a transaction, they can either decide to release the money to the merchant or return it back to you, but the contract logic prevents them from doing anything else with that money. If both sides agree that the transaction has successfully taken place, it can be released automatically, despite the arbitrators' wishes.
This is something you can't do in trad fi, so we use laws and legal contracts as "hacks" to make it somewhat possible.
conception
This sounds terrible outside for very rare edge cases. It adds so much friction to disputed transactions. And in the end rather than beholden to the law you’re beholden to a third party arbiter. Sounds terrible in a sector rife with grifters and scams.
matheusmoreira
That's a completely separate issue. It's got nothing at all to do with the currency being used. USD has exactly the same problems, as does every other currency on earth.
Society's answer to that is violence. More specifically, the threat of violence. If people don't do what's expected of them, at some point people with guns will show up and the violence will commence, and it will continue until the desired order is restored.
Stuff like laws and courts are just extra steps towards that violence. No matter the context, the threat of violence looms eternal and that's what makes people behave reasonably.
tsimionescu
There is no threat of violence if the trading parties maintain anonimty. And even if they don't, there is little realistic threat unless the victim can prove to authorities who the offending party was.
ifwinterco
Where does the trust come from for transacting in dollars, or Spanish pieces of eight? I'm not saying the monero economy is likely but there's absolutely no reason why it couldn't theoretically happen
kasey_junk
Courts, law enforcement and contract law. All of which will take a dim view of using a currency which appears designed wholly to make their function harder.
I think crypto already exists as a parallel economy. Especially between certain states.
You use monero not to exchange for fiat but, for example, oil.
fruitworks
It's developed naturally through reputation systems, escrow, etc.
wkat4242
Yes and some VPNs can be paid in monero
raffael_de
Let me give you a realistic answer. There are soft and hard criminals. For example: soft criminals buy drugs, hard criminals sell drugs. The soft criminals convert from traditional to digital money (plus maybe a little obfuscation), order and hope for the best. The hard criminals have to solve the difficult problem of reversing that conversion. They'll just have some homeless person open a bank account and then use that for the conversion. If the homeless person gets busted, it better keep its mouth shut - or else.
nunobrito
The point is being like a submarine: nobody really knows where you are moving (transactions) and where you will surface (which other crypto or fiat).
On the example you give, large majority of people just pay and accept payments using monero natively. When you are talking about large amount of money, then it is worth a visit to places like El Salvador where you have a bank account with BTC. The conversion tends to take place in exchanges outside 1st world supervision and from El Salvador you can convert BTC to other currencies according to the exchange values or just use it with a credit card.
If you want to convert smaller amounts in Europe without tracing, mostly a matter of settling the transactions with small providers albeit you should be prepared to pay a fee between 20% to 30% as commission for the service.
m00dy
Well, what you're asking about is basically a business. Most folks make bank just by setting up that kind of circle. I'd suggest reading up on front businesses like luxury restaurants that sit empty most of the time. it's such a classic play, everyone knows it. If you've got BTC and want to get it back into your bank account, hit me up anytime.
dewey
> If you've got BTC and want to get it back into your bank account, hit me up anytime.
That's exactly how people get caught.
ta12653421
Well, public offering on the internet, Money laundering as a service :-D
danlugo92
Bitcoin's traceability ruins its fungibility.
otterley
Fungibility and traceability are orthogonal. Equities markets transactions are highly traceable and also highly fungible.
Bitcoin's fungibility is limited by its incredibly slow transaction speed. (This is true of all cryptocurrencies AFAIK -- even the fastest ones that are only capable of 100K TPS at best.)
otterley
Correcting myself: I said "fungible" but meant "liquid." Bitcoin is reasonably fungible today, though not as easily as fiat currency. Traceability hasn't done much to reduce Bitcoin's fungibility AFAICT.
fruitworks
Equities markets don't have to deal with "tainted" transactions, because every transaction is like a government-approved deed or title transfer.
Bitcoin's transaction rate is artificially limited.
#2: the author wrote "This attack is not realistic. ... This is why everyone needs to run their own node"
#3: "digital forensic approach can still reveal sensitive information by examining off-chain artifacts such as memory and wallet files"
So...
#1 seems to have been mitigated.
#2 seems to not be an issue if you run your own node.
#3 seems to not be an issue if you don't let others do forensic analysis on your own computer (not the Blockchain).
It's good that people do this research to help make Monero better. I am not criticizing the people that published what OP linked to. But of course OP's post is like saying "What makes you think paint is safe? Here's a post about how paint used to include lead."
Anon84
#1 and #2 are public results by market leading blockchain analytics companies that have an alphabet soup of agencies as their major clients.
Do you think they published their current state of the art?
The fact that it's delisted from most exchanges because of its privacy features; if it was as traceable as Bitcoin, then the feds would allow it. What I see from these links is that it's not fully "traceable" and more educated guessing via heuristics.
A4ET8a8uTh0_v2
I will admit that as far as signal goes that appears to be a big one.
littlecranky67
Lightning (A layer-2 network based on Bitcoin) is similarly untraceable as Monero, without being an actual cryptocurrency. Yet the fed doesn't seem to concerned, probably also because few people and institutions understand Lightning, and the fed is not one of them or doesn't want to go against Bitcoin.
The fungibility of Bitcoin is achieved through layer-2 networks, such as Lightning. No, it is not another cryptocurrency, it is just another technological layer. You are still transfering bitcoins.
Trumps "Bitcoin payment" portrayed extensively by the media was done in the Lightning network.
kragen
I'm no expert, but this sounds significantly weaker than ZCash at first glance.
nunobrito
Monero is always private by default.
The "coin" you mention is not private by default, therefore "weaker".
kragen
That's true.
fruitworks
The current implementation of monero's tech is less advanced than zcash, but stealth addresses are as secure as ECC gets. The idea comes from ECDH.
The weakness in monero's cryptography is dependence on ring signatures, which will be improved with the FCMP++ upgrade. In other words, it is an issue of sender privacy. Stealth addresses protect recipient privacy.
jqpabc123
Alice and Bob may have a surprise in store --- the trust issues, the cost issues and the hoops they'll need to jump through in order to buy Monero, store it in a custodial wallet and then convert it back into fiat if needed.
fruitworks
I didn't find a major trust or cost issue. I just use kraken. Or you can use any other fiat-to-crypto exchange and then take it to a crypto-to-crypto exchange.
I think the bigger obstacle to most people is just the idea that cryptocurrency is difficult, and the idea that buisnesses are trustworthy by default.
danlugo92
Because your auntie is using BTC to pay for her coffee? If anything she's using cashapp.
stebalien
This article left me more confused than enlightened. I recommend reading https://risencrypto.github.io/Monero/ instead as it actually explains how the cryptography fits into Monero.
danlugo92
Monero is the only real cryptocurrency.
nunobrito
The root of the word "crypto" goes all the way in history as "to hide".
Monero has since many years been the only option worthy of truly being called a cryptocurrency. Doesn't even make sense to use anything where anyone can see all the value in your private wallet and where you are spending them.
The rest should really be designated as "virtual coins" or just call them "casino coins" because that is their use case.
pfortuny
They are not even coins. Coins do not get a pseudonym of their users attached for ever.
nunobrito
When you transfer monero to someone else there isn't a trace of where the money was before nor to whom it belonged.
You might be confusing monero with all the virtual "coins" out there.
You can have a Visa-like network that supports chargebacks, but design it in a way that the dispute arbitrators cannot seize your money. If you report a transaction, they can either decide to release the money to the merchant or return it back to you, but the contract logic prevents them from doing anything else with that money. If both sides agree that the transaction has successfully taken place, it can be released automatically, despite the arbitrators' wishes.
This is something you can't do in trad fi, so we use laws and legal contracts as "hacks" to make it somewhat possible.
Society's answer to that is violence. More specifically, the threat of violence. If people don't do what's expected of them, at some point people with guns will show up and the violence will commence, and it will continue until the desired order is restored.
Stuff like laws and courts are just extra steps towards that violence. No matter the context, the threat of violence looms eternal and that's what makes people behave reasonably.
You use monero not to exchange for fiat but, for example, oil.
On the example you give, large majority of people just pay and accept payments using monero natively. When you are talking about large amount of money, then it is worth a visit to places like El Salvador where you have a bank account with BTC. The conversion tends to take place in exchanges outside 1st world supervision and from El Salvador you can convert BTC to other currencies according to the exchange values or just use it with a credit card.
If you want to convert smaller amounts in Europe without tracing, mostly a matter of settling the transactions with small providers albeit you should be prepared to pay a fee between 20% to 30% as commission for the service.
That's exactly how people get caught.
Bitcoin's fungibility is limited by its incredibly slow transaction speed. (This is true of all cryptocurrencies AFAIK -- even the fastest ones that are only capable of 100K TPS at best.)
Bitcoin's transaction rate is artificially limited.
- https://arxiv.org/pdf/2408.05332
- https://darkwebinformer.com/chainalysis-successful-deanonymi...
-https://www.sciencedirect.com/science/article/pii/S266628172...
#1: "between 2019 and 2023"
#2: the author wrote "This attack is not realistic. ... This is why everyone needs to run their own node"
#3: "digital forensic approach can still reveal sensitive information by examining off-chain artifacts such as memory and wallet files"
So...
#1 seems to have been mitigated.
#2 seems to not be an issue if you run your own node.
#3 seems to not be an issue if you don't let others do forensic analysis on your own computer (not the Blockchain).
It's good that people do this research to help make Monero better. I am not criticizing the people that published what OP linked to. But of course OP's post is like saying "What makes you think paint is safe? Here's a post about how paint used to include lead."
Do you think they published their current state of the art?
Trumps "Bitcoin payment" portrayed extensively by the media was done in the Lightning network.
The "coin" you mention is not private by default, therefore "weaker".
The weakness in monero's cryptography is dependence on ring signatures, which will be improved with the FCMP++ upgrade. In other words, it is an issue of sender privacy. Stealth addresses protect recipient privacy.
I think the bigger obstacle to most people is just the idea that cryptocurrency is difficult, and the idea that buisnesses are trustworthy by default.
Monero has since many years been the only option worthy of truly being called a cryptocurrency. Doesn't even make sense to use anything where anyone can see all the value in your private wallet and where you are spending them.
The rest should really be designated as "virtual coins" or just call them "casino coins" because that is their use case.
You might be confusing monero with all the virtual "coins" out there.