how to buy bitcoins untraceable

When you use a sophisticated Bitcoin laundry service, it is practically impossible to trace your coins.

Zerocoin, the work of a group of cryptographers at John Hopkins University who plan to present their system at next month’s IEEE Security and Privacy conference in San Francisco, offers an extension to Bitcoin that would make the task of identifying Bitcoin users or tracing their transactions nearly impossible.
Zerocoin is designed to offer the same privacy and untraceability properties as one of those laundry services, but without the need to trust any potentially shady entity; As with Bitcoin, the user would only have to trust the currency system itself.
Bitcoin has almost made it, but it’s come just a little short,” says Matthew Green, the computer science professor who designed Zerocoin along with graduate students Ian Miers and Christina Garman.
But until it’s integrated into the Bitcoin protocol, Zerocoin would require third-party services to act as issuers of its anonymizing tokens, introducing some of the same trust problems that currently exist with laundry services.
To understand Zerocoin’s significance, consider Bitcoin’s strange properties as both one of the most private and most public payment systems ever invented; Bitcoin is private because it doesn’t need to be issued or stored by banks, and can be spent on the Internet with cash-like advantages, such as never requiring the user to reveal his or her name or register an account.
To have its intended effects, nearly all Bitcoin users would have to add the Zerocoin code, which the Johns Hopkins researchers are releasing next month, to their Bitcoin client .
The Johns Hopkins’ team’s system would work by allowing any Bitcoin user to convert a Bitcoin into an anonymous token–a Zerocoin.
But for a Bitcoin user to prevent transactions from being tied to his or her identity–particularly at the dicey moment when he or she turns Bitcoins back into dollars, yen or euros–requires extra steps such as sending Bitcoins through a “laundry” service that mixes their “dirty” Bitcoins with lots of other users’ coins and issues them random, “clean” ones.
It would be difficult to directly exchange a huge amount of Bitcoin such as that stolen in the Linode hack into USD or other Fiat money and retain your anonimity.
Used in a normal manner, bitcoin is traceable and thus not anonymous.  It can be used anonymously by taking certain precautions.
Using Tor will remove the IP tracing for the relay node and using mixing services will blur the history of the coins.
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So, as long as Bitcoin remains "pure" and is not exchanged for real currency, it can be used truly anonymously.
You get the money out of the illegitimate source using a "mule." This is someone who you pay to do basic tasks on the side as an administrative assistant type, and mixed in with some of those tasks, the mule will receive a wire transfer in their name from, say, Liberty Reserve and drop off the cash at the restaurant.
Laundering Money Online: a review of cybercriminals’ methods, by Jean-Loup Richet, a research associate at the ESSEC Business School, talks a bit about Liberty Reserve in particular and about how carders and other cybercriminals launder money in general.
Then you just inflate the business’s income with your ill-gotten money, so that instead of the "real" modest profit/loss the business really did, you claim it’s very successful, see, look at this giant pile of money we have from all the business we do.
One method I’ve heard of, in places where online gambling is legal, is to have someone take the cash, put it into an online poker account, then "lose" it to the person who wants to own the money on the books.
So, in the case of Amy’s Baking Co., you keep your hairbrained jailbird wife out of the way in the kitchen, and you have a "front" to launder your illegitimate money into real cash.
That’s why money laundering concentrates on businesses with consumables that are negligible or difficult to measure: barber shops, strip clubs, "consulting services", selling downloads, online gambling, etc.
To answer part of your question, Western Union, Moneygram, and other money service businesses (MSB) are very much required to submit currency transaction reports (CTR) and suspicious activity reports (SAR) to the U.S. government, as well as screen customers against the list of individuals who are not allowed to bank in the U.S. (usually, but not always, due to ties to terrorism).
But one way of laundering that money is to bill for something innocuous or legitimate – instead of "hacking your competitors" maybe you bill a client for "search engine optimization." That’s another way of laundering, assuming the people paying have ‘clean’ money to do so with.
Whereas with your cases, you aren’t worried about looking like you are spending more money than you have, you just want to buy some cocaine without having a credit card receipt or cancelled checks made out to "my dealer".
Laundering is taking illegitimate money and making it look legitimate so you can buy things without enforcement knocking on the door wondering why a guy who reports $10,000 in income is driving around in a Bentley and has $5000 in his pocket.
You don’t need to get money out untraceably – when it’s done "right," the whole idea of laundering is to appear to have honestly come by all your money, not to hide it entirely.
It would really help if you can get a legitimate business that you don’t own or have much connection to to facilitate some of the steps your money takes to break some of the links between you and the businesses that your ill-gotten gains flow through.
I can sort of see how you can anonymously put money in an account — go to western union with a pile of cash, and wire it to your account.
Correct – "traditional" laundering is orders of magnitude easier if you have piles of cash and a cash-heavy business to run them through.
My understanding of money laundering is slightly better than the guys in "Office Space", but I’m no accountant.
How do I use bitcoins? I have a feeling my kids won’t be happy when I tell them they’re getting virtual currency for Christmas.
Members of Congress today will get a crash course on bitcoin, the digital "currency" that allows users to conduct transactions online.
Recently, Silk Road, an online marketplace for illicit drugs, which used bitcoins to facilitate transactions was shut down by the FBI.
You hold bitcoins in an online "wallet." This is an account set up on a secure third-party website.
The system is designed to require more work to get coins as time goes by, that makes the currency’s growth rate, also known as inflation, steady and predictable.
Unlike U.S. quarters, Canadian loonies, or, for that matter, the currencies of every country in the world, bitcoins are completely virtual.
You can use bitcoins to buy anything with which you would use any other kind of currency.
Like cash, bitcoins are untraceable, which makes drug dealers like them.
New bitcoins enter the market by a process called "mining." Available bitcoins are hidden amid a complex encrypted computer program.
That has led some hackers to take over unsuspecting users’ computers to harness their power to mine for more bitcoins.
In case you have not heard of it, “Dark Wallet” is a software that works with the virtual currency BitCoin, and stands to make money flows all but untraceable.
Because of this, many people and governments fear – and perhaps rightly – that the software will essentially turn BitCoin into a giant, criminal money laundering scheme.
This level of protection goes far beyond the protections initially built into BitCoin and makes it nigh on impossible to chase a particular transaction down, which of course, is entirely the point.
True, it will make it easier for criminal enterprises to utilize BitCoin payments to bury their illicit activities even further underground, but all is not peaceful nor quiet in BitCoin land.
For a start, as BitCoin increasingly becomes the darling of libertarian minded Americans and criminal masterminds, it moves increasingly farther from mainstream acceptance.
Given how volatile trading in bitcoin has been, it’s hard to imagine it will ever be secure enough to be trusted as a medium of swapping fiat currency or other assets. In fact, bitcoin exchanges are so vulnerable that hackers betting on the price of bitcoins to dollars seemingly crashed the market on purpose: They sell bitcoins, then overwhelm the primary bitcoin exchange (Mt.Gox) with traffic.
If you want to use Bitcoins on international websites, you can use them for donations and purchases here: You can also view physical stores all over the world that accept Bitcoins on There’s no harm in trying to mine some Bitcoins yourself (see box below) and if the value jumps, you’ll end up with more than you thought you had.
Note that creating a Bitcoin address is free and they can even be created offline using freely available software tools such as Armory ( Each Bitcoin address is also case sensitive, which means that manually entering it during a transaction is not advisable.
Within this calendar year itself, Bitcoins have been valued at 8 $ to 1 BTC while at the time of writing, it’s actually closer to 105 $ USD per Bitcoin.
Unlike physical currency, Bitcoins cannot be easily stolen because theft requires access to your authorised physical device to transfer them.
At the time of writing, we could not locate any physical or online stores in India that accept Bitcoins.
Being a digital currency, you can easily carry thousands of Bitcoins in your phone or any sort of electronic storage device.
The Bitcoin network is designed to have a finite supply of 21 million Bitcoins.
This requires that you already have bitcoins, acquired through some of the more anonymous methods mentioned later in this article, or by using a bank transfer or other payment method at Bitcoin Exchange, MtGox, or another such service.
This exact scenario has played out recently, leading to some drama (search the forum.) In the second scenario, you bear the risk that your dollars will be worth fewer bitcoins by the time they reach Bitcoin 4 Cash.
in an ideal world, you’d be able to anonymously mail an envelope of cash to a trusted, reputable bitcoin exchanger and instruct him where to send your bitcoins.
Bitcoin 4 Cash does in and out exchanges, meaning they buy bitcoins (in exchange for pre-loaded virtual credit cards, pretty cool) and sell bitcoins for cash.
For the average user, the problem is moving fiat currency into bitcoin using an unidentifiable method of payment, thereby breaking the link between you and whatever it is you’re using your bitcoins for.
Silkroad, only accessible via the TOR network, using Bitcoin as its currency, has created a near bullet proof service for buying and selling illegal drugs.
That is, if you leave a trail of breadcrumbs to your account. A tweet from Asher Wolf led me into a Reddit discussion  which revolved around a person who said their bitcoin wallet, which is held with free service Coinbase, had been phished after someone connected his transactions to his real name.
Have you bought drugs on The Silk Road with bitcoin, or made other illicit transactions on the dark web using the crypto-currency? Have you simply been trying to buy upvotes on a Reddit link? It turns out that the untraceable, unregulated digital currency might not be as anonymous as many have celebrated thus far.
Of course, if you're worried about giving up some link between your drug habits and your bitcoin address, it's worth pointing out that thought leaders in the bitcoin movement warned us early on that using bitcoin for massive purchases isn't the smartest idea, even if the chain is anonymous.
The Coinbase CEO, who uses the Reddit handle bdarmstrong, responded to the thread, stating (emphasis mine), "Your information is not going to be shown on one of these pages unless you created a "buy now"/donate button or checkout page and posted a public link to it somewhere.
The Tor network makes it very difficult to track down IP addresses, and domain registration is now available via Bitcoin, so I never needed to provide any personal information when setting up this blog.
For example, to develop this blog locally, I must add some firewall rules to allow local connections on port 4000, download a different browser (Midori), and then tell it to skip using a proxy server.
You might even be able to find a match with the other content that I posted online under my real identity.
4) From the escrow address, you might be able to find the localbitcoins accounts, and then you can read the messages that we exchanged about meeting up.
When I need to go somewhere and want to be able to update this blog, I’ll back it up to the hidden volume, and then securely erase the USB disk, so I can take it with me without fear.
So unless I do some nonsense like log in to StackOverflow using my real Google account and use the “untraceableblog” username, I believe it will be almost impossible to track me.
6) You’d finally need access to the security company that has security camera footage archives, get a clear picture of my face, and somehow run a facial recognition scan to find my identity.
See, I bought these Bitcoins using an anonymous account on (created using Tor).
So if someone forces me to enter my password to unlock my computer, and finds that in their opinion, I have a volume of TrueCrypt, then there is no way of knowing if I entered the real or fake password.
The idea is that you can have a fake password that unlocks the encrypted fake folder, and a real password that unlocks the real encrypted folder, and there is absolutely no way to know which one you unlocked.
The encrypted partition holds a Bitcoin wallet, blog source code and Keepass database.
Find the Bitcoin address which sent the coins to BitPay, trace the transactions back until you find a localbitcoins escrow address.
Someone may be able to generate trusted SSL certificates for any domain, demand that ISPs route all traffic through them, or control a huge amount of Tor nodes and perform traffic analysis attacks.
What makes Bitcoin so appealing to its advocates, is that unlike other online methods of payment, such as credit cards or Paypal, transactions made using the currency are virtually untraceable, almost like a digital version of cash.
As well as appealing to criminals, the anonymity Bitcoin offers is becoming increasingly attractive to ordinary people who object to the vast amount of personal information that is routinely collected by online retailers for marketing purposes.
Created in 2009 by an anonymous Japanese computer science student using the pseudonym Satoshi Nakamoto, Bitcoin was initially adopted by hackers as a means of bartering services.
An odd alliance of libertarians, geeks, businesspeople and drug kingpins hail Bitcoin as the future of the internet – global, private and immune from national economic crises and the whims of reckless bankers.
The list of legitimate businesses that accept Bitcoin is growing all the time, from legal services to landscape gardening, video game retailers to makers of alpaca socks.
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Monero – Bitcoin Replacement.
Cody Wilson, the man behind the world’s first lethal 3D-printed gun, and Amir Taaki, a Bitcoin entrepreneur, are the two crytpo-anarchists leading the effort to build software that hopes to make Bitcoin transactions nearly impossible to track.
The software, called Dark Wallet, matches different, unrelated transactions to scramble the transaction record at the center of Bitcoin, known at the blockchain.
Anyone who imagines that Bitcoin is somehow a refuge from government surveillance has to get a chill reading that in a space of about five and a half months there were “146,946 unique buyer accounts and 3,877 unique seller accounts.” Identify some of those seller accounts and guess what — you’re well on your way to identifying the buyer accounts.
When Forbes asked researcher Sarah Meiklejohn whether the Silk Road transactions could be tracked, she was not only able to link the Forbes account to the Silk Road marketplace, but also to create a list of every transaction Forbes made.
Some excellent work from Forbes, detailed in “How We Got Busted Buying Drugs on Silk Road’s Black Market,” gives you a pretty good idea of where this leads.
But I do think it’s a good idea to get familiar with the system and perhaps buy just a small amount for the experience or to support the growth of the Bitcoin eco-system.
Update 2: For latest Bitcoin news read Bitcoin Owl, my latest project.
In short it’s digital money that solves many of the problems our current currencies suffer from and introduces many other uncertainties we never had to deal with before.
But essentially the price doesn’t really matter for the Bitcoin project.
I predicted that bitcoin’s price will stabilize at around $10, yet it now trades at $600.
I don’t recommend putting large sums of money into it as the bubble will inevitably burst in a matter of weeks but nobody knows when exactly.
Right now a transaction that redeems 1 bitcoin doesn't look suspicious, but in the near future bitcoin price will go up and the average amount of spent bitcoins in each transaction will most likely go down, making Zerocoin Spent transaction look suspicious.
Once a Mint transaction has been accepted by the Bitcoin peers, the same user can later redeem her zerocoin back into bitcoins.
She simply embeds a (preferably new) destination Bitcoin address into a ‘Zerocoin Spend’ transaction, then sends it into the network.
This means anyone who sees your Spend transaction will be convinced that you really did previously Mint a zerocoin, and that it contained the serial number you just revealed.
To ‘Mint’ the new coin you post it to the network along with a standard Bitcoin transaction containing enough (normal) bitcoins to ‘pay for’ it.
** Note that for those who ‘know’ their Bitcoin, you can think of the Zerocoin as a piece of extra data that gets added to a Bitcoin transaction.
To redeem your zerocoin, you first create a new transaction that contains the coin’s serial number (remember that you kept it secret after you made the coin).
The 40kB seems to constitute the zero-knowledge proof, which says "I'm not telling you how I know this but I know that one of the minted zerocoins has serial number C and here's how you can check that." It must be published in the first place in order for the transaction to be verified.
The key idea in Zerocoin is that each coin commits to (read: encrypts) a random serial number. These coins are easy to create — all you need to do is pick the serial number and run a fast commitment algorithm to wrap this up in a coin.
But even this isn’t a dealbreaker: it should be possible to start Zerocoin off using some training wheels — using a trusted central party to assist with the process, until enough Bitcoin clients trust it and are willing to support it natively.
This is because the block chain contains a record of every single Bitcoin transaction that’s ever been conducted.
If the transaction checks out, the Bitcoin peers will treat it just like a normal Bitcoin transfer — meaning that she’ll receive the full bitcoin value of the coin (minus transaction fees) at the destination address.
Before I get to Zerocoin I need to give the world’s shortest explanation of how Bitcoin works.
They’re issued in a fixed denomination (for example, 1 BTC), and any user can purchase a zerocoin in exchange for the correct quantity of bitcoin.
Zerocoin uses a combination of digital commitments, one-way accumulators and zero-knowledge proofs, and some extensions to the existing Bitcoin protocol.
When you spend a zerocoin, we only know that such a zerocoin existed, and that it hasn't been spent before, and so we don't know which zerocoin was just spent, even if there is a trace of the btc that come out of the spending transaction.
Adrian Chen of Gawker writes here about a website called Silk Road that "makes buying and selling illegal drugs as easy as buying used electronics — and seemingly as safe.
found a seller with lots of good feedback … added the acid to his digital shopping cart and hit "check out." He entered his address and paid the seller 50 Bitcoins — untraceable digital currency — worth around $150.
Chen notes that Bitcoins are a form of peer-to-peer currency that are "the online equivalent of a brown paper bag of cash." Bitcoins are said to be untraceable, and can only be obtained from services like Mt.
Silk Road users who may have gotten comfortable ordering their "sour 13" weed online do not seem happy about the Gawker article.
One commenter seemed to speak for many when he asked, "did you HAVE to write this article? I know it's not all that secret that you can buy illicit drugs through TOR but the longer it flies under the radar the less groups like the DEA care about it.
On top of protections for senders, Dark Wallet adds another one for receivers that it calls “stealth addresses.” When a user publishes a stealth address instead of a normal bitcoin address as his or her public P.O. box for receiving funds, any money sent by another Dark Wallet user to that address goes through an extra obfuscating process.
While Hearn says that adding Tor to bitcoinj will represent a significant upgrade to bitcoin’s privacy, he admit it’s not clear whether Tor or any other known protective measure can foil the sophisticated traffic analysis tools of agencies like the NSA, were they to turn their powerful surveillance mechanisms toward tracing bitcoin transactions.

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