Bitcoin Not the Culprit for Russian Hacking Indictments • Bitcoin News • Live Bitcoin News

The ongoing narrative by the ABB (Anti-Bitcoin Brigade) is that Bitcoin – and most cryptocurrencies in general – are anonymous ways in which criminals can conduct their nefarious transactions online. The reality, however, is that the identity of transacting parties can be traced if investigators know what they’re looking for. 


Russians Influencing US Elections

The US Department of Justice (DOJ) recently indicted twelve Russian intelligence agents, accusing them of hacking the online accounts of various US political officials. DOJ documents go into detail about how the Russians used Bitcoin to pay for various domain registrations and services such as Virtual Private Network connections.

Cryptocurrency mining

An email found by investigators could’ve been one of the essential pieces of evidence for identifying the hackers. The email requested a specific number of bitcoins to be sent to a certain address. Investigators analyzed the blockchain, looking for payments made to the suspected address around the same time the email was sent. They found only a single transaction that matched the amount and the address and began looking deeper.

Bitcoin

From that single address, they were able to look at that entire transaction history of the address and trace the coins back to their origins. However, using Bitcoin wasn’t necessarily the nail in the coffin for the Russians. The court documents show that regular fiat currencies were also used to purchase things to further hacking efforts.

Pseudonymous Currencies

Fungibility is a property of currency that every unit is exactly like every other unit. Gold can be melted down and reformed, dollar bills (ignoring the serial number) are identical. Bitcoin, on the other hand, can be “tainted.” If authorities arrest someone for selling drugs online, those Bitcoins that were transacted via his address could, in theory, be blacklisted across the network.

Bitcoin mixers provide a solution to this problem, but they’re mostly used by people who already have tainted Bitcoins. Maybe you trade in your drug-tainted coins in and receive some guy’s hitman coins. That’d be terrible. All the transactions are still stored on-chain and these services can still leave clues for investigators to find.

Monero

Some so-called privacy coins are focusing on creating fungible currencies. Monero uses RingCT and Stealth Addresses to obscure user information and add fungibility to the chain. Zcash has implemented a technology called zero-knowledge SNARKS for transactions that hide the sender, amount, and recipient while still storing the transaction on the blockchain. However, privacy is optional on Zcash, and many users opt for public transactions as private ones require a lot of computer resources.

While the mainstream media is focusing on the fact that the Russians supposedly using bitcoins to help fund their alleged interference, it should be noted that they also used cash and pre-paid cards. They continue to perpetuate the myth that Bitcoin is completely anonymous when it clearly is not and its use can be traced relatively easily.

Are the media and the Department of Justice reading too much into Bitcoin’s use by the Russians? Let us know what you think in the comments below.


Images courtesy of Shutterstock, Monero

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