All bitcoin and most other cyrptos are trackable, In fact, every bictoin ever mined can be traced threw all wallets it's passed through since the day it was mined, and that going back to 2009. That's not a surprise and has always been known by anyone and everyone with even a basic understanding of how it works.
But it is anonymous, at least unless & until it passes through a wallet with an identifiable owner, such as a a crypto exchange. At that point, the exchange could be contacted and an account owner could be identified via the KYC thing they all do. This is why hacked/stolen crypto is such a problem for hackers to liquidate, and some hacked BTC has sat untouched for years after it's theft because it's digitally tainted.
But for those that want privacy, some cryptos such as ZCash and Monero address this by obfuscating transactions so they cannot be seen or tracked. This level of privacy is both a feature and a liability when it comes to hacking.
I hope you didn't take my teasing you too seriously.
I am not up to speed on cryptocurrency, I don't understand where the initial lump sum came from to start up. It seems like a really elaborate Ponzi scheme to me.
I hope you didn't take my teasing you too seriously.
Of course not! Usually I catch those things though.
There was no initial sum of BTC. All BTC in existence is the result of mining. The first mining done took about 10 minutes on an 15 year old computer and yielded the first 50 bitcoin. Every 10 mins after that, 10 more bitcoin.
Imagine your computer making $5 million dollars every 10 minutes while you are eating lunch.
But the current value is the open market value. A ponzi scheme has funds tied up inside of a shady business that only gives you promises and, if your are lucky enough to be early, pays you. Bitcoin is not that at all.
What is being "mined" is more bitcoin. The way mining works: Think of it as a warehouse full of Rubik's cubes. Computers are put to work solving them in a specific order, so all competing computers are working on the same cube. The first one to solve it wins and gets bitcoin added to it's crypto wallet, then the computers all start working on the next puzzle.
Every 2 weeks the bitcoin software evaluates if the puzzles are too hard or too easy and adjusts the "difficulty factor" of the puzzles so that one should be solved about every 10 minutes on average. If the average is less than that, the puzzles get a little harder, or if it longer than that, they get easier. That way no matter how many computers are competing to solve the puzzles, one will still be solved about every 10 minutes.
In addition to awarding bitcoin to the winner, bitcoin transactions submitted globally get recorded in the new block which is added to a long chain of previously solved cubes (the "chain" of blocks or cubes). Think of the solved Rubik's cube as a new block being added to the blockchain, and inside that cube/block are the latest bitcoin transactions.
That's basically how mining works. Although unlike with Rubik's cubes, there is no method to solve the puzzles. The work for the computers is simply in guessing very big numbers and see if each it guesses is the solution to the puzzle. There is no known method of computing the number. Brute force guessing is the known way to find it.
I'm still pissy about the TooBigToFail balout bologna from 2007
The 2008 financial crisis and the response by congress to bail out the criminally Big Finance institutions that created the crisis was PRECISELY what inspired someone calling himself "Satoshi Nakamoto" to create bitcoin. As a decentralized currency, it would be immune to and centralized entity control. No one person is privileged with bitcoin production or usage in any way.
It's no coincidence that bitcoin was first switched on in 2009, right after the crisis.
All bitcoin and most other cyrptos are trackable, In fact, every bictoin ever mined can be traced threw all wallets it's passed through since the day it was mined, and that going back to 2009
I still think you at least implied that some central or otherwise imposed authority might decide they don't care what your computer says you own.
I still think you at least implied that some central or otherwise imposed authority might decide they don't care what your computer says you own.
Bitcoin is trackable but (apart from obtaining the private keys to wallets) not seizable. Hacked/stolen bitcoin is xferred to the hacker's wallet, and it's plainly visible to the whole world. The victims can log on to the internet and see exactly how much of the stolen bitcoin is in the hackers wallet. But without the private key, it's absolutely untouchable. And unless and until the hacker tips his hand in some way, ownership is completely anonymous.
I still think you at least implied that some central or otherwise imposed authority might decide they don't care what your computer says you own.
It's not what my computer says I own. It's what the entire global network of miners say I own, and what they say is done by an automated vote system. It's very democratic. Majority wins.
You see, the so-called "blockchain" is very redundant. Every miner (node) has a complete record of all bitcoin transactions back to day 1. And any new miners coming on board will obtain a complete copy of the entire blockchain if they want to join in the mining. If any miner should tamper with their copy of the blockchain to insert an illicit transaction, the blockchain will then not match the blockchain held by all other miners, and that miner will be cut out of the network loop.
So in order to seize a wallet's bitcoin, a hacker would need to fake that transaction in a majority of all bitcoin nodes globally at the same time. This is in practice not possible. In theory, such a hack is called a "51% attack" where an illicit operator would obtain control of at least 51% of all mining nodes. Potentially this could happen if that much computing power was added by a single controlling interest to the global mining network, but that's not even close to feasible given the current complaints about how much global power goes to bitcoin mining.
But back to the point: No, no government or bank can't simply decide to seize bitcoin from a particular wallet.
Case in point: Theer is a current case right now where someone accused in a tax case has been ordered by the judge to turn over the private keys of millions of dollars worth of bitcoin. There is no order for fed marshals to seize it because that can't be done. The guy is forced by court order to turn it over and could choose to defy that order if he wants.
Texas Court Orders Bitcoin Investor to Surrender Keys to $124 Million Stash