Biden administration unveils new crypto tax reporting rules

semperfrosty · Sep 5, 2023

Cryptjitsu said:
Stop lying to yourself. You're shilling the most transparent & trackable blockchain to everyone as some privacy & freedom tool, in spite of actual evidence. You're just selling a BS narrative.
You would not change a thing about your investment approach,because it really does not matter. It's just number go up.

It's comical to see you preach operating in crypto to me.
I use primarily decentralized on/off ramps, and have for a little while now. And I am in the US.
But WTF would I know?
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TBF John did say that you were welcome to submit some evidence to back your claims.

The Chosen People have always been welcoming of input and opinions.Its not a closed community.

johnarb · Sep 5, 2023

Cryptjitsu said:
This IP leak issue is a known thing with BTC
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Known issue but not a shred of info on where or how to find it?

johnarb · Sep 5, 2023

Cryptjitsu said:
It's comical to see you preach operating in crypto to me.
I use primarily decentralized on/off ramps, and have for a little while now. And I am in the US.
But WTF would I know?
More...

Cool... Glad to hear that

2013-2014 were very good years for LocalBitcoins... I even did side hustles, easy arb 10-15% spread on the buy-sell, was hitting different MoneyGram pickup locations

Until I saw on the news some arrests, something something lack of MSB license

I have no advise for you, but I also do not wish bad things for you

Understand the law of the land...

johnarb · Sep 5, 2023

semperfrosty said:
TBF John did say that you were welcome to submit some evidence to back your claims.

The Chosen People have always been welcoming of input and opinions.Its not a closed community.
More...

I've given up on ever seeing it

To be honest, I was excited to see it, as it would have enhanced my knowledge of the Bitcoin network operations

..would not have affected me since I run a proxy (anon vps) on my Bitcoin core wallet

https://bitlaunch.io/

ph1l · Sep 5, 2023

Cryptjitsu said:
This IP leak issue is a known thing with BTC
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johnarb said:
Known issue but not a shred of info on where or how to find it?
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I don't know if this is exactly the same issue, but ...
https://ebrary.net/88229/business_finance/privacy_leakage_bitcoin_network

Privacy Leakage over the Bitcoin Network
In the following, we present a method to deanonymize Bitcoin users by linking their pseudonyms (addresses) to the IP addresses of the underlying clients. This attack was first introduced in [6] and later expanded in [7].

Note that this attack allows to deanonymize users even when they operate behind network address translators (NATs) or firewalls. More specifically, this technique allows an adversary to distinguish connections and transactions pertaining to different users that are located behind the same NAT.

The main intuition behind this attack is that since entry nodes of any given client are not renewed by default (until the client restarts), each client can be safely and uniquely identified by the set of nodes that he or she connects to.

In terms of required resources, the attach only requires few running instances of the Bitcoin clients (each residing on a different IP) to establish a certain number of connections (following the Bitcoin protocol) and log the incoming transactions [6].

In a specific example offered in [6], an adversary equipped with no more than 50 connections to each Bitcoin server can disclose the sender’s IP address for around 11% of all transactions generated in the Bitcoin network. Experimental results have shown that deanonymization rates of up to 60% can also be reached, if the adversary were to mount a small DoS on the network (see [6] for more details). The overall cost of mounting such an attack on the full Bitcoin network is estimated to be around 1,500 EUR per month [6].

The attack evolves in three steps. First, the attacker attempts to disconnect users from Tor or other anonymizing networks that these clients may be leveraging for connecting to Bitcoin peers. This allows the adversary to use directly the information received by the network (e.g., to figure out the network’s topology). Finally, the adversary can use the acquired network knowledge in combination with the mechanism that Bitcoin uses to forward transactions in the network, to deanonymize transactions. In what follows, we detail these steps.

Phase 1: Disconnecting Clients from Tor: The Tor network [17] comprises a set of relays that are publicly available online, and which can be used by any party to send a message while avoiding traffic analysis attacks. To establish a connection to a service or a node through Tor, a user chooses a chain of three Tor relays, through which the messages to the target service or node will be routed. The final node in the chain, also known as Tor Exit node, appears to the service as the originator of this connection.

To prevent Bitcoin users from making use of Tor when transacting with Bit- coin, the adversary could exploit the Bitcoin built-in DoS protection. Recall that in Bitcoin, whenever a peer receives a malformed message, it increases the penalty score of the IP address from which the message came and bans that IP for 24 hours when that score reaches 100. To exploit this, the adversary can simply try to connect to various Bitcoin nodes, using Tor, and send malformed messages, such that all Tor exit nodes are banned from the majority of the Bitcoin nodes. Alternatively, the adversary could simply spoof the IP of the exit node and issue malformed messages from that IP that would result in a 24-hour ban of the exit node.

Phase 2: Inferring Network Topology: This phase assumes that the use of Tor has been temporarily deactivated using the strategy described in the previous paragraphs.

In this phase, the adversary targets Bitcoin clients that do not accept incoming connections and only exhibit the minimum (i.e., eight) outgoing connections to the rest of the network. The goal of the adversary is to learn the eight entry nodes of each targeted Bitcoin client.

The attack unfolds as follows. Whenever a client C establishes a connection to one of its entry nodes, it engages in the address discovery protocol described in Chapter 3 and advertises its external addresses that have the highest local scores IPC. If the adversary is already connected to one of those entry nodes, the address

IPc will be forwarded to them with some probability (which depends on the number of the attacker’s connections).

This suggests that the attacker can shortlist the entry nodes of the target address IPc as follows:

• The attacker connects to a large number of Bitcoin server nodes, say which is assumed to be close to the set of all Bitcoin server nodes NS.

• The attacker logs the messages received from all connected servers, and for each advertised address, say IPc, the attacker logs the set of servers Nip that forwarded it to the attacker’s machines.

• The attacker designate NipC as the entry node subset associated to address IPc .

Note that address NipC which is announced to the adversary by a node does not have to necessarily correspond to NipC’s entry node. At the same time, as the client does not simultaneously connect to all of its entry nodes, time intervals among the announcement of the same address by its entry nodes may mislead the attacker to a misconception of the network topology.

Assuming that the adversary knows the target address IPc before this address reconnects to the network,[1] one can leverage the antiflooding mechanism that Bitcoin has set in place in order to avoid advertising the same address multiple times [6].

Namely, the proposal in [6] ensures that the adversary advertises IPc enough before the IPc reconnects such that when IPc reconnects, the probability that its advertizement is sent to the adversary’s machines via a non-entry node is small.

Phase 3: Deanonymizing Bitcoin Transactions: After preventing nodes from using Tor, and after short-listing certain servers as entry nodes for each victim address, deanonymization evolves as follows:

1. The attacker obtains the list NS of Bitcoin servers assuming that it is regularly refreshed. Here, the adversary first collects the entire list of peers by querying all his neighbors/known peers with a getaddr message. Given this, the attacker collects the list of advertised addresses and adds to the list of Bitcoin servers NS every listed address that is online and publicly reachable. This can be easily ascertained by the adversary by trying to establish a TCP connection and exchange version messages.

2. The attacker composes the list C of Bitcoin clients to be deanonymized. Here, the attacker selects a set IPC of nodes that he or she wants to consider in the deanonymization attack. At this point, the attack is agnostic to how the attacker constructs C. For example, the attacker might randomly select IPs advertised throughout the network or obtain C as a set of the IPs used by a user retrieved by an out-of-band channel.

3. The attacker retrieves the entry nodes NipC of each client IPC € C when IPC connects to the network, as described above.

4. The attacker keeps monitoring the traffic from servers in Nip and, by mapping transactions to entry nodes, the attacker can ultimately map transactions to clients. More specifically, the attacker monitors inv messages with transaction hashes received over all the established connections, and for each received transaction, it collects the addresses of Bitcoin servers that forwarded the associated inv message at each round of transaction advertisements. The attacker finally correlates the sets of servers that advertised each transaction at each round and extracts pairs (entry — node; transaction) from the matching pairs.

Eventually, the adversary creates a list List = (IPC, IdC, PKC), where IPC is the IP address of a peer or its ISP, IdC distinguishes clients sharing the same IP, and PKC is the address/pseudonym used in a transaction (hash of a public key).
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Cryptjitsu · Sep 5, 2023

johnarb said:
Known issue but not a shred of info on where or how to find it?
More...

You can't be serious.
It's actually a common Google search with multiple articles, reddit threads and even instructionals on how to mitigate it. It's literally one of the key motivations to run your own BTC node.
Doesn't matter, think whatever you want to fit your BTC Maxi belief. I just find it very disingenuous to preach BTC as some kind of freedom/privacy tool when it is literally the worst blockchain to use for that. An unnecessary narrative to onboard new investors to pump the price.

johnarb · Sep 5, 2023

ph1l said:
I don't know if this is exactly the same issue, but ...
https://ebrary.net/88229/business_finance/privacy_leakage_bitcoin_network
More...

This is deanonymizing tor, good stuff, but we're actually discussing the simpler clearnet IP's

TOR is a honeypot for the 3-letter agencies and their partner nations due to their control of the exit nodes, they collect passwords and other stuff unrelated to Bitcoin

But tor is useful for Bitcoin as a way to hide your Bitcoin node from the firewall logs of your local ISP

Umbrel bitcoin core and LND node uses tor

---------

In very simple terms, a given transaction, bitcoin source address, amount of btc, and bitcoin destination address and the IP address

On clearnet, NoahA and I already discussed malicious (gov) nodes that can listen in on peers, to try to determine the source node that first broadcasted a given Bitcoin tx

Unless all 8 peers connected are all malicious at the time of transaction, the info is not definitive

The document is very old which as I have said on previous posts the frequency of peer nodes refresh on my Bitcoin core is not something I've seen in the past and is to address malicious listener nodes

Anyone can run a Bitcoin core software with $20 worth of btc and make some test transactions to study all of the things I said. I do not have a monopoly on the truth, nor should anyone

semperfrosty · Sep 6, 2023

johnarb said:
Haha, for shorting with a stop, I think a CEX would be the easiest way to do it

There's a less risky way to short if it's listed at a borrow-lend platform but the stop would be manual (mental)

And it's all through the crypto wallet interaction

here are the steps and let me know if you have any questions

1. Provide collateral
2. Borrow the crypto asset you want to "short"
3. Sell the crypto asset for USDT or if you want trade it for Btc or Eth
4. When you want to cover, just purchase the crypto asset and pay back the loan, withdraw your collateral

For example, I borrowed 13K cake when it was above $2.6/cake and sold for USDT and got over 35k USDT. The loan is worth less than 17k usdt at today's cake price so I can theoretically cover and book the profits...

except it was not the purpose of the short to bet against cake going down, it was to hedge the cake holdings staked for 1 year so I'm bullish on cake, except perhaps now that I see where the price is, my bullishness on cake has disappeared, lol

Maybe next year in the next bull market I will be bullish again on Cake...

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Cyop up a lazy 92 billion percent for the week!! hahaha

johnarb · Sep 6, 2023

semperfrosty said:
Cyop up a lazy 92 billion percent for the week!! hahaha
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iBe careful, mate, always look at the volume. CMC shows $71 in the past 24 hour volume

My threshold volume is $2M in the last 24 hours for a good crypto pump, unless it's one of the newly issued coins,

Also, 1D and 7D are good indicators if the up move came in the last 24 hours and could dump, or if's up more on the 7D vs 1D

Good luck!

semperfrosty · Sep 6, 2023

johnarb said:
iBe careful, mate, always look at the volume. CMC shows $71 in the past 24 hour volume

My threshold volume is $2M in the last 24 hours for a good crypto pump, unless it's one of the newly issued coins,

Also, 1D and 7D are good indicators if the up move came in the last 24 hours and could dump, or if's up more on the 7D vs 1D

Good luck!
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Good tips.Thanks.