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53 sats \ 11 replies \ @ek 17 Dec 2024 \ parent \ on: Is ecash private enough for dark markets? privacy
Mhh ok, I guess you can avoid that by running your node only on Tor.
But still: All arguments about receiver privacy on lightning seem to ignore that it's still much easier to achieve privacy on monero since it is private by default. For example, with monero, you don't need to run a Lightning node to receive payments.
it's still much easier to achieve privacy on monero since it is private by default
I think this leads people to get arrested. The monero users who got arrested in October (link) probably assumed that by merely using monero, they couldn't be tracked. But if you aren't careful in many other respects, you can be.
- You have to be careful to use tor to communicate with your peers
- You have to be careful who you peer with
- You have to be careful to remix your old utxos frequently so they don't stick out
- You have to be careful not to create a transaction that spends utxos that you received "close together"
Similar considerations apply to lightning. Neither network protects you if you are careless in these other regards. Comments like "monero is untraceable by default" or "if you want privacy, just use monero and you're done" might very easily get people arrested if they believe them and then don't take care of their privacy in other respects.
It's similar with lightning; you can't "just use lightning" if you want decent privacy. But it offers better tools than what you get on monero.
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tell that to these guys: https://cointelegraph.com/news/monero-transactions-japanese-authorities-arrest-18-scammers
there is free and open source software for tracing monero transactions: https://github.com/supertestnet/examiner/
as well as paid commercial software: https://news.bitcoin.com/ciphertrace-enhanced-monero-tracing-capabilities-governments/
care to show me some tools for tracing lightning payments? it's much harder to do, since there's no blockchain to analyze where everyone publishes their transactions
to trace lightning you'd have to subpoena records from routing nodes with the following hurdles:
(1) you don't know which ones to subpoena, so you'd probably have to subpoena all of them
(2) most of them run on tor, meaning you don't know where to send the subpoena
(3) even if you get the subpoena to them, they might be in a jurisdiction where your subpoena has no authority -- so good luck getting a reply
it's pretty simple, really: with monero, you've got lots of data to analyze to find the sender; with lightning, you don't
here's a podcast where I go into more details about this: https://x.com/saucy_xmr/status/1842664585377010175
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Those criminals were caught in your first link because of the fiat on/off ramps they were using and feds in their groupchat. Nothing to do with Monero.
Your tool doesn't deterministically "trace" anything. All it does is let's you see the Monero blockchain which you can already do with any Monero block explorer:
https://www.p2pool.io/explorer/
A chain analysis company is claiming to "trace" Monero without evidence and that doesn't give you pause or see a conflict of interest in that? Or maybe a generous way of using the word "trace"?
From your own article:
“It is extremely unlikely that Ciphertrace can trace Monero to the remote extent that they can trace any other coin"
I do think Lightning privacy is better than on-chain Bitcoin and can be used with strong privacy, but that bar is obviously higher than using Monero at the moment as vast majority are using custodians and LSPs which both diminish Lightnings privacy guarantees.
Using a remote node on Monero, behind Tor/VPN, is much more accessible. You don't have to give up custody like LN custodians, or the same degree of privacy as LSPs. And malicious remote nodes can't see amounts, addresses, balances, etc:
https://localmonero.co/knowledge/remote-nodes-privacy
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Those criminals were caught in your first link because of the fiat on/off ramps they were using
Link?
and feds in their groupchat
Source?
All it does is let's you see the Monero blockchain which you can already do with any Monero block explorer
It also does this: for about one in five transactions, it automatically eliminates every decoy spender and heuristically identifies the real spender. It does this by exploiting weaknesses in monero's decoy selection algorithm that are widely known in the monero ecosystem and actively being fixed, e.g. through FCMPs. I've never seen a monero block explorer do that.
vast majority are using custodians and LSPs
Do you have evidence of this?
which both diminish Lightnings privacy guarantees
They have tradeoffs. The custodian or LSP knows additional data about your transaction; everyone else knows less data. Some LN custodians and LSPs have really good privacy policies (e.g. most ecash mints) and that is possibly why some LN users prefer to use them rather than do all the work themselves.
Using a remote node on Monero, behind Tor/VPN, is much more accessible
And much less private. P2P traffic is not encrypted on monero so in addition to seeing all your transactions (which, in monero, expose a lot of your data), your peers also get extra data about where a transaction originated. Dandelion helps with this, but it's not foolproof. P2P traffic ought to be encrypted imo like it is on lightning, so that your peers cannot see whether the message you are sending is a transaction or a probe or something else. (You know, like we do in lightning.)
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The onus should be on the original people claiming that Monero was traced, but ok I'll play the game.
All articles about the arrests mention credit card fraud and the Mercari e-commerce platform in connection to how they were caught (or give no details at all on how they "traced" Monero):
https://u.today/100-million-yen-crypto-scam-exposed-via-monero-xmr-data-in-japan-organizer-arrested
https://regtechtimes.com/18-caught-in-monero-money-laundering-scheme-in/
https://www.perigon.io/news/finance/2024/10/21/japan-arrests-18-monero-fraud-case
https://cryptoslate.com/japanese-authorities-dismantle-monero-linked-scam-in-landmark-investigation/
Your tool doesn't "automatically eliminates every decoy spender and heuristically identifies the real spender". It's all manual guessing. It's a glorified Monero block explorer that you added buttons onto.
Some LN custodians and LSPs have really good privacy policies
You must be kidding. Privacy policies? Lol
You talk about encryption on P2P Lightning traffic as if it applies to the vast majority of Lightning users on custodians and LSPs. Using a remote Monero node reveals far less data to 3rd parties than custodial LN or LSPs, enforced by encryption (not privacy policies), and all without giving up custody to ecash mints.
Like I said the remote node can't see amounts, addresses, balances, true spend, etc:
https://localmonero.co/knowledge/remote-nodes-privacy
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Your tool doesn't "automatically eliminates every decoy spender and heuristically identifies the real spender". It's all manual guessing.
It's not all manual guessing, it automatically applies heuristics when possible. You can see an example in this video:
Note that I don't manually guess anything. I simply pick a transaction from a recent block and it automatically identifies the decoys: namely, every Possible Spender except #1 is (according to the automatically-applied heuristics) a decoy. #1 is the "real" spender.
The heuristic applied in that case is called Recency Bias and is discussed as a standard characteristic of monero's decoy selection algorithm in the excellent Breaking Monero series (see Episode 5).
The recency bias heuristic takes advantage of the fact that the decoy selection algorithm used in the most popular monero wallets is biased toward selecting keys from recently created txos (on the principle that actively circulating coins are more likely to be spent than old ones). When you have a group of "new coin" decoys, coins that are significantly older stick out like a sore thumb, and you can plausibly identify them as the real spender's coins.
Consequently, I didn't need to manually eliminate the decoys; my software simply noticed that every decoy in the example transaction was a recently-created txo, but there was one txo that was much older. That one stuck out and, per this heuristic, was the real spender, because it is very unlikely that the decoy selection algorithm would choose that txo.
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Is Liquid more or less private than Lightning?
I realize this is a dumb question
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Liquid is less private than lightning
- every liquid transaction exposes the sender's address to everyone who cares to look
- every liquid transaction exposes the recipient's address to everyone who cares to look
- every liquid transaction exposes partial info about the amount sent (namely, the fee paid) to everyone who cares to look
Lightning is more private by default, but not completely untraceable unless you take extra precautions, and maybe not even then. What makes lightning better "by default" is that you don't expose information about the sender/recipient/amount to everyone; you sometimes expose some of it to routing nodes along your path, but not to everyone who cares to look, and lightning also provides tools (like blinded paths and multipath payments) for obscuring that info from routing nodes too.
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Mhhh, ok, fair points. 👀
I think I don’t know enough about monero and lightning to have a well-educated opinion on this like you seem to have.
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