Quote from: libcoin on March 15, 2015, 07:37:36 PM

1. Me explaining to coindesk/insidesbitcoins what Chainalysis do in general (Compliance, Investigations etc) has nothing to do with the nodes - we are not using transaction to IP mapping for anything but statistical research - aka the blog post already mentioned. This fact is, as I see it, highly relevant if we start to discuss any possible legal issues.

From your website:

Quote

Chainalysis offers a service that provides financial institutions with the means to obtain regulatory compliance through real-time analysis of the blockchain. Chainalysis customers get access to an API that allows them to determine which entity a transaction originates from, and whether the flow of funds originate from someone they would want to do business with. In other words, it automates the travel rule.

How do you determine which entity a transaction orginates from in the bitcoin network and relay that information to someone without given that somebody the IP associated with said tx?

Would it perhaps be possible for a financial company, ie. an exchange, to subscribe to your services, and then just get automated recommendations based on tx'id. So that exchange could then plug into your service, and if a customer sent funds to the exchange, and you service returns a "no good" to the exchange, the customer is denied service at the exchange? That would basically put you in the same category as a rating bureau, giving you voting power over which customers should be given service at an exchange or similar. But there could be many false-positives, and the data might not be accurate for its purposes. And if enough institutions use you service, then govt. entities could force you into blacklisting certain entities, just like the USG did with Mastercard and VISA when they put a wrench in the funding for Wikileaks, or how they pressurized VISA and Paypal to stop processing payments for Mega. In essence you could contribute to breaking bitcoin fungibilty. Worse, customers that are rejected at a service based on data from your analysis service might not even get to know why they're rejected by their service provider.

We have innocent customers today having their traditional fiat transfers being interrupted, sometimes only because there's a false-positive match on a "list" that banks keep to attempt to prevent funding to terrorist groups etc. Do we really want the same for bitcoin? I'm of course not advocating that terrorist groups should be funded with USD, EUR, BTC or anything else, but on that note, perhaps stopping the "bugsplatter" in remote countries by remote controlled drones would be an idea.. I don'ẗ know what creates more terrorists, having innocent families killed (read: Drones and the rise of the high-tech assassins) in Afghanistan, or allowing people to freely use bitcoins..

The core problem is that of control. It's not about preventing crime or stopping the terrorists, it's about mass surveillance and controlling the population, terror and similar terms is only a label that is convenient to use for governments to increase the control further. After the attack in France recently, both Merkel, Obama and Cameron called for more surveilance, strange as with the current amount of surveilance there's not even enough resources to keep in check "targets of interest". How can more surveillance possibly help, except for eroding the privacy of world citizens further?

Bitcoin is meant to be a alternative to the status quo. In that regard, you're not contributing, despite your excuses.

You have stated that the nodes of yours were running to collect, analyze and prepare data for a blog post. That might be so, but as you also have a public website, see the quote above were your intentions are quite different.

You're also trying to play down what you're doing by pointing to what google does, that somebody would do it anyway, what blockchain.info does etc, still you did shut down the nodes in question when attention was brought to this issue.

On a technical level, what you're doing will probably be done by somebody else, if not done by Chainalysis, however by actually running such a service, you won't score goodwill-points with the community, something you at this point obviously have realized (hence shutting down the nodes).

I'm sure however on a financial level that providing such a "regulatory compliance"-service is not a bad idea, but for many involved in bitcoin, money is not their primary motivator. If you believe in bitcoin, and want to help the community, perhaps now would be a good time to shut down the Chainalysis-enterprise, and work with the core devs to prevent others from doing the same as you've been doing lately, perhaps even by showing some of them your code and tools to help speed up development for protecting the fungibility of bitcoins.

On a non-similar note, but to demonstrate an ethical point. A clever programmer could work on software used in a millitary weapons system, a system that was largely sold to third-world countries, and left lots of deaths in its trail. The programmer could shrug his shoulders and say: "I'm putting food on the table of my family, the fact that 100 families dies in Africa because of my code, is frankly none of my business, if I did not write it, somebody else would". Perhaps somebody else would do it, that does not mean that this particular programmer had to do it.

Of course there's no direct similarity to block chain analysis and millitary weapons systems, but the ethical points are the same. Every person matters, and the action of every single person combined becomes the actions of the whole population.

Of course it's possible to separate yourself from the collective whole, like many do, and only think about their own financial gains. In the end, I'm not sure if that's what brings the greatest satisfaction.

In summary, I'm not intending to bring on hate, just to convey my view on the matters. Solution to this issue must be built on a technical level, not on a human level.