How Did Dread Pirate Roberts Acquire and Protect His Bitcoin Wealth? [pdf]

https://s3.amazonaws.com/s3.documentcloud.org/documents/839348/silk-road-paper.pdf

by ebabchick • 13 years ago

95 53 13 years ago

s3.amazonaws.com

freakyterrorist• 13 years ago

"Inrtoduction" that's some good proof reading right there...

sillysaurus23• 13 years ago

Direct link to PDF: https://s3.amazonaws.com/s3.documentcloud.org/documents/8393...

I never know whether it's allowed to tell people they're dead...

sillysaurus23• 13 years ago

Ok, the submission link was originally not a direct link to the PDF. A moderator changed the link, so my comment is now useless, and hence should be deleted. But mysteriously I've lost the ability to edit or delete it, even though it was posted just 16 minutes ago. New HN feature? Maybe the edit time is now reduced from 2 hours to 10 minutes? Not sure.

chrismonsanto• 13 years ago

You were downvoted in that period, which might have something to do with it (people are seriously overzealous about that)

Luc3• 13 years ago

On page 12: "For some reason (mistake? a tracking attempt?) the account received a tiny amount of 1 Satoshi [...] almost a year later on July 23-rd 2012. Its owner noticed this non-zero balance one year later, and emptied it once more on August 6-th 2013. On September 11-th 2013 he received another tiny transfer of 0.0000091, and on November 18-th 2013 yet another one of 0.00011. On November 20-th he sends the 0.0000091 but the 0.00011 is still there."

Could these be rewards for transaction confirmations? (Probably not since it's not suggested in the paper, and they're the experts and I'm not).

hrrsn• 13 years ago

He would need to be mining to get those.

ok_craig• 13 years ago

Two really interesting things to me are (1) that it's now possible to have hundreds of millions of dollars worth of assets and not have them seized when arrested; and (2) there's a lot of speculation that bitcoin was created by a government entity and that that's who Satoshi is - what are the implications of that entity funding DPR?

TwoBit3• 13 years ago

Can somebody explain to me how the FBI could seize his bitcoins without knowing his password? My passwords for such things are long, written nowhere, and I enter them on oddball platforms and applications (e.g. not Windows). Is that not enough?

sillysaurus23• 13 years ago

It's suspected that computer forensics managed to recover the private key of an unencrypted wallet from his disk. The sequence of events would be: He previously used an unencrypted wallet. Then he encrypted it and deleted his old wallet.dat. Then he forgot to zero out his "deleted files" area of his filesystem, so the old wallet.dat was recoverable via forensics.

nwh2• 13 years ago

Possible he didn't have have a password on his wallet, just his laptop, which was unlocked when they arrested him.

pudquick• 13 years ago

They probably have his wallet file, but it's encrypted and he hasn't given them the password.

So in theory it's "seized" ... if they can brute force / guess the password.

But in practice, with access to a computer, DPR could probably transfer the contents from the address to a new wallet.

lazyjones• 13 years ago

SCNR: http://xkcd.com/538/

Swizec• 13 years ago

Roberts had grown so rich, he wanted to retire. He took me to his cabin and he told me his secret. 'I am not the Dread Pirate Roberts' he said. 'My name is Ryan; I inherited the ship from the previous Dread Pirate Roberts, just as you will inherit it from me. The man I inherited it from is not the real Dread Pirate Roberts either. His name was Cummerbund. The real Roberts has been retired 15 years and living like a king in Patagonia.'

boldklubben• 13 years ago

Rarely does a comment make one feel euphoria. This, to me, is the heart and soul of our internet.

VMG• 13 years ago

The assumption is that the first blocks were all mined by Satoshi, however Hal Finney was also running the client early on.

Bottom line, it's clear why the Bitcoin creators chose to be anonymous.

downandout• 13 years ago

It stands to reason that Bitcoin's creators would have believed that they needed a killer app as a catalyst to spur acceptance. Silk Road was ideally suited to show off the advantages of Bitcoin over more traditional payment methods. However, Silk Road didn't pop up until nearly two years after Bitcoin was first introduced.

This paper is trying to make a connection between a few transactions sent from a very early Bitcoin address to some Silk Road addresses. It is possible that if this early address belongs to "Satoshi" that he was simply buying from Silk Road. Whatever he was doing, the connection is tenuous at best, which of course is the entire point of Bitcoin. DPR is facing a life sentence, so there is a good chance that if he has partners, the feds (and eventually the rest of the world) will find out about them as part of a plea deal.

josu• 13 years ago

I read the article and I think that they state clearly that the connection between DPR and Satoshi is pure speculation. It is true that they could as well not have mentioned it, but hey, it makes it for a more interesting reading, and as long as the journalists don't get a hold on the paper and print "DPR = Satoshi", no harm done.

It could represent either large scale activity on Silk Road, or some form of investment or partnership, but this is pure speculation.

midmagico3• 13 years ago

It's done up in clean paper form. It's got the name of a major cryptography researcher on it. It has an abstract.

Does this mean I can sit down and write a similar-form paper consisting of wild speculation about Shamir being financially in bed with the Citi Foundation specifically to write hatchet-job pieces linking trivially-discoverably innocent people to black market drug bazaars?

No, of course not. I'm a nobody. But when Shamir does it, dozens of people spread it to thousands of others and now I}ruid is almost certainly wondering whether he's going to get a knock on his door.

How much more of a dick do you have to be before people in general just agree that it was a shitty thing to do with so little evidence?

It's not interesting, it's reputationally dishonest, and damaging.

hristov2• 13 years ago

Through a brutal reign of imaginary murders.

meowface3• 13 years ago

To play devil's advocate, Ulbricht likely felt (perhaps even "knew") that the murders he ordered were successfully carried out. And intent is usually what matters most in American criminal law.

He probably did truly feel like he was an extremely powerful druglord, even if in reality he was a nerd with a laptop.

hristov2• 13 years ago

I completely agree, i do not know why you think this is the devil's advocate position. The murders were imaginary as far as they only existed in his mind. But he probably believed he was really killing people.

This is what makes this whole situation funny in a horrible way.

liamzebedee2• 13 years ago

The important things to note about the relation between DPR and SN:

* There was an account/wallet that was created a week after Bitcoin mining 'commenced' in 2009.

* SN was known to have been active in the early mining. However so was Hal Finney (inventor of RPOW). They refer to it as the founder's wallet, but I think it would be more appropriate to think of it as the wallet of an early miner.

* This early miner's accumulated into it over 77,600 BTCs (mostly from mining operations)

* During June 2011 (4/6/2011 - 28/6/2011) almost all of these bitcoins were moved into a second account

* On the transaction graph, on one path, 45% of these bitcoins are are transferred to another wallet over the course of late 2012 to new year 2013. On the other path, the remaining 55% is sent to another wallet over the course of early 2012 to the same day new year 2013.

* The 45% wallet has a little of its funds sent to the 55% wallet, and then has laid dormant since a month back. In the 45% wallet in March'13, a fifth of the wallet is sent to the 55% wallet. Again, from the 14/9/13 to 23/10/13, another 15% is sent to the 55% wallet.

* However, if we look at the 55% wallet, we can see a clear link to DPR's wallet. In March'13, the 55% wallet sends 6 transfers totalling 2.5% of its balance ($1000) to another wallet, which sends this to DPR's account (as we know from the FBI's discovery of the wallet).

The authors suggest that all of these accounts belonged to the same person, this same early miner they call the founder. This is a possible flaw in their argument, as there were multiple early miners, Hal Finney being one of them.

The transactions that divided this wallet into the 45% and 55% wallets could have also split the ownership.

Lastly, it's very important to understand that while it may not be publicly recorded in the blockchain, these accounts could've changed hands by manually exchanging the private keys, and thus could bring into question the basis of this speculation.

nullc• 13 years ago

I'd make a reasonable bet that those motions were to one of the early exchanges, — based on the timing, maybe Britcoin. I'd consider it doubtful that the later owner of those funds was the same as the earlier one.

I'm not sure why they'd hypothesize that someone who apparently used Bitcoin only some time after it was widely made public, and then used it in a rather poor manner anonymity wise (the aggregation), was the founder— other than to make headlines like this one. :(

In any case, the address in question (https://blockchain.info/address/12higDjoCCNXSA95xZMWUdPvXNmk...) doesn't belong to Satoshi, it belongs to Dustin Trammell: http://bitcoin-otc.com/viewgpg.php?nick=I}ruid ... who was actually my first guess, and could have easily been discovered by anyone with 20 minutes and access to google. :(

I really can't understand why such a respected name is attached to work of such low quality.

jnbiche2• 13 years ago

I agree. When Shamir wrote the first Bitcoin paper over a year ago, we in the Bitcoin community eagerly awaited the paper, looking forward to the revelation of some obscure new security flaw, or other issue.

Imagine our surprise when we realized that not only did the paper not reveal anything new (Satoshi mined many of the early coins -- Eureka!), but that in order to do their analysis, they scraped the entire blockchain explorer web site to access Bitcoin's transaction history, and then commented on how difficult it was to access that history.

So little was their research and understanding of how Bitcoin works, that they misunderstood its most fundamental property: the shared public ledger that sits on the desktop of anyone running the reference Bitcoin client.

Unfortunately, it looks like they're after publicity, and not new knowledge. A big disappointment.

midmagico3• 13 years ago

Professional jealousy of a system which has made its creator effectively a multi-millionaire? Yet another in a long string of hatchet-job troll papers done by pro cryptographers designed to elicit (or vent) an emotional response rather than an academic one?

pera• 13 years ago

(Hal Finney is the creator of RPOW, and Hashcash was a creation of Adam Back)

liamzebedee2• 13 years ago

Thanks, I've edited the comment.

hendzen• 13 years ago

Just to reference some of the interesting bits to actual transactions/addresses:

Satoshi address - https://blockchain.info/address/12higDjoCCNXSA95xZMWUdPvXNmk...

Satoshi -> DPR transfer - https://blockchain.info/tx/cdcaaa0ff1446d41aae5d32c23da1ff33...

midmagico3• 13 years ago

NO, that address is NOT Satoshi:

http://bitcoin-otc.com/viewgpg.php?nick=I}ruid

meowface3• 13 years ago

Interesting that one of the co-authors is the Adi Shamir.

just_for_sec• 13 years ago

I think even more interesting is founding organization (Citi Foundation).

psykovsky• 13 years ago

More interesting even is the fact that both his Bitcoins studies were sponsored by Citi. Especially when they seem so empty of value and are only any good as FUD material against Bitcoin.

yuvadam• 13 years ago

Adi Shamir (the "S" in RSA) is doing significant research on Bitcoin, including for customers such as CitiBank (IIRC).

dcc1• 13 years ago

1. Inrtoduction

I stopped reading there...

fchollet• 13 years ago

You should have kept reading --it's every other word. I liked the "Reopened on Novebmer 6th 2013".

The rigorousness of the argument and research is comparable to that of the proofreading.

jnbiche2• 13 years ago

With respect to their research, see my comment: https://news.ycombinator.com/item?id=6793410

And their first paper was also full of typos.

DGrutt• 13 years ago

If Satoshi sent coins to the Silk Road as the authors suggest maybe that was to take advantage of the mixing service. It seems like he or they would want to cash at least some of these out.

nikcub• 13 years ago

Picked apart and debunked within hours of being published. A good summary thread:

http://www.reddit.com/r/Bitcoin/comments/1reuwq/vigorous_deb...

The real story here is how Adi Shamir can get caught up in such horrible published research, not once - but twice now[0]. They keep referring to blockchain.info as the blockchain, and have again scraped the website (referring to 'HTML output') to get their data - even after it was pointed out to them last time that the websites are just a representation of the blockchain.

You really have to question just how much the authors understand what they are writing about when they don't even understand the blockchain. This research isn't even worthy of a blog post, let alone being published as an academic paper by a noted cryptographer.

[0] https://gist.github.com/jgarzik/3901921

Luc3• 13 years ago

They keep referring to blockchain.info as the blockchain, and have again scraped the website (referring to 'HTML output') to get their data - even after it was pointed out to them last time that the websites are just a representation of the blockchain.

I'm not sure THIS is really the issue worth debating. Their first paper states: "On May 13th 2012 we downloaded the full public record of this system in one of its two major forms (1), which consisted of about 180,000 HTML files." "(1) We believe (but did not verify) that these two forms contain exactly the same information, and even if there are tiny differences they are likely to have only a negligible effect on our statistical results."

That, to me, is acknowledgement that they knowingly chose to scrape the website instead of parsing the 'real' blockchain. If I'm guessing, I'd say they did it this way because they had someone with the skills to do the scraping available to them (when all you've got is a hammer...).

even after it was pointed out to them last time that the websites are just a representation of the blockchain.

Yes, 'just' a representation of the blockchain. Good enough for all their intents and purposes...

But, you know, we could just email them.

Luc3• 13 years ago

On the other hand, by scraping they miss out on stuff like http://bitslog.wordpress.com/2013/09/03/new-mystery-about-sa...

j0hnb0nk• 13 years ago

" Ulbricht grew up and went to high school and middle school in the Austin, Texas, area. " source: http://www.businessinsider.com/meet-ross-ulbricht-the-brilli...

(the owner of the bitcoin address in question): " Dustin D. Trammell Lived in Austin, Texas " (and has since 2002, when Ross lived there) source: https://plus.google.com/116073269295024509653/about

Study debunked, nothing to see here, move along eh? Probably just a big coincidence and they never met or knew each other yet were working in parallel and Trammell's exact coins happened to end up in Ross's hands. The FBI will be all over this soon enough.

How Did Dread Pirate Roberts Acquire and Protect His Bitcoin Wealth? [pdf]

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