[PSA/Article] You can still use CoinBase safely!

All the posts lately just trashing CoinBase.... shits ridiculous. You guys are surprised that a corporation is tracking your every action? You really thought it was OK to copy&paste a DNM address into your CoinBase account, enter ''any'' number and hit send without attracting some type of attention to yourself?

The whole reason basic OpSec is brought up again and again and again; your freedom, job, income, right to vote, your whole life (and maybe someone else's) depends on it! I'm not here to lecture (that's what the noob section is for) so if you don't know what your doing do us all a favor and go back to Noob-School. OK, now back to CoinBase.

Just because they track coins, for all we know all we know to their 'final destination', doesn't mean it cannot be used safely. This is true for pretty much any U.S. market where you can buy BTC as well, since they are all likely to have similar compliance programs in place (albeit with varrying levels of capability and/or staffing). It's already been posted on here but to help out those of you who seem to be having trouble with this (and there seems to be a lot of you), here's the basics.

TL/DR If you know what your doing and already know how to use CoinBase safely nothing below this line should be news to you.

To stay anonymous you need to separate the coins from yourself. Think of every tranaction out of market (in this case CoinBase) as an extension of your license # - even better than a government-issued I.D. since you probably had to submit not just that but also your SSN, address, and bank accounts w/ proof of ownership but maybe a credit card or two and a picture of yourself in order to buy it in the first place.

Before going over the basics lets clear up some terminology first. * Hot Wallet: The first wallet to receive coins from CoinBase (or other market) * Decoy Wallet: A temproary wallet created to handle only a select few transactions between different addresses. * Storage Wallet: The wallet you use to store your coins in before normal use (you should have at least two, one for DNM stuff and the other for everything else) * Tumbler: An online service that accepts a BTC deposit and ''mixes'' or ''tumbles'' the coins around, in the end sending you back completley different coins * Market: Either a DNM or legal market, wherever your spending your coins

** How to separate you from your coins ** The key here is to have as many transactions as possible from seemingly different locations and owned by apparently different people injected between your hot wallet and your storage wallet. This is harder than it sounds: you can't just create a bunch of wallets in Electrum (even using Tor), send a bunch of transactions to yourself and be done. Why? Because it would likely all end up on the same connection which could be linked back to your IP, not to mention the coins would still be traceable directly back to your hot wallet. The easiest way to demontrate the process is visually:

Case 1 - Direct-to-market
CoinBase -> DNM
Pros: None.
Cons: You might be getting a letter or a knock soon.

Case 2 - The Lazy Deposit
CoinBase -> Hot Wallet -> Decoy?(...)/Storage Wallet? -> Market
Pros: Very easy for any noob to accomplish without trying too hard
Cons: Coins trace directly back to you, can be traced by CoinBase

Case 3: Basic Tumbling
CoinBase -> Hot Wallet -> Decoy?(...) -> Tumbler -> Storage Wallet? -> Market
Pros: Not very difficult, coins difficult to trace
Cons: Tumbling fee (2.5%-5%), more involved than lazy deposit, CoinBase can track your coins to the tumbling service depending on your use (of lack of use) of decoy wallets.

The last example is really the only way you should be handling your coins if you plan on doing something even remotely illegal with them!

** Problem with just using Electrum ** Electrum doesn't give you any control over change addresses (if you don't know what this means you need to go back to Noob-School). That means no matter how many new decoy addresses you create there is a very good chance that you might end up mixing clean and dirty coins. Once that happens all your coins are dirty (tied to your ID).

If you are only using Electrum you need to (at a minimum) use multiple wallets. To improve your odds follow the tips below and/or use a full client like Armory that gives you more control over the movement of your coins.

** Tips for the paranoid ** * Use as many decoy addresses as possible (in different wallets), and use different Tor identities for multiple wallets. Be careful not to get them mixed up! You want each wallet to look like it is created/used/owned somewhere far far away from you. * When transacting between decoy wallets try NOT to use nice whole numbers for the value (in USD or BTC) and send the change to a different hot wallet. For the super-paranoid you should probably burn that change wallet (eg. detroy the private key and never ever use it). * Tumble between wallets (created using different Tor identities) at least twice

The point is you can use any exchange anonymously no matter how Hitler their TOS may be. Just be careful and follow basic OpSec and you should be fine.


Comments


[37 Points] XanaxBaratheon:

Who do you get your meth from?


[6 Points] None:

look I didn't read the whole thing, but here what it comes down too. Every transaction costs money, theres only so much I want to spend on a gram of MDMA. We thought they didn't have time for small fish, we were wrong, I'm locked out of my coinbase account now anyway lol

Also DNM addresses are created on the spot, so I'm guessing (and I'm not an expert) that they can only take you out after they take out the DNM


[5 Points] AgoraMarket:

The ultimate problem for big-time buyers is going to be the USD-to-BTC conversion, which tumbling has nothing to do with. Ditto for vendors, with BTC-to-USD cash outs.

If you use Coinbase or Circle, there's simply no way to avoid scrutiny at the fiat conversion step, even if you tumble coins all you want. Either the bank will take notice of someone depositing almost $10,000 within a week, or the bitcoin exchange will take notice of anyone buying (or selling) almost $10,000 in bitcoin within a single week.

People can move to LocalBitcoins, but that brings its own set of problems. Banks can still be involved, meeting random people to exchange thousands of dollars is risky and inefficient, etc.


[7 Points] None:

Well written.


[3 Points] pieintheskyDNM:

Can't you just "tumble" using something like Primedice? Also if you set your payout probability to 95% most of the time you'll get a little kicker before you withdraw to another wallet.


[3 Points] None:

i mine my btc so im anonymous


[2 Points] None:

even if it is safe, fuck coinbase, theyre a bunch of spineless cowards who jump when LE tells em to. I rarely use my bank account for things outside of paying rent & bills as is, so cash to BTC has always been my method of getting coins. just lately have I realized that seems like thats one of the few 'safe' methods of obtaining them anymore.

I head to one of the public libraries in my area, login to my LBC account, initiate a trade with the 1 vendor I have consistently used, and then from another computer, buy postage online (for the next day). go home and box up the cashmoneys up with MBB. I have heard dogs trained to smell for inks used in cash are becoming more popular, probably paranoia but mylar's cheap anyway. the next day, head back to the library and check to see that dude has accepted the trade. if so, go drop it off at a blue box and wait. coin is typically released within hours of package's arrival. cost is current rate of bitcoin + 5-8% (depending who you use), plus about $6 for shipping. sellers typically require you to open a new trade if BTC value fluctuates by more than a couple percent before they get your cash. this might not be financially feasible if you aren't buying lots of coins/very often.

if you really want to mix it up, could speak to the vendor about boxing 'multiple' trades in one package, and then opening multiple accounts on LBC and having them distribute coins to them all. would never suggest this to a vendor I didn't already have somewhat a working relationship with, as it definitely indicates you're up to something. then again if you're regularly buying thousands of dollars worth of coin at a time, they probably already know this.


[2 Points] youshoulddefodoit:

Case 2 - The Lazy Deposit

CoinBase -> Hot Wallet -> Decoy?(...)/Storage Wallet? -> Market

Pros: Very easy for any noob to accomplish without trying too hard

Cons: Coins trace directly back to you, can be traced by CoinBase

Just how dangerous is the 'lazy deposit' for small time buyers? I received my first parcel yesterday and followed this steps, although I used Localbitcoins instead of Coinbase.


[2 Points] rndbnd:

I thought it was decent information until I realized there's no way Coinbase could differentiate a "decoy" wallet from any other wallet, or the benefits that would bring. I have used a few different BTC exchanges since the SR1 days, depositing directly instead of using a tumbler. Right now I use Coinbase without any problems. Sometimes I tumble, after being paranoid from reddit posts, but only rarely. TLDR: Been doing unsafe practices for years with no problem.


[2 Points] None:

I still haven't actually heard of anyone getting in trouble just for depositing to DNM and nothing else.


[1 Points] 1234567as1:

Is a Full client like armory compatible with tails?


[1 Points] 1234567as1:

Can I use two different electrum wallets one for decoy and one for storage? If I need to make them have desperate tor identities how would I go about that


[1 Points] None:

Am I wrong, but the guy got in trouble for his high dollar transactions that were flagged, and not solely because he used Coinbase to buy BTC that was used on a DNM?


[1 Points] earthmoonsun:

I suggest to be even more paranoid and exchange to alt coins additionally


[1 Points] None:

Why the fuck is everybody freaking out about tumbling all the sudden? Have we seen a single legal case that actually looked at the blockchain yet?

Based on what I read yesterday, the guy wasn't busted for sending coins to a market. He was busted because he was making large cash deposits and buying thousands of dollars worth of BTC a month.


[1 Points] agentgreasy:

I agree.

We have seen a lot of news lately about people being caught... I don't think it has anything to do with any changes on the side of good - I think it has to do with changes on the side of bad.

I don't know when people got so trusting of shit... all it take is a little pattern recognition and a tiny amount of knowledge to make something obvious. Numbers are the easiest place for this - the numbers never, ever, ever lie. If you start a pattern, you're already telling a story. The more of that pattern you make, the more the story becomes complete. The value imposed upon this concept is natural - and a company like Coinbase, getting more money means more funding towards the development of these natures.

The basal point of opsec, is to avoid pattern generation and to foil the connection from A -> B.


[1 Points] agorathrow8080:

Its obvious this is confusing people...coinbase has to follow the same laws as a bank, look up bank secrecy acts, reg b reg z,a few others... if you are moving around thousands at a time your gonna get flagged, even with legit purposes, calm the fuck down and learn some new opsec people

I have had coinbase almost aince launch.

Sometimes i get a few hundred, uually i just buy $10/$15 each pay period, then just trasfer around what i need when I do. Blockchain to another wallet to tumbler...yeah i loose what 10$ jumping around but so what.

If you are dealing in thousands, you should know what your up against and not complain about a company following established banking rules to stay in business


[0 Points] 420jizzfest:

localbitcoins master race


[0 Points] AussieCryptoCurrency:

TL/DR If you know what your doing and already know how to use CoinBase safely nothing below this line should be news to you.

I love how this TLDR is followed by more text. Lots.