Bitcoin Caveat emptor
Do you own Bitcoin? Thinking about it? Let me just say, if you ever get into a situation where you want to buy or receive any cryptocurrency, make sure that it is clean. You might end up with a bunch of useless numbers and lose lots of money, because you might suddenly become associated with money laundering.
I have a funny story for you. But before I get there, I have to quickly explain the term Bitcoin Mixer a.k.a Bitcoin Tumbler.
Every Bitcoin transaction gets recorded to an ever-expanding ledger - the blockchain. To prove the ownership of your Bitcoin, you have to have your private key stored in your wallet. That key allows you to claim your Bitcoin. The information about bitcoin moving from wallet to wallet is also stored on the blockchain. Since the blockchain is out in the public, everyone can see all the transactions and can trace any Bitcoin from its inception to the current wallet. Except... the last statement is not completely correct.
There is a thing called Bitcoin Mixer. Their mixers take Bitcoins from various people, mix them together and send them to new wallets. The only traceable wallet then is the wallet associated with that particular mixer and has no more history.
The selling features of Bitcoin Mixers are anonymity and non-traceability. Your name is never associated with your wallet (unless you choose for it to be so) and can be only linked to the IP address, an approximate geo location. And by using other means of access to the Internet, that can be masked as well. However, this argument of anonymity is fairly weak. It’s like using unmarked $20 bills on a global scale.
Then we are left with the traceability issue. You can imagine who has the most to gain when (virtual) money can't be traced from person to person, from transaction to transaction.
To learn more about mixing and tumblering you can read Mixers, Tumblers, Foggers. I also recommend How to mix your coins using the Best Bitcoin Mixeror Dirty Bitcoin: Why BestMixer Might Not Make Your Day.
Now, back to the funny story. Last week our Internet connection in the office went down. A quick call to our provider suggested that there might be a problem with the fiber connection to our office and a quick reset might do the trick. It did and the day kept going. Until late afternoon… then, no more Internet connection for you.
Another call, another reset. The following morning, the same situation. This time the technician suggested that he could see an unusually high volume of traffic to one particular address. On that address was one of our servers. To mitigate the issue, he disconnected the Internet connection to our server and the Internet was up again.
What to do? We already had a plan in place to move our infrastructure to the cloud. It was time to set that plan in motion. We copied the server instance to Amazon cloud (AWS), changed a few configuration settings and ... almost as expected ... the server went down. A flood of traffic (the right term for it is a Distributed Denial of Service attack) followed the server. Fortunately AWS allows you to add a load-balancing system including firewall protection. A short time later, the site was up. This time, legitimate traffic could access it easily, while bad traffic bounced off.
Of course, your question is: how are these two things connected?
Well, the server was hosting a website where one of the pages talked about the Bitcoin mixers. Obviously somebody was not happy either about the fact that the page existed or wanted to prevent others from seeing it. The world of Bitcoin mixers attracts this type of attention.
What started as a horror story ended up as an amusing story with a happy ending. Why? We had a plan and we executed on it. And when you plan ahead, even a disaster can’t keep you down for long. That's the recurrent pattern.