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Satoshi wanted the software to inspire honesty

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How I learned Chess

I lived in the dorms at UCSD for my last two years of college and played chess with my suitemates.  One of them beat me consistently.  I believe he and I both played the same way, being honest and transparent, explaining our moves to our opponents, offering them the chance to defend against hidden threats or defeat long term strategies as soon as we devised them.  This openness may appear to be self-defeating, but that is because we are short-sighted.  The goal of chess is not to beat your opponent, but to learn about hidden threats and any long term strategies that may hurt us.  Cooperation in this endeavor paid off for both myself and my friend, St.Jean.

I recently had a long conversation with the founder of Wall of Coins, Robert Genito.  We have become friends over the last year because we are both passionate about making scammers learn the lesson that honesty is the best policy by frustrating their attempts to cheat.

Rob described to me some of the methods Wall of Coins uses to screen out scammers and prevent man-in-the-middle attacks, and repair (some of) the damage they do when they happen.  I remarked to him during our last conversation that if I write about these things, it will read like a How-To guide for scammers.  We agreed to view that as an opportunity rather than a problem.  There is a bit of psychology and philosophy that backs up the creation of such a how-to guide, but I don't know of an elegant way to lead you to it.  Instead, I'll offer these keywords: "reverse psychology", "failure leads to success", "anti-fragile", "shine light in dark places".

Wall of Coins pushes every transaction and member through what they call a "security intelligence layer."  It collects information from several sources, including the metadata in and image analysis of the photographs members send in, the reputation of IP addresses, and the ownership and age of phone numbers.  The layer was designed through the cooperation of an individual from EndGame, another fellow who helped banks, the Navy, and other government bodies with cyber-security, someone from the financial operations of a few of the largest banks in the USA, and several other security experts through many months of trial and error and discussion.

So How Do I Scam Them?

Well, it's a lot of work.  It's more work than it's worth, or at least that is the goal.  Perhaps you will follow the instructions below to execute a man-in-the-middle attack and succeed, and that will be my fault, but I believe you will be converted to the side of light by the many honest folks who will stand in your way using the knowledge they get from this newsletter.
  1. You'll need a way to get a new IP address.  At some point, you will start having difficulty because you will have ruined the reputation of the one you've been using.
  2. You'll want to find victims who live in your zip code or else learn how to alter the meta data in the images you'll have to take.
  3. Since it's easy for software to distinguish between an original photo and a photo of a photo, you'll need a printer of the same type that your victim's bank uses, and paper with the same watermarks on it as their bank's receipts are on.
  4. You may need to have an extended conversation with your victim after they make the deposit so that if Wall of Coins contacts you (using the telephone number you'll have to write on the receipt) to verify details of the deposit, you will have them.
  5. Obviously, you'll want to use a burner phone.  This lowers your chances of success, but it protects you from being identified as the owner of a phone used to steal.
  6. Pray to Baal and Satan and your other gods because Rob admitted that he stayed far away from giving me the ingredients of the secret sauce in Wall of Coins' Security Intelligence Layer.
So I am now using Wall Of Coins instead of LBC to sell bitcoins for cash deposit to my M&T bank account.

Speaking of Thieves, How's the USPIS?

They still have my money.  I received a letter from I. Hasfurter of the U.S. Postal Inspection Service explaining that they are assuming that the cash sent to me has been (or will be) used to violate section 21 USC 841 ("et seq.", which means "and following" - 842 and 843 are also "prohibited acts" but under letters B and C), and that under that assumption, they have the authority to keep the property as a forfeiture.  So I wrote this letter to I. Hasfuter:

Dear I. Hasfurter,
Greetings.  I am in receipt of correspondence from you (certified Mail 7015 3010 0002 0672 8509) in which you indicate that $X U.S. currency has been seized under 21 USC 881.  21 USC 881(a)(6) indicates that in order to be subject to forfeiture, said moneys must be “furnished or intended to be furnished by any person in exchange for a controlled substance or listed chemical in violation of this subchapter.”  Your letter indicates that the violation is described in 21 USC 841 et seq..  I have received no evidence that this currency was furnished in an exchange violating 21 USC 841 et seq., nor the name of any man or woman who furnished or intended to furnish it in such an exchange.
Your letter suggests that I may request a pardon for the property or contest the forfeiture.  Both such remedies for property that does not meet the requirements of 21 USC 881(a)(6) appear to me to be premature.  I believe the sender is preparing an affidavit showing that the currency was paid to the sender to purchase apparel and other music festival merchandise. I believe Joseph Bennett is the man who seized the parcel containing this currency.  I have provided evidence to Joseph that the sender intended to furnish the currency to me in exchange for bitcoin which is neither a controlled substance nor a listed chemical. Once returned to me, I will not use the property (or equivalent value) for any exchange that violates 21 USC 841 et seq., as any thorough examination of my past will show.
If the belief of some man that the property meets the requirements is enough evidence for your organization to proceed with this forfeiture, please state so.  If this is the case, I require the name of the man holding this belief and the name(s) of the men and/or women he accuses of violating or intending to violate 21 USC 841 et seq. so that I may protect myself from any such error.  If, on the other hand, your organization will forward the currency (or equivalent value) to me upon failing to establish that it meets the requirements, I require an estimation of how long you give yourselves to make that determination, as well as compensation for keeping my property from me for so long.
Thank you for your cooperation in this matter,
Dave Scotese

Perhaps I have misjudged Jeff

Jeff Schaff of West Virgina started trading with me in October of 2013.  He traded with me again in November of 2014.  He recently sent me an empty FedEx envelope.  It may not have been empty when he sent it, but he refuses to answer when I ask him for help recovering the cash he claims was in the envelope when he tendered it to FedEx.  I chose to trust him because of our history, and released the trade the day he opened it because I believed his claim that he paid an extra 4% (a practice I suggest in my ad so that I will consider releasing immediately, if I trust you).  I reported the empty envelope to LBC and they locked his account before he tried to withdraw the money.

He insisted on blaming me rather than some random employee at FedEx, or anything else that may have happened..  I called FedEx to find out what we could do and they said the sender would have to open a claim.  I asked him to do that and he refused, insisting that I was the dishonest one.  While I avoided accusing him, my suspicions grew.  He wouldn't message me on LBC either, but threatened me with an IRS audit through text messaging.  He gets this newsletter, but apparently he forgot about what I learned from Peter Hendrickson.  Thanks for the chuckle, Jeff.

LBC eventually said that since I had already released the trade, they'd have to let him keep the bitcoin.  I assume this is something LBC's lawyers explained to them: LBC does not want any liability for making a legally wrong decision, and I had cut them out of the loop when I closed escrow. I do not blame myself for trusting Jeff.  His reaction to LBC's lockup of his account tells me he's a pretty miserable guy.  I don't know if he's miserable because he's been stealing, or if he's totally honest and just has some weird faith in FedEx employees' integrity.  It does not seem that karma bit him.  It bit me, and perhaps that is because I'm not charitable enough.  So I just emailed him that if he did scam me, I forgive him under the assumption that he needed the money, and the hope that he will connect the dots on the karma side of things, and that if he didn't scam me, to please help me with FedEx.  And if Marc Hernandez ever gets this newsletter, I have the same hope for him too.  Dishonesty eats at you, even if imperceptibly.

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