Bitcoin Forum

So each Bitcoin in the Eco-system today isn't equal. Some Bitcoins were used in a crime , and if they were , they can be worth less because of the transactions that have been facilitated with that specific Bitcoin. And if there was a crime that happened 20 transactions ago , and you now have that specific Bitcoin , can you be indicted for a crime that someone else has committed but you are holding the Bitcoin that is associated with it?

If this is the case , how can we consider at this point , BTC as a store of value?

It's like both of us holding 1KG bar of gold , but mine is worth less than yours but the market agrees to buy BTC at a certain price...

If this is the also the case , doesn't that mean that the demand for virgin Bitcoins more valuable than the other BTC out in circulation and thus , the circulating supply should be different...? How much crime has been associated with the circulating BTC in circulation? and if the "legal" Bitcoin that has been circulated are the only ones that are valuable , then how much would BTC be actually worth?

Is there a metric that determines if a crime has been committed with the association of each Bitcoin in circulation? Could that be a good idea for a new metric?

To me, this question seems like: if my £20 bank notes has trace amounts of cocaine from the person before it, is it worth less?

And also it is generally worth the same amount. You just se epeople trying to haggle on the price if they think it comes from a less legit source... Although sometimes mined crypto ("clean" stuff is worth more, like the bank note with AA00000001 as its serial.

If you look into mixers then they have evil units shared between different outputs, many people use them for fully legal purposes (based on international laws). So one input of illegality can go through the mixer without a trace of where it leaves (if mixed well)... They could then of course mix to xmr, grin or dash too via some online services thst do exchanges without signups.

Many crimes have been linked to bitcoin but not as many as have been linked with cash and financial institutions...

Criminals use Bitcoin! This is a very shallow approach. Don't the same criminal organizations use dollars or gold? I think it's wrong to look at it this way. Bitcoin is already trackable. States can legally allow bitcoin. They can keep track of everything from which wallet is out of money.

I agree with you. Fiat and Financial Institutions should be indicted for all of their crimes , but i digress.

At the end of the day , there are going to be virgin Bitcoins in circulation , and if there is a private entity that exists out there buying up all the coins , then we will have a supply problem , no?


For sure. I think that Criminals use fiat / gold as a means of crime. BTC is trackable correct , but i'm just saying that because there are some coins that are deemed "bad" , it makes the other ones that are virgins , more valuable.

But the virgins will be tainted at some point --my imagination was thinking something else than Bitcoin, damn.

The freshly minted Bitcoin will be spent, mixed, traded, etc., IMO there is no way to separate them for a long period of time. Even if there are whales who hoard freshly minted coins, they need to spend it to buy whatever they want, whenever they want. Hence, the concept of tainted coins is weak.

As demand goes up, so does the price...

If someone's paying $20k for virgin bitcoins, people will happily buy from exchanges for a lot less...

It might turn into gold too if it's the private keys to the 12.5btc that are sold... So three people could have one key. So people could flock away if they start getting scammed.

No one will punish anyone for using bitcoins that was used in crime 20 transactions ago because it will be impossible to prove in court that you had anything in common with crime. Especially if they were mixed by mixing services or even mixed in organic way:

1- 200$ bitcoins from crime send to me to wallet on which I store 1000$ crime free bitcoins (17% concentration of bitcoins derived from crime)
2- I have transfer 1200$ to exchange with 100 000$ bitcoins in hot wallet. I've bought LTC for longer hold (0,002% concentration of bitcoins derived from crime)
3- someone withdraw 1000 BTC from exchange to new created wallet (0,002% concentration of bitcoins derived from crime).
4- this guy is running an ICO and send 10 BTC to bounty manager to run bounty (0,002% concentration of bitcoins derived from crime).
5- This guy started signature campaign and paid 300$ in bitcoin to you on your bitcoin wallet on which you store 1000$ crime free bitcoins. (0,0007% concentration of bitcoins derived from crime).

This 200$ in 5 transactions was mixed in a way that your 300$ have direct connection with them, but only 1/142800 of your funds are connected to crime. I can't imagine a court that will punish anyone for receiving a transaction of funds that are in 1/142800 connected with crime.

So in my opinion there is no difference between new coins and existing coins even if they were used in crime long time ago.

Why would a person found with so called illegal Bitcoin be considered a criminal without investigation & when he/she is not the criminal? Are there laws against the holding of tainted money?
Does the amount of illegal fiat currency in circulation reduce the value of the total supply of the currency?

Well, If this becomes a serious problem in the future, I guess more people will start mixing their coins or even use lightening network to avoid the problems associated with tainted Bitcoin.

I mean,why would even they bother? Like, this idea is basically if one was tainted, one should buy it cheaper, and if it's new, it should be bought at a higher price right? BTC is BTC. The market approves of it, and basically, every coin we have there is mixed and match when we buy and resell. Just like how fiat is switched upon buyer to seller to buyer. It's always an endless cycle of mixing coins and such cause that's how the market works. It's not like one BTC has it's own serial number. There is no plausible way to track of it like how you said so, and see, no matter the source, it doesn't change the fact that it would still be BTC.

It's like you're the owner of a restaurant, and you're actually asking people to NOT pay using money that has gone through the hands of many. You request only the money that was freshly printed by the banks ALWAYS.

Well there isn't really quanta of bitcoins like as it gets transferred from a person to person irrespective of them being criminal or not. The transaction and the amount spent is divided and sent in form of input and output and also deduct the fees of transfer as in miner fees.

Mere possession of stolen goods doesn't instantly make you a criminal as well, yes the authorities have the right to confiscate it but you as an unaware owner of a stolen Bitcoin doesn't make you a criminal as well, it doesn't even make you an accessory to the crime itself. As long as you aren't directly associate or involved with the crime you won't face a criminal charge about it.


Unfortunately we don't have that kind of convenience of system lying around where we can separate "clean" Bitcoins from the "dirty" ones all we see is the amount of BTC we can send and receive. Honestly you really don't have to worry about this one especially if you don't transact to suspicious individuals trying to send or sell you BTC. For businesses however will be a different case for them as they can't really choose who will be buying from them that is why they are very conservative when it comes to accepting crypto in their services.

So think for a moment and then apply the same equations on cash ,
You get a 100$ note and someone stamps on it ,
Would it still be of the same value or the value will decrease ?
It's gonna be the same even if you damage it as long as it's viable .
Therefore it's weird to think that the price will change with respect to the use of it.

We're told regularly that big dicks pay miners a premium for virgin coins. I'd be very curious to know if anyone will pay them a premium when the time comes to sell.

The only time a coin is guaranteed to be radioactive is if it comes directly from something crime related. Rest of the time it's not an issue. The coins I bought in 2013 will almost certainly have some Silk Road taint somewhere. Considering the amount supposedly stolen from Gox most people will have a bit of those too. Mine have gone through exchanges and payment processors just fine.

As soon as coins get turned away with a hint of nefarious activity 50 wallets back the whole thing falls apart. The moment virgin coins ride to the rescue someone'll infect the shit out of them. There'll always be direct taints and I'm fine with that but anything a few levels lower is unworkable.

fungibility is an issue for all forms of money, not just BTC. if you buy forged/discounted black market gold, it needs to be melted down and re-stamped before passing as legitimate. if you receive marked, serialized bills in a ransom operation or bank robbery, they can't be deposited at banks or easily spent.

on-chain tumbling can be effective at obfuscating the source of funds and making outputs fungible again. however it's important to note that mixers and coinjoins can be retrospectively broken as new privacy vulnerabilities are discovered.

There may come a time where mixed coins will be regarded with suspicion precisely because their fungibility has been restored.

Already happening albeit forced on them by their regulator - https://cointelegraph.com/news/binance-returns-frozen-btc-after-user-promises-not-to-use-coinjoin

And I have no doubt that many a privacy coin will be given the boot from exchanges as condition of staying open.

There is no reason why 1BTC should be more valuable than the other. Always 1BTC = 1BTC. 21 million BTCs are all created in the same way, are charged the same fee and have the same price. In addition, many of the BTCs on the market have been used on darkweb many years ago. We do not have such a choice, and I do not think it is necessary. Whenever blood splashes on the BTC paid for the murder, we will differentiate them.

Theoretically you are correct but in reality, virgin bitcoins are more valuable than normal bitcoin. Technically, both are bitcoins but the virgin one is being sold at premium in the market. The premium ranges from 10% to as much as 30% in some cases. Read the below article,

https://medium.com/@official_83664/what-are-virgin-bitcoins-and-where-can-i-buy-them-d6eab0f669e0

Due to the transparent blockchain technology, it is easier for the regulatory agencies to track down the bitcoins that are used in illegal settlements! Probably a normal human being like you and me, won't be able to differentiate between these "blood bitcoins" to "virgin bitcoin", but there are companies like chainanalysis or Ciphertrace is pioneering such techniques! Slowly becoming a reason of concern!

As someone who's only transacted through exchanges, it's the least of my concern but that also shows how this would be impractical for law enforcers. For example, I can get bitcoins from somewhere and then send it my wallet in the exchange. If that bitcoin is tainted and they received it, does that make them a party to whatever crime was committed with that bitcoin?


Considering the number of times these are passed around, would "normal" users get prosecuted though? Not everyone is knowledgeable with this tools. I'm not even sure if it's possible to run an analysis before you receive it.

Oh, interesting! This is my first time hearing about Virgin Bitcoin! Objectively, if we can distinguish them, it will create excellent value for an asset that can prove its origin. This is truly a fantastic project that makes me look forward to it!


You made my day!! Lol!

the oldest mixing algorithms have long since been broken but blockchain analysis companies are always a step behind. effective tumbling means that observers can't tell with a great deal of certainty that outputs came from a mixer at all.

at the same time, exchanges have a strong interest in retaining fungibility, otherwise their liquidity is dead. the key is to avoid obvious association with prohibited activities.


case in point. wasabi wallet's coinjoins are blatantly obvious, which is not as much of a problem for centralized mixers with superior liquidity:

You can't be considered criminal for holding the bitcoin someone else used for something criminal. I don't know where you made that up but if someone steals crypto from an exchange for example and moved it through a mixer and then you ended up with it, cops do not look where the money is right now in that scenario, they look where it came from and the transactions and they check out what the people who gave it to you are doing right now.

So, the emphasis is not the bitcoin itself that reached to your pocket, it is the people who gave it to you and that is why they follow them up, as soon as bitcoin leaves their wallet and enters yours, they start watching what they are doing with alts you gave them or fiat you gave them and not check what you do with the bitcoins you got from them.

you might be cleared of wrongdoing, especially if you could prove you obtained the coins with legitimate funds, but this scenario could also result in:
-exchanges freezing/closing your accounts and reporting you to law enforcement
-law enforcement investigating you and possibly even seizing your money with civil asset forfeiture

https://www.heritage.org/research/reports/2014/03/civil-asset-forfeiture-7-things-you-should-know

Thank you for the article, and I guess I have heard about it a long time ago. Anyway, as long as virgin BTC is on the same wallet, its status will not change. Someone who wants to sell it at a higher price should sell it with private key so that its virginity is not compromised. Because it will not stop after the place is changed. Personally, to me, I can only consider its virginity as being different than others. Otherwise, BTC is BTC.

Fiat that we use every day has likely at some point been used by criminals, but no one runs around taking cash from people's wallets. This obsession with virgin bitcoins is just a paranoia, people are ready to pay a premium to sleep well at night, it's their choice, but smart people would just use mixer if they feel like the coins that they received might be dirty.

There is no metric for these I think. It may not even be possible to inspect whether a certain Bitcoin is dirtier or cleaner than the rest. That sounds absurd to me. A Bitcoin is a Bitcoin. It cannot be labeled clean or dirty. It depends on the person using it. Just like fiat. Fiat is neither clean nor dirty but the users are.

Bitcoin whitepaper never claimed it as storage of value,so you are using at your own risk if you are looking for something better than gold which has constant value compared to any other asset in this world.

If some bitcoin is not equal to others, please direct me to where I can purchase those cheaper bitcoin that are less equal at the discounted rate.
Like in the real world with fiat money, if a crime is committed wtih bitcoin, while YOU are in control of it, then you can be held responsible. If a crime is committed with some bitcoin before you get it, then that has nothing to do with you.

There is a demand for virgin bitcoin, and you can pay a miner a premium to buy a complete block reward / new bitcoin, directly from them. Even Bobby Lee used to do this on the shop of BTCC exchange when he used to work there, where you could buy gold coins or bars loaded with virgin coins if I remember correctly. This is mainly for collectors though, its something people do because they dont want to be associated with any past transactions.

There is no legal or illegal bitcoin, there is just bitcoin, and they are all treated the same by wallets and nodes.

There are some companies that track bitcoin transactions where crime has been committed. They can publish information about these specific coins so that exchanges and law enforcement can track and associate an ID on an exchange with bitcoin. If there is a crime using bitcoin, and then that bitcoin is sent directly to an exchange where an ID is associated, or an address associated to an ID, then possibly it can be used as proof that you are involved in the crime. If that bitcoin is later used elsewhere, it does not mean any other users are associated with that crime.

The Silk Road marketplace had bitcoin that was confiscated by law enforcement, so was used in crime. That bitcoin was auctioned off, and is back in the bitcoin ecosystem, being used by people...that is a perfect way to see that even bitcoin that has been involved in a crime before, can be used again without any problems, and is treated equally to other bitcoin.

Well, you do have a good point man:D that’s why you should worry about who you’re receiving Bitcoin from, but because you received it doesn’t really make you a victim. There are lots of things one should worry about when they are making use of cryptocurrency, but I have never seen anyone have this kind of issue, so you should not worry much about it.

Everyone that has committed a crime using cryptocurrency paid the price for it, I never read or heard a story that someone else suffered the consequences of another’s crime. This is one of the reasons why a lot of people want regulation and all that, but we all know that that’s not really how Bitcoin is meant to be, it’s meant to give people freedom to do whatever they like, whether good or, and sadly, bad :(.