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Bitcoin => Bitcoin Discussion => Topic started by: mixeridea on June 10, 2011, 06:45:48 AM

Title: Mixer business idea
Post by: mixeridea on June 10, 2011, 06:45:48 AM
(Note: This is a single-purpose sockpuppet account.)

Idea for airtight coin anonymisation, based on the fact that freshly mined blocks are the only truly anonymous untraceable blocks.

Create a TOR hidden service that resells virgin coins on consignment, to those desiring premium anonymity, as a moneymaking business.  Virgin coins are those where the coins haven't been spent from their generation transaction, and only come in multiples of  50.

Here's how it would work.  Someone who wants to buy an anonymous block could come along and purchase one at a premium (example: 55 BTC, or whatever price the market demands, they could be sold with bids and asks).  That premium would be shared between the miner who provided it and the site.

One way this could work is if the site generated pre-seeded wallet.dats for miners they can use for mining, and the hidden service keeps a copy of all the private keys.  For miners it would be a foolproof opportunity to make a few extra BTC: whilst they mine in one of these wallets, their coins could be sold by the hidden service when needed, available the moment they are mined.  If the hidden service sells an anonymous block, 50 BTC just disappears from a miners mining wallet, and gets replaced in another wallet belonging to that miner in full, plus their premium.

These freshly mined blocks would be completely clean and have no transaction history.  They could be used for cashing out proceeds of suspect activity, or whatever.

That way, the service could spend the coins directly from the miners wallet when bought without "virginity" being tainted by transferring them into the service, and also gets around the fact that it's difficult to choose which coins you're spending out of the current client when you do a transaction and have lots of coins.

The site would mix up the "dirty" coins before they went to the miners whose clean blocks were purchased.  Miners would receive the mixed up dirty coins, in the process they would just get more of them.

Presumably these miners don't care what coins they get, they just want more of them, and they probably figure that any investigation that followed the money to them could be dismissed the same way if they were running a TOR exit node and activity got followed there as well.  The answer would be the same as with TOR: "sorry sir, it's not me, Iím just doing a service to help bring privacy and a voice to oppressed third world countries".  The risk and the hassle factor would be priced into the purchase price of an anonymous block.

Title: Re: Mixer business idea
Post by: BTCcommodities on June 10, 2011, 06:54:17 AM
inb4 money laundering

Title: Re: Mixer business idea
Post by: BubbleBoy on June 10, 2011, 07:49:14 AM
Pretty good. But are the laundry needs of the Bitcoin community limited to the amount daily fresh coins ?
You might be underestimating the hassle factor, the miners know full well they are participating in a laundry operation and can be charged on that count alone, unrelated to the crime that is being hidden. Unlike TOR, there are no laws against internet traffic laundering. If the money laundry laws as they stand don't yet apply to Bitcoin, I'm sure they will amend them in no time.

Title: Re: Mixer business idea
Post by: mixeridea on June 11, 2011, 06:17:31 AM
Aren't bitcoins just internet traffic too, within the view of the law?  The day a government applies a currency law to bitcoins is the day it legitimises bitcoins as currency.

Title: Re: Mixer business idea
Post by: BubbleBoy on June 11, 2011, 05:46:06 PM
Not necessarily. A definition of money laundering would include any commodities bartered in the process, ex diamonds, gold etc. If I sell drugs for gold and then pretend I've mined the gold from my back yard I'm still guilty of money laundering (even if I pay taxes for the 'extracted' gold). It's easy to recognize bitcoins are a commodity, without legitimizing them as currency.