Bitcoin Forum

I need to update this:

I DON'T SUPPORT THE FOLLOWING SCENARIO!
It's just a topic where you can debate if it viable , or if it's gonna be embraced.
Hold your carrots!


It all started with :
http://www.forbes.com/sites/kashmirhill/2013/11/13/sanitizing-bitcoin-coin-validation/ (http://www.forbes.com/sites/kashmirhill/2013/11/13/sanitizing-bitcoin-coin-validation/)

And next moment we have the reactions :
https://bitcointalk.org/index.php?topic=332918.0 (https://bitcointalk.org/index.php?topic=332918.0)

Well , I went to :
https://coinvalidation.com/ (https://coinvalidation.com/) , downloaded the pdf, for users , saw page with 3 rows and 100 words and nothing solid.

I think that we're got the wrong impression here. I saw the word "addresses" to many times in the forbes article and then this  paragraph in the pdf files:
"We have developed tools and relationships that provide Bitcoin businesses with a full “know your customer” compliance suite. "

From my point of view I think the word Coin is misleading. My opinion is that the project is aimed at the addresses.
And I see a way it might actually work , but first let's assume those guys have a plan , and they have an ace in their hand.
Something like a big company wanting to start accepting bitcoins but concerned about the mess around it.

So , Walmart is announcing:
 "We accept bitcoins""From cointrusted addresses only"

Most of the people will jump in ,and how can I get and use a cointrusted address?
It's simple ,

1) Go to any trusted exchangers , verify your identity and buy bitcoins which will be sent to a new address you specify
The address has to have a 0 balance and no previous history.

2) Now , you can go to Walmart and buy with bitcoins ,  from that address , because Walmart has a white list common with those exchangers and only people on that list can make purchases.
Nothing new from "we only accept Visa and Mastercard , not AE"

The results will be something like:
-Walmart knows that you are a verified customers (they can have your id)
-People when exchanging bitcoins know that this guy has some verified papers.
-You know that you actually have some kind of ownership on that address and can prove in court that "You John , on 11/1/12013 sent to Michael 245 Bitcoins"

And on the surface everybody is happy , right?
People who don't want to enroll , are (???) not forced to enroll.

And I have that BIGGGG feeling I'm missing something right?

You really believe that? You really believe the idea is for it to remain truly voluntary?

Why would any business even bother requesting only white-listed addresses, if it wasn't due to coercive regulations?


Yes. It seems you still trust governments.

I was ironic but that's not the point.
The thing is that they CAN'T force you to enroll.

You go and buy from people not in the program spend your bitcoin on dice or porn or drugs and they can't do anything.
And nobody said that you can't have a trusted address and an untrusted one at the same time.

Also , i live in a country in which trusting my government means you're mentally ill.

Is there a country where it doesn't? (rhetorical question)

There are orders of magnitude , like stupid , moron , insane...:D
I think we have the most corrupt and plain stupid government in the whole EU. They just steal like a petty thief everything they can put their hands on.
It's come to a point when it's disgusting to read the news.

I kind of see their point, and what they are trying to do. To be fair, their sales pitch will probably go a long way towards making bitcoin acceptable in the big-brothers perspective, and thus, us much more rich.

That said however, there will still be far too many addresses out there in the world. And many countries where to spend your bitcoin, and many jurisdictions. Just like Switzerland treats their finance different from the US, so will it be with Bitcoin.

I think we have to wait and see what they are really talking about to get a better idea of what they are trying to do. However you have to keep in mind, that whatever they are up to- shunning them won't make it go away. Even if they dissapear there will be others trying the same thing. Eventually it will be Experian itself. So what then?

This is also my point , they don't want to go after the coins or the paper bills. They go after the owner of the address or the bank account.
It's far more simple and more efficient.

Okay, I get it, you mean a black market will keep existing. That's correct. But there will be much more monitoring, and that makes it much more difficult. For example, suppose your salary is payed in BTC. They know exactly how much you have, because your salary is whitelisted. Now you want to buy something they don't approve or donate money to wikileaks, whatever. You know you can't use your whitelisted addresses because they can link them to you. You'd need to exchange your coins against "free coins". But that would leave a trace... you see the problem? By controlling your money, they control you.

Yup , this is where it's going...
And the result .. people will get their salary in bitcoins and when they want to do naughty things they go online , buy litecoins and.....
I have the feeling I have seen this once ,:DDDD

I'm sure it would immediately bring many more people into Bitcoin, but at what cost? Frankly, it would undermine most of what Bitcoin offers: relative anonymity, decentralization, and loose if any regulation.

...or they just use dollars.

If businesses will accept this STUPID idea, for example McDonald etc....i am sorry, but this will be end of bitcoin because you will have not single store where you can use it as now

The main problem with this idea is the implementation. If the goal were merely to provide KYC and other regulatory solutions this may be necessary but as far as I know you don't do that for every little transaction. A transaction over $10,000 and the bank alerts that authorities as they should.

The implementation of this coinvalidation idea doesn't seem to be setting any limit on an amount of money. I've had the idea myself to provide tools for people to comply with the law but we also have to make sure the tools we build aren't the sort of tools which can be abused later by law enforcers.

Bitcoin is not inherently fungible. It never really was designed to be because the ledger always was public.
It was designed to be pseudo-anonymous and private.  The main problem with this particular implementation is that it can easily be used later to block transactions, to prevent legitimate individuals from spending their coins. It empowers authorities in the USA or in North Korea to create blacklists and whitelists where certain addresses can spend their coins and not others.

There has to be a technical solution which we can come up with which cannot be abused easily by either side of this debate. The side pushing anonymity will have bad actors who will abuse anonymity. I'm not talking about Silk road. And the side pushing for taint lists and coin validation will develop technology and then attempt to abuse that as they are doing with Facebook.

If there is a search warrant or if I'm moving large amounts of money then of course that is when my address should go on a blacklist if it's pseudo-anonymous. From here I would have to give my identity or be blocked from moving a large amount of coins. I could agree with this if it were limited to that. The problem is what if I want to donate a small amount of coins or spend in a reasonable way and there is nothing connecting me to terrorism, money laundering or anything else. Why should I be investigated?

It's not optional to say they cannot investigate at all but it's also not optional to allow them to have free reign to investigate anyone for any reason.

Why will it kill bitcoin?
Most people will get a bitcoin trusted address like they do now with paypal or a cc card and get over it.
All the advantages bitcoin was suppose to have (small fees , easy to use , fast trasactions) are going to be forgotten because the merchants request an id in order to buy from them?

The ones who don't want it... they don't want it and that's it. Nothing you can do about it.


If McDonalds embraces this idea i bet that in 1 month we'll have at least 20k verified addresses.

I don't have a problem if I'm required to use a Bitcoin trusted address if we are talking about more than $10,000. It's already like that with banks and anything else and I can understand and accept why they would want to check me if I'm sending $100,000 to Yemen. But if I'm sending $10 to Yemen and they want to check me then I'm going to be completely pissed. If I have to get a trusted address to transact at all then that is completely unacceptable.

When we deal with cash there is a limit that we can deal with before regulations are triggered. We need these sorts of limits to the Bitcoin space as well. We should be able to be anonymous unless we start making large transfers of Bitcoins. If Satoshi for example were to wake up and start sending his Bitcoins to unknown places then I would expect the community to investigate that. I would also expect the intelligence agencies of the world to investigate it because they probably want to know who Satoshi is sending money to if that were to happen because Satoshi has a lot of money.

The majority of the rest of us have relatively little money and there is no good reason to force us to register our coins as if we are criminals. We don't register our dollars unless it's $10,000+ right? The IRS and FBI get called if you put $12,000 in a bank. If you put $500 into a bank you shouldn't have to be trusted because that is just oppressive.


Bitcoin was never truly anonymous. I actually think its critical to have the ability to follow the money because if you want to investigate corruption it's necessary to have that ability. I keep telling people that having the ability to investigate corruption is essential. If one address gives $5 million dollars to a political campaign then perhaps that should be investigated. Maybe an address with $5 million dollars should be validated. I can agree with that.

But the average person isn't going to have millions of dollars and shouldn't have to lose their privacy for their small amounts of money which doesn't make any real difference. If you're in a position to bribe others then its important to be able to investigate that and it has nothing to do with law enforcement and more to do with preserving the democratic process. You cannot have a good functioning society if anonymous donors are bribing everyone.

The ability to investigate the blockchain benefits the Bitcoin community as a form of sousveillance. Coinvalidation on the other hand depending on how its implemented could be a poison pill or trojan horse. It creates a database which cannot be uncreated and we don't know who is in the database or why? We don't know who will be allowed to access the information and why. The rules as for who and what triggers being put into the database must be made clear.

If you're a rich address, in the top 1000 richest then perhaps you should be in a bunch of databases. If I had 10,000 Bitcoins I would expect to be in all sorts of government databases and that is fair game. If I have 5 Bitcoins and I'm in the database then that is wrong and political in nature.

So I suggest there should be a rule in place so that only large holders (people who have coins worth beyond a certain threshold) get put in these databases. If people with 10,000 coins are in there then at least it might make some sense. You have to be a pretty big fish or big criminal to scam people out of that many coins or to get that kind of net worth.

DPR had over 100,000 Bitcoins? If it wee all in a single wallet then perhaps that could trigger the attention of the authorities and should. Who would keep that many Bitcoins in a wallet? Also if there are strange traffic patterns and it looks like its associated with dark net addresses then those addresses can go into the database.

But I shouldn't have to worry about my address going into the database if I have nothing to do with it. Worst of all if I receive some tainted coin I shouldn't have my entire address locked. And no government should have the power to stop the flow of money like that anyway. What if it were China doing that or North Korea?

Here's the bit you're missing. Let's say I want to buy stuff at Walmart, like you say, and I already have bitcoins. So my only option is to go to a "trusted" exchange and get their trusted bitcoins sent to my new trusted address... but will that exchange accept my (not yet) trusted bitcoins? Will they take them at all, will they charge me a premium for taking them?

Go through the same process with dollars. Let's say governments around the world institute a policy that from now on they'll only allow "clean" dollars to be transacted (for argument's sake, let's say dollars that have never touched cocaine). You have instantly created two "classes" of dollars. To shift the argument from coins to wallets is just slightly moving the goalposts.

The good news is that it's never going to work for a number of reasons:

1) There are already almost 12 million BTC out there, chances are all or some contain at least some smidgeon of taintiness.

2) There are way too many addresses.

3) There are way too many ways of getting the coins to the addresses.

4) China doesn't give a damn... Germany doesn't either... neither does Canada... or Iceland...

5) The people who are behind this impetus to "clean" Bitcoin are arguably not precisely pristine themselves... all sorts of hilarity will follow.

There may be a way around this which preserves pseudo-anonymity.
Keyhotee for instance allows an individual to have a reputation, be trusted, and remain pseudo-anonymous.

It may be possible to tie a Keyhotee ID pseudo-identity to a real world identity for the purpose of reporting or being verified in such a way that the database owner cannot violate your privacy. If your real name isn't in the database then the information isn't centralized. Instead your public key could be checked and the government could be sent a public key allowing them to know its you when you're under your alias or code name without violating your privacy.

Would most people agree to this? Some but not all would. If I'm using a pseudo-nym but I want to allow the government to verify and check me out without allowing some commercial third party man in the middle "Coinvalidation" company to be in the picture then perhaps there should be a way for me to do that.

If for instance I have a particular Bitcoin address and a public key with contact information and lets say the government also has a public key with their contact information. They could simply put their public key up somewhere and call it the IRS public key and then anyone can encrypt their tax records or whatever directly to that public key. If it's anti-terrorism and the government is trying to deal with that then they can have a public key for the DHS. There are potentially a lot of decentralized ways of doing it without requiring that we trust Coinvalidation company not to abuse our privacy.

It's pretty simple. The government wants certain information from the Bitcoin community. If we want to report our taxes we send it directly to the IRS. If we want to fly on a plane they check us. The problem is that after the whole Facebook outcome now privacy itself is under attack. Facebook does not collect information to fight terrorism or for solving crime but instead collects it to exploit and sell it. The biggest concern I have with coinvalidator is that they might start sharing the database with other corporate entities. And of course how long does this database keep the information? What level of access control does it have? Is it role based?

That database is sensitive information and it's not the kind of information that people would want shared. If someone has a lot of Bitcoins they probably don't want the world to know it when those coins are worth $100,000.

Perhaps in the free world they can't force you to enroll, but in the US 'they' can.
 ;D

I think that your comment about trusting the government is a universal concept.

They don't want banking secrecy because that fuels corruption. So I actually understand the argument. How effective would an organization such as Wikileaks be if they could not follow the money? How could law enforcement actually investigate on the evidence given to them from Wikileaks if there were no money trail?

But you're right that the idea of trying to separate into clean and dirty Bitcoins is unacceptable. The coins should not be tainted. If there are bad actors then investigate the bad actors and not the coins.

But should we have to go through a security check to cross the street? I don't think so. But if we get on a plane of course we have to go through a security check. So there is a balance that is missing here. You need the ability to check and investigate without requiring people get a digital ID card to access their money.

The idea of having to identify yourself is as stupid as the whole force people to get ID to access the Internet. The Internet ID card is a horrible idea and this idea is horrible if it's implemented like that. If you're trying to do something legitimate and move a lot of money into it then there should be a background check and part of that would include verification in my opinion. But once you do get verified you should be able to attach that to any of your aliases with complete privacy. The company that verified you does not have to keep track of all your aliases to know that those aliases belong to a verified individual. That is my point. You can be verified but also have pseudo-anonymity where even the database owner doesn't know which aliases belong to whom.

Do it like that and you can have privacy while also allowing people to be verified. It's not all that different from age verification on websites. A particular forum does not have to know your identity, but once you are verified as being over 18 then all websites would accept your verified pseudo-nyms without having to know any detail about you other than you passed the verification check and were cleared to enter.

Of course they will accept your previously non verified bitcoins form an unknown address because you'll have to provide papers when you do the exchange ... nothing new from how thing are going

1) a paper bill was used to pay a criminal , after 20 years i'm paid with that bill , it it tainted? am i going to jail?
this kind of regulation has nothing to to with the bitcoins , but with the account

2) accept from x , deny from rest , numbers don't matter to such a system (just like the .htaccess ip filter)

3) i'm not getting what you want to say :D

4) have you as asked them ?

5) that is for certain.

If the bad actor is being investigated then the people investigating the bad actor need a way to clear everyone who is not that specific bad actor. I need a way to allow them to check to see that I'm not a bad actor.

But I don't want to have to be continuously checked over and over. There should be a way for me to claim my addresses and my coins with a digital signature representing me if there is a problem. Once that digital signature is recognized as matching an identity of a person who is cleared for access then I should be left alone.

The majority of people should have no problem at all and shouldn't be flagged. The people who scammed people out of thousands of coins, honestly if they get flagged and asked to verify their identity that might be a good thing.

wait when did walmart announce they were accepting bitcoin?

And I see a way it might actually work , but first let's assume those guys have a plan , and they have an ace in their hand.
Something like a big company wanting to start accepting bitcoins but concerned about the mess around it.

I wouldn't be here on the forum but rather drunk already if that were the case.

correct

first thing. coinvalidation are just a business. they are not government. they are simply business advisers trying to help bitcoin BUSINESSES to comply with the regulations.

second thing regulations only apply to businesses that deal in the FIAT side of things. EG. exchanges, businesses converting to fiat for supplies, wages and tax purposes.

third thing. as it says in the PDF on coin validation site for end users. they are not asking for end users information.

take this as the example....
coinvalidation talks to bitstamp, ensures they have a policy that covers all of the FIAT exchanging policies. EG the wire transfer regulations of $1000 requiring AMLKYC if done in a short period or $10k over a year.(allowing bitstamp to lower daily limits and yearly limits to reduce personal risk) to be on the look out for transactions that are obviously linked to a crime. EG 1 TXID hop away from a silk road address..

they then accredit bitstamp as being a clean legit and compliant business to be listed in their database. all bitstamp withdrawal pubkeys are then treated as clean.(meaning the addresses where bitstamp hold the private key)

now then imagine alpaca socks shop see's a TXID that can be coinverified as coming from bitstamp. and another TXID showing a 1 hop taint from a known silk road withdrawal address.. alpaca socks will probably accept them both, as they are for small amounts of funds..so not much risk, infact places like alpaca wont even use coinvalidation service due to the small transaction values.

now imagine a car showroom or real estate..they would accept the bitstamp clean TXID but not the silk road TXID.. and would use the coinvalidation service.

coin validation is not in the game of asking for driving licence information from EVERYONE.. all they ask is that the businesses that are accredited as clean and compliant on their database, are compliant. meaning bitstamp will ask for AMLKYC for customers wanting to withdraw FIAT above the daily limit.

this has been the regulations for years, concerning businesses dealing in large transactions. coinvalidation just want to be the offionado's to offer business advice and help businesses easily identify blackmarket known addresses.

this is not about putting users onto a santa's "naughty or nice" list. it is about knowing the origins of coins. EG if it was exchanged for fiat, if it was mined, if it was from a black market sell.

Why bother counting the coins , when they can go over individuals.
It's like a bank going to track all the papers bills I deposit instead of looking to my account withdraws and deposits.

Put a label on an address and attach it to a person. The the person is responsible how he spends the money. And how he gets it.
You receive money from unknown source?
1) give them back
2) use them which makes you guilty
It's already happening and this works with credit cards right? Why not with bitcoins.

I see the whole damns txid as a way to complicate everything.

Also this version defeats every mixing / dark wallet services.

At that point I would switch to an alt coin that had no such mess.  This will not happen though.  In fact the US government would probably alter cash to be (more) track-able like with RFID before Bitcoin had a required centralized coin register. 

wrong.
government do not ask people to write their name and zipcode on every bank note they use. all they ask is businesses receiving large amounts or amounts from black listed entities to be refused service and/or report it.

banks later can check serial numbers and see that one day 2 years ago that bank note may have come from the whore house in las vegas. it wont show the identity of everyone using the coins in between, just the businesses that have been flagged up as illegit

the same applies to coinvalidation
they will have a database of complying businesses and hopefully find the addresses of atlantis/silkroad and other underground services. then shops can check to see if funds came from legit businesses, were mined or came RECENTLY from underground services. to access the risk of accepting the funds from individuals.

with al that said. coinvalidation will inevitably fail.
how simplewould it be to deposit BTC into a fully coinvalidation accredited exchange like bitstamp. not turn it into FIAT to withdraw. but allow it to be used as a mixer. then withdraw the BTC again to show as a clean TXID, to then put into another exchange for the purposes of converting to FIAT and then the coinvalidation service verifies funds came from bitstamp. allowing the FIAT funds to be withdrawn to a bank. the answer.. very simple.

as i said before places like alpaca socks wont bother with coinvalidation. but a real estate agent would, and just like any business doing deals over $£1000 in one go or over $£10,000 in ayear, expect them to do some checks and accept or reject the trade from proceeding.

you mean the risk of accepting dirty bitcoin that will later be rejected by another business, thanks to your efforts.


i may not know exactly how this project will work and how it will initially effect users.
but the red flags are full on, and i'm not the only one seeing them.
maybe you'r to in love with your wonderful idea to see how destructive it could become.

destructive?
coinvalidation is not government, they are business advisors.
it will only affect users who are silly enough to withdraw funds from a coinvalidated known blackmarket and directly put funds into a exchange to withdraw into fiat..

the service wont ask you to register all of YOUR pubkeys. it is purely a database for good and bad businesses. so there are many ways YOU can mix your coins before entering or exiting a market/business

and if someone pays me from a coinvalidated known blackmarket, directly to my exchange wallet ( i  often have payment go directly to my ewallet )

what will happen to me? what will happen to my funds?

eh eh eh, what happens then?

This makes me sick to my stomach, and fearful for Bitcoin's ability to survive long term.

Let's just remove every dollar that's ever been used for illegal activities from circulation, what's the worst that can happen? /s

please answer me.

this is so naive.

Significant security issue for all greenlist addresses, funds can be more easily stolen the more often an address is re-used. This is all cryptographic stuff, but the more technical minded people here on Bitcointalk always make this point when discussing re-using addresses.

Money can be more easily stolen from all greenlist addresses.

What happens if you send coins from not cointrusted addresses ?

Returned or confiscated ? :)

It's like going to the electric , gas  company or whatever and telling them ... i left a few dollar bills by your door yesterday , did you get them?
How can you prove that you indeed have sent those bitcoins ?

Probably become unspendable unless you send them to some government backed company who will accept and wash the coins in return for a fat percentage (tax) and of course lots of proof of ID.

Exactly my feeling too...

It can be wrong, but I choosed this extreme argument, because i think it can show you something, what you are missing. If I understand this right...Let's say you are in the world, where BTC is 1# currency and the blacklisting/redlisting or whatever is working...you are in the country where prostitution / drugs are illegal (almost all countries in world). Now tell me one thing...how are you gonna pay? Sure you wouldn't pay with bitcoins (all prostitution and drug  bitcoins and adresses would be blacklisted, right?), would you? Because if in any time in future the prostitute or drug dealer will be caught, they will track the bitcoins to you...And you know what? How the tv show character Walter White said in the Breaking Bad...."Do you really wanna live in a world without Coca-Cola?"... i don't...

I am not saying, that i approve drugs or prostitution...no, but people should have their own choice to decide if they want to make stupid things or not...that is a life...

Nobody can track dollar bills, if there would be some way, they would already track it...bitcoin bring this possibility to the governments.....so if this will happen, our freedom will be smaller than it is now and privacy? In few years, there will be no such thing as a privacy...

So after all, when bitcoins will "win" the battle for #1 currency,  in exchange for our financial freedom and privacy...i think many people would say: You remember the dollar? Yeah man, good old times....;)

I don't know, i am just thinking something like this surely can destroy bitcoin and the sooner you will get it, the sooner we can take some actions against it as a community, together...

What did you smoke?
You're seeing as a problem that people can't do anything illegal?

Well , let me give you another example , maybe you realize what stupidity you just said:
Control chips are installed on birth and the first thing people are scared of is :
"I can't kill my neighbor anymore"

remember coinvalidation is just a business advisory service with a database. Compliant exchanges are just businesses that have to monitor for serious crime transactions (large FIAT transactions that are linked to serious crimes) they themselves cannot "freeze" funds. only a bank or a court order can.

infact if you were being investigated you would not know about it. this is the whole "it will take 3-5 business days" bit. giving the exchange a few hours or days to check you out before sending the funds onto the bank and your bank having a few hours or days for their own compliance checks. within the 3-5 day window.

some businesses to avoid risk of being penalised, headaches of looking at certain transactions, and avoid headaches of paperwork have the right to refuse service to any customer they please as long as it has been done before the transaction is processed.. although this would be bad for business. its the same as alcohol laws.. the law is simple dont sell to underage. but the shop can reduce its own risks by making a policy to refuse service to anyone that looks young that fails to provide ID. EG 'challege 21', 'challenge 25'

its worth reading the regulations of your country instead of asking other peoples opinions, they are not that hard to find. as although most developed countries are the same, there are some small variances in a few details. but the general rule of this scenario affecting the USA is:

US customers transacting over $10k need AMLKYC info,
US customers that have revealed information that their funds are 100% crime related will have their info passed onto fincen. and may find out later that their bank has frozen their funds..
thers more but go read it for yourselves.

the exchange cannot freeze funds. but they can without explaining why, refuse the customer and ban them (again this is bad for business, but they can do it, if given sufficient information before hand to prevent the transaction occuring.)

so i cant tell you what policy alpaca socks or bitstamp may create if they used coinvalidation as advisors. as half of it is the businesses own risk prevention, which goes above the law.

the main question to ask is why woud you want to highlight yourself as a high risk by doing large payments knowingly from illegally obtained funds.
if lets say you done a $10k FIAT withdrawal and maybe $20-$100 was from others who were stupid enough to send directly from silk road to you, then :
1) slap them across the face with a wet fish for being foolish and not mixing before risking YOUR funds
2) dont worry too much, as small amounts VS  YOUR larger clean funds will dilute risk.

but lets say all of the $10k came directly from silk road... slap yourself across the face with a wet fish...

LOL! I knew that would be your answer.
k anyway,

I have no way of knowing if the coins come from illegally obtained funds.... i do not know my customers very well, and i dont want to, these are 50$ tx's we are talking about...


WHAT????? i read " don't worry if you get paid in tainted coins you seem to have plenty of clean ones you can actually spend  in your stash "

thats the F'in problem, if i get paid in tinted coins, how will i know? will i be able to sell these coins at the exchange?


the bottom line:
suddenly taking bitcoin payments from random people is risky.

the sad truth:
this makes bitcoin worthless.

First...Thanks to bitcoin, I smoke Cohiba Behike  ;D what do you smoke?  ..Second, I wrote: "It can be wrong, but I choosed this extreme argument, because i think it can show you something, what you are missing." It didn't show you what you are missing here and you didn't understand it at all so better read posts from other members, maybe than you will get it, but basically i wrote the same, i was just hoping you will see the problem here in this scenario, but from your posts i have that feeling we both are living in two different worlds so let's just agree to disagree... ;)

EDIT: Prostitution and buying weed in Netherland is legal....your "can't kill neighbor anymore" example is stupidity for me, because it is not the same and exactly because you don't get this, that its not the same, you are not understanding my point above....we are living in two different worlds...I want the freedom to decide, you obviously don't...


http://s3.amazonaws.com/rapgenius/cocacolabreakingbad.gif

Can you pay in a weed shop in Netherlands or in a brothel with a visa card issued in France?

now we have got passed the fact that coinvalidation is not a personal identifier of every user (todays hysteria) and moved onto the deeper topic of the actual risk.. then yes using an american exchange * to directly withdraw FIAT, and not mixing your coins first would be a risk. thats why there is always localbitcoins.com or other exchanges that have not used coinvalidations services. or as mentioned, putting coins into an exchange * not converting to fiat (avoid triggering any FIAT regulation checks). then wait a few minutes and withdraw the bitcoin so it shows as fresh from a regulated exchange(abusing the first exchange as a mixer/validating service). and then put into another exchange* to then transfer to fiat. which will trigger the checks and see the coins have come from a valid exchage just 1 hop ago.
 * that volunteered to use coinvalidations services

but this is a headache to do for some. but inevitably apart from ensuring that exchanges learn how to handle the US Dollar legally. the database part of coinvalidation will become the useless part, because everyone will be mixing and hopping transactions around certified businesses before finally triggering the FIAT checks. thus coinvalidation will end up just being compliance advisors without the database.

im more concerned with mike hearns brainfart of tainting actual coins

eg coinvalidation would allow checks to show that maybe at onetime my coin 35 hops back was in a silk road pubkey. if i moved it through 50 of my own addresses it becomes 85 hops, thus making it beleivable that it passed through 85 different people before going into an exchange. meaning low risk.

mike hearns idea. "this coin is red-listed who are you". pass it through 50 of my addresses.. "this coin is red-listed, who are you" no matter how many bunny hops the coin moves until valid ID is given the coin remains red-listed. the ONLY option would be to put it into a mixer that doesnt request ID and hope the coin you withdraw is not someone elses red-listed coin. eventually all coins, once circulated enough would touch a black market at one point or another. making them all red-listed

i was thinking  tainting coins was just a function of coin validation.
wtv both are unnecessary and uselessness, and therefore harmful.

OP, you can't have a whitelisted Bitcoin addresses only policy because you can't block people from sending you bitcoins. Anyone can send any bitcoins to you as long as there are some miners out there who will confirm any transaction. So what does Wallmart do then? Just take those bitcoins and steals them? Not to mention that you can't guarantee the address to which someone verified withdrew their coins is actually under their control... What if the verified person withdrew to an address of a friend? or a customer?

It's an infeasible, stupid and bad idea, period.

First thing you all that read this thread have to take into account is that I DO NOT SUPPORT IT!
I just whant to figure out a way it might work.

Now
Same is with cc cards , i can send you any amount I want , just go in a bank sprout a card number and here your go.
And honestly I don't have a clue what happens next according to the law.

To be honest I have not read this thread entirely, but you should know who is behind this new firm:

He comes from an incredibly wealthy and well connected American 'dynasty' family


http://www.reddit.com/r/Bitcoin/comments/1qoe8c/research_into_founder_of_coinvaildation/

Well , at least I can say your account is quite interesting before I switch to reading the link.

CoinValidation:

http://www.youtube.com/watch?v=9vkF-k56b2g

This stands against bitcoin and the idea envisaged by Satoshi.

Satoshi abandoned this experiment long ago.  Maybe he's the smart one.

Or his mortgage rates grew , and he changed his name to <insert the person you hate most here> and started the bitcoin foundation.
 :)

Actually, Hazek, I think you may have stumbled into to the solution to this whole mess. Really, all that has to happen is that someone that owns a big stash of tainted coins (say the good folk who brought you the MyBitcoin fiasco, or some equivalent) send a few satoshis to hundreds of thousands of addresses... they can "taint" the entire network for a few thousand USD worth of coins, including the walmarts and mcdonalds of this world.

Really hoping this doesn't go ahead :/

Whats the point of your question? It doesnt matter if you can pay in brothel with visa or not. It would matter if there was no other way to pay in brothel than using visa card...You can pay there with physical bills or coins, thus non-trackable...bitcoin is online only and you can track every transaction...with tainting coins, tracking will go to whole another level and it would bring more negative things than positive

The point is that I can pay with a card issued in a country where prostitution is banned in another country in which it is not banned without having anything to worry about it.
You can do that with cards , bitcoins , cash with no problem.

If you want to do it in a country in which it is banned , you're breaking the law , no matter what you use.

So , you're advocating for privacy just so you cold break the law?
There are two ways around this:
1) Run in the shadows and continue breaking the laws and hope you won't get caught
2) Try to change the laws

96% of dollar bills have traces of coke on it ,,, so I gues 99% is tainted.... sorry you can not taint bitcoin, there is no pont any mixer can undo it , is just that simple.
The US govt will fail here.

You didn't even bother to read , did you?