Bitcoin Forum

It's been months since I started contemplating improving the anonymity/privacy of my coins.

There's just one fear I keep having though, which is.. say I CoinJoin my coins a few times and then go through a mixer as well. 5 years later I want to sell my mixed coins - will I not get in trouble with the authorities?

It starts to feel more and more like the further you want to improve your privacy these days, the bigger of an enemy of the State you become. With all the crypto-related stuff that has been pushed in the last few years, it gets to the point where I think that in a matter of years mixing your coins will put you somewhere on the government's blacklist - in fact, it already got to that point in some areas of the crypto sphere such as exchanges not accepting XMR anymore or blocking/seizing your funds because they found out your BTC went through some mixer beforehand. So my fear isn't far-fetched, is it?

Therefore, while I would love to go ahead and mix the heck out of my coins just so that it becomes a big headache for and almost impossible for the government to keep up with my coins' track, there's this fear I'm having that mixing my coins now may turn into a big headache for me in the end as I might have to answer some questions I will literally have no answers for.

I can't imagine myself being able to prove for example where my coins actually came from in a matter of years if some authorities ever ask me to do so - if you asked me right now to show you all the wallets I've ever used, I'd probably send you to my local junkyard to find my shredded/burnt paper wallets and put all them pieces back together because all that's where all my previous wallets are, lol.

So what do you think, is it worth it to use mixers or could I get into a bigger trouble in the end? :)

What I personally do:

1. Mix a good chunk(but not 100%) of the coins I own.

2. Send the mixed coins(on different batches) on some addresses that I own, probably more than 10 times(preferably around 25 just to be sure). Pretty much a manual version of Samourai Wallet's Ricochet[1] because I'm cheap. This is to hopefully not sound alarms on anti-mixing(or soon to be) centralized exchanges as the coins were moved a lot of times after the time it was mixed. Or if they actually went that far and "detected" the past mixing and asked you about it, you can just say that you don't know about it lol because the mixing was like 25 transactions ago. 🤷‍♀️

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EDIT: but yea boys and girls, mix your coins. at least some. at some point almost all bitcoin are already mixed in the past that it would be unfeasible for exchanges to blacklist every single address.

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[1] https://samouraiwallet.com/ricochet

Unless I had a gaping security hole from leaving my coins unimxed I definitely would not mix them. We've no idea how uptight third party services will get about it in future, how good the tracking tools around at present really are and there may well be much better options to add privacy in future as well.

If there was a deeply pressing need to do it then doing it now rather than later at least looks less fishy a few years down the line.

In practice, is mixing only applicable for people who have good fund and not too small? Personally, mixing is the same as transactions and cost transaction fees. It depends on the fund value initially and number of mixing rounds.

If the fund is small, the rest after mixing will be smaller and the percent of lost for fees will be higher than if doing the same with bigger fund.

Choose time to mix is another contributor to result from mixing (in the side of mixing cost). Good time to mix should be in the weekend but people should check mempool before mixing their coins. Mixing is different than consolidation but choosing good time is the same.
[JULY 2020] Fees are low, use this opportunity to Consolidate your small inputs! (https://bitcointalk.org/index.php?topic=2848987.msg54779679#msg54779679)

This is by no means unique to cryptocurrency. Everything from using Tor to having to root your own phone to be able to turn off some of the telemetry and tracking, it is time consuming and often difficult to maintain your privacy, and this is by no means accidental.

At some point, near enough every bitcoin in circulation will have been mixed/coinjoined/payjoined/something else at some point in its history. You can't ban every bitcoin, so how far back do you look? 5 transactions? 10? 20? So all I need to do is bounce my bitcoin through n+1 transactions and now they are "clean" again? It's an untenable position for the exchanges to hold.

I would also mention, as I always do, that there is no need to rely on centralized exchanges.

Exactly, but I wouldn't be comfortable in sending freshly mixed(in terms of hops) on centralized exchanges, hence why I do the Samourai Ricochet thingy. Mixing/CoinJoining is one of those things that will get it's maximum effect if everyone does it.

True, and I rarely use centralized exchanges. Sometimes I just need money urgently and have to sell some coins in a quick manner. I have contacts with a few bitcoin buyers and sellers, but timezone differences is a btch.

That's a good suggestion.
Antonopoulos made that suggestion few years ago.

Just use the mixer for the coins you want to mix (not all ofc). Then transfer those mixed coins about 5-10 times in addresses you own.

If Exchanges do not accept your coins because they are tainted, it is because they checked the past 5-10 transactions of those coins. If they check all previous transactions of those coins, they would realize that almost all coins are tainted (because they had been in a mixer/casino/etc at some point in the past).

So just move them in your wallets for some time to by pass their taint check.


Edit: Just saw o_e_l_e_o post:

I agree, but they are usually much safer. In some exchanges like bitstamp, Kraken, coinbase, I can trust that I will be able to buy/sell 2-3 bitcoin easily, with safety.
I don't know if I would trust some random guy in the internet with such amount.

Oh absolutely, I'm simply pointing out that while centralized exchanges do hold such a position, it is a stupid position, and one that is easily overcome as you are doing.

It's funny, but I'm the exact opposite. There is no way I would send 2-3 bitcoin to a centralized exchange. I have exactly zero faith that they wouldn't freeze my account, demand ridiculous amounts of personal data and information, I would spend weeks having to jump through hoops to hopefully get my coins back, and all my data would end up in the hands of third parties and governments for my troubles. I'd much rather trust a hardcoded multi-sig escrow or someone I have personally traded with several times in the past.

First and foremost, thank you all for replying with your sincere opinions.


Yeah, this is definitely a good idea. I might spare some money on these txs just to hop my mixed BTC from one address to another until it gets exhaustive and quite hard to keep up with its trace. :)


I might have a few privacy/security holes if I take an in-depth look at the history of my coins as I had zero idea about any privacy issues back when I started with crypto, so I'd rather mix them up. I agree though that future is quite uncertain so it might be a mistake to mix my coins right now.


Agreed. Yeah, never thought that at one point all BTC will undergo a "privacy-improving process", especially as some of those willing to do so may be trying to evade taxes/charges, which means they probably have a quite impressive stash to mix.


I get your point but I still do not trust them. I barely trust sending $10 to an exchange at this point, as I'm just sick of their procedures. The fact that you cannot trade on a website without having the ensurance that your money will still be yours afterwards is annoying as hell. I'd rather find other ways to trade and accept stupid mistakes I may make than ever use them again.

the ideal is for decentralized/p2p mixing transactions (like coinjoins or atomic swaps) to blend in among normal network transactions.

right now, that isn't possible. it's currently trivial for blockchain analysis to recognize coinjoin transactions/outputs or to monitor multiple blockchains for atomic swaps. i'm skeptical it will "get you in trouble with the authorities" on its own, but it could get your money frozen by over ambitious exchanges. we definitely need better on-chain privacy enhancements.

something i'm excited for is schnorr signatures, which will in turn enable adaptor signatures. this will allow atomic swaps without requiring you to publish all the script information on-chain. in other words, you'll be able to do atomic swaps for mixing without leaving behind any on-chain data that connects the outputs together. http://diyhpl.us/wiki/transcripts/layer2-summit/2018/scriptless-scripts/

From my point of view, it is worth it to mix, coinjoin, whirlpool your coins. In decentralized ecosystems like bitcoin, everyone agrees on certain qualities, characteristics, properties of the system, usually it is hard to change even a single aspect of decentralized system. If majority decide, for example, that total supply should remain fixed, it will stay so. Majority tend to defend what they consider useful for the system in order for it to effectively grow and evolve. Fungibility is one of the main properties of money, otherwise it is not money if it couldn't be exchanged for another unit. Bitcoin is also money, way better than we had seen before. That property should also be protected like other useful properties of bitcoin. The only way to defend it in decentralized system is to convince majority that it needs to be protected by any means including obfuscating of bitcoin transactions.

"United we stand, divided we fall..."

Then it's better NOT to mix anything if your coins are, exchange - your wallet - exchange.


Or make good relationships with some people in peer to peer trading markets like LocalBitcoins.

While I personally don't mix all my coins, not sure about you, but I don't like my money being traced not only by random people, but also by exchanges either; regardless how reputable or "trusted" that certain exchange is. Regardless, requiring privacy in this case is hugely subjective so, you do you.

You will not get in trouble if you did not knowingly take money from a criminal that is all I'm very confident of. I mean, dollar bills have cocaine on them. And corrupt ministers give money out all the time. If you was going to jail because a bad guy touched your money, we would all be in jail now!

I think your fear is completely justified, the pursuit of anonymity will always have its price in the future - especially if we take into account that the idea of decentralized money has never and will not fall on fertile ground. I recently read an article (https://bitcointalk.org/index.php?topic=5251778.msg54540567#msg54540567) where someone pointed out how Bitcoin could be classified in the future, in fact that their price will depend on their origin. If we consider that something like this can happen, in 5 or 10 years someone might tell you or me that our BTCs are worth 10-20% less because they are not very clean - or in an even worse case they could be frozen on some exchange while we do not prove their origin.

However, as others have stated, most BTCs will be marked as black/gray in some way by going through mixers, online casinos, participating in scam or the dark web. The only sure way to have clean coins is to buy virgin Bitcoins, and not use any mixers afterwards - but miners usually sell their stock over OTC at a 10-20% higher price

Coins which go from exchange - your wallet - exchange are important to mix imo.

As exchanges requires KYC, your coins will be linked to your ID when you send them to exchange. So, basically, if coins came from bitcointalk, you are linking your bitcointalk account to your ID if you don't mix them.

But the risks? Read OP. I believe privacy is less-important for a trader who is here only to profit in fiat in my opinion. Exchange - wallet - exchange.

Privacy/anonymity is a human right. That can't be taken away from anyone unless you commit serious crime.
This's one of the reasons I believe it's important to understand the problems the laws are trying to solve in other to help them (the laws) solve the problem without violating important/fundamental rights like privacy/anonymity.
I would suggest methods that cloak/hide users transactions or coins effectively without making them hard to go through or traced when the law wants them. This's why immutablity should remain a fundamental principle of Blockchain/decentralized tech.
You could tie the important/big transactions and coins to your unique personal identities while still keeping them well hidden, private or anonymous...so that you can easily go through them when requested by the law. Again this is why immutablity is important.

I believe people have the right to refuse to reveal certain data if they did not break any serious rules/laws, and if they feel unsafe. People also have the right to delete harmless/safe/good data they no longer need if they want to, but it could make things a bit hard for them in the future.

There are risks when you don't mix them as well.

For example, you earned a lot of money in this forum already in your signature campaign. Have you paid taxes from that earnings?
Did you send your coins from crypto-games campaign straight to an exchange, linking your ID with crypto-games (a casino) and your bitcointalk profile?

Are casinos legal in your country? Shouldn't you pay taxes on your earnings? Can you explain all that to the authorities?

I honestly really wish it was that way, but it looks like the authorities have found a way to forcefully change some stuff without changing Bitcoin itself. Let's hope your last quote will still apply even 5, 10 or 30 years from now. :)

Tell the centralized exchanges this, not us! :D I'm quite sure there would be a problem if there was a clue that your banknotes came from a not-so-legal source. It goes even worse for bank accounts (which are closer to what Bitcoin is): had you received money from a criminal through the bank, don't be surprised if authorities ever call you out for an interrogation.

Your statement is quite contradictory, you cannot cloak/hide a transaction without making it hard for authorities to trace it. If the authorities can easily do so, then can the average person who knows how to do a proper blockchain analysis. The idea is that I'm trying not to link my txs to my identity/fingerprints.

True. It's a double-edged sword. You basically have to choose between the probability of a bad actor trying to analyze the blockchain to find who you are and the probability of someone considering you a suspicious dude because you tried avoiding your identification.

I doubt it that it will be possible to taint all bitcoins, because some of them are constantly being cleared through transaction fees, coinbase transactions don't consume any UTXO, so modern heuristic used by surveillance companies is not suitable in such cases. However, some governments can start punishing those miners who include tainted transactions in a block, if miners fail to somehow check legitimacy of every transaction they include, they will be immediately shutdown. If they include suspicious transactions with very high fees, they may also be punished as money launderers.

If you're going to be receiving Bitcoins, there is a high chance that your coins are already tainted. If the adoption rises even more in the future, most of the coins that you're going to receive would've been tainted, albeit just through a few hops. Unfortunately, the authorities don't care about your reasoning because they are not concerned about whether you can spend the coins.

I'll say, just go for it. You're better off protecting your privacy than trying to stay on the safer side. If you get banned off any platform, at least you'll know that they aren't conscious about your privacy. They also can't prove that you're doing anything illegal since using a mixer doesn't directly constitute you doing illegal things.

the more people use mixing options to mix their bitcoins the harder it is going to get for these centralized services to block deposits and cause any trouble for their users because eventually a large portion of their users could have mixed coins and any limitation could cost them a lot of revenue.
right now they can put up the restrictions because of low number of users and the stronger government pressure.

i think these risks are being overblown. the people that really need to mix outputs are those withdrawing from darknet marketplaces and gambling sites. that's what will get your exchanges accounts shut down, and possibly attention from law enforcement.

some people get too hung up on tax issues IMO, thinking the tax authorities are gonna demand an immaculate, provable record of every transaction ever made in your life since you acquired your first mBTC. i simply don't buy into that sort of paranoia---and if i did, i don't see why mixing would do you much good since you couldn't prove anything about the source of your coins.

tax authorities are always trying to minimize time spent on any case. more than anything, they want to quickly reconcile your fiat transfers (assuming they are income) with the expected taxes due. they have no interest in coordinating an expensive multi-agency criminal investigation because someone is advertising a casino in their bitcointalk profile. :P

If you are spending the whole UTXO, a chainanalysis algorithm might assume that the coin didn't change owner.

As an example, if you have an output with 0.24235958 BTC, it would be strange if this amount minus the fee was moved to another address - either it's a deposit to some service, which is easy to check because of how hot wallets operate, or you're sending to your own new address. A natural transaction would look like 0.24 BTC + change + fee.

I agree with this as well... But, anyway, there is a risk in not mixing coins.
Even though it is improbable that government will be asking more taxes for people who come to bitcointalk, I don't doubt they would do it if it is convenient for them (depending on the country you live in)

Correct, never mind chainanalysis algo, any algo, including the new Coinbase one, should reliably assume entirely spent UTXOs are mainly with the same owner, which is why chronologically illogical and sum illogical mixing is still a great way to break that chain analysis.

I even use most of my actual spends to consolidate, and I'm sure algos identify this behaviour as well.

Read what I said, it's different for some users, and I believe it's more risky to mix coins if you're only doing Bitstamp - Your Wallet - Bitstamp/your other KYC/AML exchange.

But they are fully known to you. The risk with mixing is that attitudes, techniques and surveillance will change over time. If staying put and doing nothing is a minimal or manageable risk then the path of least resistance makes most sense.

i think that's a fair assumption. coins derived from exchanges are generally treated as "clean".

spending outputs should be treated with care and on a case-by-case basis. one should always consider where their outputs come from, and at what times it is appropriate to use them.

i have several different wallets with outputs from different sources, some of which generally need to be mixed or otherwise transferred through a third party service that is unlikely to flag them before i can deposit funds to a regulated exchange. for example, binance and kucoin have no policies against gambling. coinbase does. when i need to sell gambling winnings into dollars, one way is to deposit to one of these more lenient exchanges, trade the BTC into USDC, then transfer to coinbase and convert to dollars. this has the added bonus of saving me a ton on trading fees.

I think this should be threated case by case, as figmentofmyass said.

I prefer to keep some of my bitcoin anonymous. It depends on which country you live, what are your bitcoin sources and so on.

Just like attitudes,techniques  and  surveillance  regarding mixers will change over time, those things may also change over time for bitcoin holders and people who receive bitcoin as payment.

I agree it is safer to "do nothing", but it is even safer to play both: do nothing with some coins and mix others.

Almost everyone who replied in this thread receive bitcoin as payment from casino or mixers.

Ofc if you only do bitstamp > wallet > bitstamp you have no reason to mix. Then you shouldn't mix. There are many risks involved, even the mixer service can run away with your money.

This privacy of a thing is something I’m no longer looking into since I discovered that Bitcoin is not 100 percent anonymous. So since then I am just using Bitcoin and not caring about anonymity and all that, I just use it because I like the technology and all that. But if it’s all about staying anonymous, nah I don’t stress myself for that.

I have known about these coin–mixers for long now, but I have not had interest in making use of them. Someone once posted in this forum how his coins were seized by an exchange because they suspect that it was mixed. I didn’t get to know whether he got it back or not, it’s a long story, but I hope he did. That’s something I wouldn’t try.