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For those not familiar with what it means for something to be fungible, it refers to how interchangeable individual units of a commodity or good is.
Your Bitcoin is the same as my Bitcoin. My gold bar is the same as your gold bar.
For the longest time, I had always viewed Bitcoin as a perfectly fungible store of value. As I continue snooping the forum however, it seems that many members aren't so sure.
Bitcoin that has been 'tainted' by illicit activity has allowed exchanges to flag (and possibly freeze) any Bitcoin they deem to not be clean. Something as simple as using mixing services, coinjoin transactions, or other anonymity features is enought to have your Bitcoin flagged. Obviously, this poses a major issue, a fungibility issue. Now, my Bitcoin is not the same as yours. Mine is "tainted", while yours is "clean". This undermines the entire definition of fungibility.
I hate to come with a problem and not a solution..but I beg the question(s)..
What do we do about this?
Are there people actively trying to fix this?
Is this something that can be fixed by devs or is this a political game?
What do you do with "tainted" coins? Use a DEX and exchange back for a new set of coins?
Is this all just a bunch of nonsense and nothing to worry about?
If you recall any good discussion on this topic somewhere on this forum please drop a link.
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In the worst cases, if exchanges as well as governments are able to track a transaction to know it's coming from a mixer, mixing in general will be useless. However, i think about Chipmixer who has the only mixing kind service as the user will receive private keys to spend from instead of a direct transaction to his wallet. Would they be able to trace it also ?
I was pondering this as well. However, I believe it is the round number amounts in the wallets that may be of some issue as this is quite easy to identify. Then again, I am not sure how this would look from an exchange's point of view. It is also unique that the keys are funded prior to your deposit which adds a layer of obfuscation. How would this be different for mixers like Tornado Cash on the Ethereum network? |
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So most top exchange can detect it: Binance's partnership with Chainanalysis to detect "Dirty" Coins... Maybe you were successful with your little experiment, however, it doesn't mean that they are not going to look at your account in the future. And then when you least expected, they will suddenly freeze your account or worst confiscate it. But how in the world are they going to say that mixed coins just 'arent valid'. For example, if I cut grass for Bitcoin and one of my clients is a privacy enthusiast who regularly uses mixers for his stack. What happens when I try to deposit these? My account is now frozen? Bitcoin gone? This just doesn't seem right. I'm trying to wrap my head around how they would be able to track something like this. Someone educate me, please. |
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Anyway, I think the easiest way to hide this history is just bouncing your mixed BTC from address to address. After a few days of every-now-and-then bounces, I doubt anyone will have a clue. Perhaps this is a tactic also used by mixers?
This tactic would be no match for a standard blockchain analysis tool. They would easily be able to follow that trail of transactions. The key is to use all of the privacy features that some of these new-age mixers present. This includes changing output values to keep any analysis tool from matching up inputs and outputs. But bouncing transactions around in such a rudimentary way would be highly ineffective. |
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Which exchangess? Most of the US based ones, like Coinbase & Gemini will close your account if they think funding is coming from a mixer. There are lots of discussions about that happening here and on many other sites. Other ones, in other parts of the world, who knows. Depends on their mood and how much BTC. Also, if you are not doing a straight BTC -> fiat exchange may be a bit less strict. Where some others, really don't care at all. As for if it's from a mixing transaction or not. Depends who you ask: https://bitcointalk.org/index.php?topic=1935098.msg58313016#msg58313016-Dave Meaning they will confiscate your funds in the process? Or will they give them back and just say you're not welcome here anymore? Quite curious. |
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For those of you who are not familiar, ESG (Environmental, Social, Governance) criteria are a set of standards for companies to screen potential investments. This enables them to make informed decisions on the companies or individuals they are investing in. Environmental criteria consider how a company performs as a steward of nature.
Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates.
Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights. It is arguable that Bitcoin presents issues in all three criteria. Particularly Governance in the eyes of ESG. ESG has been around since 2006, and for a while, major companies found it laughable to follow such restricting standards. ESG companies even found it harder to survive when they were being outpaced by entities that could invest their money as they pleased. Larry Fink, the big man at BlackRock, recently met with other financial giants at the World Economic Forum and discussed ways they will standardize these criteria and make it challenging to survive for those who don't adhere. If you are familiar with CoinBureau (loves alts) then you may have seen his video on ESG and how much of a threat it poses to Bitcoin in particular. In his video, he goes into great detail discussing Bitcoin's potential Environmental, Social, and Governance issues in the eyes of ESG. The video is very informative and well researched, so I recommend taking the time to watch it. (Link at the bottom) In my attempts to dismiss it as FUD, I went to the comment section of the video to see what his viewer base had to say. As expected, it's just a bunch of fanboys telling him about how quality his content is with minimal discussion of the discussed topics. I want to discuss this further here. Kevin O'leary stated on the What Bitcoin Did podcast that the May crash from our ATH was not due to China's infamous ban. He suggests it was ESG concerns over Bitcoin's environmental concerns. He explains that Tesla dropping Bitcoin payments was not because governments threatened to pull carbon credits, like many thought. In reality, it was ESG issues brought to him by ESG rating companies. Could something like ESG criteria bring issues to Bitcoin? Are all of Bitcoin's potential issues surrounding Environmental, Social, and Governmental factors in the eyes of ESG legitimate or just FUD? ESG Video: https://www.youtube.com/watch?v=zVxiFEzCp2U |
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I have been re-reading many of the old BIPs and I stumbled back upon BIPs 100-109.
For those of you who remember, BIPs 100-109 are a collection of attempted hard forks with the aim of increasing the max block size from 1mb. Clearly, these proposals were rejected.
I know this community is not very keen on increasing the block size, but it seems that everyone agrees it will need to be addressed in the future.
But when does this become "okay"?
When does it become okay to increase the block size, and by what increment? Or is it completely unnecessary because of L2's?
I understand the centralization issues a larger block brings, but how bad could it actually get from a small increase?
Educate me!
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Do we think that Bitcoin mixers/tumblers will become useless as blockchain analysis gets better?
Will we create applications that analyze the blockchain well enough to see through mixed Bitcoin?
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Does anyone have any reliable resources regarding properly/safely mixing BTC?
This is not for any nefarious reasons, I am just interested in trying the service.
I have tried to find some reliable service providers online however I get a lot of scam reports when I look into the services a bit deeper.
Are there any services you folks have used?
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Bitcoin is to valuable which means people do not like to use it as a currency and instead like to hodl it for long term gains. I think Altcoins are the future of micro transactions and Bitcoin will be used as a reserve currency.
I would say the progress with the Lightning Network proves otherwise. Bitcoin accompanied by L2's has more than enough potential to become the hub of all transactions. I do not see this happening any time soon, but the potential is certainly there. |
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Magnificent read.
To be honest, reading this was kind of bitter-sweet because I had always had REALLY high hopes for quantum computing. The amount of "problems" it could theoretically solve was just so hard to ignore. Growth at an exponential level.
However as lovely as these pipe dreams were, I find it more rewarding to understand where we really are with respect to achieving quantum computers.
Thank you for sharing.
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We will have to wait and see what happens with these Bitcoin DeFi projects. I'm pretty skeptical about this.So far,I have never seen a really successful DeFi project,that was based on ethereum or any other altcoin.I don't think that Bitcoin based DeFi projects will be any different. Assuming Bitcoin devs (not just Square's) are able to create a system that is both efficacious and secure, I believe that it could become the primary DeFi network. I don't think that the Bitcoin Core developers will bother with creating a DeFi network. They have other things to do.If you want something secure and effective,just stick to Bitcoin Core and forget about second layer or third layer solutions.  I think it is quite evident that L2's will have a major role to play in the adoption of Bitcoin. The base layer can only handle so much. I can't see a way we can reach global adoption without L2's. |
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Bitcoin DeFi projects have been a huge focus for companies like Square. Jack Dorsey has been working with his team to create a DeFi business built on Bitcoin's rails. It has been reported that there are around 26 active Bitcoin-related DeFi projects. That is just what Square is doing. As we are all aware, DeFi projects have been primarily dominated by the likes of Ethereum & Binance Smart Chain. Projects like Aave, Uniswap, Compound, and PancakeSwap already have tens of billions of dollars locked up in their network. This will grow exponentially. It seems rather clear these DeFi projects will take place on sidechain/layer-2 solutions. The on-chain network is currently not fit for these projects. Regardless of the technical aspects, however, I am wondering if Bitcoin DeFi will be able to draw similar liquidity to what we are seeing in ETH & BSC. Will Bitcoin DeFi be able to compete? Will we be able to offer the same yields? Will it be as effective/efficient as DeFi on other networks? Could Bitcoin DeFi be superior? Assuming Bitcoin devs (not just Square's) are able to create a system that is both efficacious and secure, I believe that it could become the primary DeFi network. This is much easier said than done, however, and is certainly an uphill battle. Then again, maybe the goal isn't to be #1 in DeFi.  What do you folks think a Bitcoin DeFi network would look like? Do you think we would see anything truly unique? |
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Once again the market has been manipulated after the statement of Elon Musk "Tesla will Re-accept Bitcoin" and this way based on the volume of accumulation one day bitcoin network might go completely into the hands of centralized powers.
It needs to be allowed for its real growth. Quite often these guys manipulating the market looks like an asset that doesn't have its own value, but depends on someone's words.
The "pumps" happened WELL before Elon even went live at the conference. Him saying that had NO effect on the market. Do not kid yourselves. |
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Are there any Bitcoin mining facilities currently running on nuclear energy?
yes ofcourse yes nuclear has been around longer then wind and solar Yes..that is quite clear. I am asking about Bitcoin mining operations running off of nuclear energy. Are there any that do this? |
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--snip--
There are two solutions to this problem. One is to increase the block size, but without an improved scripting system that can parse these kinds of complex conditions, you'll just end up making the blockchain too big for most people to download fairly quickly.
This is pretty interesting to know that the next set of challenges that LN will face is related to the need for complex scripts and the need for Bitcoin to find a way to accommodate this. Now, all this talk about Smart contract language for Bitcoin is a bit esoteric from my viewpoint but didn't a bunch of developers propose a scripting language change to achieve specifically this? It was called Simplicity and I could never go beyond the video where the developer is showing the Half-adder implemented in Simplicity. What is the current state of development with Simplicity? Did it not prove useful in being the smart-contract solution? Once you answer a few questions, I promise I'll do some research on my own too. Thanks for this. To answer the OP, I don't understand why nobody has pointed this out yet, but one of the challenges I feel is for the mining incentive to continue to remain lucrative to ensure the hashrate that we see today. In two decades, it'll halve twice. The state of the fee-market by that time and price of BTC will be the factors to decide whether it is lucrative enough for miners providing security to the chain. Why is it a concern what the mining block reward will be? By the next halving, Bitcoin will have gone much higher in price, thus making mining still worthwhile. While the amount of Bitcoin you receive per block mined will go down, this doesn't mean the dollar amount per block will. |
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What do you think will be the biggest technical obstacles faced in the next decade?
Obviously it's scaling bitcoin for mass/global adaption. Based on network, there are 3, which are on-chain (Bitcoin), side-chain (such as Liquid and RSK) and off-chain/2nd-layer (such as LN). For on-chain scaling, it's mainly about reducing transaction size, transaction batching and faster verification. 1. Taproot already locked-in and it's just matter of time before it's activated. However, Taproot only has noticeable impact with complex script and multiple keys/signature. 2. Using more efficient transaction serialization to reduce transaction size. See Did you know bitcoin uses 6 different ways to represent integers. 3. Mimble Wimble which perform transaction batching and improve privacy. But AFAIK it's difficult to implement Mimble Wimble without sacrifice it's privacy property. One is to increase the block size, but without an improved scripting system that can parse these kinds of complex conditions, you'll just end up making the blockchain too big for most people to download fairly quickly.
And increase block size also involve social (and even politic) problem. Do you think adding Mimble Wimble will bring negative press such as that with XMR. Mimble Wimble in my opinion is will be unnecessary for a while. I'm not insinuating exchanges will delist Bitcoin (lmao) but wouldn't adding Mimble Wimble not be entirely good? |
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Even with id and bitcoin.
I'm not entirely sure what this is asking.. IP addresses and MAC addresses on the network would certainly pose some sort of anonymity risk. Your post should contain details as to what exactly you are inquiring about. |
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It is an interesting take by Elon with regards to Tesla saying that 'Tesla will be resuming BTC payments' but on the stand of renewables backing up to 80% of it BTC mining energy usage with an increasing trend on this.
In terms of the types of renewable energy sources he places a greater emphasis on both geothermal and even nuclear energy.
What are your thoughts on this, can BTC mining become mostly renewable, how long do you see this taking, and what will be its main energy source?
I’ve been reading about nuclear plants beginning to mine Bitcoin. If this is the trend then I think that hitting his goals will be quite easy. Renewable energy is cheaper than it’s legacy competition now, so it’s bound to happen and is only a matter of time. It is nice to hear Elon state the number he’s looking for, and I expect we’ll be there towards the end of the year. I can see Tesla resuming BTC acceptance and an SEC ETF approval being major catalysts for the 4-year bubble top many are expecting in December. Elon's angle on nuclear energy is something I found fascinating. It would be great because it would be able to handle the constant need of energy that ASIC's require. Not to mention its insane renewable properties. Are there any Bitcoin mining facilities currently running on nuclear energy? |
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Here's the paradox though, if everyone who knows about bitcoin gets teleported back in time, the supply will quickly go up because everyone is going to buy it and there is definitely someone that will break the laws and cause a paradox which renders the first time travel not real which takes us back to square one which is the present before the time travel.
This is literally what I think about. I have tried to beat this idea in many different ways but I am unable to break out of the paradox. You would just have to be quick  |
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