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Author Topic: Blockchain.info coin mixer TOTAL RIPOFF  (Read 8190 times)
misterbigg
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February 12, 2013, 03:58:10 PM
 #1

Why is it that MtGox, which has to pay for employees, legal consulting, a physical office, and banking compliance, charges 1% or less for transactions, but Blockchain.info charges 1.5% for something that is automated (coin mixing)?
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February 12, 2013, 04:05:32 PM
 #2

Why is it that MtGox, which has to pay for employees, legal consulting, a physical office, and banking compliance, charges 1% or less for transactions, but Blockchain.info charges 1.5% for something that is automated (coin mixing)?
Because some folks will pay for it even though it doesn't add much value compared to Instawallet.
Wanting 0%-taint is stupid, if you want to mix coins you're after plausible deniability, not 0%-taint, I guess that's just marketing.

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February 12, 2013, 04:25:22 PM
 #3

Because some folks will pay for it even though it doesn't add much value compared to Instawallet.
Wanting 0%-taint is stupid, if you want to mix coins you're after plausible deniability, not 0%-taint, I guess that's just marketing.

Does Instawallet keep track of IP addresses?
Does it keep logs of transactions?

I'm guessing the main reason people will pay 1.5% is because of these 2 reasons, worst case scenario and BC.info are sub-poena'ed for info about the washed BTC, they would not have a lot of info to give.
You have no idea how fast our logs fill Smiley
Even if we wanted to keep them we simply wouldn't have enough disk space (we don't have that much of it anyway because all our servers have SSD hard-drives)

n8rwJeTt8TrrLKPa55eU
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February 12, 2013, 08:27:04 PM
 #4

The mixing space today is like the exchanger space a year or two ago: few alternatives and lack of competition.

My guess is that this state of affairs will correct itself after one or two high-profile cases of undesirable events facilitated via information leakage through address reuse and unmixed funds.
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February 13, 2013, 02:29:32 PM
 #5

Why is it Blockchain.info charges 1.5% for something that is automated (coin mixing)?


Because they can! They advertise a lot and are a very well used site.

The big guys always charge a lot, because they spend a lot to advertise and make sure when people use blockchain.info, that they end up using their service.

You should start a bitcoin business yourself.  Put in a buttload of hard work and make the business, THEN start a bitcoin mixing service of only 0.5%.

I'd use it!

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piuk
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February 13, 2013, 03:08:57 PM
 #6

Because we are one of the few services with a sufficiently large transaction volume, large hot wallet and the ability to calculate taint. We also take the risk of accepting zero conf transactions.

I am not adverse to lowering the fees. Those of you who feel a 1.5% fee is too high would you use the service at a 0.5% fee?

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February 13, 2013, 03:25:56 PM
 #7

I'll happily pay 1,5% if I feel I need to use this service. The reason I've never used it is because I don't need to, not because I think the price is excessive.

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February 13, 2013, 03:28:17 PM
 #8

I'll happily pay 1,5% if I feel I need to use this service. The reason I've never used it is because I don't need to, not because I think the price is excessive.
+1
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February 13, 2013, 03:44:45 PM
 #9

I think the fee is fair. It's a great example of the freemium business model.
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February 13, 2013, 04:41:12 PM
 #10

I am not adverse to lowering the fees. Those of you who feel a 1.5% fee is too high would you use the service at a 0.5% fee?

I'll also chime in and say I think the 1.5% fee is fine. The speed at which you send unconfirmed funds, even for large amounts, is remarkable and as I know very well involves quite a lot of risk. Myself I'm happy to pay for that convenience and use the mixer (really, coin-swapper) all the time. If anything the main thing I want to see is more control, like the ability to set the tx fee for the mixer output, (outputs often take far too long to confirm due to their low priority) and the ability to chose the number of outputs that will be used.

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February 13, 2013, 06:02:29 PM
 #11

I never used the mixer. But if it is as good as the other blockchain.info's services that I did use, 1.5% fee is fair and reasonable.

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February 14, 2013, 03:30:18 AM
 #12

I am not adverse to lowering the fees. Those of you who feel a 1.5% fee is too high would you use the service at a 0.5% fee?

Lowering price will increase demand.

While I use Bitcoin completely legitly; I can think of several instances where I would have been glad to pay .1-.5% to sever the audit trail but where 1.5% was too expensive relative to the expected benefit so I did not.

Since the system is already built (sunk or fixed expenses) then what are the variable costs for mixing? It seems like there would be very little if anything. Consequently, you can price in a similar manner as digital downloads like ebooks, mp3s, etc. to maximize profit.

If I were you I would experiment with a variable mixing cost and then gather some analytics to determine what the elasticity of demand is. This would give you the data to price in order to maximize profit. Additionally, a variable mixing cost would help make it even more difficult to try and reverse analyze mixed transactions.

misterbigg
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February 14, 2013, 11:08:57 PM
 #13

The problem is that 1.5% is so far removed from the actual cost. It is essentially monopoly rent. We need competition in mixing services, just like we need competition among exchanges.

It makes no sense to me that a Bitcoin exchange, which has huge fixed costs, can charge a smaller percentage per transaction than a coin mixing service (which is largely automated and only costs a trivial marginal amount above the base service of computing resources, and bandwidth).

Consider mixing a $500,000 USD balance. Does it make sense that this would cost $7,500? Who in their right mind would spend that much?

We need competition for mixing. The cost for mixing should tend towards zero. It should be some sort of decentralized service that every major vendor provides as a value-add.
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February 15, 2013, 03:31:47 AM
 #14

The problem is that 1.5% is so far removed from the actual cost. It is essentially monopoly rent. We need competition in mixing services, just like we need competition among exchange.

....

We need competition for mixing. The cost for mixing should tend towards zero. It should be some sort of decentralized service that every major vendor provides as a value-add.

Then why don't you start one if you think there is a lot to be made operating one?

The cost of creating or providing a good or service is irrelevant to the price consumers will pay based on their subjective value derived from the service. Piuk should be looking at how to maximize his profit whether that means charging 10% or .1% for the service.

minimalB
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February 15, 2013, 09:30:03 AM
 #15

Those of you who feel a 1.5% fee is too high would you use the service at a 0.5% fee?

Personally, i would use this service much more often if fee would be in range of 0.1-0.5%
TradeFortress 🏕
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February 15, 2013, 12:51:39 PM
 #16

Because we are one of the few services with a sufficiently large transaction volume, large hot wallet and the ability to calculate taint. We also take the risk of accepting zero conf transactions.

I am not adverse to lowering the fees. Those of you who feel a 1.5% fee is too high would you use the service at a 0.5% fee?

Perhaps a tiered system. 1.5% = full mix, 0.5% = basic mix (possible taint).

People who really want mixing would pay the 1.5% fee, others who just want to make it far harder to track would use the latter.
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February 16, 2013, 06:41:17 AM
 #17

Because we are one of the few services with a sufficiently large transaction volume, large hot wallet and the ability to calculate taint. We also take the risk of accepting zero conf transactions.

I am not adverse to lowering the fees. Those of you who feel a 1.5% fee is too high would you use the service at a 0.5% fee?

Perhaps a tiered system. 1.5% = full mix, 0.5% = basic mix (possible taint).

People who really want mixing would pay the 1.5% fee, others who just want to make it far harder to track would use the latter.

Sell 3 albums at $15 or 5,000 singles at $.99. Which yields the most net profit?

stochastic
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February 16, 2013, 07:42:25 AM
 #18

Because we are one of the few services with a sufficiently large transaction volume, large hot wallet and the ability to calculate taint. We also take the risk of accepting zero conf transactions.

I am not adverse to lowering the fees. Those of you who feel a 1.5% fee is too high would you use the service at a 0.5% fee?

Perhaps a tiered system. 1.5% = full mix, 0.5% = basic mix (possible taint).

People who really want mixing would pay the 1.5% fee, others who just want to make it far harder to track would use the latter.

Sell 3 albums at $15 or 5,000 singles at $.99. Which yields the most net profit?

It is more like 3 albums at 1.5% of $15 each or 5,000 singles at 0.5% of $0.99 each.

Introducing constraints to the economy only serves to limit what can be economical.
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February 16, 2013, 10:28:42 AM
 #19

1.5% is fine for small tx's but when you want to send >BTC50 you really ask yourself is this worth it?

misterbigg
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February 16, 2013, 02:53:00 PM
 #20

I think it should be free.
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