Tainted Bitcoins?

[BitcoinNewsMagazine]

Mixers no longer work. The coin analytics companies can identify and see past mixers now and have been for awhile. If you need to anonymize bitcoin you have to jump to an opaque blockchain and back, and take care on how you do it to avoid timing analysis.

[DuddlyDoRight]

Mixers no longer work. The coin analytics companies can identify and see past mixers now and have been for awhile. If you need to anonymize bitcoin you have to jump to an opaque blockchain and back, and take care on how you do it to avoid timing analysis.

wrong..

chainalysis.com uses input, outputs, and timing to map. If you have no change outputs as inputs they fall back to timing and back-data behaviour patterns.. They are forced to eventually attribute using exchanges through government or willful cooperation..

Nobody can map seeds or key pairs cryptographically..

[pearlmen]

I am actually reading about tainted bitcoin for the first time and even the way the tainted bitcoin came about but the issue is how do one get it tainted especially where its a scam situation. Do I report somewhere or I paste the transaction id somewhere? Also, I feel it won't still have any effect since we already have a mixing service to clean it of.

[NamedUser]

Hello,

I buy Bitcoin locally with cash and charge a 3.5 percent commission. I then sell the Bitcoin in Kraken and cash out.
I've been noticing that some of the Bitcoins I get are tainted (https://blockchain.info/taint/*bitcoin address here*) and I'd like to know what risks I'm taking by selling such Bitcoins there.

Should I be worried?

This brings us to the old bitcoin problem: lack of fungibility. Since the blockchain is public, some addresses have been linked to criminal activity. It shouldn't be a problem, because all bitcoins should be considered valid, but if authorities decide it's a problem, then it becomes a problem, unfortunately.

I hope future improvements in privacy such as CoinJoin and Confidential Transactions can be enabled by default and work seamlessly. Meanwhile yes, you should worry about coins linked to criminals...

That in theory should solve everything but even so, blockchain analysis will always be around. Maybe when coinjoin comes out it'll be a big business trying to figure out who's sending what where (and when).

[DuddlyDoRight]

I am actually reading about tainted bitcoin for the first time and even the way the tainted bitcoin came about but the issue is how do one get it tainted especially where its a scam situation. Do I report somewhere or I paste the transaction id somewhere? Also, I feel it won't still have any effect since we already have a mixing service to clean it of.

It's only tainted when a mixer or exchange refuses it because they blacklist the input.. It has nothing to do with blockchain or crypto but instead their own or outsourced seperate database..

People are mostly wrong about bitcoin security. chainalysis.com only needs input and output flow because typical user behavior.. They have the best tracking algorithms.. It has nothing to do with crypto or IP data.

My credibility: I wrote one of the best mixers ever and I follow chainalysis behavior through headlines.

[leopard2]

I was recently looking into that, because I am in fact worried about fungibility

If there was a magical method to connect an owner to each BTC wallet on the planet, fungibility would be destroyed for sure. Even if we never use BTC for illegal purposes, this is still bad, because one would be constantly at risk of handling funds that are connected to crime. BTC could become worthless due to that.

So  I was curious whether ZEC, XMR or DSH would offer better fungibility and found this. 

https://www.reddit.com/r/DarkNetMarkets/comments/5cb74u/blockchain_analysis_and_antimoney_laundering/

I believe that this KI spider type of software will destroy BTC fungibility in the long term and it clearly looks as if XMR is (at this point in time) offering the best alternative.

[DuddlyDoRight]

Quick way to beat any tracking: Go through any time-randomizing mixer, or gateway and abandon any change outputs.

Quick way to beat 'tainted' coin inputs: Use a blacklisting service against inputs

[leopard2]

Quick way to beat 'tainted' coin inputs: Use a blacklisting service against inputs

Stupid question, what is that? Please explain.

[ImHash]

You are either crazy or simply performing money laundry, you suck at both, instead go like this;
Buy whatever you can afford to buy.

Open BitMixer.io and send them 10% of your bitcoins and give them an address no matter what address.
Sell whatever you receive in Kraken and then send another 10% until you are all done and then go to sleep knowing you are in the clear.

People might scare you by lies and misinformation, better not pay any attention to them.

[DuddlyDoRight]

You are either crazy or simply performing money laundry, you suck at both, instead go like this;
Buy whatever you can afford to buy.

Open BitMixer.io and send them 10% of your bitcoins and give them an address no matter what address.
Sell whatever you receive in Kraken and then send another 10% until you are all done and then go to sleep knowing you are in the clear.

People might scare you by lies and misinformation, better not pay any attention to them.

Not wanting to be tracked to exchanges or service wallets has nothing to do with money laundering.. Your BTC is eventually going to go through a fiat institution if you want to use it as currency in most of the world.. Everything from prepaid cards at the local dollar store up to a broker account has a identification requirement and is reported to the federal government in every country..

One of the things that's always annoyed me about this community is how people will catch grief for things like this, but pre-mined alt-coin authors and half-arsed casino and niche owners nobody bats and eye to.. People here even quickly forget about site owners literally leaving with millions of USD worth of BTC inside a couple weeks(who usually go startup again and repeat)..

[Mike Mayor]

Hey guys, thanks a lot for the useful replies. I greatly appreciate them. Also, I want to say that I bought like 1.45 btc from Kraken like the other day and it was 29% tainted. What do you think about that?


@BitcoinNewsMagazine May I ask how to use that service? I mean, I input my wallet there and get all sorts of data. I was thinking that if some of my coins were sent from a known wallet (aka well known wallet with stolen funds) then I would've seen a message about it there?

I apologize, I'm not good with interpreting that data.

the "taint" you see on blockchain.info is not what you think it is. read the answer that FlamingFingers gave you.
and when you are buying bitcoin from an exchange service like Kraken and withdraw it to your personal bitcoin address, the coins will come from Kraken's wallet and usually if you search the address that sent you those coins in walletexplorer you'll see kraken as a result. that service is good but not complete, it is mostly there to show their capability of blockchain analysis and as a free advertisement for their paid work.

I was also thinking that tainted Bitcoin is not want people think. I don't think there is any reason for worry.  It's pure paranoia. I'm not sure why coinbase closes account but I would never ever any currency​ on any exchange for just that very reason.

I guess it is good to know to be on the safer side maybe or just to stay informed.

[GetClams.com]

What is considered an unacceptable level of taint? At what % does it become a problem?  Has there been a precedent for this?