Is that possible to know from which input coins come from?

[overc]

Let's imagine this situation: two transactions:

T1 has three inputs:
    T1.I1
    T1.I2
    T1.I3
and one output:
    T1.O1

T2 has one input:
    T2.I1 (sources from T1.O1)
and two outputs:
    T2.O1
    T2.O2

The question is:
Is that possible to know where coins for T2.O1 come from?
Is that from T1.I1 or T1.I1 and T1.I3, or something else, may be T1.I2 only?

As far as I understand it is impossible to know because all T1 inputs mixed in T1.O1.
Am I correct?

[1715580144]

1715580144

[1715580144]

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[theymos]

Right. It's impossible to unambiguously track a single bitcoin (or whatever) through many transactions because there's no objective way to say which outputs it has gone through.

[overc]

Right. It's impossible to unambiguously track a single bitcoin (or whatever) through many transactions because there's no objective way to say which output it's in.

So, in that case how is concept of "colored coins" is going to work?

[Meni Rosenfeld]

Right. It's impossible to unambiguously track a single bitcoin (or whatever) through many transactions because there's no objective way to say which output it's in.

So, in that case how is concept of "colored coins" is going to work?

You define your own standard of matching inputs and outputs. Colored coins transactions need to be carefully constructed to conform to this standard and make such matching possible.

A transaction like you propose will uncolor the coins because it mixes inputs of several colors into the same output, and is this something to avoid.

Please see https://bitcoil.co.il/BitcoinX.pdf for a worked example with order-based coloring.

[overc]

Thank you very much!

So, it is one more Bitcoin's myth: "all coins are completely traceable as far as all transactions are in public ledger"

[DeathAndTaxes]

Thank you very much!

So, it is one more Bitcoin's myth: "all coins are completely traceable as far as all transactions are in public ledger"

Well they are traceable.   Give me a tx and I can trace it back to the coinbases where the coins were created.  However there is no 1:1 mapping of inputs and outputs.  So 1 tx can be traced back to multiple coinbases and one coinbase can be traced forward to multiple unspent transactions.