Consolidation of mixed outputs

[o_e_l_e_o]

This implies you fully entrust those remaining 0.079 BTC to CM though; not that I'd ever doubt them, but in general I try to minimize such trust.

Yes, that is the downside. As with any such service, coins you store on the service are entirely owned by the service and not by you until you have them safely back in your own wallet. However, it's a risk I'm willing to take for small amounts of coins for the benefit of having instant access at any time to mixed coins, just as I'm willing to take the risk of storing small amounts of coins on an insecure mobile wallet for the benefit of having instant access when I'm on the go. Your own risk profile may vary.

You'll maybe pay a bit more though, since every time you create a new session and deposit some coins, they'll be 'truncated' to 0.001 amounts, right?

Yes. This method will not work for any change amounts below that value.

[witcher_sense]

Teleport transactions software, a CoinSwap implementation from privacy expert Chris Belcher, can potentially be used for the consolidation of previously mixed transaction outputs. One of the ways this could be done is the following:

1) You have multiple mixed outputs of a different amount, which you received from Chipmixer, for instance;

2) Instead of consolidating them directly or sending them to another mixing round, you could perform a series of coin swaps, where you would be sending your TXOs one by one at random intervals and with different fees;

3) After your coin swaps are done, you will have a set of swapped TXOs, which will differ from your initial one (because coin swap uses multi-transactions to avoid amount correlation);

4) Next you either consolidate all TXO into one transaction or into several transactions, it doesn't actually matter. You can also create additional hops before "real" payment to be able to plausibly deny any connection to a previous output merge, but again it is not necessary.

What do you think?

[DaveF]

And even if there is an 'upper limit' of the addresses they will give you all you need is another email and you can start the process again.

Probably worth pointing out that using more than one account is against their terms and you risk getting hit with KYC demands, which obviously defeats the whole purpose here:

Any Customer using more than one Bitrefill account, or any other expedient, in order to circumvent the limits below, is in breach of these Terms and can have its account, or accounts, suspended until customer due diligence is successfully completed.

That looks to be to cover the $2k / day limit. Unless you have a lot of UTXOs then I doubt you would ever hit that wall. But as always when using a service to do something it's always a risk.

Also, do they have a minimum deposit amount or do they charge a processing fee? I can't imagine they would be too thrilled by receiving dozens of 1000 sat outputs and having to consolidate them all.

As of now $1.00 (when it hits not when you send so don't send all those $1.00 with a low fee since if it takes a while to get there and even a small dip occurs.

As for all the small TX if a lot of people start doing it I can see them raising it from $1 to $5 to even higher.
For now it's an option.

There are other services out there that do similar with gift cards that allow you to bank funds but Bitrefill is one of the oldest and stable, and has a really good reputation.

-Dave

[n0nce]

Oh, the issue with this is that I assumed the change doesn't all land in the same address. I'm not sure if there's a standard way; as far as I know, change is handled a bit differently from one wallet to another.

Oh, wait, you meant literal reuse of the change address? Which wallet does such thing?

I don't remember which one, but I remember one or more wallets did this a long time ago... Though I've got no memory of their names anymore, whether they're still around and if they are, whether they changed this by now.

This implies you fully entrust those remaining 0.079 BTC to CM though; not that I'd ever doubt them, but in general I try to minimize such trust.

Yes, that is the downside. As with any such service, coins you store on the service are entirely owned by the service and not by you until you have them safely back in your own wallet. However, it's a risk I'm willing to take for small amounts of coins for the benefit of having instant access at any time to mixed coins, just as I'm willing to take the risk of storing small amounts of coins on an insecure mobile wallet for the benefit of having instant access when I'm on the go. Your own risk profile may vary.

Cool, thanks for clearing that up! I agree that for certain use cases and certain users, solutions that involve trust are viable options and give them benefits that would otherwise be hard to achieve.

You'll maybe pay a bit more though, since every time you create a new session and deposit some coins, they'll be 'truncated' to 0.001 amounts, right?

Yes. This method will not work for any change amounts below that value.

What I meant was that if e.g. you have a 0.0025BTC UTXO and a 0.0015 one, if you send them both in the same session, you end up with a balance of 0.004. But if you want better privacy and use the session restore trick you described before, you will end up with 0.003, right? Or will the 0.0005 of each UTXO be donated either way?

Teleport transactions software, a CoinSwap implementation from privacy expert Chris Belcher, can potentially be used for the consolidation of previously mixed transaction outputs.
~ snip ~

Thanks, this is new to me. I'll have a look at it!

[witcher_sense]

Teleport transactions software, a CoinSwap implementation from privacy expert Chris Belcher, can potentially be used for the consolidation of previously mixed transaction outputs.
~ snip ~

Thanks, this is new to me. I'll have a look at it!

Coin swap is a privacy-oriented technique which involves you swapping your history of transactions with someone else's history of transactions in a non-custodial and trust-minimized way using the smart contracts capability of the bitcoin protocol. The chief advantages of the given method are that (1) you avoid creating toxic change completely during the process of swapping, (2) there are no any thirds-parties or intermediaries involved in this process that can steal your money or surveil your inputs, (3) everything occurs on a base layer of the protocol, which minimizes the attack surface, and, which is arguably the most important point, (4) poor privacy practices of the people you are swapping with doesn't lower the amount of privacy you get and doesn't affect negatively the anonymity set.

[o_e_l_e_o]

As of now $1.00 (when it hits not when you send so don't send all those $1.00 with a low fee since if it takes a while to get there and even a small dip occurs.

Wow. Even at the current bitcoins sale prices, that's only ~3,000 sats. Most services don't accept such small inputs for obvious reasons.

Or will the 0.0005 of each UTXO be donated either way?

Yes, it would be donated either way, unless you combine the two UTXOs in the same transaction and send 0.004 BTC in a single transaction. Each individual deposit is floored to the nearest 0.001 BTC and the remainder donated, regardless of if you make multiple deposits in the same session. See from their FAQ:

Since we don't have chips lower than 0.001 BTC, your deposit will be treated as donation. Be aware that if you send 0.0015 BTC, you will receive one 0.001 BTC chip. Sending 0.0015 BTC twice will result in two 0.001 BTC chips.

[n0nce]

Or will the 0.0005 of each UTXO be donated either way?

Yes, it would be donated either way, unless you combine the two UTXOs in the same transaction and send 0.004 BTC in a single transaction. Each individual deposit is floored to the nearest 0.001 BTC and the remainder donated, regardless of if you make multiple deposits in the same session. See from their FAQ:

Since we don't have chips lower than 0.001 BTC, your deposit will be treated as donation. Be aware that if you send 0.0015 BTC, you will receive one 0.001 BTC chip. Sending 0.0015 BTC twice will result in two 0.001 BTC chips.

Cool, then besides convenience there's no real downside to always doing this 'session-restore trick' anytime you mix multiple UTXOs with ChipMixer!
Now that you quoted the FAQ, I remember last time I read it was right after sending some 0.xxx8 or 0.xxx9 UTXO, expecting to be able to send the missing amount to reach the next chip size separately, causing almost the largest possible donation during funding process...

[mikeywith]

Creative way of (ab)using an exchange for gaining instead of losing privacy! Since we're speaking about small amounts, actually an 'instant exchanger' might be perfect for this.

How about (ab)using hash rental websites like nicehash, deposit mixed coins into your nicehash wallet, rent SHA-256 hashrate, and mine to a large pool that pays every 24 hours (you don't have to pay withdrawal fees), you get fresh coins or otherwise completely unlinked.

The pool doesn't know where your hashrate came from, nor how you obtained it, it only knows the address you are going to deposit to.

[DaveF]

Creative way of (ab)using an exchange for gaining instead of losing privacy! Since we're speaking about small amounts, actually an 'instant exchanger' might be perfect for this.

How about (ab)using hash rental websites like nicehash, deposit mixed coins into your nicehash wallet, rent SHA-256 hashrate, and mine to a large pool that pays every 24 hours (you don't have to pay withdrawal fees), you get fresh coins or otherwise completely unlinked.

The pool doesn't know where your hashrate came from, nor how you obtained it, it only knows the address you are going to deposit to.

Technically they know where your hash comes from since the NH relays are well know. They don't know how you PAID for it.
However, since NH charges a 3% fee and most PPS pools are in that same 3% range you are taking a big cut off the top.
Probably no more then some of the other ways discussed here however.

-Dave

[mikeywith]

Technically they know where your hash comes from since the NH relays are well know. They don't know how you PAID for it.

True, and that is more than enough, it will take some cooperations between the pool and the rental service (nicehash or whatever else) and that's very unlikely to happen, because the two services are so far from regulations unlike many of the exchanges.

However, since NH charges a 3% fee and most PPS pools are in that same 3% range you are taking a big cut off the top.

You are correct, that's the drawback, but still, you can find PPS pools with 0% fees, also nicehash has been paying 5% less than the market on the 7-day average reported on whattomine.com, so that might even get you more sats than you deposit, but of course, this isn't always the case and thus one should go with the assumption that it will cost anywhere between 3% to 6% to obtain those coins.

With that said, if my life is at stake, and I want the maximum privacy I could get - I would still prefer a similar method to any exchange of any sort for these reasons.

1- Using an exchange of any sort means both your deposit and withdrawal addresses are known to a single entity, so they or anybody who hacks them or forces them (like a government) to reveal their data will know about your new address.

You can overcome this issue if you use 2 different exchanges as you mentioned earlier, but then that's also an extra layer of risk added on top of an already risky approach.

2- Most exchanges fall under the regulation and KYC b.s, at any point you might be forced to give away your identity, while a mining pool or a rental service are the last places to be regulated due to the complexity of their business model.

Also, getting some outputs with little to no history is a plus, but it really all depends on how far are you willing to go. Will I pay 5% in this process given that my life isn't at stake if someone happened to link my transactions together? hell no, would I even risk using an exchange for that purpose? also no, to me, using a good mixer like Chipmixer while applying a few of the many tips mentioned here is more than enough in my case.

[ABCbits]

Creative way of (ab)using an exchange for gaining instead of losing privacy! Since we're speaking about small amounts, actually an 'instant exchanger' might be perfect for this.

How about (ab)using hash rental websites like nicehash, deposit mixed coins into your nicehash wallet, rent SHA-256 hashrate, and mine to a large pool that pays every 24 hours (you don't have to pay withdrawal fees), you get fresh coins or otherwise completely unlinked.

That might work, but people should be careful since NiceHash ToS mention they implement AML/CTF.

You are correct, that's the drawback, but still, you can find PPS pools with 0% fees, also nicehash has been paying 5% less than the market on the 7-day average reported on whattomine.com, so that might even get you more sats than you deposit, but of course, this isn't always the case and thus one should go with the assumption that it will cost anywhere between 3% to 6% to obtain those coins.

Some people happily use credit card which usually has 3% fee for convenience sake, so IMO 3%-6% is acceptable for those who want to protect their privacy.

[n0nce]

Creative way of (ab)using an exchange for gaining instead of losing privacy! Since we're speaking about small amounts, actually an 'instant exchanger' might be perfect for this.

How about (ab)using hash rental websites like nicehash, deposit mixed coins into your nicehash wallet, rent SHA-256 hashrate, and mine to a large pool that pays every 24 hours (you don't have to pay withdrawal fees), you get fresh coins or otherwise completely unlinked.

The pool doesn't know where your hashrate came from, nor how you obtained it, it only knows the address you are going to deposit to.

That's a pretty cool and creative idea, of course it comes from a long-time mining connoisseur, I like it! You basically sell those UTXOs for hashpower, which generates a similar amount of BTC back; no actual connection, especially nothing that could be analyzed on-chain. I know that you could also deposit through LN on NiceHash, but not sure what the minimum deposit size is on other hashrate rental platforms. This is interesting when it comes to the topic of consolidation / having lots of inputs you want to mix together and get a larger output out of it, without accidentally linking those UTXOs together.

[PrimeNumber7]

I tried to bring this idea up but wasn't sure how to correctly phrase it. Sending multiple outputs to a single CM mix, individually, will keep them completely unlinked, right?

Well, a single ChipMixer session provides a single deposit address, so no, it would link all the outputs. The way to do it is to deposit any UTXOs you don't mind being linked in a single session, withdraw a voucher for the total amount of your deposit, and then destroy that session. Repeat with another sessions with another set of UTXOs and withdraw another voucher. Repeat as many times as necessary - you can do as little as one deposit per session if you want (bearing in mind the minimum deposit limits). Once you have multiple vouchers, you can open yet another new session and combine all the vouchers together, and then make a single large withdrawal.

You are putting a lot of faith in CM. It is impossible to know if CM is being run by an intelligence agency or government. If they are not a honeypot, it is impossible to know if an intelligence agency has been able to compromise their servers in a way that will allow them to gather information about inputs and outputs.

Creative way of (ab)using an exchange for gaining instead of losing privacy! Since we're speaking about small amounts, actually an 'instant exchanger' might be perfect for this.

How about (ab)using hash rental websites like nicehash, deposit mixed coins into your nicehash wallet, rent SHA-256 hashrate, and mine to a large pool that pays every 24 hours (you don't have to pay withdrawal fees), you get fresh coins or otherwise completely unlinked.

The pool doesn't know where your hashrate came from, nor how you obtained it, it only knows the address you are going to deposit to.

That would probably make it difficult for blockchain analysis companies to track the flow of your coin via mass surveillance, however, if a government were to inquire with nicehash as to what happened to your particular deposit, that same government could go to the pool you mined on and ask for information about where your mining payouts were sent to.

[o_e_l_e_o]

Building on the miner idea, here's another one which just occurred to me:

I create a transaction which spends all the coins I want to mix as a fee. I then send that transaction in private to a mining pool who is offering this service. They keep that transaction secret and eventually include it in a block that they mine, thereby claiming all my bitcoin for themselves. At a later date, they then send me an equivalent amount of bitcoin (minus 1% or whatever) to a brand new address I supply them with from their pool of mining rewards as part of one of their regular distribution-of-rewards-to-individual-miners transactions.

Other than the obvious trusting of a third party, there would be two main risks for such a set up that I can see. If you were trying to mix a sufficiently large amount of coins, then some individual miner in the pool, after learning about your transaction from the pool, may be incentivized to go off and attempt to solo mine a block in an attempt to steal your deposit. Secondly, in the event of a chain re-org, then if the block including your transaction loses, your transaction would return to being unconfirmed but would also have been exposed to the wider network, allowing other pools to attempt to mine it.

[mikeywith]

That would probably make it difficult for blockchain analysis companies to track the flow of your coin via mass surveillance, however, if a government were to inquire with nicehash as to what happened to your particular deposit, that same government could go to the pool you mined on and ask for information about where your mining payouts were sent to.

That's true, the government can also take you to a detention camp and beat the shit out of you until you show them all your transactions, but it's all a matter of how far are they willing to go? mining pools are unregulated for the most part because their business model is very complicated, they deal with no banks, and most of them operate in places where most governments like the U.S or EU countries don't have power own, like China.

But then, even if we were to go with the assumption that a said government will go as far as doing what you suggested, you can still use a passthrough running on some server, that way, you break the connection between Nicehash and the pool, nicehash will tell your government that you mined to server xyz (which at least in theory nobody knows about), from there, unless they find a way to get into your server, they won't know where the hashrate went to, unless they contact every mining pool on planet earth.

The second and better option would be using a decentralized mining pool like P2pool where the blocktemplate is generated by your own node, you connect Nicehash to your node or one of the public nodes, there is no company called p2pool which governments can ask for information, so the link between your incoming hashrate and outgoing hashrate is broken, it will be extremely difficult to anyone to link the pieces back together.

One way which they can track you is by asking Nicehash for the total hashrate you pointed and then attempt to estimate how much "BTC" would have come out of it, and then they would track addresses that received a similar amount, but given that there will probably be a few hundred thousand miners getting that same sum of outputs, it will be extremely difficult to narrow it down to just you.

Another thing they might filter is the addresses that didn't receive BTC before the hash rental took place, this will someone reduce the size of the circle, but it will still be very, very unlikely to know exactly.

Also, creating a decentralized mining rental marketplace won't be all that difficult, that way, you kind of break the chain at the first step of the way, making it even more difficult for anyone to track you.

With that said, I am not saying this is the perfect solution for privacy, the efforts and cost are higher than the traditional ways mentioned in other comments, the hash rental method is really like exchanging BTC for tomatoes and then selling the tomatoes for BTC to someone who lives on the other side of the world, it will take more effort and will cost more, it will also be a lot slower, but it will be more effective than going to supermarket to buy tomatoes with your BTC and then sell it back to them for BTC.

[DaveF]

Building on the miner idea, here's another one which just occurred to me:

I create a transaction which spends all the coins I want to mix as a fee. I then send that transaction in private to a mining pool who is offering this service. They keep that transaction secret and eventually include it in a block that they mine, thereby claiming all my bitcoin for themselves. At a later date, they then send me an equivalent amount of bitcoin (minus 1% or whatever) to a brand new address I supply them with from their pool of mining rewards as part of one of their regular distribution-of-rewards-to-individual-miners transactions.

Other than the obvious trusting of a third party, there would be two main risks for such a set up that I can see. If you were trying to mix a sufficiently large amount of coins, then some individual miner in the pool, after learning about your transaction from the pool, may be incentivized to go off and attempt to solo mine a block in an attempt to steal your deposit. Secondly, in the event of a chain re-org, then if the block including your transaction loses, your transaction would return to being unconfirmed but would also have been exposed to the wider network, allowing other pools to attempt to mine it.

So if all of a sudden a new pool(s) appear(s) and they include TXs that nobody has seen in the mempool you don't think that is going to look a little odd?
1st time / block it happens there would be some discussion about it here and elsewhere.  If it keeps happening they people are going to look at the address where the block reward went and start looking where those TXs go. Possibly not even the government or for any malicious reasons. Just people trying to figure out what these odd blocks are doing.

The best way to hide is in plain site.

-Dave

[LoyceV]

[1] Firstly, if you're looking to consolidate many small inputs, you could send everything to the mixer 1 input at a time. This way you won't link them when sending.

When you mentioned "small inputs", I assumed the amounts are too small for most mixers.
I know only one mixer that gives up to 20 deposit addresses to use, which could also work for small amounts.

An option here might be to try to find a service which will accept such small inputs in exchange for either a Lightning payment or a Monero payment without too much in the way of fees

To quote myself:

The cheapest exchange I know to convert on-chain Bitcoin to Bitcoin LN is CoinPlaza.it. They charge 0.1% for this transaction, without further fees. But they charge much more from LN to on-chain.
They require an account though, although without KYC for small amounts (<€500/month). FixedFloat.com would do the same without account, although I'm not sure if they'll demand KYC for higher transactions. Depending on your needs it can pay off to check rates at different instant exchangers.

I don't trust most instant exchangers at all, but especially for the small amounts we're talking about here, I don't mind risking it. BestChange lists a few exchangers with low minimum. If you use different coins (or LN) on different exchangers (through Tor) with random email addresses (when needed), it will be quite difficult to link your transactions. Obviously, you shouldn't reuse addresses and use self-hosted wallets.

So if, for example, I have 0.012 BTC in a voucher on ChipMixer, than after a couple of small change deposits I can withdraw a 0.016 chip, which prevents them being linked from people looking at individual sizes as you suggest.

I tried to bring this idea up but wasn't sure how to correctly phrase it. Sending multiple outputs to a single CM mix, individually, will keep them completely unlinked, right?

Assuming you mean sending multiple transactions to different ChipMixer sessions, getting Vouchers and Redeeming them into a single CM session is unlinked. But since each session has only one deposit address, you shouldn't send multiple deposits to that address (obviously).

These platforms like https://fixedfloat.com/; they require no registration at all. I don't know if you can deposit multiple times there, though.

You shouldn't deposit multiple times to the same address, but you can easily create a new exchange each time you have change to send somewhere. Even better if you use different services.

as far as I know it has never happened yet. A few months back, when 1x 0.001BTC chip was over 50 bucks (or now at roughly 30), they didn't make them smaller either; and as o_e_l_e_o said it was the same size when Bitcoin was $1,500 a pop.

CM raised the minimum chip size to 4 mBTC I think around the end of 2017, when Bitcoin transaction fees were high enough to waste most of a 1 mBTC chip on fees. I've never seen chips under 1 mBTC.

It seems neat idea, but i wonder if there's privacy implication if you keep doing it for long time? I know Bitrefill give new address for each purchase, but i don't remember whether they also give new address for each deposit.

As long as they don't ask KYC, you can just create a new account once in a while. Or even each time. Or don't use an account at all, all you need is a throw-away email address.

Probably worth pointing out that using more than one account is against their terms and you risk getting hit with KYC demands, which obviously defeats the whole purpose here:

Any Customer using more than one Bitrefill account, or any other expedient, in order to circumvent the limits below, is in breach of these Terms and can have its account, or accounts, suspended until customer due diligence is successfully completed.

The way I read it, it doesn't say you can't have more than one account, but you can't use it to get around the limits. Even without account, you can spend $1000 per month. And since we're talking about small change here, that "ought to be enough for anyone" (not plagiarism, just a famous quote from someone who may or may not have said it).

Hypothetical: what if someone creates a Change Consolidation Lottery? It would work like this: you go to the website, get a deposit address, send your change/dust, and the service collects it. When enough inputs are piled up, a (provably fair) lottery is drawn. Higher deposits are more likely to win of course. The winner receives the total pool (minus transaction and service fees) back to the address their deposit came from.
If enough people use it, it will be difficult to link transactions.

[AnotherAlt]

These platforms like https://fixedfloat.com/; they require no registration at all. I don't know if you can deposit multiple times there, though.

You shouldn't deposit multiple times to the same address, but you can easily create a new exchange each time you have change to send somewhere. Even better if you use different services.

Not sure if you guys will believe me or not, Once I sent some Doge to the previous deposit address on Fixedfloat. I thought it was gone. Their support was offline, The transaction page expired, and I lost hope. Then a few hours later their support back online and manually send me my doges. Old days.

https://prnt.sc/sQbBwrOoQcy4

[LoyceV]

Not sure if you guys will believe me or not

It varies per exchanger, this one keeps each deposit address as a fixed exchange pair. I haven't tried it though, address recycling isn't recommended.

[o_e_l_e_o]

So if all of a sudden a new pool(s) appear(s) and they include TXs that nobody has seen in the mempool you don't think that is going to look a little odd?

Doesn't really matter if enough people use it. If I deposit to ChipMixer and someone tries to follow my coins, they will eventually see them be pooled and the split in to one of their classical funding transactions which creates ~50 outputs all of 0.008 BTC (or some other chip size). If I withdraw from ChipMixer, then the coins come directly from one of these classical funding transactions, and so again are easy to identify. In both cases, all an adversary can tell is that I used ChipMixer; they can't like input to output or vice versa. The same would be true of this mining pool set up. You could identify transactions spending all the inputs as fees, and you could see where this mining pool sent all its coinbase rewards, but you couldn't link the two together.

Hypothetical: what if someone creates a Change Consolidation Lottery? It would work like this: you go to the website, get a deposit address, send your change/dust, and the service collects it.

Doesn't really solve the problem of dust outputs being too small to spend or a user screwing up their privacy by creating a single transaction linking a bunch of different dust outputs. Combine this idea with the SIGHASH_NONE and SIGHASH_ANYONECANPAY set up we've discussed previously regarding dust outputs, and you might be on to something.