Privacy Tips: Don't send round amount

[Little Mouse]

Blockchair has an option to check whether transaction privacy is good or bad. And from that, I learned that sending round amount decrease the privacy of a tx, at least make it almost confirmed and identifiable that round amount is the amount which has been sent to (recipient) and the rest is change address. It makes sense. We are always doing this. We sent round amount most of the times and the rest goes to the change address. Anyone can identify which one is receiver address and which one is change address. If you are concerned about your privacy, this is one of the simple strategy to follow. If you don't send round amount and instead add small amount to the fund you would like to send, it will not be that easy to identify the recipient and change address.

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[Poker Player]

Yes, well, that's good, but I don't get too obsessed either, because, for example, the payments I have received these last weeks from the signature campaign have been 0.003 Bitcoin. In the transaction it is clear who are the recipients and what is the change address. But also, the address where I receive this amount is public.

But well, as a general idea to not leave too many clues when you make transactions and keep your privacy is fine.

[hosseinimr93]

To add to OP:
The other criteria that can be used for identifying the change address and the recipient's address is the script type used for the addresses.
For example, if you make a transaction from a segwit address to a legacy address and the change is sent to a segwit address, the legacy output probably belongs to the recipient and the segwit output is probably the change.

[crwth]

I do notice that every time I have transacted with my wallet it shows that my privacy has "possible sending to self" type of thing. Is it going to be a concern if you have managed to do that but there's no record of you doing it in any website? Like the tx id is not announced and it's just you who knows about that transaction and it's going to be buried in all the transactions for the day right?  

How would one know? Unless it's going to be announced or connected with wallets etc, right?

[Charles-Tim]

The problem is not only about sending small amount, it also applies to the wallet people are using that select addresses to take UTXOs to send, it also applies to wallets not having coin control and address freeze. Anyone that wants privacy this way has to make use of a reputed wallet that have such features.

But the people that truly have privacy while making use of bitcoin are the people that run their own node.

[o_e_l_e_o]

For example, if you make a transaction from a segwit address to a legacy address and the change is sent to a segwit address, the legacy output probably belongs to the recipient and the segwit output is probably the change.

Which, with a little bit of tinkering and a good wallet, can be used to your advantage to obfuscate the change output. If sending to a legacy output as in your example, you can also manually send the change to a legacy output to help hide which is which. Even better if you are sending from segwit to segwit and you still send the change to a legacy (or P2SH) output, as most analyses will then say your change is the payment and the payment is the change.

Is it going to be a concern if you have managed to do that but there's no record of you doing it in any website?

There's a record on every bitcoin node on the planet, and anyone can see it using any of the many blockchain explorers in existence.

How would one know? Unless it's going to be announced or connected with wallets etc, right?

Because there are dozens of blockchain analysis entities which are constantly analyzing the entire blockchain and every transaction which takes places, linking addresses together and linking address groups to individuals and entities.

[crwth]

There's a record on every bitcoin node on the planet, and anyone can see it using any of the many blockchain explorers in existence.

I know that of course, but would someone check it if it's just buck change money? Unless you are transferring tons of BTC, that's a different case.

Because there are dozens of blockchain analysis entities which are constantly analyzing the entire blockchain and every transaction which takes places, linking addresses together and linking address groups to individuals and entities.

So they have automated it already and scouring the internet for possible connections for different types of addresses? I see. That's just how we people are. We really need to be careful or something. So the goal is not to be investigated by them or prevent possible invasion of privacy, right?

[Despairo]

I know that of course, but would someone check it if it's just buck change money? Unless you are transferring tons of BTC, that's a different case.

It's not only about huge amount only, but chainalysis and other blockchain analysis are working to recognize the Bitcoin owner regardless the amount. They want to track the whole Bitcoin holders and if possible, they will freeze the amount if it's linked to centralized entity.

There's few other things that will decrease our privacy aside from send round amount Bitcoin:
1. Send the whole Bitcoin balance to one address.
2. Receive and send Bitcoin regularly at the same pattern (e.g. every 3 days, week, etc).

[tranthidung]

Blockchair has an option to check whether transaction privacy is good or bad.

Not only Blockchair.com explorer has that feature, others have, such as blockstream.info.

When you check 'your' transaction privacy, use Tor. If you don't use Tor, you self-break your transaction privacy.

And from that, I learned that sending round amount decrease the privacy of a tx, at least make it almost confirmed and identifiable that round amount is the amount which has been sent to (recipient) and the rest is change address. It makes sense.

Yes it makes sense. In addition, always use change address is another good advice.

However, if you don't use round amount but later consolidate leftovers into one transaction, it is a bad practice.

[LoyceV]

Blockchair has an option to check whether transaction privacy is good or bad.

Don't believe Blockchair's privacy score, it's terrible. This transaction for example has "Privacy 95 High", while it's the exact same thing every week.

We sent round amount most of the times and the rest goes to the change address.

I sometimes do the opposite: send a round amount to my own change address, and a "weird" amount to the address I'm paying to. Using disinformation for privacy
You can do the same with fees: change what you pay depending on the transaction speed you need.

For example, if you make a transaction from a segwit address to a legacy address and the change is sent to a segwit address, the legacy output probably belongs to the recipient and the segwit output is probably the change.

That's a good one to manually adjust too, but you'll risk paying more in fees later. Luckily, most services nowadays use native Segwit so all inputs and outputs can have that format.

[Mr.right85]

I hope you guys don't think I should have been above this but, when it comes to matters of security and privacy, I'm often interested and hope to understand in order to be a little safer than safe.

I have been going through this thread just now and most of the replies that comes in. My confusion right now is, why is this """Change Address""" about? I've done some transactions for sure but, haven't taken one of this or maybe just didn't understand or gave it any importance so,

What is it really about (Change Address)?
And why does it matter as per issues of security and privacy?

[Welsh]

Don't believe Blockchair's privacy score, it's terrible. This transaction for example has "Privacy 95 High", while it's the exact same thing every week.

Seems to me like it's added fluff to give its users the impression that they're a step ahead of the competition, without it actually meaning anything at all. Probably, a loosely implemented feature without any meaningful criteria.

I've noticed that Blockchair has a tonne of advertising they like to do, so that's probably why they've implemented something like this, since users will think it's a handy feature without actually knowing what determines it.

Based on the information you've provided at least, that's the impression I get. Although, I generally quite like the platform compared to some others.

[tranthidung]

What is it really about (Change Address)?
And why does it matter as per issues of security and privacy?

What is the "Change" address on bitcoin wallet ? read to know !

It starts with choosing a good wallet to use. A good wallet is non custodial that gives you private key and full control of keys and coins as well as Coin Control feature. With Coin control feature, you will be able to use Change address or not but the default setting should be "Yes".

Some platforms allow you to use Change address too but they provide you non custodial wallet.

[aysg76]

Yes, well, that's good, but I don't get too obsessed either, because, for example, the payments I have received these last weeks from the signature campaign have been 0.003 Bitcoin. In the transaction it is clear who are the recipients and what is the change address. But also, the address where I receive this amount is public.

Yeah this is the case in most of transactions in which privacy is not focused upon and you could see the recipient address and change address easily on these explorers but if you can try to improve your privacy with the necessary steps.All the records are traceable but it depends on us how we improve our security like using mixers while making transactions and being not traceable.

Seems to me like it's added fluff to give its users the impression that they're a step ahead of the competition, without it actually meaning anything at all. Probably, a loosely implemented feature without any meaningful criteria.

I also think this feature is loosely implemented because they have set the different bars like

Code:

 0 - Critical
1-49 - Low 
50-89 - Moderate
90-99 - High 
100 - Healthy 

They provide the little explanation of how they categorised this privacy meter by saying with 100+ metrics but didn't give explanation on it and users would see the score under the transactions but how come they have that score will not be public and can say we don't need to trust them blindly and scores can differentiate a lot for these transactions.

I've noticed that Blockchair has a tonne of advertising they like to do, so that's probably why they've implemented something like this, since users will think it's a handy feature without actually knowing what determines it.

A possible explanation why they came up with this feature to attract more users to their platform and there were introduction of this on many articles and twitter also a source to advertise your platform but as user it depends on us how we determine our privacy and should be used in much effective manner rather then completely believing on these platforms although they provide a lot information on other things.

Don't believe Blockchair's privacy score, it's terrible. This transaction for example has "Privacy 95 High", while it's the exact same thing every week.

And this one has 0 level of privacy score so can't say anything about surety with them.

[Mr.right85]

Thanks tranthidung, it was thus helpful, haven't gone through the thread (What is the "Change" address on bitcoin wallet ? read to know !) you provided and am of course on course. Thanks to this response:

In this transaction, the total payment made was 10 BTC and the total balance was 10.89 BTC. So the Bitcoin wallet cannot just take out 10 BTC out of 10.89 BTC thus the whole 10.89 BTC is spent in two transactions.

But a thing to note here is:

One transaction of 10 BTC goes to one address (recipient), and another 0.89 BTC goes to another address which the spender of 10.89 BTC controls and this is the change address. And your wallet will have the private keys of the change address so that you can again spend the 0.89 BTC change that you have received.

So effectively now the 10.89 BTC is spent in its entirety and destroyed hence preventing double usage or double spending of the same bitcoins.


Source

From the above thread which offered more clarification to the topic of discussion and i find it relevant for other newbies that might be following up this thread.

Although, a few more of my questions remains unanswered and would be checking as well to what response I would get. I quote it right here again...

What is it really about (Change Address)?
And why does it matter as per issues of security and privacy?

What is the "Change" address on bitcoin wallet ? read to know !

As the referred thread don't really carry issues pertaining to its relevance with respect to security and privacy. Any help?

[hosseinimr93]

As the referred thread don't really carry issues pertaining to its relevance with respect to security and privacy. Any help?

I think The Cryptovator has answered your first question in the topic shared by tranthidung well.

Assume that you have a 100 dollar bill and you want buy something which is worth 50 dollars.
You give your 100 dollar bill to the seller and get a 50 dollar bill. Bitcoin works in the same way. If you have an UTXO worth 0.1 BTC and want to pay someone 0.05 BTC, you make a transaction with your 0.1 BTC. Your transaction will have two outputs. The one will go to the recipient and the remaning amount which is called change is sent back to you.

Now let's go to your second question.
Assume that you want to have 0.1 BTC and wants to pay someone 0.6 BTC. Your transaction will have two outputs. One of them will be 0.6 BTC which goes to the recipient and the change will be 0.4 BTC minus transaction fee.
If the change address is same as the sending address, everyone can know which of outputs is the change and which one is owned by the recipient.  In this way, you may hurt your privacy.
With using a different address as your change address and choosing the outputs amounts in the way no one can know which of them is the change, you can improve your privacy

[Little Mouse]

Probably, a loosely implemented feature without any meaningful criteria.

Actually they have some criteria to identify and score a transaction based on their criteria. Though these are basic and very much likely to get a wrong score (as shown by LoyceV), I think following their criteria would definitely give you some extra benefit for your privacy.

They have 100+ indicators to score a transaction. You can check all of them here- https://blockchair.com/api/docs#link_M6
These are basics but of course first step toward privacy. Anyway, I'm not vouching for them lol.

[pooya87]

It is worth mentioning that whenever you check your address or transactions in a block explorer you are associating a lot of meta data with your coins. Keep in mind that these centralized services are storing cookies on your computer (in the browser) and see your IP address and your system fingerprint. There is no reason to think they aren't storing all that.

[o_e_l_e_o]

1. Send the whole Bitcoin balance to one address.

Well, this depends. If you are consolidating multiple outputs in to one, then yes, this is bad for your privacy. But if you are sending the entirety of a single output from one address to another, this can be very good for your privacy since you avoid creating any change at all. An outside observer can't tell if you've paid someone or just moved all the coins to another address you own.

That's a good one to manually adjust too, but you'll risk paying more in fees later. Luckily, most services nowadays use native Segwit so all inputs and outputs can have that format.

If paying from a native segwit address to a legacy address, then you've got the option of sending the change to either a nested segwit or now a taproot address instead, which will achieve the same result of confusing any blockchain analysis while only incurring a very minor future fee increase.

Probably, a loosely implemented feature without any meaningful criteria.

The criteria they use are actually very well defined: https://blockchair.com/api/docs#link_M6. Knowing what they are makes it very easy to figure out how to fool them, although there is of course no guarantee that blockchain analysis companies are using similar criteria.

[Pmalek]

A lot of the services and goods you pay for have a fixed value in USD, EURO, or some other fiat. So the amounts you send won't be round, and depending on how you earn your bitcoins, the UTXOs in your wallet aren't round either. Let's take signature payments as an example. You are mostly paid in a fixed USD amount converted to BTC. Therefore, it's unlikely that you will receive exactly 0.01 BTC. Getting 0.00991 BTC or 0.010005 BTC is more likely. And then if you are paying someone for some services, it's again usually a fiat amount converted to BTC. 0.00246792 BTC is $50 right now. Nothing round about that. 

[Little Mouse]

A lot of the services and goods you pay for have a fixed value in USD, EURO, or some other fiat. So the amounts you send won't be round, and depending on how you earn your bitcoins, the UTXOs in your wallet aren't round either. Let's take signature payments as an example. You are mostly paid in a fixed USD amount converted to BTC. Therefore, it's unlikely that you will receive exactly 0.01 BTC. Getting 0.00991 BTC or 0.010005 BTC is more likely. And then if you are paying someone for some services, it's again usually a fiat amount converted to BTC. 0.00246792 BTC is $50 right now. Nothing round about that. 

You are right but that's not the case all the time of course. There are also fixed BTC paid campaign. And also, I have paid 0.0025 BTC. Both are identical of course. People transacting with mutual contacts don't bother sending a few sats higher which make a round figure too. I have seen this many times, even in my currency exchange service, I received some round amounts which should be little less. Anyway, most of the times the payment should be somewhat not a round figure, having an on chain analysis would do the calculation. I will look if such data is available. However, you should know that there are a lot of chips (1 mBTC, 2 mBTC, and multiplier)- https://bitcointalk.org/index.php?topic=5410924.0

[LoyceV]

0.00246792 BTC is $50 right now. Nothing round about that.

If the amount in dollars (or euros or any other major currency) is a round number, it's trivially easy for a block explorer (or anyone observing the transaction) to check and they'll assume that's the amount you sent, and the other amount goes to your change address.

[o_e_l_e_o]

Blockchair even does it for you, appending the value in a fiat currency of your choice at the time the transaction was made. Here are a couple of examples I pulled just now from the most recent block:

https://blockchair.com/bitcoin/transaction/e5e028807b3b7b2c5cc94f97769a1ddb7b8b487f6ded8c4fa8fe1013006fc131
One output of $5 exactly, another of $1,083.99.

https://blockchair.com/bitcoin/transaction/5c4b4cea7c01f99541169ce83e97309f32c9b8bc8b0c106af100b22bae8ddf48
One output of $2.99, another of $2,121.04.

Looking only at the bitcoin amounts - no round numbers. Looking at the fiat amounts - completely obvious which is payment and which is change (even ignoring the large discrepancy in value between the two outputs in each transaction).

[Pmalek]

If the amount in dollars (or euros or any other major currency) is a round number, it's trivially easy for a block explorer (or anyone observing the transaction) to check and they'll assume that's the amount you sent, and the other amount goes to your change address.

True, but that's a whole lot of guesswork. Looking at the value of one output, you might say this is probably the change because it's the equivalent of $/€/£43.28, while the other entry of approximately $/€/£20 is the amount that was paid. But maybe that $/€/£43.28 equals exactly 1000 units in my local fiat currency and blockchain analysis got it all wrong. 

[o_e_l_e_o]

True, but that's a whole lot of guesswork.

Pretty much all of blockchain analysis is guesswork. If they are looking at a transaction they are interested in and cannot figure out which output is change and which isn't, then they will absolutely be using every technique they can think of to try to shed some light on the situation.

But maybe that $/€/£43.28 equals exactly 1000 units in my local fiat currency and blockchain analysis got it all wrong.

If you are the focus of some blockchain analysis investigation, then they probably already know which fiat currency or currencies you are likely to be transacting in.

[witcher_sense]

Blockchair's privacy-o-meter is highly inaccurate bullshit and should not be seen as a measurement tool to determine how good or bad you are at privacy-enhancing techniques. If you know precisely how blockchain surveillance firms work and what patterns and blockchain transactions heuristics they are looking for to cluster address, you can fool and confuse this meter each time you are making your payment. The unspoken rule is if some of the outputs are a round amount either in bitcoin or fiat currency terms, it is a payment. Period. Take advantage of this stupid heuristic by making ALL your outputs a round number and sending the leftover to miners. What will Blockchair say about this kind of transaction? The explorer is probably going to be confused and assign your transaction a "green" status as highly private. Or you can construct a fake CoinJoin transaction in which there will be several inputs of equal size and several outputs. For example, you have a UTXO with 1.01 BTC, but you need to make a payment of 0.2 BTC. First, you make a transaction with 5 equal outputs (0.2 BTC) and 0.005 BTC going to miners. Secondly, you create a transaction with 5 inputs + 1 input (0.005 BTC) and five outputs of 0.2 BTC. 0.005 BTC goes to miners as fees, and one or several or all five outputs can later be used as payment.

[Little Mouse]

Blockchair's privacy-o-meter is highly inaccurate bullshit

I didn’t appreciate their privacy score but I have shared one of their metrics/criteria which is helpful or one of the very first steps toward having some nonidentical tx. It doesn’t necessarily confirm everything is secured but it's one of the tricks of course. Of course it's easy to make them fool since you know their criteria.

[LoyceV]

For example, you have a UTXO with 1.01 BTC, but you need to make a payment of 0.2 BTC. First, you make a transaction with 5 equal outputs (0.2 BTC) and 0.005 BTC going to miners. Secondly, you create a transaction with 5 inputs + 1 input (0.005 BTC) and five outputs of 0.2 BTC. 0.005 BTC goes to miners as fees, and one or several or all five outputs can later be used as payment.

Paying $100 to miners seems like a waste of money for a very small potential improvement in privacy. There are better things to do with that amount: send it to a paper wallet for long-term storage, or use an instant exchange to turn it into LN funds.

[o_e_l_e_o]

The unspoken rule is if some of the outputs are a round amount either in bitcoin or fiat currency terms, it is a payment. Period. Take advantage of this stupid heuristic by making ALL your outputs a round number and sending the leftover to miners.

Even better than this is to make your change a round number and your payment not a round number. If you are buying goods, can you throw a couple of extra small things in to your (physical or electronic) basket to make the final amount a non-round number? If you are paying for a service, can you buy some extra add-on or pay for a few extra days to make the final amount a non-round number? If you are paying a friend, family member, donating to a cause, etc., then you can always just throw in an odd number of spare sats. Rather than just make everything a round number, you can actively send blockchain analysis down the wrong path if you are smart about it.

Or you can construct a fake CoinJoin transaction in which there will be several inputs of equal size and several outputs. For example, you have a UTXO with 1.01 BTC, but you need to make a payment of 0.2 BTC. First, you make a transaction with 5 equal outputs (0.2 BTC) and 0.005 BTC going to miners. Secondly, you create a transaction with 5 inputs + 1 input (0.005 BTC) and five outputs of 0.2 BTC. 0.005 BTC goes to miners as fees, and one or several or all five outputs can later be used as payment.

This provides no privacy at all. Any blockchain analysis company will obviously trace funds backwards, and if they only have to go back a single transaction to see all your 0.2 BTC inputs being created from the same output, then it is trivial to link them all together.

[dkbit98]

Paying $100 to miners seems like a waste of money for a very small potential improvement in privacy. There are better things to do with that amount: send it to a paper wallet for long-term storage, or use an instant exchange to turn it into LN funds.

Even some centralized exchanges are using Lightning for withdrawals and deposits, so it would be interesting to know if they can somehow track you and connect that with your identity.
So far I didn't see any way how they can do that, and we can always exchange LN back to bitcoin in different amount of coins.

Even better than this is to make your change a round number and your payment not a round number.

I think there is something in human nature that likes rounding numbers, but you can always donate few more sats and donate when you are paying for something.
If something is 0.01 BTC you can pay something like 0.010018642 BTC or any other random number, and I think this little trick would also work.

[LoyceV]

If you are buying goods, can you throw a couple of extra small things in to your (physical or electronic) basket to make the final amount a non-round number?

Now that you mention it: who does this? Usually, goods don't have a round price. I can imagine people use round numbers when sending money to an exchange, funding their online casino account, or when topping up their hosting balance (probably a round number in dollars), but not for buying stuff.

Even some centralized exchanges are using Lightning for withdrawals and deposits, so it would be interesting to know if they can somehow track you and connect that with your identity.

With KYC: yes.
Without KYC and on Tor: good luck to them

I think there is something in human nature that likes rounding numbers

Before I realized the privacy implications, I indeed used to like round numbers. It's a lot easier to type and remember them. And I'm probably not alone in this.

[o_e_l_e_o]

If something is 0.01 BTC you can pay something like 0.010018642 BTC or any other random number, and I think this little trick would also work.

Are there any payment processors which watch for exact values and would take issue/not correctly identify your payment if you pay extra? There are obviously plenty that completely mess up if you transfer less than the invoice, but what about if you transfer more than the invoice?

Now that you mention it: who does this?

Depends what you are buying I guess. A grocery shop or something similar in which you've got multiple smaller items in your basket is very unlikely to end up at a nice round price. Buying a single expensive item though, such as a phone, laptop, large appliance, is far more likely to be priced at a nice round $399 rather than $394.61, or 0.02 BTC rather than 0.019847539 BTC.

[dkbit98]

With KYC: yes.
Without KYC and on Tor: good luck to them

So withdrawing LN BTC from kyc exchange (let's say Kraken) and converting it to BTC mainent, exchange would know that BTC is now connected with you and your kraken account?

Are there any payment processors which watch for exact values and would take issue/not correctly identify your payment if you pay extra? There are obviously plenty that completely mess up if you transfer less than the invoice, but what about if you transfer more than the invoice?

I never tried doing that for online purchases, I guess I don't like throwing away money, so I mostly sent exact amount of money.
I know people who made mistake sending wrong amount of coins, adding extra zeros and they got refunded after making complains.
For small amount of sats I thin they consider it as a standard tip, like if you give few extra buck when you buy something in coffeshop.

[LoyceV]

With KYC: yes.
Without KYC and on Tor: good luck to them

So withdrawing LN BTC from kyc exchange (let's say Kraken) and converting it to BTC mainent, exchange would know that BTC is now connected with you and your kraken account?

I'm not sure.

[o_e_l_e_o]

So withdrawing LN BTC from kyc exchange (let's say Kraken) and converting it to BTC mainent, exchange would know that BTC is now connected with you and your kraken account?

I suppose it depends on how much blockchain analysis Kraken is doing, or how much data they are sharing with blockchain analysis firms.

If you withdraw via Lightning and then simply close your channel to get those funds back on to mainnet, then Kraken will obviously be able to see the final destination of your Lightning payment and the channel close transaction, and could link all that together. If you withdraw via Lightning and then send those Lightning funds to some other exchange service in order to receive mainnet bitcoin back on a completely separate and unlinked address, then they will have a far harder time tracking that, although not impossible with enough data and resources.

This could all be improved by the implementation of something like rendezvous routing, so Kraken doesn't know the final destination of your Lightning withdrawal.

I never tried doing that for online purchases, I guess I don't like throwing away money, so I mostly sent exact amount of money.

Same. I'm a big proponent of avoiding privacy leaks from change addresses by simply not creating any change. Choose your outputs wisely, and buy a little more or a little less than you intended to match an output almost exactly to the payment amount, with any extra left over on the fees.

[witcher_sense]

Paying $100 to miners seems like a waste of money for a very small potential improvement in privacy. There are better things to do with that amount: send it to a paper wallet for long-term storage, or use an instant exchange to turn it into LN funds.

100$ is just a round number used to explain sending of round numbers; you can pay less if you wish. I understand you can somewhat obfuscate your transaction history by going off the chain, but honestly don't understand why you consider it a good practice to move toxic change to cold storage. Assuming there are many effective ways to get rid of these undesirable inputs, why would you want to keep it at all? Given the state of affairs that even open-source software developers nowadays don't mind infringing others' privacy to make a quick buck, let alone blockchain surveillance firms, this is highly unlikely that ten years from now that will change and that toxic change will magically transform into something more private. No, they will wait until you make a mistake spending your criminal outputs in the wrong way.

This provides no privacy at all. Any blockchain analysis company will obviously trace funds backwards, and if they only have to go back a single transaction to see all your 0.2 BTC inputs being created from the same output, then it is trivial to link them all together.

Right. To construct a fake CoinJoin transaction, one should use inputs from different addresses that don't share history with each other, otherwise, it is trivial for an outside observer to figure out that this was an attempt to mimic a heuristic.

[LoyceV]

honestly don't understand why you consider it a good practice to move toxic change to cold storage.

If you send 0.005BTC to miners, it's gone. If you send it to cold storage, you can always use it later when needed. If you don't want to use it, don't use it. But things may change in the future, and as long as it's in cold storage, nobody can know it's yours.

Assuming there are many effective ways to get rid of these undesirable inputs, why would you want to keep it at all?

I think we have a different approach: I don't believe in "undesirable inputs" because all Bitcoins are equal.

toxic change

This sounds like the religion of "taint". I simply don't believe it exists

spending your criminal outputs in the wrong way.

Wait what? The topic was about privacy, not about hiding crimes. If you stole 1.01BTC, then indeed I can imagine you don't mind sending 1% to miners if you believe that's what keeps you out of jail, but I was assuming we're talking about honest law abiding citizens why just don't want to world to know their private financial details.

[witcher_sense]

If you send 0.005BTC to miners, it's gone.

Send instead any other amount you can afford to sacrifice. In my view, if you are advocating for bitcoin fungibility, you should support voluntary donations to miners because fees you pay to get your transaction mined are arguably the only natural way by which bitcoin gets cleaned of all taint nonsense. No other mixing solutions are able to provide the same fungibility guarantees.

I think we have a different approach: I don't believe in "undesirable inputs" because all Bitcoins are equal.

Yes, all bitcoins are equal, but you probably don't want your employer to know on what things you spend your Coinbase withdrawals, or do you believe this information cannot be used against you just because bitcoin is fungible?

This sounds like the religion of "taint". I simply don't believe it exists

Again, this has nothing to do with your belief system, the undisputed fact is that this "perfectly fungible change" is not as private as the funds that had gone through mixers.

Wait what? The topic was about privacy, not about hiding crimes. If you stole 1.01BTC, then indeed I can imagine you don't mind sending 1% to miners if you believe that's what keeps you out of jail, but I was assuming we're talking about honest law abiding citizens why just don't want to world to know their private financial details.

In some places having bitcoin in your possession already makes you a criminal, but what if one day all honest law-abiding citizens in your country are ordered to hand over all bitcoin holdings to the government, how many of them will want to turn into criminals?

[LoyceV]

In my view, if you are advocating for bitcoin fungibility, you should support voluntary donations to miners because fees you pay to get your transaction mined are arguably the only natural way by which bitcoin gets cleaned of all taint nonsense.

That makes no sense. First, taint doesn't exist. But even if it would exist, it doesn't do me any good giving my money away to a miner so that the miner will get "clean" Bitcoins. Unless I would be a miner of course, but not many Bitcoin users are miners.
Even better: if taint doesn't exist, the concept of "cleaned" Bitcoins can't exist either

what if one day all honest law-abiding citizens in your country are ordered to hand over all bitcoin holdings to the government, how many of them will want to turn into criminals?

What if they demand to hand in all cars and other items you possess? Hypothetical scenarios like this aren't something I'm concerned about.

[witcher_sense]

That makes no sense. First, taint doesn't exist. But even if it would exist, it doesn't do me any good giving my money away to a miner so that the miner will get "clean" Bitcoins. Unless I would be a miner of course, but not many Bitcoin users are miners.
Even better: if taint doesn't exist, the concept of "cleaned" Bitcoins can't exist either

All these philosophical arguments that bitcoiners make regarding fungibility don't work as well as miners maintaining fungibility directly via creating transactions with no attached history. Therefore, I don't need to "believe" that bitcoin is fungible, I can provide evidence that it really is, that eventually, all bitcoins in existence may be re-issued and become indistinguishable in a practical sense as if they have never been used in transactions.

What if they demand to hand in all cars and other items you possess? Hypothetical scenarios like this aren't something I'm concerned about.

They are only hypothetical for people living in developed countries where the private property rights of citizens are guaranteed and respected; for others, that's the unfortunate reality.

[o_e_l_e_o]

because fees you pay to get your transaction mined are arguably the only natural way by which bitcoin gets cleaned of all taint nonsense.

I'm not sure I agree. If you think about it logically, then miners claiming fees is not really that different to a coinjoin transaction, when considered solely from a taint point of view. If anything, miners claiming fees should be more tainted, not less. I'll explain my reasoning.

If you take an output from a coinjoin transaction, then you can approach that in one of three ways:

• We have no idea which input(s) created that output, so the default is to consider it clean
• We have no idea which input(s) created that output, so the default is to consider it automatically tainted
• That output is associated with every input, and so if any of the inputs are tainted, then that output is also tainted

If you take the fees in a block, then the only logical approach is that those fees are 100% provably associated with every input spent in that block, and therefore if any of the inputs are tainted, then the fees are also tainted.

I do agree that the industry treat block rewards (fees included) as completely clean, but doing so makes no sense, and by any logical metric then block fees are every bit as tainted as coinjoin transactions. It is a success on the part of blockchain analysis firms that they have managed to widely convince everyone in the space that this is true, when in reality is it completely arbitrary nonsense, just like the rest of taint analysis.

[BlackHatCoiner]

Tainting coins might be a pointless process of detecting actually illicit-related activity, but it's a very effective process of incentivizing bitcoin users to be as compliant and conformist as possible. Same as with anti-money laundering laws, and privacy sacrificing to protect from terrorism and tax evasion. In the end, it's an incentive of being meek, for the sake of the surveillance state.

I'm afraid that block rewards are not tainted, because the industry focuses on the majority. Once the miners start moving the money across addresses, here the taint comes. And it also doesn't make sense, even in the head of a conformist: Transactions are picked according to their fee rate, and since bitcoin is censorship resistant, miners can (and should) pick the transactions that pay them the most. On the other hand, treating already used coins as tainted makes the users question the previous owners, and let authorities put their nose into their stuff to prove they have no relation with them.

It's a brilliant, fraudulent conspiracy.

[o_e_l_e_o]

I'm afraid that block rewards are not tainted, because the industry focuses on the majority. Once the miners start moving the money across addresses, here the taint comes.

There have already been several such transactions I am aware of, on both bitcoin and a handful of alts, where someone has made a transaction which sends <1% of the value to another address and pays >99% of the value as fees. There's a good chance that such transactions are by someone trying to create a transaction manually and not really knowing what they are doing or messing up some code they were writing, but there's also a chance that such transactions are a miner making use of the fact that block fees are treated as clean to avoid taint analysis. If such practice became widespread, then you can be sure that blockchain analysis entities will start treating block rewards as tainted too.

And it also doesn't make sense, even in the head of a conformist: Transactions are picked according to their fee rate, and since bitcoin is censorship resistant, miners can (and should) pick the transactions that pay them the most.

And any miner which decides to censor transactions simply puts themselves at a financial disadvantage compared to other miners which don't. This will only become more apparent over time as fees contribute more and more to the total block reward.

[BlackHatCoiner]

There have already been several such transactions I am aware of, on both bitcoin and a handful of alts, where someone has made a transaction which sends <1% of the value to another address and pays >99% of the value as fees.

Such transactions should not be broadcasted, because there's no single mining pool that monopolizes the network. There's a high chance the miner just loses their money, as he pays another miner the >99%. And since it should stay locally, to the candidate block, there's no reason to not make a non-standard transaction. Such as one emptying the entire input in fees.

Or just use a mixer. Same job, less effort.

This will only become more apparent over time as fees contribute more and more to the total block reward.

That. And, personally, I just think the user base will mature over time, which is a disadvantage for taint-proclaiming companies. Strong hands come with strong reactions.

[o_e_l_e_o]

Such transactions should not be broadcasted, because there's no single mining pool that monopolizes the network.

I never said they were. I said they could be a miner making use of block fees to avoid taint analysis, with the implication I was making that said miner does not broadcast the transaction but simply adds it to every candidate block they are working on until they successfully mine it.

And since it should stay locally, to the candidate block, there's no reason to not make a non-standard transaction. Such as one emptying the entire input in fees.

But such a transaction makes it completely obvious that is what the miner intended to do, whereas one which sends a small amount to another address and a huge amount in fees can be plausibly denied as "I fat fingered the fee" or "I was trying to code a transaction manually and forgot to specify a change address, and so everything was taken as a fee".

[BlackHatCoiner]

But such a transaction makes it completely obvious that is what the miner intended to do, whereas one which sends a small amount to another address and a huge amount in fees can be plausibly denied as "I fat fingered the fee" or "I was trying to code a transaction manually and forgot to specify a change address, and so everything was taken as a fee".

True. Dumb subjection requires dumb solutions. So, better just avoid the merchants all together, whenever that's possible. I haven't once been told to have tainted coins, even though I mix regularly.

Also, one more reason they don't taint block rewards is because every bitcoin user is part of it, and as you said they associate every input with every output, hereby if one user is a suspect, every bitcoin user from that block becomes also a suspect, same as with mixing. And since everyone can't own tainted coins (although with AML they are all tainted until proven clean) as this would make tainting further pointless (because if all are tainted there's no taint), their analysis begins from the moment these brand new outputs are spent.

The funny part is they don't care (or care little) for blackmailing users with tainted coins. The real power comes from controlling bitcoin users who just want to complete verification, and who suddenly feel responsible for someone else's actions (if they take the time to read what's a tainted bitcoin).

[jerry0]

What exactly do you mean round amounts?  You mean don't send 0.0005 btc and send like 0.000523?

[o_e_l_e_o]

I haven't once been told to have tainted coins, even though I mix regularly.

Same. As soon as any merchant tells me my mixed/coinjoin/swapped/otherwise obfuscated bitcoin isn't good enough for them, I'll be immediately leaving that merchant for a less stupid competitor.

What exactly do you mean round amounts?  You mean don't send 0.0005 btc and send like 0.000523?

Yes, exactly.

Let's say you have one output of 0.00052376 BTC. You make a transaction which creates two outputs, one of 0.0001 BTC and one of 0.00042076 BTC, with 300 sats paid as a fee. Which of the following scenarios is more likely?

• Someone requested payment of 0.0001 BTC, and whatever is left over is the change.
• Someone requested payment of 0.00042076 BTC, which just so happens to be the amount to exactly match your output and leave you exactly 0.0001 BTC as change.

Obviously the first scenario is far more likely, making it trivial to identify which output is payment and which is change. If instead, your two outputs contained 0.00010814 BTC and 0.00041262 BTC for example, then it becomes far more difficult to figure out which is which.

[Cratoon]

What will you suggest about the chip? I guess Chip mixer given the idea of a chip where 0.001 BTC is the minimum. I don't use mixers, but do they allow sending less or more than the round figure?

[LoyceV]

What will you suggest about the chip? I guess Chip mixer given the idea of a chip where 0.001 BTC is the minimum. I don't use mixers, but do they allow sending less or more than the round figure?

This topic is about the amount you send, not the amount you have. If you start with a round amount, nothing changes: send a "weird" amount to make it harder to guess which one is your change.

[o_e_l_e_o]

What will you suggest about the chip? I guess Chip mixer given the idea of a chip where 0.001 BTC is the minimum.

Loyce is right, but ChipMixer chips can be even better than that. Rather than deliberately sending a non-round amount to obfuscate which is output and which is change, you can select the exact right size and number of chips needed to end up not creating any change at all. You can't lose your privacy to consolidating change outputs if you never created any change in the first place. You can just leave the rest of your coins as a voucher for a later time or withdraw them in a completely separate and unlinked transaction.

[Fivestar4everMVP]

Wallet used for bitcoin transaction also plays a role on how blockchair classifies or determine the level of privacy of such transaction.
Blockchair is my favorite blockchain explorer and I use it frequently to monitor my bitcoin transactions so I noticed what I said about, there was a time I was using this wallet called chainge finance, I noticed that each time I transfer or send bitcoin from that wallet to another wallet, the transaction privacy on blockchair is aways low or shows critical level, recently I stopped using that wallet and switched to mycelium, and I noticed that transaction privacy changed from low to medium and high for transactions I make using mycelium wallet.

[witcher_sense]

<…>

I wouldn't call it a disagreement, you are telling me that the whole concept of taint is flawed, and shouldn't be promoted or allowed to exist, which I fully agree with. Let's assume, however, that not all people are willing to adhere to the same principles as we are and that they refuse to come to the same conclusions despite the logical nature of those conclusions. Let's take a CoinJoin transaction as an example. It is nothing else but a regular bitcoin transaction, albeit a collaborative one. The beauty of collaborative transaction is that participation in it is always voluntary, which means you have full control over whether to join it or not and also whether to collaborate with certain inputs or not. If you think, for example, that some of the inputs are connected to a money laundering activity, you may refuse to participate in such a transaction. Simply put, you don't want to ruin your reputation by doing business with persons you consider "wrong." How exactly you determine that a certain person is wrong is another story, but I think, in a decentralized system, you should have a right to choose, and you should be able to assess the risks. If you don't care about other people's possible connection to criminal activity, if you don't want to chain surveil them to kind of prove such a connection, you can freely mix your inputs with theirs, but you are risking "poison" your outputs, at least in the eyes of some chain surveillance companies. Now let's take transaction fees. What distincts transaction fees from collaborative transactions is that users have no ability to decide with which inputs to "mix" their transaction and, therefore, they can't surveil others' inputs beforehand, and they can't assess all the risks properly. Basically, the mere use of the Bitcoin network becomes dangerous since there is a very high chance that their "clean" coins will be poisoned by criminal ones. The risk of taint makes bitcoin unusable, but an unusable network makes taint useless. Taint nonsense imposed on individual users destroys the network, if that is its goal then it obviously shouldn't exist.

Who can control which transactions to include in a block? Miners. But the problem with miners is that they aren't very interested in censoring transactions and preventing criminals from accessing a block space because not only does it require them to do chain analysis, but it also makes them less competitive and less profitable when compared with miners that do only mining. The mining process is required for the bitcoin network to function properly, it makes it secure, but compliant miners will result in the weakening of the network. Taint nonsense imposed on miners makes the bitcoin network insecure, a subject to censorship and capture by the government. If that is its goal, then taint obviously shouldn't exist.

Regarding transaction fees: in the eyes of taint nonsense, it poisons every transaction after a block was mined because there is no way to distinguish the fees coming from good transactions and the fees coming from bad transactions. Moreover, it poisons freshly created bitcoins because, again, there is no way to tell which part of the coinbase transaction is fees and which part is "virgin" bitcoins. If the goal of taint analysis is to make even fresh bitcoin dirty, then it obviously shouldn't exist.

[o_e_l_e_o]

Blockchair is my favorite blockchain explorer and I use it frequently to monitor my bitcoin transactions

The very act of doing this constitutes a huge risk to your privacy, since blockchair can now link all the addresses you have looked up together by means of your IP address and browser fingerprint.

-snip-

I take your point regarding the ability to choose your co-inputs, but I think it is academic. We both know that blockchain analysis companies aren't analyzing coinjoin transactions, and deciding that the outputs from coinjoins with all clean inputs are untainted and the outputs from coinjoins which include tainted inputs are tainted. Rather, they see a coinjoin transaction and they taint all the outputs as being linked to a coinjoin. Given this, it is irrelevant whether a users carefully chooses which co-inputs they coinjoin with or if they don't. Their output(s) will still be flagged by these entities as having come from a coinjoin. See for example: https://nitter.it/bittlecat/status/1207621591820951552. Given all this, then my point above still stands, and block rewards should be classed as every bit as tainted as coinjoin outputs. We know they aren't, but this is due to arbitrary "rules" set by blockchain analysis companies which are not based on any reality or logic, which they have managed to convince the majority of the space are infallible.

[LoyceV]

Blockchair is my favorite blockchain explorer and I use it frequently to monitor my bitcoin transactions

The very act of doing this constitutes a huge risk to your privacy, since blockchair can now link all the addresses you have looked up together by means of your IP address and browser fingerprint.

Use Tor Browser, and go to Blockchair's Tor domain blkchairbknpn73cfjhevhla7rkp4ed5gg2knctvv7it4lioy22defid.onion The captcha isn't hard. Get a new Tor Circuit (CTRL-SHIFT-L) once in a while, and/or look up addresses and transactions that aren't yours to add some misinformation

[BlackHatCoiner]

We both know that blockchain analysis companies aren't analyzing coinjoin transactions, and deciding that the outputs from coinjoins with all clean inputs are untainted and the outputs from coinjoins which include tainted inputs are tainted.

Exactly. This isn't some sort of "one guy does a bad thing, the rest pay it", which would neither make sense unless all of them were involved. There's absolutely no evidence provided that there's that one guy (unless they're all, which is true according to the fantastic world of FATF). And even if that's the case, it neither makes sense to not do the same for those who deposit coins to an exchange, and who weren't using an "unhosted" (lol) wallet before.

It's clearly a disincentive for privacy protection.

[witcher_sense]

We both know that blockchain analysis companies aren't analyzing coinjoin transactions, and deciding that the outputs from coinjoins with all clean inputs are untainted and the outputs from coinjoins which include tainted inputs are tainted.

Their reasoning is likely the following: if there are some "dirty" inputs coming into a CoinJoin transaction, then this transaction should be flagged as "illicit" since some entities are definitely trying to hide something. This particular transaction, therefore, is not a representation of rights to privacy and the ability of people to selectively reveal the aspects of their lives but rather an attempt to cover crime, at least part of the transaction is aimed at that. Since the case is clear; there is a telling indication that criminals used CoinJoin and this particular transaction to hide their dirty business, it is perfectly justified to somehow mark this transaction to try to catch the criminals in the future. So far, so good. But since chain surveillance firms have no idea which outputs belong to those criminals, they need to violate the privacy rights of all participants, not just criminals. This is how the process of elimination works: everyone is guilty until proven otherwise. Clearly, they think they do good - they are trying their best to prove that you are not a criminal by spying on your post-CoinJoin transactions.

Okay, but what about clean-inputs CoinJoin transactions? Why is it also getting flagged as "suspicious"? I think the reason for this is that they don't actually believe that people should have a right to selectively reveal themselves... If your inputs aren't connected to any illicit activities or sanctioned entities, why would you want to obfuscate your transaction history? The only "rational" explanation is that you are considering becoming a criminal! You clearly are "preparing" your outputs so that they can be used in dark markets in the future; you are thinking that from now on, it is a good idea to begin hiding your financial affairs. Because if you weren't considering joining the dark side, you would be readily sharing your transactions with good guys who are relentlessly trying to prove you aren't a bad guy.

[o_e_l_e_o]

I think the reason for this is that they don't actually believe that people should have a right to selectively reveal themselves...

Precisely this. Blockchain analysis is just one part of the global surveillance state, which thanks to various leaks and whistleblowers we now know is far more widespread and invasive than we ever previously considered. The governments of the world do not want you to have privacy; the governments of the world do not think you deserve privacy. Privacy is inherently wrong as far as they are concerned. Only criminals needs privacy, and privacy is only for criminals.

This goes far beyond coinjoins, though. This is why governments are trying to force legislation to mean that users must provide KYC and proof of ownership for all deposit and withdrawal addresses to and from centralized exchanges. This is why they are advising financial regulators to monitor any transaction and address which is not part of a centralized platform which enforces KYC on all their users. Any use of bitcoin outside of KYCed accounts is suspicious and high risk, as far as they are concerned.