BTC: cutting the trace

[dkbit98]

Please stop promoting the idea that taint exists. I consider making people believe it exists an attack on Bitcoin, and it may very well be the only way for governments to stop Bitcoin from succeeding. Don't fall for it.

Try telling that to all the people who are using shitcoins like ethereum, that now have 52% of all blocks being OFAC compliance, it's growing all the time according to mevwatch.info, and now it has built in censorship for transactions!
You can also write your government and all other governments and complain to centralized exchanges who all say that tainted coins exist.
Welcome to the crypto main stream narrative, I hope you like it

I sure don't like this, but closing my eyes won't change the fact that people can run into problems if someone catches them with coins coming from some hacks and exploits.
One solution is to stop using centralized exchanges and services, that will reduce potential problems, but you can't avoid them totally.
We could also use Lightning Network or second layer solutions that can also break connection with your previous transactions if done correctly.
Perfect solution would be if Bitcoin would implement protocol based privacy changes, but I am not sure this will happen in next few years.

[1714807425]

1714807425

[BlackHatCoiner]

Welcome to the crypto main stream narrative, I hope you like it

I'm absolutely disgusted by the overwhelming majority of the cryptocurrency community, but I feel even worse when I don't react. Victims of "tainted coins", censorable transactions, and centralized exchanges' oppressors are just insufficiently educated victims. If most taught the merchants that taint is a nonsense, that they shouldn't rely their payment processor to a third party, that keeping their funds on centralized exchanges is plain dumb, that using ethereum is like digging your own pit, they'd reason things more clearly.

I sure don't like this, but closing my eyes won't change the fact that people can run into problems if someone catches them with coins coming from some hacks and exploits.

Funds coming directly from illicit activity are reasonably watched. So mix them. If you're afraid that they may be linked to something extraordinary that's being watched by the feds, let a mixer give you some newly minted coins. The feds can't seriously and reasonably accuse you of anything. Every input that comes from a mixer is clear that wasn't previously owned by one entity.

One solution is to stop using centralized exchanges and services, that will reduce potential problems, but you can't avoid them totally.

Why not? Traditional peer-to-peer transactions please. No Coinbase, no BitPay, no Changpeng Zhao. Just me and the merchant.

[o_e_l_e_o]

Try telling that to all the people who are using shitcoins like ethereum, that now have 52% of all blocks being OFAC compliance, it's growing all the time according to mevwatch.info, and now it has built in censorship for transactions!

Shitcoins gonna be shit. A mining pool (MARA) tried this OFAC compliant nonsense on bitcoin once, and it lasted a grand total of about 10 blocks before they had to reverse their decision. As it should be.

I sure don't like this, but closing my eyes won't change the fact that people can run into problems if someone catches them with coins coming from some hacks and exploits.

People can run in to problems if they use centralized platforms which treat bitcoin as non-fungible based on entirely arbitrary guesswork. It has nothing to do with the bitcoin themselves, and everything to do with the centralized platform.

One solution is to stop using centralized exchanges and services, that will reduce potential problems, but you can't avoid them totally.

You can absolutely avoid them totally. I've been buying/selling/trading/using/saving/spending bitcoin for years. I'd wager I'm in the top 1% of bitcoin users in terms of actually using bitcoin as a currency, almost daily. Every single one of my coins has been mixed, coinjoined, or otherwise obfuscated. I have literally never once had a problem with someone refusing one of my coins or demanding KYC or any other such nonsense, precisely because I refuse to do business with anyone who attacks and undermines bitcoin's very existence by treating it as non-fungible.

Here's an analogy:

I am a merchant. You want to buy some things from me. You try to pay with cash. I say "I cannot see the full history of this cash, so I refuse your money". So instead, you tap your debit card. I say "I cannot accept this money without knowing the full history of it". I demand access to your bank account so I can see where all your money comes from. You leave and come back with your bank statements, but I don't like what I see, so I refuse payment. You then try to pay with PayPal. I demand access to your PayPal account so I can see where all your money comes from. You unlock your PayPal account on your phone and hand it over for me to look at. This PayPal money looks OK to me, so I accept it. You then leave the shop and start telling all your friends "Make sure when you shop there you have all your bank statements with you so the merchant can look at them, and make sure none of your money comes from anywhere except your employer, since they can't trace those funds." Your friends all look at you like you are crazy, and then simply choose to shop with the merchant next door who doesn't do any of this nonsense.

Whenever this situation comes up, with the discussion of centralized exchanges and privacy, it always seems that the default position is "Sacrifice all your privacy and let people spy on you so that you can use a centralized exchange". In any other financial situation that would be seen as utterly crazy, as I've just shown above, but for some reason with bitcoin people just accept this nonsense? The problem here is not mixers, or coinjoins, or Monero, or any other privacy technique - the problem here is centralized exchanges. If you don't want a centralized exchange to seize your coins, then don't use a centralized exchange. There are plenty of decentralized exchanges to choose from.

The logical position when faced with entities which are stealing coins is not "I should bend over backwards and sacrifice everything to hopefully mean they don't steal my coins!", but rather to simply not use the entity which is stealing coins.

Most of the power of authoritarianism is freely given. In times like these, individuals think ahead about what a more repressive government will want, and then offer themselves without being asked.

[Little Mouse]

First, using mixer has a chance of getting dirty bitcoin in return regardless of mixer is legal or illegal in a place.

Please stop promoting the idea that taint exists. I consider making people believe it exists an attack on Bitcoin, and it may very well be the only way for governments to stop Bitcoin from succeeding. Don't fall for it.

Maybe you are right. It doesn't exist in the sense that 1 BTC is 1 BTC, all the BTC has the same look but it's a true fact that someone may get in trouble if they use input that they received from a stolen fund from a hacker. They are not the hacker, they haven't stolen but they have exchanged something with him and received that input. Won't it get them some hassle? I have never faced any issue, as o_e_l_e_o said above. But still, it's a concern I think and that's my very personal opinion. In the case of fiat money, we can't actually check who is who when fiat gets hand changed while in BTC, we can see the addresses attached with any stolen fund (I didn't say dirty bitcoin, I realized the term isn't a good one here. Used stolen fund as an example only.)

There are multiple types of services:
~
Second - newly minted coins. You deposit some funds and you receive "clean, newly minted coins fresh from miners genesis block". Good part is newly minted coins out of coinbase (not this one) should have no history and should be accepted by anyone accepting Bitcoins. Bad part is that none of services that advertises by that does that.

Do you support the term "clean"? Well, they mean no history of the input as it was from coinbase, newly minted. What does it mean by "not clean"? Has a history or some bad history(linked to that stolen fund)? Then why is this difference even? I know chipmixer doesn't work in that way. Just saying.

I sure don't like this, but closing my eyes won't change the fact that people can run into problems if someone catches them with coins coming from some hacks and exploits.

That was my only concern but picked the wrong term actually lol.

You can absolutely avoid them totally. I've been buying/selling/trading/using/saving/spending bitcoin for years. I'd wager I'm in the top 1% of bitcoin users in terms of actually using bitcoin as a currency, almost daily. Every single one of my coins has been mixed, coinjoined, or otherwise obfuscated. I have literally never once had a problem with someone refusing one of my coins or demanding KYC or any other such nonsense, precisely because I refuse to do business with anyone who attacks and undermines bitcoin's very existence by treating it as non-fungible.

Well, the problem is with centralized services only. Binance has frozen an account when they found a link with coinjoin though they later returned the BTC once the user promised not to use it anymore.
Great to know that you are that 1% user of Bitcoin.

[o_e_l_e_o]

They are not the hacker, they haven't stolen but they have exchanged something with him and received that input. Won't it get them some hassle?

It might, but the hassle comes entirely from the fact that the centralized platform they are using fundamentally does not understand how bitcoin works and is attacking bitcoin by perpetuating the nonsense that some bitcoin are worth less than other bitcoin. The hassle does not come at all from the bitcoin in question being intrinsically dirty, tainted, or any different to any other bitcoin. And as I said above, if you are ever faced with such a scenario, the correct answer is not to accept that the bitcoin you are trying to spend are somehow less valuable, but rather to find a different service which does not make such ridiculous arbitrary judgements.

Well, the problem is with centralized services only.

Precisely. Just use bitcoin peer to peer without going through a centralized third party - as it was always intended to be used in the first place - and any problems with taint or other made up nonsense completely disappear.

[dkbit98]

You can absolutely avoid them totally. I've been buying/selling/trading/using/saving/spending bitcoin for years. I'd wager I'm in the top 1% of bitcoin users in terms of actually using bitcoin as a currency, almost daily. Every single one of my coins has been mixed, coinjoined, or otherwise obfuscated. I have literally never once had a problem with someone refusing one of my coins or demanding KYC or any other such nonsense, precisely because I refuse to do business with anyone who attacks and undermines bitcoin's very existence by treating it as non-fungible.

That currently works only because Bitcoin is not widely accepted by merchants, so regulators simply couldn't enforce stupid regulations on everyone.
Imagine that you had to pay everything with Bitcoin, but merchant would be forced to scan your sending address to see if there any any alerts for avoiding your coins.
That is why EU is now working on new regulations and this would mean reporting of every little thing and all transaction people are making.
One more danger is the new labeling for efficiency of blockchain in new EU MiCA regulation act.

[Mbidox]

Precisely. Just use bitcoin peer to peer without going through a centralized third party

The subject of claimed tainted coins could be a problem (or risk) in the future, if you want to change your crypto back into Fiat and no longer find an exchange, that does not makes two categories of crypto.

Of course you can go to an exchange, that only ensures that buyers and sellers find each other. For example person A) who wants to sell their crypto against Fiat and person B), who wants buy Crypto against Fiat. Person B) directly get Crypto from person A) and person A) directly get Fiat from person B) by providing his bank account number.

BUT: In this case there will be a bank involved.
There were cases in Germany, where person B) has tried to wash his Fiat by buying crypto this way. The bank account of person A) was closed without giving an explanation. (So we could say in this case there was "tainted Fiat".)

-> So when you try to sell your Crypto to get Fiat with a DEX/P2P, you will run into the risk of tainted Fiat.

The only remaining possibility then would be to meet each other live in person with Cash Fiat and Crypto.
But: That would again entail other risks. *haha

[o_e_l_e_o]

That currently works only because Bitcoin is not widely accepted by merchants, so regulators simply couldn't enforce stupid regulations on everyone.

All the more reason for the community to send a message now and stop using any service which enforces taint or demands KYC, before such requirements become too widespread to avoid.

The only remaining possibility then would be to meet each other live in person with Cash Fiat and Crypto.

I've done this more than once. Yes, there are risks involved, but there are risks involved with any method of trading and I find face to face to be both easier and safer than many other methods. People buy goods and services face to face billions of times a day around the world, and the vast majority of transactions proceed without issue.

[Pmalek]

Maybe you are right. It doesn't exist in the sense that 1 BTC is 1 BTC, all the BTC has the same look but it's a true fact that someone may get in trouble if they use input that they received from a stolen fund from a hacker. They are not the hacker, they haven't stolen but they have exchanged something with him and received that input. Won't it get them some hassle?

It might get them into trouble because of the choices they make. And that choice is using a centralized exchange that believes in tainted coins. It's not a protocol-level problem with Bitcoin itself. The problem is in the way those CEXs look at the history and conclude this is dirty, don't allow it. If 90% of users stopped using services that place taint tags on Bitcoin, there would be 90% less problems with taint unless new platforms step in.   

If I operated a currency exchange office and you walked in wanting to exchange your USD for EUR, and I turn you down because you are black/Jewish/female/fat/foreign/ginger, it's me and my business that does the discrimination. USDs and EURs can be used by those categories of people with no problem at all. I am the scumbag that introduced arbitrary rules for whatever reason. If the majority of people kept using my services, those silly rules and restrictions become a standard. If they don't, then there is no racism in the same way as there is no taint. 

[BlackHatCoiner]

People buy goods and services face to face billions of times a day around the world, and the vast majority of transactions proceed without issue.

A merchant and a customer, which is what you're referring to, don't have the same relationship with a taker and a maker of a trade. Building a reputation is a must for the merchant, because that's what usually draws the customer. It's safer to buy marihuana from a reputable local store legally than from a drug mule illegally.

Same goes for peer-to-peer trading with a complete stranger. There's been a case in my local board wherein the OP got ripped off that way. The taker just took the cash and left.

[o_e_l_e_o]

Building a reputation is a must for the merchant, because that's what usually draws the customer.

And having a good reputation as a P2P trader allows you to bring in more customers, be trusted with larger trades and more volume, and have rates which are more in your favor.

There's been a case in my local board wherein the OP got ripped off that way. The taker just took the cash and left.

Why was the bitcoin not in escrow? It's pretty standard to lock the bitcoin in escrow before arranging to meet, and good P2P platforms like Bisq or LocalCryptos will facilitate this

[BlackHatCoiner]

And having a good reputation as a P2P trader allows you to bring in more customers, be trusted with larger trades and more volume, and have rates which are more in your favor.

So I guess the non-reputable trader has to begin first the trade, face-to-face, and then the maker can settle it once he reaches home?

Why was the bitcoin not in escrow?

It wasn't bisq, they had just discussed it online, and said to meet to exchange. My point was that a stranger and a stranger don't have the same relationship a merchant has with his customers. (And if both don't have a reputation, there is a risk in doing this face-to-face)

[o_e_l_e_o]

So I guess the non-reputable trader has to begin first the trade, face-to-face, and then the maker can settle it once he reaches home?

The bitcoin seller deposits the bitcoin to escrow. They meet, and the buyer hands over the cash. The seller can usually release the bitcoin from escrow there and then depending on the specific escrow set up, or release it a little later if the two parties agreed on that first.

It wasn't bisq, they had just discussed it online, and said to meet to exchange.

Handing over untraceable cash to a random stranger with no reputation, no escrow, and outside a peer to peer platform to mediate any dispute? Well, I'm sorry, but that's just irresponsible.