Mixer restrictions

[Synchronice]

If Monero had been the first, it would have been immediately attacked and put down.

The thing is, Monero couldn't be first because its complicated compared to Bitcoin and we all know that simple product always runs first before a complicated and complex products. But if we magically assume that something like Monero has been first, then I would say that it would be crushed early because it's too much private and it would probably negatively affect upcoming crypto currencies since the existence of Monero (first coin as we assume) would scare the world.

I do not know if Satoshi wanted rather a Monero than a Bitcoin, but some how it all happened in a way that Bitcoin was able to survive.  As much as they want a Monero, I believe if it was first then we would not have a Bitcoin.  Or.  Maybe we would have had both, but only in the dark.

The whole idea of Satoshi was to get rid of 3rd parties. He didn't like the idea that bank was a trusted gatekeeper, that could see every transactions, so he made every transaction public, where everyone can see them instead of one central trusted gatekeeper.
He definitely wanted privacy for Bitcoin, that's why he created a model where public keys were anonymous and others could only see that X was sending money to Y but X and Y weren't known for the public.

Whether Satoshi really wanted Bitcoin to be like Monero is hard to know. He himself was an extremely privacy-focused person but Bitcoin wasn't such product. Either he didn't want it completely private or technologies and knowledge that was available to him and his group at that moment, wasn't enough to build something like Monero. Don't forget, Monero was created in 2014.

[nullius]

If Monero had been the first, it would have been immediately attacked and put down.

The thing is, Monero couldn't be first because its complicated compared to Bitcoin and we all know that simple product always runs first before a complicated and complex products. But if we magically assume that something like Monero has been first, then I would say that it would be crushed early because it's too much private and it would probably negatively affect upcoming crypto currencies since the existence of Monero (first coin as we assume) would scare the world.

As I said earlier, why wouldn’t Bitcoin “scare the world” as it is?

• Permissionless.  [...]
• No ability to freeze and seize funds.  [...]
• Censorship-resistance.  [...]
• Borderless.  [...]
• Irrevocable transactions.  [...]
• Creates ransomware as a new business model for cybercrime.  [...]

That list could be continued at length.  I’ll leave it as an exercise to the reader.  Now, what if the following were on the same list?

• Cash-like financial privacy.  [...]
• Cash-like fungibility, as a consequence of cash-like privacy.  [...]

Too many Bitcoiners start with their conclusion that “Bitcoin is perfect, handed down from the gods Satoshi”, and work backwards to retcon Bitcoin’s design bugs as desirable features.

It’s a general problem.  It even happens with, e.g., Satoshi’s senseless use of double-hashes (double-SHA2-256 and RIPEMD160-SHA256).  The Bitcoin folklore excuse for this is that wise Satoshi “prevented length extension attacks”—even though (a) the double-hashes are used in all sorts of places where no length extension attack is possible, and (b) the right way to prevent length extension with a Merkle-Damgård hash function is either to embed the message length at the start of the message, to pass the message length out-of-band, or (where applicable) to use HMAC.

Whereas the double-hashing is a relatively small idiosyncrasy.  It’s mildly annoying to work with, and it wastes some compute cycles (and thus, electricity).  The impact is relatively low.

By contrast, the transparent blockchain is a major problem.  At this late date, in the mixer advertising ban thread, I argue that it’s a catastrophic flaw.

Ironically, it seems most Bitcoiners don’t understand that blockchain transparency scares off banks and other big businesses, who don’t want their own transactions to be transparently published to the whole world.  Duh.  They’re not stupid.  They care about their own corporate privacy.

And it's already shown with how some exchange that support Litecoin and Zcash don't support withdraw to stealth/shielded address.

AFAIK, most don’t.  Though Zcash made a big deal of it when Gemini started to support shielded withdrawal (note: my information is outdated; I don’t know the current status).  That’s one of the most regulated exchanges in the world:  USA, New York BitLicensed, KYCed and AMLed up the wazoo.

Think about that—and imagine if Bitcoin, the original and the dominant coin, had had the same privacy either from the start, or added on the same timeline as Zcash.  I keep mentioning Zcash partly because it started as a Bitcoin clone, with added technology that was first proposed for Bitcoin!  (Since then, it has evolved in a different direction; around 2022, I didn’t make myself popular in the Zcash community by arguing to keep it more like Bitcoin.)

The prehistory of Zcash consists of softfork privacy proposals for Bitcoin.  Zcash’s transparent pool is (or was) a straight-up clone of pre-Segwit Bitcoin’s transparent blockchain (IIRC, codeforked from Bitcoin v0.11); even script worked exactly the same, and still mostly does.  Technologically, at least, the shielded pools could have been, and could still be more or less easily tacked onto Bitcoin by softforking in a new transaction type like Segwit and Taproot did, without disrupting the transparent pool.

Per my vague allusion in my prior post, I heard that Litecoin was suffering something like tainting of funds that had recently passed through MWEB.  That is for CEX deposits.  I never heard of Zcash having any such problem; I suggest that shows the importance of having the privacy feature from the beginning, to set the precedent.  For exchanges that have listed Zcash for the past ten years, even if they don’t handle shielded themselves, how can they suddenly start to make a fuss about the fact that ZEC can pass in and out of the shielded pools?  It’s always been that way!

On a not unrelated note, Zcash development’s former Electric Coin Co. had a contract with JPMorgan Chase to add privacy to a permissioned bankers’ blockchain.  Banks want privacy, you see.  What, do you suppose banks want their own transactions published to the whole world on a transparent blockchain!?  Banks are not so stupid.  This is old news.

Worlds collide: JPM works with team behind anonymous crypto Zcash

By Marc Hochstein

May 22, 2017

For years, Jamie Dimon has derided digital currencies. Now, his company has teamed up with the creators of one of the most prominent “altcoins” to build privacy features for the bank's blockchain platform.

JPMorgan Chase’s partnership with Zerocoin Electronic Coin Co., announced Monday, is perhaps the most surprising alliance yet as traditional financial institutions co-opt a technology originally developed to route around them.

ZECC’s founder, Zooko Wilcox, was part of the 1990s cypherpunk movement, which sought to defend individual privacy through strong cryptography. Last year his firm released Zcash, a cryptocurrency designed to be more anonymous than bitcoin.

Just that phrase, “more anonymous than bitcoin,” might send shivers up the spines of some bank compliance officers, to say nothing of regulators. So, just to be clear: JPMorgan isn’t using Zcash. "This is solely a technology transfer agreement," Wilcox said.

Instead, his team will use the same cryptographic techniques to add a “security layer” to Quorum, the system JPMorgan is developing to run smart contracts.

As for Bitcoin, some exchange and blockchain analysis treat all known coin from mixer or CoinJoin as "risky", "dangerous", "tainted" or something like that.

Please take the long view.  This fight started not later than 2011—perhaps earlier; a more knowledgeable Bitcoin historian would need to elucidate.

Forum bug:  I can’t merit anonymous posts from the time when the forum allowed totally anonymous posts.

If you see this as a good thing, you hate freedom.

See also (from 2013, linking back to the above-referenced 2011 thread among others):

Trust summary for Mike Hearn

Trusted feedback

User	Date	Reference	Comments
nullius	2026-11-03	Reference	In the world that Mike Hearn built for us, Bitcoin is not money. Money is fungible. Every Bitcoin UTXO is an NFT. ¶ Reference link from 2013 is in a thread where Hearn’s OP was proposing a coin taint scheme; it links to another Hearn thread from 2011, and gives more context of the broader discussion. Now, welcome to 2026, when it’s become normalized for Bitcoiners to run their own coins through “AML checkers” to see how tainted they are.
nullius	2020-11-15		Together with Gavin Andresen, one of the two original insider attackers on Bitcoin development. Tried to pull off an effectual coup against Core development. Strongly anti-privacy.

[PrivacyG]

It took the USG more than a decade to attack and shut down e-gold (the GS&R gold-backed electronic currency from 1996–2009—not the relatively new, unrelated altcoin), even though that was a totally centralized network with non-anonymous operators who were eventually arrested.  How do you suppose they’d react so fast to attack a P2P network of nerds running software on their own computers?

I infer that the CIA invited Gavin for a little chat in 2011, because the CIA was way ahead of the curve; that’s their job.  But in 2011, what high-level policymakers had even heard of a “bit coin”?  Transparent blockchain or no.  And this is why the accomplished fact of Bitcoin’s initial implementation is so very important.

And the E-gold plea deal had a Know Your Customer rule imposed, which continues to make me believe Monero would have been targeted if it came first,

E-gold's plea agreement included a forfeiture of about $1.2 million to the government, a $300,000 fine, and a condition that Douglas Jackson impose know your customer (KYC) rules on e-gold customers. Customers who lived in high-risk countries or who had not completed KYC verification were limited to low or no transaction rates.

To me, their strategy to put Bitcoin down was very obvious.  I believe they would have restricted and then banned it if they never found the middle way, which is currently Know Your Customer all over the platforms Bitcoin is included on combined with Blockchain Analysis, which provides them a ledger clear as day, and they obviously even end up LIKING it!

I doubt they would have tried to kill Monero immediately as in today the source code is published and tomorrow it gets the ban hammer, or even within an year or two, unless it had as much success in a short time as Bitcoin did in years.  I admit I was wrong to say 'immediately' as it may offer the image of it being attacked as soon as it got released.  I believe they operate rather on a 'manage it while small, attack it if almost too big' frame work.  Bitcoin became almost too big, so they started putting pressure on it.  Bitcoin is bad!  Bitcoin is used in crime!  Bitcoin is used in terror attacks!  Drugs are sold on the 'Dark Web' for Bitcoin!  Human trafficking with Bitcoin!

But while it did imprint a 'Bitcoin is bad' idea in the brains of most people, it did not work well enough to keep it from growing, and in the middle of all of this Bitcoin became too big.  Way too big!  And considering there was no real evidence of Bitcoin being mainly used for crime, I am pretty sure there was a point where they were down to only TWO choices left.  Ban it or join it.  And they definitely joined it and made things their way.  You barely have a single ATM in the World you can buy or sell Bitcoin with out Know Your Customer any more.  You can barely find a platform you can use Bitcoin on with out having to give up your identity for it.  Nowadays, you say 'Bitcoin' and 'Know Your Customer' almost immediately comes up.

In a way they got defeated, but on the other hand they won.

If Monero was instead of Bitcoin, the only solution left would have been to ban it because there would have been no way of joining it.  It would have continued to exist on computers of some nerds, it would have continued to be used in the dark, but it would have not been present on platforms, Banks and what ever else.  This is happening right now even.  You see Monero being pushed away, de listed from platforms, people depositing it being treated as criminals and asked for documentation, and no one was vocal enough to cry out so loud people would protest the change, so for them this is also a win.  They made it difficult enough to use that most people simply end up not wanting it any more.

I would argue I rather have a 'dark only Monero' than a Monero present everywhere with Know Your Customer, which does mean I prefer it the way it currently is.  But I suppose you get what I mean.

We know what actually happened  But it’s hard for you to predict in retrospect what would’ve happened, if Bitcoin had had privacy from the start.  The precedent of a transparent blockchain changes the viewpoint of regulators about what they will now accept; it also changes your viewpoint about what regulators would have ever accepted.

I personally do not think it would have been any different than the scenario I presented.  It is the same steps being applied no matter what the possibly threatening subject is, depending on which stage of growth and possibility of management the subject is in.

Or.  Maybe I am very wrong and you are right, which I actually do hope that you are.  To be honest with you, I do wish they simply had no choice but to accept the situation they are in.  Which is that Bitcoin became too big, and that Monero would have had the same fate as they would have also let it grow too much for too long, becoming an uncontrollable success.

Right now however, I simply can not think of it that way.  Monero was attacked together with Samourai, Wasabi, Chip Mixer et cetera.  It was all around the same time.  Samourai developers were sentenced, Wasabi bent the knee, Chip Mixer got seized, Monero got pushed away.  Wasabi 'returned' standing back up and Kruw got mentioned as a Money Laundering facilitator in documents released by the Secret Service, which I personally believe was kind of a threat too, and Monero is still kept at a distance.

Does it really seem to you like they would have let Monero be?

• Cash-like financial privacy.  I don’t understand why people treat blockchain privacy as if it created some sort of a new bogey.  Zcash and Monero merely provide privacy more or less approximating that of old-fashioned cash.  So, if anyone ever invented cash, which is issued by governments, then “it would have been immediately attacked and put down”?

They are trying to attack and put down Cash as we speak, as the whole World is moving toward a 'digital Cash'.  Considering this, there is no argument to even be made.  There is Cash, they do hate it and they are putting it down already!

The origins of Cash are extremely long.  Thousands of years even.  People of power always hated it and always wanted a way of monitoring and controlling Wealth.  That was never different, it is only now that we 'finally' have a way to put it in a centralized ledger that can be synchronized instantly all across the World with no wires, no horses, no thousands of miles to travel, no paper documents to wet.

Bitcoin is NOT cash.  Bitcoin’s privacy is such utter shit that from a privacy perspective, I’d rather use a bank account.  No joke.  (I actually first said so in 2017, on the Zcash forum.)  And therefore, Bitoin is NOT FUNGIBLE.  As long as there is even one thread on this forum teaching people how to use “AML checkers”, Bitcoin is a system for trading NFTs by definition.[/anchor]

I will not lie about this, and I’m done making excuses about it.  Without blockchain-layer privacy, Bitcoin is broken by design.

I agree that Bitcoin did become really bad from a Privacy perspective as soon as people started to analyze the Blockchain, but I do believe Bitcoin and Monero are BOTH necessary in the kind of World we are heading in to.  Particularly considering there are now non custodial ways of swapping between the two, it will be a great way of pretending you are just a normal person while still having a whole hidden stash of boat accidents no one knows of.[/list]

[nullius]

PrivacyG, thanks for your thoughtful reply.  After I post this, I’ll send it a merit even though I strongly disagree with most of your arguments.  I think most people don’t understand the purpose of merit.  It’s not a “like” button.  Intelligent disagreement is welcome from people who are basically on my side; it checks me for human error, and it helps me to strengthen my own arguments.  I dislike your arguments, but I don’t dislike you—and I appreciate the intelligent discussion.

Before I address your arguments, I will draw another analogy.

PGP isn’t like sealing your letters in a paper envelope:  It’s like putting them in an adamantine bank vault, which cannot be breached^* by tools and torches.  Accordingly, all of your arguments about Monero apply a thousandfold to PGP.

^* Important qualification:  See my soon-forthcoming thread on post-quantum PGP encryption, which I’ve been planning since the day I returned to the forum.  If you’re doing anything with non-post-quantum PGP that could in any way compromise your safety if your messages are adversarially decrypted within the next decade, then you’re taking a foolish risk.

PGP not only can be, but is used to transmit child pornography, to keep terrorist communications secret, and by drug dealers on Teh Dark Webz.  And I’m pretty sure that some money launderers must use PGP to keep their communications secret; if one’s dirty-money laundry requires interaction with humans, rather than just eeeeevil non-transparent blockchains, then communications security is a necessity!

PGP’s development was intentionally accelerated as activist software (note: badly slanted Wired article, IMO), to help derail pending legislation with the power of accomplished facts.  The year was 1991.  In Senate Bill 266, an anti-terrorism bill, tough-on-crime U.S. Senator Joe Biden inserted a provision to require backdoors for encryption.  At the time, it would’ve been relatively easy to ban non-backdoored encryption:  No encryption tools were in widespread use.

Phil Zimmermann decided to fuck Senate Bill 266 by rapidly spreading strong encryption into comon usage, before the bill could become law.  N.b. that this was not a left-right political fight.  Zimmermann is a lefty civil libertarian; in 2008, he vehemently objected to his past statements being used to make it seem falsely as if he opposed the 2008 Democratic ticket.

Cypherpunks was founded in 1992.  The PGP style of code activism suffused not only its ethos, but its conscious practical strategy.  “Cypherpunks write code.”  If legislators have opinions contrary to yours, then make their opinions less relevant to reality.  Most of all, fight by fait accompli.  Let the genie out of the bottle, so nobody can put it back in.  This is crypto-anarchy.

Zimmermann wrote the code for PGP v1.0 in haste—and he didn’t really know what he was doing.  PGP v1 wasn’t “pretty good”; it was kinda awful.  But it achieved its immediate purpose:  As part of strong pushback from civil libertarians, it helped to defeat the anti-terrorism bill’s anti-encryption provision.  Meanwhile, other programmers stepped up to help improve PGP.  PGP 2 was much better than PGP 1, and PGP 3 lived up to its name of “Pretty Good Privacy”.

In the first few years of its existence, one of the programmers who went to work on PGP was Hal Finney...

To stick his thumb in the eye of pending Federal legislation was not without consequences for Phil Zimmermann.  USG investigated and harassed him for three years.  Zimmermann could have wound up in Federal prison.  But he had many supporters, even inside USG.  Ultimately, the investigation was dropped.  USG just wasn’t ready to begin imprisoning programmers merely for writing some source code; I myself find it interesting that they started making that a habit under the administration of President Joe Biden.

Lest any Trump supporters quote me on that, I need to add for the record that in the big picture, on balance, Trump is orders of magnitude worse for freedom.

...and according to merit stats, this is currently the second-highest merited topic of all time:

⇾ Bitcoin and me (Hal Finney)
For those who don't know me, I'm Hal Finney. I got my start in crypto working on an early version of PGP, working closely with Phil Zimmermann. When Phil decided to start PGP Corporation, I was one of the first hires. I would work on PGP until my retirement. At the same time, I got involved with the Cypherpunks. [...]

Fast forward to late 2008 and the announcement of Bitcoin. [...]

As we all know, if Satoshi was Bitcoin User #0, Hal was Bitcoin User #1.  And Hal contributed to Bitcoin, just as he’d contributed to PGP.

Now, what are Hal’s third-to-last and second-to-last posts on this forum, before worsening illness and impending death made his Bitcoin Forum account go silent?

Hal Finney’s third-to-last forum post:

⇾ Re: Zerocoin: Anonymous Distributed E-Cash from Bitcoin
I really like Adam's very creative idea earlier in this thread to have a pure-zerocoin system:

https://bitcointalk.org/index.php?topic=175156.msg2420768#msg2420768

The zerocoin paper proposed a hybrid bitcoin-zerocoin system. Bitcoins would be temporarily exchanged for zerocoins, and then exchanged back. Adam's idea was that zerocoins would be exchanged directly for zerocoins. Zerocoins could be mined directly, too. All this is a simple modification of the zerocoin protocol. In fact, it would be simpler in terms of code size, because you wouldn't have to support bitcoin transactions. No scripting language, no bitcoin validation rules. Just pure zerocoin spend transactions.

This would also free us from the forced assumption of bitcoin-zerocoin parity. [...]

* nullius wonders how that could be read not to suggest a potential altcoin?

Hal Finney’s second-to-last forum post:

⇾ Re: Zerocoin when?

[—Greg Maxwell talking about zerocoin.—]

The zerocoin part does more than defend against DOS, doesn't it? It also provides a degree of anyonymity, if I understand it. In the conventional multi-party anti-taint protocol, every participant knows the mapping from inputs to outputs. But in your improved protocol using libzerocoin, nobody sees the mapping. Now, this requires more than two participants, so considerable organization is needed to coordinate.

Still, this an application of the zerocoin protocol which doesn't have an impact on the blockchain. OTOH, it has a small anonymity set, so the benefit is rather modest.

I’m a Zcasher.  That was a development after Hal died; I don’t know what he would have thought of it.  All I know is that Hal and our other favourite Bitcoin devs wanted Zerocoin, and I wanted Zerocoin.

Zerocoin and me

I rejected Bitcoin to wait for Zerocoin or its equivalent.  That’s why I didn’t buy BTC at $200–$400.  I knew about all of this; I wasn’t an expert, but I was basically aware of it, and I occasionally checked for new developments to see when I will be able to buy BTC with Zerocoin.  Then, when Zerocoin became Zerocash, then Zcash, I waited for Zcash mainnet.  And upon my very first BTC buy (for cash or cash equivalent, no-KYC), I immediately swapped all my newly-purchased BTC to ZEC on Shapeshift.  The original no-KYC version of Shapeshift.  My anonymously purchased coin went into the Sprout pool for holding.  (Edit, more instructions for anyone who wants to follow my example:  All of this was done via Tor for network-layer privacy; no exceptions, and I use an isolating Tor gateway to assure that I make no mistakes.)  I’m one of very few people who can safely brag that blockchain analysts will never trace me.

But yes, I avoided transparent BTC like plague at $200–$400 to await some sort of Zerocoin.  (Edit:  And lower, earlier, because wtf, people are publishing their financial transactions on the Internet!?)  Blockchain privacy is an MVP feature.  Bitcoin personally impoverished me by not implementing Zerocoin.

I keep mentioning Zerocoin, because I want to kick Bitcoin onto the path it could’ve, should’ve taken in 2013.  And now, I am returning to my roots.

Nowadays, you say 'Bitcoin' and 'Know Your Customer' almost immediately comes up.

That’s the point where I flip to become actively anti-Bitcoin.  To say KYC to me is to wave a red flag at a bull.

I came to Bitcoin for freedom.  BTC+KYC is repulsive to me; it’s just like backdoored encryption.  Why bother?  Why the fuck should I even want it at all?  I’d rather use Paypal.

I always loved Bitcoin for these people:

If you see this as a good thing, you hate freedom.

Everyone should click through to the thread context, read Anonymous’ post, and see what the OP is.  Note the date in 2011.

And this discussion has thus far only made firmer my conclusion that not only was it feasible for Bitcoin privacy to win by early accomplished facts, but imperative—lest the strategic weapon of accomplished facts be turned against us.

In a way they got defeated, but on the other hand they won.

They won, by co-opting Bitcoin.  Too many Bitcoiners fixate on “number goes up”, while big-money institutions move in to make themselves the economic majority.  Hey, during the fork wars of 2017, what did Bitcoiners say to Jihancoiners about “the economic majority”?

If the Bitcoin economic majority is now pro-KYC, then Bitcoin has been turned against my interests and yours.


PrivacyG, I began to write much more in direct reply to your post—to respond to all of its most significant points.  However, I think it may be wiser to cut this here, thus to keep it focused on the foregoing.  If appropriate, I’ll return to your post in another reply.

The foregoing history re PGP, etc. was mostly dashed off the top of my head.  Usually, when writing about such history, I like to do more fact-checking of my fallible human memory.  That takes time, and I want to respond more quickly here; thus, I’ll post this as-is.  If I have made any egregious errors, then I’ll be duly embarrassed, and I will edit this with a journalistic-style correction.  Factual corrections are welcome, with citations to reliable sources (even as simple as “lol, (wikipedia link) says...”).

[LoyceV]

Make no mistake:  I am not attacking Bitcoin.  “Taint”, “AML checks”, and “risk scores” have successfully attacked Bitcoin.

I've been saying that for years. Governments can't stop Bitcoin, but they can make people believe Bitcoin is bad, or at least some Bitcoins are bad. That's the exact opposite of how governments treat their own banknotes: they want everyone to know each banknote has the exact same value, no matter where it came from. Without that, fiat money couldn't exist.
"Taint" only exists if people want it to exist, and the companies who's business model is to sell "the notion of taint" are good at convincing more and more people they need to pay them for their "services".

[ABCbits]

As for Bitcoin, some exchange and blockchain analysis treat all known coin from mixer or CoinJoin as "risky", "dangerous", "tainted" or something like that.

Please take the long view.  This fight started not later than 2011—perhaps earlier; a more knowledgeable Bitcoin historian would need to elucidate.

Forum bug:  I can’t merit anonymous posts from the time when the forum allowed totally anonymous posts.

If you see this as a good thing, you hate freedom.

I didn't know someone speculate such possibility long time ago, although it's disappointing he consider it as something that shouldn't be feared. It reminds me of statement from one of former US official few years ago.

Carole House, a former White House director for cybersecurity and secure digital innovation, who is now executive in residence at Terranet Ventures, spoke at the DeCenter Spring Conference at Princeton University in April, proposing exactly that.

In her speech, House suggested that it would be great if miners, as well as validators of proof-of-stake blockchains, came together and agreed not to mine OFAC-blacklisted transactions, as well as not to build upon blocks with such transactions. She also noted that having as much hashpower as possible in the U.S., where miners have to comply with the sanctions, would help make that vision a reality. 

It's essentially 51% attack under disguise of "OFAC compliant".

[joker_josue]

Make no mistake:  I am not attacking Bitcoin.  “Taint”, “AML checks”, and “risk scores” have successfully attacked Bitcoin.

I've been saying that for years. Governments can't stop Bitcoin, but they can make people believe Bitcoin is bad, or at least some Bitcoins are bad. That's the exact opposite of how governments treat their own banknotes: they want everyone to know each banknote has the exact same value, no matter where it came from. Without that, fiat money couldn't exist.
"Taint" only exists if people want it to exist, and the companies who's business model is to sell "the notion of taint" are good at convincing more and more people they need to pay them for their "services".

That's the point. The problem isn't the level of privacy that Bitcoin can provide. But rather, it's about how others deal with it. What's wrong is this constant requirement for KYC (Know Your Customer) for almost everything in life, whether it's related to finances or not.

In the other one, I heard a comment about AI that could be applied here as well. The fact that people are using AI to deceive others will lead to the truth being discredited.
For example, in some countries there has been an increase in people using AI to try to get refunds for meals ordered through Uber Eats. They take photos of the food, alter the image, and claim that everything was wrong or spoiled. In other words, if this trend increases, the functionality of requesting refunds, when things are truly wrong, ceases to be functional.

Is the problem AI? No.
Is the problem that platforms like Uber Eats have a refund function? No.

The problem is people who like to abuse what was created for their own benefit.

Blockchain analytics companies were born even before governments started going after Bitcoin. It was born because someone remembered wanting to be a police officer and go after someone who stole BTC.

It was the Bitcoin community itself that created tools to track down those who own Bitcoin.

Is Bitcoin to blame? No.
Was it the fault of whoever created Bitcoin? No.
People just like to take advantage of what they have that's good.

The best proof that Bitcoin is private is that to this day no one has been able to discover who its creator is. You could say that he didn't touch his Bitcoin. He didn't touch that Bitcoin that was known to be his. And the other one? We don't know.

[satscraper]

~

Long-read indeed.

As I understand it, you’re trying to blow against the wind. What should I say about that...probably nothing, except that every man is the smith of his own rough luck.

As LoyceV said, “the taint” here is nothing more than perception, and it seems you took this stuff seriously, just as the government wanted. I didn’t. I use BTC freely in my life to cover my everyday expenses, and I’m quite happy with the opportunity it offers.

May I ask the same about Zcash and similar stuff? That’s the rhetorical question, in fact.

[nullius]

"Taint" only exists if people want it to exist, and the companies who's business model is to sell "the notion of taint" are good at convincing more and more people they need to pay them for their "services".

Eh?  You encourage AML checks.  (No offense to NotATether; I understand why they offer this.  My point is that taint is real—and it’s grown to be something it wasn’t four years ago.)

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Bitcoin Historical Context

Please take the long view.  This fight started not later than 2011—perhaps earlier; a more knowledgeable Bitcoin historian would need to elucidate.
I didn't know someone speculate such possibility long time ago, although it's disappointing he consider it as something that shouldn't be feared.

I think one of the problems is, most Bitcoiners lack adequate historical context to see the implications of this thread.

You are far more knowledeable than most forum users, so please don’t take insult as I illustrate this example:

The upper bound (latest possible time) for when you (u=359716) first discovered Bitcoin is 2014.  (Not asking.  None of my business.)  Thus, if I tell you that Gavin (u=224) “verified” Faketoshi in 2016, or if I talk to you about the personalities involved in the 2017 Jihancoin hardfork, I don’t need to explain.  You may know many parts of this better than I do!  If you talk to a newbie who discovered Bitcoin in 2020, you may guide them to read old forum threads about Faketoshi, and about the fork wars, etc.

If I discuss my suspicion that Gavin (u=224) may have been compromised by the CIA, you may know why; even though the most relevant thread was in 2011, it’s one of the most (in)famous old threads on the forum.

Yet if even you don’t know that this...

It reminds me of statement from one of former US official few years ago.

Carole House, a former White House director for cybersecurity and secure digital innovation, who is now executive in residence at Terranet Ventures, spoke at the DeCenter Spring Conference at Princeton University in April, proposing exactly that.

In her speech, House suggested that it would be great if miners, as well as validators of proof-of-stake blockchains, came together and agreed not to mine OFAC-blacklisted transactions, as well as not to build upon blocks with such transactions. She also noted that having as much hashpower as possible in the U.S., where miners have to comply with the sanctions, would help make that vision a reality. 

It's essentially 51% attack under disguise of "OFAC compliant".

...is indeed only the later iteration of a plan first discussed in 2011, (and maybe even earlier that I don’t know about?)...
By the way, I observe that Hearn posted this topic ten days before Gavin announced that he was visiting the CIA; see also the alleged Satoshi email quoted below:

From time to time governments freeze the assets of people or organizations they believe to be criminal. [...] BitCoins apparent inability to do this will certainly make law enforcement uncomfortable with the concept.

But in reality, by the time BitCoin is large enough for this to be a real issue it will be quite possible to freeze bitcoins by requiring miners to exclude transactions from blacklisted addresses.

I infer that you read it, ABCbits; I quote it for others.

...then, I guess that most of the discussion of this 81-page thread probably lacks for historical context.

Why am I freaking out about the mixer advertising ban?  I don’t need mixers, and I was never in their paid signature campaigns.  I see this in the big picture, in the historical context of the past 15 years.  Step by step, Bitcoin is being transformed from a system of freedom into a weapon for crushing oppression.

I intend soon to make a new thread showing some old threads that I know, and inviting others to do similarly.


Check Post History

Once again, none of what I say here is new for me.

If different same-sized pieces of a currency have different values, then it is not a currency at all:  It is a chaotic mess of non-fungible tokens.  (This is what Mike Hearn wanted; and where is he now?)

From: Satoshi Nakamoto <satoshin@gmx.com>
Date: Sat, Apr 23, 2011 at 3:40 PM
To: Mike Hearn <mike@plan99.net>

[...]

I've moved on to other things.  It's [Bitcoin is] in good hands with Gavin and everyone.

So, this unauthenticated e-mail was allegedly sent by Satoshi to Mike Mr Surveillance & Taint Hearn four days before Gavin Andresen publicly announced his visit to the CIA:

Subject: Gavin will visit the CIA

I want to get this out in the open because it is the kind of thing that will generate conspiracy theories:  I'm going to give a presentation about Bitcoin at CIA headquarters in June at an emerging technologies conference for the US intelligence community.

Coin taint and blacklisting are what break Bitcoin’s fungibility.  BTC is an NFT:  A non-fungible token, due to coin taint and blacklisting.  The subset of Bitcoiners who refuse to acknowledge this are either living in a Reality Distortion Field, or still under the influence of the blockchain transparency fetishization with which Mike Hearn, et al. poisoned Bitcoin early on.  I identify a lack of fungibility as the biggest long-term economic threat to Bitcoin.

Is the problem AI? No.

Disagreed, but that’s off-topic.

Is Bitcoin to blame? No.
Was it the fault of whoever created Bitcoin? No.
People just like to take advantage of what they have that's good.

That view is both totally passive, and outright nihilistic.

The best proof that Bitcoin is private is that to this day no one has been able to discover who its creator is. You could say that he didn't touch his Bitcoin. He didn't touch that Bitcoin that was known to be his. And the other one? We don't know.

That assumes a whole string of facts not in evidence.  Even assuming all those facts arguendo, all it would show is that it’s hard to dox the coins of someone who mined anonymously on a desktop PC in 2009.  For those of us who didn’t, it’s irrelevant.  It’s also irrelevant to further usage of those coins; as soon as a 2009-era anonymous miner moves the coins, they go into circulation like any others, and are thereafter subject to all of the same privacy and fungibility problems.

As I understand it, you’re trying to blow against the wind.

You could have said the same thing to Satoshi in 2008.  Some people aren’t so passive.

What should I say about that...probably nothing, except that every man is the smith of his own rough luck.

This is the type of response that gets Bitcoin accused of a cultlike mentality.  If I’d written about problems with the banking system (where I could’ve made a ton of money when I was younger), then you’d give me three cheers.  Instead, I wrote about real problems with Bitcoin—and I showed some historical context of how Bitcoin developers tried to fix those problems in 2013.  You reply that it’s basically just my fault that I didn’t corrupt my principles with FOMO for HODL moons. 🚀

I reject a system that doesn’t give me freedom.  Isn’t Bitcoin supposed to be about freedom?  I didn’t come to Bitcoin for financial speculation, and I’m more than beginning to agree with those who say the speculation aspect is a bad thing.  It corrupts.

As LoyceV said, “the taint” here is nothing more than perception, and it seems you took this stuff seriously, just as the government wanted.

So, it’s all in my head?  If I get funds frozen under shotgun KYC because of taint, will you guarantee my transaction, and make me whole with money from your own wallet?  Or will you tell me it’s “nothing more than perception” that my funds were frozen?

This is gaslighting—with a twist:  You’re in denial of the real impact of taint.  See also my above self-quote about a “Reality Distortion Field”.

I didn’t.

Yes, you do.  Your signature, avatar, and personal text currently advertise “AntiSwap.io - NO AML/KYC EXCHANGER MONITORING”, which would not need to exist without taint and “AML” problems.

Whereas I’m the only one in this thread who absolutely rejects the concept of taint.  I shall never, ever use an “AML checker”.  I swear on my PGP key.

I could be open-minded about getting my dick stomped on an anvil [sexually explicit link]; I am absolutely closed-minded about “AML checkers”.

You may also want to inform some other benighted rubes that taint is all in their heads, such as NotATether, or...

I put my Address in to the b1exch Anti Money Laundering checking tool for the first time this year, and considering my threat level I should be tied up and locked in a dark, damp cell right now!

No offense to said “benighted rubes”, whom I personally respect.  We’ve all gotta deal with the real world somehow.  My own choice to deal with it is henceforth to treat a Bitcoin UTXO as a hot potato.  I will hold ZEC and some XMR, use exchanges with strict no-KYC policies, and never, ever use an “AML checker”.

Anyway, satscraper, your account was registered in 2022; perhaps you may want to learn the history of taint, before you try to teach others about it.

One of most commonly raised issues with Bitcoin is that of crime and punishment. Over the past 40 years our societies have, through both fair means and foul, built an integrated anti-money laundering system that attempts to let governments trace the proceeds of crime.

[...] Blacklist providers maintain sets of outputs that are blacklisted or tainted in some way, for instance because the owner reported them stolen or because it’s believed they are owned by some criminal enterprise. [...]

[LoyceV]

Eh?  You encourage AML checks. ~

[ANN] BitMixList.org - XMR <=> BTC - AML Score Checker - Bitcoin Mixer List
Merited by klarki (100), bitmover (15), ABCbits (13), LoyceV (12), n0nce (10),

Please don't make assumptions about my intentions.
First, my Merit doesn't mean I agree to every part of a post, nor do I encourage everything in there. It simply means I think the post is worth reading.
Second, that topic started out as [ANN] BitMixList.com - Bitcoin Mixer List and was edited later. I sent those 12 Merits on Tue 12 Dec 2023 11:22:31 AM CET, and when the title wasn't edited yet.

[bitmover]

"Taint" only exists if people want it to exist, and the companies who's business model is to sell "the notion of taint" are good at convincing more and more people they need to pay them for their "services".

 My point is that taint is real—and it’s grown to be something it wasn’t four years ago.)

Taint is real.

People/companies/authorities/governments  who "want" it exist have the power to do so. Those actors are part of the bitcoin network already.

 Tainted coins are part of the reality now. We can ignore that such thing exist, but we might just lose money, get coins frozen, etc.

I don't want to support the idea of tainted coins, but I have to live with it. To avoid my coins getting blocked by third party services

Also, I don't want to send high AML coins which I received to people who I know are not able to deal with them.

[nullius]

Silence Speaks

🦗 🦗 🦗

I find it telling that thus far, from those who have replied, nobody has responded to my quotes showing that in 2013, Hal Finney, Greg Maxwell, and Adam Back (among others!) were working on Zerocoin proposals to bring privacy to Bitcoin.  Note:  Zerocoin for Bitcoin (PDF) was the research antecedent of Zcash—and one of its co-authors, Professor Matthew Green of Johns Hopkins University, later joined the board of the Zcash Foundation.

I will crush the myth that Bitcoin’s fully transparent blockchain has any kind of benefit!

Moreover, why does OgNasty do a hit-and-run?  I see from some searches that he viciously attacked mixers for years.  Yet he gave 100 merits to Hal’s most famous post—perhaps without realizing that Hal’s last on-forum work for Bitcoin was to undo Bitcoin’s transparency, turning Bitcoin into a giant “mixer”.  And OgNasty has promoted PGP, which Hal was (gasp!) paid to work on—and which is used on the darkweb just like mixers, and which gives Zerocoin-tier privacy to communications.

Re: [Merit] Hey Bitcoiners! Can You Send Encrypted Messages?
Merited by nullius (1) (According to BPIP, I sent this merit 2021-04-10T04:45:50Z, not now.)
I'm curious if anyone that learned how to encrypt messages for this thread has actually put it into use?  Were you able to get a friend or family member to use PGP to read your messages?  

Re: [Merit] Hey Bitcoiners! Can You Send Encrypted Messages?
I must congratulate OgNasty on keeping this thing going.  I wish that more people cared about PGP.

Hey, how many newbies nowadays know that Hal Finney, the co-author of PGP, received the first Bitcoin transaction from Satoshi Nakamoto?  Bitcoin and PGP belong together.

Please don't make assumptions about my intentions.

Okay, I will ask you.  And if I have mistaken you, I will apologise for that.

• Have you ever (even once) AML-checked any of your own UTXOs?
• Do you encourage or discourage at-risk people, such as mixer users, to manage their risks of shotgun KYC and other taint problems by AML-checking their own UTXOs?  (Bonus question:  If you tell them not to, then do you personally guarantee their funds in case of loss caused by taint?

To be clear, I cast no personal aspersions on NotATether.  I infer that their offer of AML checks to no-KYC people is intended to be harm reduction—arguable (and I argue against using it^*), but offered thoughtfully and with earnest good intentions.

^* Since I argue against it, and I definitely don’t guarantee anyone against shotgun-KYC loss and/or other taint damage, I must in conscience say what I’m saying:  Treat BTC as a hot potato.  Hold ZEC and XMR.  Tell everyone why, and fight for BTC to get the blockchain privacy (and thus, fungibility) that Hal tried to give it in 2013.

Edit:

Taint is real.  [...]

I don't want to support the idea of tainted coins, but I have to live with it. To avoid my coins getting blocked by third party services

Also, I don't want to send high AML coins which I received to people who I know are not able to deal with them.

Thank you.  I’m currently facing that problem:

• I don’t know how to handle UTXOs with high risk scores.
• I refuse on principle to learn how to use an “AML checker”.  This is not what I signed up for!  This is NOT why I came to Bitcoin!
• If a trading partner sends me a tainted coin, and that causes me a loss, then I face a dilemma:  Either I can blame them (thus acting as an agent of tyranny, to enforce taint on them), or I can be the BTC bagholder eating the loss (which is totally unjust to me, and which I cannot afford!).
• I ask people to send me ZEC or XMR.  But in practice, some people will send me only BTC.  Thus, I have no choice but to try to figure out WTF to do about taint—if only so I can dump BTC like a hot potato for fungible money (ZEC preferred, XMR acceptable).

Thank you for caring about not dumping tainted coins on others, and “passing the buck” to them.

[OgNasty]

Moreover, why does OgNasty do a hit-and-run?  I see from some searches that he viciously attacked mixers for years.  Yet he gave 100 merits to Hal’s most famous post—perhaps without realizing that Hal’s last on-forum work for Bitcoin was to undo Bitcoin’s transparency, turning Bitcoin into a giant “mixer”.  And OgNasty has promoted PGP, which Hal was (gasp!) paid to work on—and which is used on the darkweb just like mixers, and which gives Zerocoin-tier privacy to communications.

Re: [Merit] Hey Bitcoiners! Can You Send Encrypted Messages?
Merited by nullius (1) (According to BPIP, I sent this merit 2021-04-10T04:45:50Z, not now.)
I'm curious if anyone that learned how to encrypt messages for this thread has actually put it into use?  Were you able to get a friend or family member to use PGP to read your messages?  

Re: [Merit] Hey Bitcoiners! Can You Send Encrypted Messages?
I must congratulate OgNasty on keeping this thing going.  I wish that more people cared about PGP.

You don't seem to be connecting the dots.  I am a proponent of Bitcoin having privacy features.  I am against this forum promoting 3rd party mixers utilized by scammers here to steal funds from others.  

My stance is simple but let me simplify for those who may not understand.  

Free privacy for everyone = Good

Getting paid to promote money laundering for scammers = Bad

[LoyceV]

Have you ever (even once) AML-checked any of your own UTXOs?

That's hard to avoid: just using Blockchair.com is enough to see their "AML scores" being advertised.

But if I use a centralized exchange, I'd better be able to answer any questions they might have. Just like I have to answer questions if my bank or tax authority asks them.

Do you encourage or discourage at-risk people, such as mixer users, to manage their risks of shotgun KYC and other taint problems by AML-checking their own UTXOs?

I think you're asking the wrong question: "taint" only exists if services believe it exists. So if you're asking me if people should be careful before using such a service, then yes, they should. Even better if they can avoid such services.

do you personally guarantee their funds

No. What kind of question is that anyway? I'm not an insurance company, and I'm not earning anything from someone else's coins.

some people will send me only BTC.  Thus, I have no choice but to try to figure out WTF to do about taint—if only so I can dump BTC like a hot potato for fungible money (ZEC preferred, XMR acceptable).

There are many services that offer to exchange BTC for privacy coins without KYC, although it's good to know some lie about it and still request KYC.

[nullius]

Moreover, why does OgNasty do a hit-and-run?

You don't seem to be connecting the dots.  I am a proponent of Bitcoin having privacy features.

Quoting what I linked above from “OgNasty do a hit-and-run”:

If Monero had been the first, it would have been immediately attacked and put down.

This is very true.  That is why the Trojan Horse approach is necessary.  All you have to do is look at Namecoin...  It was going to give us immutable access to websites, even being worked on by satoshi himself, and still failed because of restrictions on exchanges and DNS providers.  If Bitcoin wasn't a tool to track transferred coins and instead obfuscated them, the regulators would have never let it get off the ground.

I am against this forum promoting 3rd party mixers utilized by scammers here to steal funds from others.  

My stance is simple but let me simplify for those who may not understand.  

Free privacy for everyone = Good

Getting paid to promote money laundering for scammers = Bad

I will focus here on ChipMixer, because (a) I promoted them for free, and (b) I see post history that you attacked them.

ChipMixer was “pay what you want”.  Within the constraints of what a centralized mixer can do,

Mixers are a Band-Aid on a gaping wound.

how is “pay what you want” substantially different than “free privacy for everyone”?  Any price that anyone paid them for mixes was basically a voluntary donation.

Note:  I know for a fact, from first-hand experience, that you could send exactly chip-sized deposits into ChipMixer, and withdraw the exact same amount.  It was easy for me to send any arbitrary amount, when I swapped straight from Zcash into a ChipMixer deposit address.  For example, selfish bitch that I am, I paid ChipMixer nothing (0.00000000 BTC) for the chips I used for txid 40fca7f95058864b1457fb8f626fd02a97aba7f502386ad30f7ca184f5ee81c4 to pay my loss of a charity bet with theymos:

Or the following post, +5 [merit] from ChipMixer?  I retract part of the beginning of that post, but I proudly stand by the part ChipMixer quoted:

However, due to my intent to expose the blockchain data from this transaction, I decided to use an address from ChipMixer.  The address was obtained using ChipMixer voucher codes that I set aside for this potential purpose in November.  I always keep a moderate amount of money in Chip vouchers, just in case I need to do something bad for my privacy.  The money for these vouchers may have been deposited by me anytime in about the past three or four years; thus, any blockchain observer who identifies Chip inputs will not find it feasible to guess which were mine.

There are multiple ways to use ChipMixer - it is great to see a person who understands their risks and plans how to achieve most privacy with the tool.

The transaction was for me to send 0.01 BTC to a charity of theymos’ choice, as I had promised.  It’s txid 40fca7f95058864b1457fb8f626fd02a97aba7f502386ad30f7ca184f5ee81c4 with an OP_RETURN memo to show that the transaction fulfilled my promise.

Now, let’s talk about PGP.  PGP is used all over the darkweb.  PGP is used by pedophiles, terrorists, and drug dealers.  PGP can be FUDded with classic Four Horsemen types of arguments.  PGP can be, and often is attacked similarly as you did to ChipMixer:  Used for crime.  What’s the difference?


Reply to LoyceV

Still *crickets* re:  In your opinion, would Hal Finney, Greg Maxwell, and Adam Back would have damaged Bitcoin by giving it Zerocoin privacy in 2013, as their old posts show they clearly wanted to do?

First, here, we need to admit that Bitcoin has a problem:  Its transparency is a design flaw, which Satoshi knew about, didn’t know how to fix, and underestimated the impact of.

I wouldn't call it a design flaw, I'd call it a design choice. It's a choice that brought Bitcoin where we are today.

do you personally guarantee their funds

No. What kind of question is that anyway? I'm not an insurance company, and I'm not earning anything from someone else's coins.

In substantial essence, you’re advising people to stick their heads in the sand about taint.  It’s irresponsible, as people could lose funds.  So, you admit that people who take your advice will be the bagholders if taint causes them financial losses?

Have you ever (even once) AML-checked any of your own UTXOs?

That's hard to avoid: just using Blockchair.com is enough to see their "AML scores" being advertised.

Not hard to avoid.  It’s been years since I used Blockchair at all—and IIRC, I’ve never looked up my own BTC UTXOs on Blockchair.

Anyway, I will rephrase:  Have you ever (even once) intentionally AML-checked (or used Blockchair, etc. taint info on) any of your own UTXOs to mitigate the risk to yourself of potentially receiving tainted BTC?  I don’t usually pry into people’s such practices—but when you’re implying to people that they can simply ignore taint, it would behoove you to disclose whether or not you’ve ever used AML-check information to protect yourself.

But if I use a centralized exchange, I'd better be able to answer any questions they might have. Just like I have to answer questions if my bank or tax authority asks them.

It is not only CEX, which is generally understood to be custodial.  Many noncustodial coin swaps with relatively attractive rates (e.g., FixedFloat, ChangeNOW) are dangerous this way.  They do not advertise no-KYC.  Aggregators that use them are plastered with warnings not to send BTC from mixers, gambling sites, etc.—though that warning wouldn’t help someone who e.g. gets paid in an on-forum trade by someone who got paid by someone who used a mixer, or gambled, or...

Moreover, per what you mention below, the Scam Accusations board has multiple threads raising flags on exchanges that advertised “no-KYC”, then shotgun-KYCed users—sometimes for quite large amounts of funds, equivalent to >1 BTC.

some people will send me only BTC.  Thus, I have no choice but to try to figure out WTF to do about taint—if only so I can dump BTC like a hot potato for fungible money (ZEC preferred, XMR acceptable).

There are many services that offer to exchange BTC for privacy coins without KYC, although it's good to know some lie about it and still request KYC.

I know; my signature is currently advertising one.

Disclosure:  I have not yet tried them, as I have not needed to make an exchange.  I will soon.  I did research them before advertising them, and I will eat my own dogfood.