Bitcoin Mixing Confusion

[cryptobuff]

There are a lot of theories about how to mix bitcoin. You could use a mixing service that you trust or exchange bitcoin for other altcoins, move them to a different exchange, and then convert them back into bitcoin.

Lets say I buy some bitcoin from btc-e and I don’t want them to see what i'm doing with that bitcoin. couldn’t I just send the bitcoin to another address that I generated my self? Then they couldn’t prove if I had the bitcoin or not. Isn’t that "mixing". So why would people pay for another person to do the same for you?

[1714011353]

1714011353

[franky1]

simply depositing funds into btc-e and withdrawing is even simpler. the withdrawal amount comes from a different wallet owned by btc-e

[wasserman99]

If you were to use btc-e (or any other exchange) to do this then btc-e would keep logs of your transactions. It would be difficult to trace the flow of your bitcoin, especially if you used more then one address to withdraw from, however once it is determined that the bitcoin went to a btc-e address, all an attacker would need to do is present btc-e with legal papers (generally a subpena or a warrant) to find where the bitcoin went.

If you use an actual mixer (like bitcoinfog or bitmixer) then there will not be any logs as to the addresses that the bitcoin were sent to (they at least claim to not keep logs)

[snappa4ever]

There are a lot of theories about how to mix bitcoin. You could use a mixing service that you trust or exchange bitcoin for other altcoins, move them to a different exchange, and then convert them back into bitcoin.

Lets say I buy some bitcoin from btc-e and I don’t want them to see what i'm doing with that bitcoin. couldn’t I just send the bitcoin to another address that I generated my self? Then they couldn’t prove if I had the bitcoin or not. Isn’t that "mixing". So why would people pay for another person to do the same for you?

This is generally not advisable because of the fact that exchanges keep logs of all trades, deposit and withdrawals.

Even if you were to use altcoins to try to hide the path of your money the amount you would pay in trading fees would likely exceed the amount you would pay in mixing fees to bitmixer (not to mention the slippage you would experience in trading larger amounts)

[cbeast]

I don't get it. Any electronic signal can be traced. Any broadcast signal can be triangulated. Therefor Bitcoins cannot be anonymous.

[hua_hui]

Bitcoin is not really anonymous. Once being sending, the senders' IP can be tracked down! Going to exchange, order records will be kept. If you try to hide yourself, why not choose other coin being really anonymous!

[cryptobuff]

Lets say you used the tor network or a vpn to broadcast a transaction which moved bitcoin from address A to address B. Since the transaction was broadcast from an ip address which was most likely not associated to you, then nobody could prove that you owned address B. Obviously all the transactions are viewable on the blockchain but people couldn’t prove that you owned address B. Isn’t that mixing?

[kolloh]

Lets say you used the tor network or a vpn to broadcast a transaction which moved bitcoin from address A to address B. Since the transaction was broadcast from an ip address which was most likely not associated to you, then nobody could prove that you owned address B. Obviously all the transactions are viewable on the blockchain but people couldn’t prove that you owned address B. Isn’t that mixing?

Mixing is supposed to stop the tracing of transactions. In your example, you can still see that bitcoins were sent between A->B. While you cannot prove that address B is owned by the same owner as Address A, you still know where the coins currently reside. Mixing is supposed to make it harder trace where the bitcoins end up by separating the source from the destination.

[cryptobuff]

What if I use a mixing service and end up with completely different coins than when I started, but then the other person receives my coin and uses for some illegal purpose and gets prosecuted. Then I would be blamed for the crime. Is this true?

I also have another question. Even though all transactions are visible, do companies such as coinbase  or bitstamp watch were the bitcoin you receive move?

Lets say I buy bitcoins from coinbase, sell them to a friend, and then he uses them to buy drugs from the silk road or something similar. Could coinbase detect that they eventually moved to a silk road account?

If so, would that mean that the guy that bought all of the silk road auctioned bitcoin would have a harder time selling them?

[TheWallStreetCrew]

Does anybody use Darkcoin or Monereo or any other anon coins? Daily volume is very high on these coins which could indicate so but I have never heard of anyone discussing the results.

Has anybody confirmed whether thees actually work?

[kolloh]

What if I use a mixing service and end up with completely different coins than when I started, but then the other person receives my coin and uses for some illegal purpose and gets prosecuted. Then I would be blamed for the crime. Is this true?

I also have another question. Even though all transactions are visible, do companies such as coinbase  or bitstamp watch were the bitcoin you receive move?

Lets say I buy bitcoins from coinbase, sell them to a friend, and then he uses them to buy drugs from the silk road or something similar. Could coinbase detect that they eventually moved to a silk road account?

If so, would that mean that the guy that bought all of the silk road auctioned bitcoin would have a harder time selling them?

I doubt you could be blamed for a crime that happened with coins that used to belong to you. This is like purchasing an item at a store with cash and then the cash being given as change to someone else who ends up using it for criminal purposes.

There have been reports of Coinbase tracking transactions to known gambling websites:
http://www.reddit.com/r/Bitcoin/comments/2e2yxr/beware_coinbase_is_banning_accounts_that_play_on/

[odolvlobo]

It is doubtful that companies track your coins beyond the initial send, but they could. They might assist governments in tracking your coins if asked.

[mb300sd]

I used blockchain's shared coin for all transactions, a little more traceable than a regular mixer, but its so cheap that theres no reason not to use it.

[mlferro]

That is good

for several reasons, one of them makes you well informed about the coins that are having better repercussion

[cryptobuff]

What if I use a mixing service and end up with completely different coins than when I started, but then the other person receives my coin and uses for some illegal purpose and gets prosecuted. Then I would be blamed for the crime. Is this true?

I also have another question. Even though all transactions are visible, do companies such as coinbase  or bitstamp watch were the bitcoin you receive move?

Lets say I buy bitcoins from coinbase, sell them to a friend, and then he uses them to buy drugs from the silk road or something similar. Could coinbase detect that they eventually moved to a silk road account?

If so, would that mean that the guy that bought all of the silk road auctioned bitcoin would have a harder time selling them?

I doubt you could be blamed for a crime that happened with coins that used to belong to you. This is like purchasing an item at a store with cash and then the cash being given as change to someone else who ends up using it for criminal purposes.

There have been reports of Coinbase tracking transactions to known gambling websites:
http://www.reddit.com/r/Bitcoin/comments/2e2yxr/beware_coinbase_is_banning_accounts_that_play_on/

In the US counterfeit money circulates throughout the economy without anybody noticing but if you happen to acquire a counterfeit bill and spend it, you could be prosecuted even if you didn’t realize it was counterfeit. How is bitcoin immune to this? Also in the US if you have possession of stolen money but you didn’t commit the crime, then the money can still be seized.

[shorena]

-snip-
In the US counterfeit money circulates throughout the economy without anybody noticing but if you happen to acquire a counterfeit bill and spend it, you could be prosecuted even if you didn’t realize it was counterfeit. How is bitcoin immune to this? Also in the US if you have possession of stolen money but you didn’t commit the crime, then the money can still be seized.

While I do not doubt that sometime in the future police will try this. This is utter nonsense. There are no bitcoin to seize. A TX has inputs and outputs. You never have any bitcoin in your possession, just the private keys that allow you to spend your unspend outputs. Each TX in a sense is like melting one or more block(s) of metal (inputs) and creating a new one (or several).