I have always thought about this too when someone mentioned that their account was locked on an exchange with them no longer having access to their funds, because it was marked as a tainted Bitcoin. This made me think of ways that we can avoid this, then the first thought that came to mind was this: we all already knows the addresses that belongs to these hackers right?
Whenever there is such money laundering activity, we check the Blockchain and we know the addresses that were used by the hackers, if we stop accepting anything from those addresses would it make any changes? The answer that came to my mind was a No, because then I remembered we have Coin mixers.
But even if we decide to stop accepting from these addresses, what if they start moving it from on address to another, are we going to continue marking those addresses or what? And there will be innocent that wouldn’t be aware and eventually receive coins from them, what are we going to do? This is really serious.
Topic: Another shower thought about tainted bitcoins (Read 349 times)
Hopefully in the future there will be tools that can trace
Bitcoin originating from illegal activities, so when we buy Bitcoin, we can be sure that what we are buying is not tainted Bitcoin.
Bitcoin originating from illegal activities, so when we buy Bitcoin, we can be sure that what we are buying is not tainted Bitcoin.
Well, If I'm not mistaken, in the future Bitcoin user's anonymity will gradually decrease once a tool to trace tainted Bitcoin is created, and that means every Bitcoin in circulation is being monitored.
I'm not sure about this, but as time passes by, more users are looking for solutions to minimize the criminal involvement of Bitcoin by sacrificing our privacy.
Such topics have been discussed quite often, which in the end tainted Bitcoin did not make the demand for Bitcoin decrease.
Because most people only focus on making profit from Bitcoin, regardless of where it comes from. I am sure that all of us are
unconsciously using Bitcoin originating from illegal activities, but until now it has been difficult to prove this. Because many
scammers disguise their Bitcoin transactions by using Bitcoin mixers. Hopefully in the future there will be tools that can trace
Bitcoin originating from illegal activities, so when we buy Bitcoin, we can be sure that what we are buying is not tainted Bitcoin.
Because most people only focus on making profit from Bitcoin, regardless of where it comes from. I am sure that all of us are
unconsciously using Bitcoin originating from illegal activities, but until now it has been difficult to prove this. Because many
scammers disguise their Bitcoin transactions by using Bitcoin mixers. Hopefully in the future there will be tools that can trace
Bitcoin originating from illegal activities, so when we buy Bitcoin, we can be sure that what we are buying is not tainted Bitcoin.
All these talk about dirty bitcoins is quite funny , there are limited number of bitcoins and imagine that they all eventually gets tainted? Which is likely to happen, and if that happens, what are we going to do about that, will everybody that’s making use of Bitcoin be considered a money launderer? 
Perhaps its just an absurd perception from some individuals who are concerned with illicit use of Bitcoins. To be honest, no one really cares if Bitcoin has been used for or came from some kind of illegal activities as long as we see its still spendable in our wallets.
Case in point, if my memory serves me right, the U.S. Government has seized large amounts of Bitcoins from illegal activities before but they weren't concerned about its origin or history or if its "tainted" or not.
In fact, they gladly auction it off to the public - effectively making it "clean" again so to speak.
All these talk about dirty bitcoins is quite funny , there are limited number of bitcoins and imagine that they all eventually gets tainted? Which is likely to happen, and if that happens, what are we going to do about that, will everybody that’s making use of Bitcoin be considered a money launderer?
This is a really a big case. I think we really need to look for ways to solve these problems. I know that the reasons as to why they came up with this idea of identifying dirty coins is because they are trying to track down those are involved in criminal activities and such, but they should find a better means to solve these issues.
This is a really a big case. I think we really need to look for ways to solve these problems. I know that the reasons as to why they came up with this idea of identifying dirty coins is because they are trying to track down those are involved in criminal activities and such, but they should find a better means to solve these issues.
I don't thin chainanalysis techniques consider the fee part of a transaction as tainted, since it's a separate field from the output. I don't even think that they use the term "taint" in a meaning that "this coin and all the coins that come in touch with it are dirty forever". They just track where the coins are going, and if they find a centralized service somewhere in the chain of transactions, they can contact them to ask if they have KYC on that address in their system. And since at this point nearly any Bitcoin has some traces of taint, the chainanalysis techniques use some taint score that can be increased or decreased or reset. They are not stupid.
It's not the haters. And it's not that people are going to put you in jail.
It's the annoyance that when you want / need to convert to fiat for whatever reason and some exchange gives you a hassle and wastes your time.
I don't like using Coinbase / Gemini to convert but at times I need to. I have been asked at times where coins have come from. Same way when I sold an expensive piece of machinery I had to deal with an IRS form 8300. If you are US based it's just part of life.
-Dave
We need more adoption for bitcoin. Imagine for selling your coin you do not need to go to an exchange but you have a known network who are exchanging in between them. I am lucky to have such a few circle however I do use exchanges when I need to buy any alt with the hope that the BTC price against it will increase at some point an I will make some profit. It's the annoyance that when you want / need to convert to fiat for whatever reason and some exchange gives you a hassle and wastes your time.
I don't like using Coinbase / Gemini to convert but at times I need to. I have been asked at times where coins have come from. Same way when I sold an expensive piece of machinery I had to deal with an IRS form 8300. If you are US based it's just part of life.
-Dave
What is going to be next? Are we going to have to register the ethnicity and religion of the wallet owner?
I suppose there is no such thing as tainted Bitcoin and I believe with @pooya87 remarks. I also think that "tainted Bitcoins" is a wrong perception from users who likes to associate or make an analogy with tainted fiat money that have serial numbers which is most often used to uniquely identify its integrity, origin, etc... e.g. "marked money" (used in law enforcement) and I'm afraid such feature was absent with Bitcoin - which makes it hard to distinguished if its "tainted"or not. Imho.
Hmmm apart from the tainted coin subject which I think we all agree is pointless, actually I always thought fees are paid directly to the miner, but thanks to your post now I'm really wondering as well how did all those inputs combine? You pay a fee, every tx does, and all those fees automatically become 1 input? Or how does it work now, very good question to me in my mind!
first of all nobody in decentralized world of bitcoin (that means all full nodes and all miners) gives a rats ass about "tainted coins" because there is no such thing in bitcoin as that. the only place you'll even encounter the term is in the centralized world which shouldn't even be used in the same sentence as bitcoin let alone we use them with bitcoin!
secondly if a "tainted coin" is being spent as a fee (eg. having 1BTC and paying 0.9999 of it as fee) it is obvious where the coins went! it is not really hard to say that the new output in that particular coinbase tx is the same "tainted coin" and follow where that one goes.
and finally the centralized world can not push this nonsense about "tainted coins" forever. eventually all wallets will have coinjoin and similar options to improve privacy and they won't have any other choice but to accept that this notion was stupid in first place and in fact using it pushed people to use more coinjoin-like options!
secondly if a "tainted coin" is being spent as a fee (eg. having 1BTC and paying 0.9999 of it as fee) it is obvious where the coins went! it is not really hard to say that the new output in that particular coinbase tx is the same "tainted coin" and follow where that one goes.
and finally the centralized world can not push this nonsense about "tainted coins" forever. eventually all wallets will have coinjoin and similar options to improve privacy and they won't have any other choice but to accept that this notion was stupid in first place and in fact using it pushed people to use more coinjoin-like options!
I think somewhere I have said that if we start going back at some point we will see some of the coins that I am holding came from an unexpected incident but I am the one who do not know about it. Will you put me in the jail for that?
There are no point of thinking about it. The haters will always try to find something that will scare you. Don't bother and care about it.
There are no point of thinking about it. The haters will always try to find something that will scare you. Don't bother and care about it.
It's not the haters. And it's not that people are going to put you in jail.
It's the annoyance that when you want / need to convert to fiat for whatever reason and some exchange gives you a hassle and wastes your time.
I don't like using Coinbase / Gemini to convert but at times I need to. I have been asked at times where coins have come from. Same way when I sold an expensive piece of machinery I had to deal with an IRS form 8300. If you are US based it's just part of life.
-Dave
I think somewhere I have said that if we start going back at some point we will see some of the coins that I am holding came from an unexpected incident but I am the one who do not know about it. Will you put me in the jail for that?
There are no point of thinking about it. The haters will always try to find something that will scare you. Don't bother and care about it.
There are no point of thinking about it. The haters will always try to find something that will scare you. Don't bother and care about it.
I created a thread about the funding of collectable loaded coins last year.
https://bitcointalksearch.org/topic/loaded-coins-do-you-care-where-the-funding-comes-from-5146208
Discussed the possibility of having coins loaded with "tainted" funds sitting around for years.
Moving from person to person, but until that least person went to cash it out to fiat it looks like it was just sitting in a wallet waiting to be spent.
-Dave
https://bitcointalksearch.org/topic/loaded-coins-do-you-care-where-the-funding-comes-from-5146208
Discussed the possibility of having coins loaded with "tainted" funds sitting around for years.
Moving from person to person, but until that least person went to cash it out to fiat it looks like it was just sitting in a wallet waiting to be spent.
-Dave
How far fetched would then be to name any unknown Bitcoin address (unknown as in not linked to anyone's identity or fingerprints) dirty/suspect?
I really can't say, because I'm not a developer, but I don't think it would be too farfetched for bitcoin to reach such levels of anonymity that plausible deniability will be the default for even the people who don't do anything to improve their privacy. I'm guessing it's just probably a matter of when. But then again, I'm just guessing lol.
Don't know how exchanges can still trace those tainted bitcoins. If that time will ever come, these hackers will be very happy.
Most exchanges already have an anti-fraud monitoring system. And the cryptocurrencies entered by the user are checked for origin. At the slightest suspicion, the source of origin is specified, if it is not there, then the cryptocurrency is returned. Can a cryptocurrency pass through mixers be considered clean by exchanges?
I guess the question is who cares and why?
Did you get some of those "tainted" coins from one transaction away are now trying to convert them to fiat and Conbase (or whoever) is putting you through hell?
Or did you get them and send them to me and then I sent them to someone else who sent them to someplace else and now they are so spread out and mixed that it really does not matter.
Unless you have freshly mined coins, it really is not going to matter because sooner or later something is going to be mixed with something else of dubious origins.
As for the miner fee, does not matter to most "fiat conversion" places from what I read years ago they are still tainted.
-Dave
Did you get some of those "tainted" coins from one transaction away are now trying to convert them to fiat and Conbase (or whoever) is putting you through hell?
Or did you get them and send them to me and then I sent them to someone else who sent them to someplace else and now they are so spread out and mixed that it really does not matter.
Unless you have freshly mined coins, it really is not going to matter because sooner or later something is going to be mixed with something else of dubious origins.
As for the miner fee, does not matter to most "fiat conversion" places from what I read years ago they are still tainted.
-Dave
Wait til mixing and coinjoining becomes the norm(hopefully someday, hopefully something built in on wallets that sort of happens automatically or something) that all circulating bitcoin becomes so called "tainted". By then, there will almost no be any tainted bitcoin and exchanges wouldn't be able to complain.
I like that kind of scenario. If it will happen, no more business for these mixers or coinjoin services. I think there's possibility in the future that someone will create a btc wallet or crypto wallet that has mixer in it. Everything is possible in this space. So looking forward on that moment. Don't know how exchanges can still trace those tainted bitcoins. If that time will ever come, these hackers will be very happy.
Wait til mixing and coinjoining becomes the norm(hopefully someday, hopefully something built in on wallets that sort of happens automatically or something) that all circulating bitcoin becomes so called "tainted". By then, there will almost no be any tainted bitcoin and exchanges wouldn't be able to complain.
How far fetched would then be to name any unknown Bitcoin address (unknown as in not linked to anyone's identity or fingerprints) dirty/suspect? It's been a while since Monero started getting a quite strong push backwards and I still haven't heard anything positive ever since. In fact, the most recent article I read regarding Monero is about the IRS willing to pay someone to crack XMR. To me it seems like this is likely to be the norm soon as well..
Wait til mixing and coinjoining becomes the norm(hopefully someday, hopefully something built in on wallets that sort of happens automatically or something) that all circulating bitcoin becomes so called "tainted". By then, there will almost no be any tainted bitcoin and exchanges wouldn't be able to complain.
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