Topic: Bitcoin mixing is NOT money laundering, per se - page 11. (Read 4155 times)

You are wrong to attribute to my messages a moral coloring in the style of "good" and "bad", I condemn only the misuse of tools. My extensive experience and diverse background in the field of information and physical security allows me to argue that partial and unsystematic efforts to preserve confidentiality are a waste of resources, and it would often be better if they did not exist at all, because the harm is greater than the benefit. It's like building a house with three walls and leaving a huge gaping hole instead of a fourth. You will be protected from idle prying eyes from three sides, but do not be fooled by the illusion that you are safe in such a house.

For my own understanding bitcoin mixing is not money laundering. If the chip mixer is closed, it is probably because the chip mixer did not properly comply with the concern which caused it to be closed.

Because if this is a way for money laundering, no more than the Chipmixer took longer to operate. The only sad thing is that Bitcoin mixing is open to anyone who will use it, and there is no doubt that it can be used by someone with bad intentions. So no one is saying that Bitcoin mixing is bad, is there?

In addition to that, Bitcoin mixing only hides its true identity via the addresses used by Bitcoin holders who make transactions, that's the only thing I know why it works as a Bitcoin mixer.

Correct. But I don't want to go full privacy. Again, I don't want from the merchant I exchange stuff everyday to know I have an account here on bitcointalk, which makes me an extra income. I am fully aware that I can be de-anonymized in real life, but my goal is to retain part of my personal life private; specifically, this business in this forum.

This only strengthens my argument, which is that I want financial privacy on the Internet. What you just described is the reason most privacy experts advocate for Monero. It serves better privacy. According to your reasoning, we should neither use Monero because it makes us look suspicious. Why would I want to use a currency which completely hides my financial activity? Isn't that correct?  

So, utilizing privacy-respecting tools for bitcoin with limited privacy gained is "bad", "for criminals only", but using monero which is the most completed black-box cryptocurrency to this date is "good", "for every person who wants some privacy". Okay.  

BTW, I hope you know that it's entirely possible to receive coins which were used for illicit activity prior X transactions; and that X is arbitrarily marked as "good" and "bad" from mass surveillance corps which analyze the chain and create this "taint" perception.

I think you don't usually make a payment for the sole purpose of "make a payment". For this payment, you want to receive something in return - a specific product or service. The weak point of your privacy strategy is that the full cycle of interaction "money-goods" or "money-services" is only partially performed in a decentralized peer-to-peer network, and the other part is performed in real life or on the Internet, where, generally speaking, it is much more difficult to protect yourself from deanonymization, especially if you voluntarily and knowingly display a "red flag" when making a payment using a mixer. The context can be almost anything - an unclosed adjacent browser tab, a smartphone’s geolocation not turned off, a voluntarily filled in postal address for a delivery service, a gait identification system through an outdoor surveillance camera at a pharmacy in a neighboring house, and you never know what else.
These are different things. In the case of Monero, not only the content of your payment is hidden from prying eyes, but the very fact of the payment is also hidden. Without a key to read a particular transaction, you won't even be able to know that it actually happened.
Yep. We're really talking here about a public ledger that you're trying to misuse by mixing - and in doing so, claim that "it's okay, it's definitely not for dirty illegal business like money laundering."

I don't want to reveal the origins of my coins, some of which come from this very forum, and this is enough to have them sent to a mixer. I don't understand for what context are you talking about.

But I am hiding something. The origins of my coins. It's information I don't feel confident to have it publicly available at any time.

You either accept that, and let everyone scrutinize your life, or you live normally, obviously with part of your privacy violated by big corps, but not by every individual who has access to the blockchain. Do I need to remind you we're talking about public ledger here?

No, it's exactly the same thing. Using Monero means you want on-chain privacy. It not reasonable to distinguish it, as it's essentially a protocol with continuous and mandatory mixing, similar to making coinjoins.

You do not live in a vacuum, but in real life. If necessary, you will be deanonymized not by the peer-to-peer payment passed through the mixer, but by the context of the payment. And using a mixer, you only attract additional attention to yourself, advertising that you are hiding something. You can deceive yourself as much as you like, but anonymity and privacy are a myth in the modern world.

If you want to make an anonymous payment, it's much more reasonable to use a monero-type blockchain that was initially closed than to try to obfuscate the trail in a public ledger like bitcoin. Mixing in a mixer gives the illusion of privacy, which, like any self-deception, is sometimes much more dangerous than its complete absence.

It's important to clarify that Bitcoin mixing does not necessarily equate to money laundering.

While it can be used to conceal the origins of money obtained through illegal activities, mixing is not a money laundering service in and of itself. Mixing coins can be a conscious decision made by individuals who value their privacy, whether they are involved in criminal activities or not.

It's crucial to respect individuals' privacy and recognize the importance of privacy-enhancing techniques. Remember that privacy and money laundering are not synonymous, and privacy is a fundamental human right.

"Suspicious" doesn't tell me much. Earning bitcoin from someone who's involved in child porn can also happen incidentally, without using any privacy-enhancing tool, because people don't study the coins' history prior they accept them. Also, there is no law that prohibits mixing. There is only law about unregistered money transmitters. Mixing is more broad than that.

Watching both the blues and the reds doesn't tell me much either. The result is that we've all mixed coins together, and there is no direct path to match the blues. I don't argue they provide absolute privacy, but it's definitely not how trivial you imagine it to be.

Yes. They don't have the time to de-anonymize everyone else's coins (which is far easier to do btw). They are funded with millions by the American government, but they... don't find the time.  

oh blackhatcoiner. missing the point

if you dont want businesses keeping tabs on you. and by that i mean risking then being on a government list..  you simply stop using things that wave a large neon red flag saying please look closer at me, please share what data you gather before a mixer and after a mixer with other businesses because im doing something that is by regulation deemed suspicious

you keep pretending that there is no policy to watch those entering and exiting mixers more carefully... but there is


thus when they find details about you when you get bitcoin and buy things .. which go to a mixer
but then after the mixer you do other things that note details about you..

it doesnt matter that you think you mixed it in the middle. they find you out by joining the two ends together. making the utility of mixing in the middle redundant as a feature. becasue the simple use of a mixer makes them fid the two ends of the ins and outs of your transactions

they put the two together and join up the two activities even if they cant link in the mixer middle initially.
you keep thinking that if you break the connect in the middle you become lost. but forget that the start and ends can be found

in short your thinking is
>     >>>        >
if you break the red connect, you are(in your mind) safe because you think they cant link your blue to your purple

reality is:
>     >>>        >
because there is a red. they follow back and follow forward to find the blues that are you. they are watching both the blues BECAUSE OF THE RED
they simply find the two ends. because the middle is what triggered them to look at the two ends

they are not spending time looking at everyone elses natural non mixed blues
>    >    >
because the non mixed blues have not triggered a watch warning/suspicious activity threshold to spend time watching all the normal blues

its because of the mixer in the middle that they are looking at the first and last parts.
they find you by the beginning and end parts.. because the middle part caused them to highlight each part.

example:
if they honeypot trap you by running lots of DEX traders to get your bank name linked to a bitcoin address
and thats seen going to a mixer. boom. your on a watch list

then after the mixer you do things like buy giftcards delivered to emails or home addresses they know of you. the giftcard merchant gets told to flag you becasue your names on a list.

where as someone that didnt use a mixer is not on a list where they are spending the extra time to look at you to try to find links

the sillier part is that you blackhatter have actually been giving out examples of how mixers work. revealing the allotment amounts that mixers use thus making it easier for those scoping the blockchain to recognise mixer transactions. thus flag coins that go in and coins that come out. thus also making it easier to put peoples movements onto watch lists.

heres the thing
regulators learned which coins got deposited into things like silk road. after seizing silkroad they learned some usernames and delivery addresses of its users. and sellers
then coins on the outs of a mixer. if they find similar usernames, addresses. they join them together
(same with the bitfinex hack)

all because those coins going in and coins coming out had been highlighted for extra scrutiny.

According to what I understand, while Bitcoin mixing itself may not be unlawful or used to launder money, it can be utilized for those things. The most crucial factor in financial transactions is privacy, so everyone should be allowed to utilize tools like Bitcoin mixer if they are preserving their personal data.
Additionally, as the OP clarified, it is not the same as money laundering. Therefore, there is no reason to combine the two. Only when we choose to view something negatively do we declare it to be bad.

There are no associated risks as long as you use bitcoin peer-to-peer. Such risks only arise if third parties, which are prone to regulation, are the backbone of the ecosystem. I don't recognize any third party which, if shut down or regulated, would take the entire currency with it.

I don't argue you advertise such thing; I'm just saying that if someone tries to trace you on-chain, it's good for you to have them known you've used a mixer. That clarifies you are not the owner of all mixer's outputs, and that the history prior mixing is not important.

Let's stop this dialogue if the above arguments are not enough for you. I'm willing to admit that bitcoin coins are fungible enough these days to not worry too much about it. The risks of losing the fungibility of coins in the open blockchain in the future may differ from different points of view, depending on future development scenarios and on individual risk tolerance.

I guess I really don't understand the meaning of mixing. Why would I want to advertise the fact of mixing my coins? What do I benefit from this to offset the potential problems associated with the common use case for mixers to launder "dirty" money?

Incorrect. One input is not the same as ten. But one bitcoin is exactly the same quantity regardless the number of inputs. This is the same as arguing that ten euro coins can have different value than a 10-euro banknote. They have exactly the same value, it's just the weight that changes.

Incorrect. Legacy address is not equal to Segwit address. But one bitcoin is exactly the same quantity regardless the script used. Similar analogy applies here as well.

Please point me to one such case.

Again, bitcoins are equal. I can acknowledge that the owners of those particular coins need privacy, but the bitcoins per se are no different to "modern" coins.

You have fundamentally misunderstood mixing. You're not supposed to hide the fact that you mixed. You're supposed to obfuscate your coins' origins. You pretty much want from the rest to know that your coins come from a mixer.

firstly governments do not watch everything everyone does in the first place.
they dont have enough politicians agents to watch screens for everyones daily activities
put it this way the IRS has 80k employees meaning 1 employee per 3125 working age american
with weekends off and 4 weeks vacation thats 13 people they would have to audit in 8-10 hours for each persons whole year of activity if they were to watch everyone.
meaning without leaving the office all employees would only have about 30 minutes to audit every working age person

instead they delegate that task to NON-government entities, like centralised exchanges, money services, and financial institutions.
where by governments only receive data about suspect transactions that meet a threshold target of suspicion, because it takes hours to investigate someone properly

and for the multiple time the thing which you want to ignore, but shouldnt.. is that using a mixer adds points to your suspicion rating with all financial services who do share data with each other and do report suspect behaviour which mixing is listed as suspect

so if your concern is "government overwatch" you are i will say this again much more likely to be on a government watchlist by using a mixer. you are much more likely to have data shared by using a mixer

and yes when you buy coin. and buy produce. they can find out info about you. then when you put the remaining change through mixers..  and then put that mixed coin into a financial service. they see the before and after traces of you and link it together

where as regular folk wont get reported to a government agency. because they didnt use a mixer to even flag a suspect threshold to even be invested by financial services to then not be reported to government

oh and by the way the couple that done the social engineering hack on bitfinex and stole 120k coins and then used mixers and AEC. they got caught
and those involved in silk road got caught too even when their coins went through mixers.

so although mixers are promoted to offer privacy. they in actual fact highlight people to be put on watch lists and be found out more than someone that just buys furniture or electronics without using a mixer

learn what the regulations actually do mention to atleast know what to avoid if you want to stay off watch lists. stop relying on what you hope and dream the systems should be, and whats told to you by sponsored idiots just wanting a pay day.. . and actually learn what is actually happening away from idiot sales pitches. learn the good and bad. find out how things actually work outside of sponsored snake oil sales pitches. and then learn how to evade being highlighted

the sponsored promoters of mixers dont care about end user security. they just care about making money out of selling an idea

If you don't like the example of centralized exchanges, I can cite a number of others to support the generally self-evident point that bitcoins are not the same.
1. One bitcoin in an address with multiple inputs is not equal to one bitcoin in an address with one input. You can consolidate many inputs into one by making a transaction to your own address, but this will require additional effort, time, and miner fee overhead from you.
2. One bitcoin on a legacy address is not equal to one bitcoin on a segwit address or one bitcoin on a taproot address. You can transform address types by transacting to your own address, but this will also require you to add extra effort, time, and miner fee overhead.
3. There is a number of evidence that investors of a certain class prefer to buy bitcoins not on the exchange, but directly from mining companies, and even pay an additional premium to the market price for owning bitcoins with zero history.
4. Bitcoins from the earliest period of history (about a year after the genesis block) are under close scrutiny by blockchain analyzers, and their transition from a quiescent to an active state can lead to significant consequences. One bitcoin from this period of early history is not equal to one bitcoin from a more modern period of history.


I respect your right to confidentiality, anonymity and privacy, but it seems to me a rather stupid idea to use for this purpose a completely open and transparent bitcoin blockchain, which does not have the native fungibility of coins. I am not against the use of bitcoin mixers, but you should be aware of the possible negative consequences of their use in the present and in the future, which I mentioned above. The spread of bitcoin adoption could lead to the segmentation of the single bitcoin space into partially isolated fragments, some of which may be significantly affected by the efforts of regulators. If you live in an anarchist commune and use bitcoin as your only payment instrument, never touch fiat money, then you have nothing to worry about. If you live in a normal society and continue to use fiat gateways, then you should be aware that the use of bitcoin mixers increases your privacy and at the same time increases the risk of your deanonymization. Because you can mix well, but you can't hide the fact of mixing.

I'm not contradicting myself. Just because there exist services which enforce arbitrary rules, it doesn't mean the coins are the problem. Just as if there would be a merchant in real life, who would not accept your cash because he thinks you're not trustworthy, and asked for further info like bank transactions, passport, phone number etc., it doesn't mean your cash are problematic; the merchant is.

Notice that you repeat the usage of centralized exchange as if it was an indivisible part of the Bitcoin ecosystem. It's not. I have not used a centralized exchange in my life that enforces such nonsense. I trade peer-to-peer using decentralized, trustless exchanges*, just as bitcoin was designed to be.

Depends on the conditions. If the only condition is "don't use such services", I don't think you have much freedom encroached.

* with this exception.

You contradict yourself. First say that the history of a particular bitcoin does not matter, and then admit that this is only true until you use centralized exchanges, otherwise you will have problems freezing funds. And problems with freezing funds will also arise for someone who buys bitcoins from you that have passed through a mixer on a decentralized exchange, and then wants to bring them to a centralized exchange. For you it doesn't matter, but for someone it can be a serious limitation in the freedom to manage their funds. So don't tell me that the history of a particular bitcoin is unimportant, because it isn't. Conditional freedom is a kind of non-freedom.

There will always be decentralized exchanges, which are superior in terms of enforcing arbitrary coin criteria, because they cannot be shut down. So you will always have the option to go and buy / sell this way.

Great, so don't use a centralized exchange. You will never have your coins treated unequally in Bisq.

If this is the case now (due to the imperfection of automatic blockchain analyzers, gaps in the legislation of different jurisdictions and local weaknesses of regulators) - this does not mean that it will always and everywhere be like this. Of course, there will always be more loyal jurisdictions that will be color blind in the matter of bitcoin color differentiation. And I'm talking more about the real risk of such a separation in the future than about a fait accompli in the present.

Although it seems that some centralized exchanges even today will automatically block your deposit if the incoming bitcoin had traces of passing through the mixer in its history. The deposit will be unblocked after you document the legality of the origin of the funds, show a certificate of income.

I think every Bitcoin user should have color blindness in that matter.

I strongly disagree. There are abundant bitcoin buyers and sellers who are willing to exchange bitcoin without questioning the coin history at all. That alone should be enough to consider it fungible. The fact that some companies enforce a view in which some coins are worth less, doesn't mean they really do, because there are people who don't buy this view, and still are willing to buy / sell them for the same price.