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I've never understood the focus on explicit services for Bitcoin mixing. I made a comment on a different post a while ago and I'll paste it below: You're imply

by tuxxy 9y ago

I've never understood the focus on explicit services for Bitcoin mixing. I made a comment on a different post a while ago and I'll paste it below: You're implying that mixers and tumblers are ONLY dedicated malicious services. What you're forgetting is that hot wallets used on popular bitcoin services also serve as tumblers. The distinction between a "malicious tumbler" and a service's hot wallet is just the dedicated use. For example, if a bitcoin shopping site had a wallet you deposited coins into, you'll be recording that you have <number> of coins and they will show that. Your coins will be mixed with their hot wallet and who knows how long they keep them in there. If you wait a few days and withdraw, chances are that most (if any) are NOT your original coins. Not to mention, if you blacklisted these coins, then users who receive these coins wouldn't be able to legitimately use them. TL;DR: Tumbling services are just dedicated to tumbling bitcoins. Most semi-large bitcoin services with hot wallets inadvertently tumble their user's bitcoins.

mahyarm 9y ago
What other pooled wallet service doesn't keep records on purpose or has no need to? Gambling?
- user5994461 9y ago
  To have worked in Gambling, it is heavily regulated. To be allowed to operate in X country, we had to specifically store a replica of customers accounts in their jurisdiction, so that all servers and data could be seized by the local law enforcement should the need arise. The stories goes that these requirements raised after some shady gambling companies left with all their customer funds.
  - mahyarm 9y ago
    So how do those offshore online gambling companies work then? Do they all have KYC type records or are there some places where they don't?
    - wolco 9y ago
      Years ago when I worked for this type of company we moved our prod game servers to Indian reserves in Canada. That was very costly, later moved to Costa Rica.
samtregar3 9y ago
Is there an example of a "popular bitcoin service" where you can have an account, deposit and withdraw coins and not have any record kept of the relationship between those deposits and withdrawals? If the point of a mixer is to obscure the connection between two bitcoin addresses, using a service that records that connection seems like a poor plan.
SomeStupidPoint 9y ago
Do a lot of services allow you to refund money to a new account? As I understand it, bitcoin doesn't track coins so much as it tracks the funds associated with account numbers. When you have "dirty" coins, it's really that people know an account (say, A) has illegitimately gotten funds (say, $x). A tumbler functions by taking $x from A, transferring it to the tumbler account (say, T), and then transferring it on to other accounts (eg, B1, B2, ..., Bn) in various amounts that total the input ($x) minus some fee. Something like: (A, $x) -> [T] -> [(B1, $y1), (B2, $y2), ... (Bn, $yn)] In order to use a service as a tumbler, you'd need them to a) keep secret what you bought from them (ie, the difference between $x and $y) and b) allow you to transfer the funds out to a different account number than the one that sent the coins in (and ideally, a few such numbers). It would seem like any legitimate business would hand over that information when requested (or subpoenaed).
- resf 9y ago
  > As I understand it, bitcoin doesn't track coins so much as it tracks the funds associated with account numbers. It's actually the opposite. The blockchain does track coins, but not accounts or account numbers. Rather, each transaction involves "scripts" which specify some conditions with which coins can be used as inputs to another transaction. In a normal transaction, one key can spend the coins, but e.g. it is possible to send coins to a script that is impossible to satisfy, therefore the coins are unspendable, yet don't exist in an 'account' at all.

by tuxxy 9y ago

mahyarm 9y ago

What other pooled wallet service doesn't keep records on purpose or has no need to? Gambling?

user5994461 9y ago
To have worked in Gambling, it is heavily regulated. To be allowed to operate in X country, we had to specifically store a replica of customers accounts in their jurisdiction, so that all servers and data could be seized by the local law enforcement should the need arise. The stories goes that these requirements raised after some shady gambling companies left with all their customer funds.
- mahyarm 9y ago
  So how do those offshore online gambling companies work then? Do they all have KYC type records or are there some places where they don't?
  - wolco 9y ago
    Years ago when I worked for this type of company we moved our prod game servers to Indian reserves in Canada. That was very costly, later moved to Costa Rica.

samtregar3 9y ago

Is there an example of a "popular bitcoin service" where you can have an account, deposit and withdraw coins and not have any record kept of the relationship between those deposits and withdrawals? If the point of a mixer is to obscure the connection between two bitcoin addresses, using a service that records that connection seems like a poor plan.

SomeStupidPoint 9y ago

Do a lot of services allow you to refund money to a new account? As I understand it, bitcoin doesn't track coins so much as it tracks the funds associated with account numbers. When you have "dirty" coins, it's really that people know an account (say, A) has illegitimately gotten funds (say, $x). A tumbler functions by taking $x from A, transferring it to the tumbler account (say, T), and then transferring it on to other accounts (eg, B1, B2, ..., Bn) in various amounts that total the input ($x) minus some fee. Something like: (A, $x) -> [T] -> [(B1, $y1), (B2, $y2), ... (Bn, $yn)] In order to use a service as a tumbler, you'd need them to a) keep secret what you bought from them (ie, the difference between $x and $y) and b) allow you to transfer the funds out to a different account number than the one that sent the coins in (and ideally, a few such numbers). It would seem like any legitimate business would hand over that information when requested (or subpoenaed).

resf 9y ago
> As I understand it, bitcoin doesn't track coins so much as it tracks the funds associated with account numbers. It's actually the opposite. The blockchain does track coins, but not accounts or account numbers. Rather, each transaction involves "scripts" which specify some conditions with which coins can be used as inputs to another transaction. In a normal transaction, one key can spend the coins, but e.g. it is possible to send coins to a script that is impossible to satisfy, therefore the coins are unspendable, yet don't exist in an 'account' at all.