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They would have to tumble the bitcoin so that the sale is not linked to their bitcoin. Then, they can cash it out by trading it in an exchange and withdrawing u

They would have to tumble the bitcoin so that the sale is not linked to their bitcoin. Then, they can cash it out by trading it in an exchange and withdrawing usd to their bank, or they can trade it for cash on something like localbitcoins.com. The Bitcoin/usd market is liquid enough to absorb this amount of money.

herbst 9y ago
You are assuming that the person bought it with traceable fiat money. I never bought Bitcoin not in cash and person and mainly I earned them myself, also never linkable to my identity
- albertgoeswoof 9y ago
  Never linkable? Are you sure, if you earned them they must have come from somewhere?
  - celticninja 9y ago
    It is pseudonymous, so if you did work for someone over the internet and never met them, they could pay you without ever knowing your name and address. If your adversaries were looking to trace the coins they would see a transfer between 2 addresses only. If they managed to track down the owner of the sending address then that person could say they paid you for work done and pass on whatever contact details they have. So unlinking can be done and this is based on the adversary knowing which transaction and who the sender was.
  - ryan-c 9y ago
    Mining them using the eligius mining pool (which doesn't require registration, just a bitcoin address) over Tor would be pretty hard to link to an identity.
- deleted 9y ago
  [deleted]
fbnlsr 9y ago
I'm not very familiar with the inner parts of the system, but I thought each and every transaction in the bitcoin ecosystem is traceable. How does one can "unlink" bitcoin from this sale?
- noddy1 9y ago
  A few options - in practice you would probably do some/all of these: 1) Put them through a mixer 2) Put them through an anonymous exchanger like shapeshift and convert into a privacy focused cryptocurrency like monero/zcash 3) Sell on offshore/low-regulation exchange, or via an anonymous credit card service
  - PhasmaFelis 9y ago
    How does tumbling/mixing work?
    - icelancer 9y ago
      Decent enough read here on the subject: https://darknetmarkets.org/a-simple-guide-to-safely-and-effectively-mixing-bitcoins/ https://darknetmarkets.org/a-simple-guide-to-safely-and-effe...
    - 0xcde4c3db 9y ago
      (n.b. I'm not a cryptocurrency expert; this is probably a bit oversimplified, but should get the idea across) It works by lumping the coins of all the users together, breaking any direct connection between the endpoints of any given transaction. Suppose Alice makes a deposit at the bank, but in the margin of the deposit slip she writes "for Bob". The cashier at this particular bank records a credit of $1000 from Alice, then prints and mails $1000 of cashier's checks to Bob, recording that series of debits as well. Later, the authorities raid the bank and seize its ledger. They can see a credit from Alice and a bunch of debits to Bob, but there is no transfer between Alice's account and Bob's account; this only proves that Alice could have paid Bob. If this bank has hundreds of other customers making similar transactions every day, it's basically impossible to use the ledger alone to prove any connection between Alice and Bob. Now scale that up so that "the bank" is actually a consortium of banks that also perform a bunch of transactions among themselves to further obscure any associations among customers.

herbst 9y ago

You are assuming that the person bought it with traceable fiat money. I never bought Bitcoin not in cash and person and mainly I earned them myself, also never linkable to my identity

albertgoeswoof 9y ago
Never linkable? Are you sure, if you earned them they must have come from somewhere?
- celticninja 9y ago
  It is pseudonymous, so if you did work for someone over the internet and never met them, they could pay you without ever knowing your name and address. If your adversaries were looking to trace the coins they would see a transfer between 2 addresses only. If they managed to track down the owner of the sending address then that person could say they paid you for work done and pass on whatever contact details they have. So unlinking can be done and this is based on the adversary knowing which transaction and who the sender was.
- ryan-c 9y ago
  Mining them using the eligius mining pool (which doesn't require registration, just a bitcoin address) over Tor would be pretty hard to link to an identity.
deleted 9y ago
[deleted]

fbnlsr 9y ago

I'm not very familiar with the inner parts of the system, but I thought each and every transaction in the bitcoin ecosystem is traceable. How does one can "unlink" bitcoin from this sale?

noddy1 9y ago
A few options - in practice you would probably do some/all of these: 1) Put them through a mixer 2) Put them through an anonymous exchanger like shapeshift and convert into a privacy focused cryptocurrency like monero/zcash 3) Sell on offshore/low-regulation exchange, or via an anonymous credit card service
- PhasmaFelis 9y ago
  How does tumbling/mixing work?
  - icelancer 9y ago
    Decent enough read here on the subject: https://darknetmarkets.org/a-simple-guide-to-safely-and-effectively-mixing-bitcoins/ https://darknetmarkets.org/a-simple-guide-to-safely-and-effe...
  - 0xcde4c3db 9y ago
    (n.b. I'm not a cryptocurrency expert; this is probably a bit oversimplified, but should get the idea across) It works by lumping the coins of all the users together, breaking any direct connection between the endpoints of any given transaction. Suppose Alice makes a deposit at the bank, but in the margin of the deposit slip she writes "for Bob". The cashier at this particular bank records a credit of $1000 from Alice, then prints and mails $1000 of cashier's checks to Bob, recording that series of debits as well. Later, the authorities raid the bank and seize its ledger. They can see a credit from Alice and a bunch of debits to Bob, but there is no transfer between Alice's account and Bob's account; this only proves that Alice could have paid Bob. If this bank has hundreds of other customers making similar transactions every day, it's basically impossible to use the ledger alone to prove any connection between Alice and Bob. Now scale that up so that "the bank" is actually a consortium of banks that also perform a bunch of transactions among themselves to further obscure any associations among customers.