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The thing is that 96 bitcoin could be thrown through a mixer of sorts. Take the 96 bitcoin, split it into 96 different addresses with 1 bitcoin, then mix those

The thing is that 96 bitcoin could be thrown through a mixer of sorts. Take the 96 bitcoin, split it into 96 different addresses with 1 bitcoin, then mix those 96 individual addresses to multiple new addresses and then reassemble them elsewhere. This is a horrible explanation, but explains the general idea. You could also mix from Bitcoin to Monero or another currency and back again through various pairs. There are lots of things out there to attempt to trace the bitcoins back to the source since every transaction is always logged, however if people keep rearranging coins on various addresses it does make it harder. Having a blacklist registry of all bad/stolen coins would be great if implemented, however I don't know how feasible it would be.

JumpCrisscross 7y ago
> 96 bitcoin could be thrown through a mixer One, mixer output could be, by default, added to the registry as laundering proceeds. Or two, the subunits could be traced through the mixer, thus retaining their black marks.
- rini17 7y ago
  This may result in tainting large part of bitcoin in circulation. If someone buys a coffee with tainted coins, is the cafeteria now responsible for querying the registry to reject the transaction? Or it risks to have whole daily turnover, if spent together, end up tainted?
  - PeterisP 7y ago
    I'not saying that it's going to happen, but it certainly seems plausible to have laws that merchants who violate some blacklist forfeit their daily turnover, there are existing laws with much, much harsher consequences.
- derefr 7y ago
  Many upstanding people—and even large companies like payment processors!—process their received funds through a mixer “just to be safe”, i.e. to escape any coincidental untoward paper-trail that attaches to their funds two or three steps back. You know how they say that every US dollar bill has a little cocaine on it? Using your suggestion, every dollar bill would be marked tainted as drug proceeds.
  - wmf 7y ago
    That's as dumb as laundering clean money “just to be safe” or covering up a crime you didn't commit “just to be safe” (hey Reiser). If your coins are clean, mixers make them dirtier and this has been known all along.
    - nybble41 7y ago
      They're not trying to hide the proceeds of a crime, they just want to protect their privacy from anyone snooping on the transactions. The government is not the only party interested in how people are spending their money, and criminals are not the only ones with a legitimate reason to want to keep their financial dealings private.
    - derefr 7y ago
      If you're e.g. a retailer, you can maybe know your coins are clean one step out, but you can't know if they're clean for their whole traceable history without standing up a fancy Network Analysis OLAP cluster and hitting it with some really high-cost queries. Let me put it this way: what would you do with your float if you run a convenience store in a bad part of town, and know that there are marked bills floating around in the local economy, and that the police might pop in at random one day and take them out of your till? Well, you'd probably deposit your float in your local bank at the end of each day, and then get new, guaranteed-unmarked bills from the bank. That's mixing! It's not money laundering, just mixing. You're removing the potential liability of being blamed for what your customers' employers' customers' employers did.
michaelt 7y ago
If we follow the stolen-property example, if a stolen car is broken up and sold as parts, and I buy a widget from it, the fact the car was broken into 96 bits doesn't make the widget any less stolen, no matter how many hands it passes through.
- derefr 7y ago
  The analogy doesn’t hold. A car with a stolen part does not, itself, become a stolen car, because there’s a clear division between the part and the car itself. The only thing the police would want to seize as stolen property from you is the stolen part—they’d get you to take it out of your car, and be on their way. Cryptocurrency is less like car parts, and more like gold: putting the crypto through a mixer is like melting some (unknowingly) stolen gold jewellery into a batch of non-stolen gold, forming new gold bars, and then selling those. Is the whole batch of gold now “tainted” by the stolen gold? Does it all need to be seized as stolen property? If not, then what does need to be seized? An equal shaving of gold from each buyer’s new bar? If it were possible to figure out which mixer recipient was the original jewellery thief, you could just seize their mixed assets, since those assets should be equal in value to the stolen input assets. But the whole point of a mixer is to destroy that linkage, such that you have no idea who any of the recipients are.
- deleted 7y ago
  [deleted]

JumpCrisscross 7y ago

> 96 bitcoin could be thrown through a mixer One, mixer output could be, by default, added to the registry as laundering proceeds. Or two, the subunits could be traced through the mixer, thus retaining their black marks.

rini17 7y ago
This may result in tainting large part of bitcoin in circulation. If someone buys a coffee with tainted coins, is the cafeteria now responsible for querying the registry to reject the transaction? Or it risks to have whole daily turnover, if spent together, end up tainted?
- PeterisP 7y ago
  I'not saying that it's going to happen, but it certainly seems plausible to have laws that merchants who violate some blacklist forfeit their daily turnover, there are existing laws with much, much harsher consequences.
derefr 7y ago
Many upstanding people—and even large companies like payment processors!—process their received funds through a mixer “just to be safe”, i.e. to escape any coincidental untoward paper-trail that attaches to their funds two or three steps back. You know how they say that every US dollar bill has a little cocaine on it? Using your suggestion, every dollar bill would be marked tainted as drug proceeds.
- wmf 7y ago
  That's as dumb as laundering clean money “just to be safe” or covering up a crime you didn't commit “just to be safe” (hey Reiser). If your coins are clean, mixers make them dirtier and this has been known all along.
  - nybble41 7y ago
    They're not trying to hide the proceeds of a crime, they just want to protect their privacy from anyone snooping on the transactions. The government is not the only party interested in how people are spending their money, and criminals are not the only ones with a legitimate reason to want to keep their financial dealings private.
  - derefr 7y ago
    If you're e.g. a retailer, you can maybe know your coins are clean one step out, but you can't know if they're clean for their whole traceable history without standing up a fancy Network Analysis OLAP cluster and hitting it with some really high-cost queries. Let me put it this way: what would you do with your float if you run a convenience store in a bad part of town, and know that there are marked bills floating around in the local economy, and that the police might pop in at random one day and take them out of your till? Well, you'd probably deposit your float in your local bank at the end of each day, and then get new, guaranteed-unmarked bills from the bank. That's mixing! It's not money laundering, just mixing. You're removing the potential liability of being blamed for what your customers' employers' customers' employers did.

michaelt 7y ago

If we follow the stolen-property example, if a stolen car is broken up and sold as parts, and I buy a widget from it, the fact the car was broken into 96 bits doesn't make the widget any less stolen, no matter how many hands it passes through.

derefr 7y ago
The analogy doesn’t hold. A car with a stolen part does not, itself, become a stolen car, because there’s a clear division between the part and the car itself. The only thing the police would want to seize as stolen property from you is the stolen part—they’d get you to take it out of your car, and be on their way. Cryptocurrency is less like car parts, and more like gold: putting the crypto through a mixer is like melting some (unknowingly) stolen gold jewellery into a batch of non-stolen gold, forming new gold bars, and then selling those. Is the whole batch of gold now “tainted” by the stolen gold? Does it all need to be seized as stolen property? If not, then what does need to be seized? An equal shaving of gold from each buyer’s new bar? If it were possible to figure out which mixer recipient was the original jewellery thief, you could just seize their mixed assets, since those assets should be equal in value to the stolen input assets. But the whole point of a mixer is to destroy that linkage, such that you have no idea who any of the recipients are.
deleted 7y ago
[deleted]