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All of this is new to me. So there are almost two Bitcoins, clean BTC and tainted BTC. If merchants can check if the history of a coin is clean or tainted they

All of this is new to me. So there are almost two Bitcoins, clean BTC and tainted BTC. If merchants can check if the history of a coin is clean or tainted they could refuse the sale or ask a higher price to hedge the risk of not being able to use the coin. Is there any service like that? Is that double prices dynamic already happening? Mining creates clean BTC, anything else risks tainting them. I expect that the ratio between prices in tainted / clean BTC will grow if the set of tainted coins increases compared to clean ones.

vmception 5y ago
> I expect that the ratio between prices in tainted / clean BTC will grow if the set of tainted coins increases compared to clean ones. I don't. I expect the absurdity will become more clear and make the whole attempt to flag them irrelevant. for example, after a national or municipal government seizes bitcoin under some semblance of due process or even an actual criminal charge and reauctions them, we are supposed to pretend those bitcoins are magically clean? do all the exchange softwares update to know that? they still have the transaction history from the event that flagged them to begin with. the answer is easier when it involves a government you respect like when the US Marshalls auction off a drug kingpin's seized bitcoin. but what about a government you don't respect? welp a sovereign nation seized it so they're clean now. If so, some random jurisdiction with some level of sovereignty can just become the bitcoin washer as a service, if not then exchanges are acting too arbitrarily and are going to lose business for no legal reason. Exchanges flag bitcoin to stay within an imagined impending compliance burden of being able to prove they don't accept dirty money. If they flag bitcoin with the clearest outcome of having been seized by the state and reintegrated into the economy, then they have made a hopeless error. People with ambiguously acquired bitcoin already have a dozen ways of getting it into bank accounts and cash, and will have even more in the future. So it's just the merchants and exchanges that have to make sure they are attracting business. For those reasons I don't see a separate exchange rate forming, its an average of fungibility that leads to the same result.
toss1 5y ago
Which means that if you really want to clean dirty BTC, you need to simply use it to pay for miners, then mine clean BTC.
- hamiltonians 5y ago
  how would that work if it is unspendable
  - toss1 5y ago
    Unspendable with who? Seems if you can't go to exchanges, going to private corps or individuals who don't follow the ban lists would likely work, makes it their problem. Of course, scale matters. Buying a couple of rigs off random sellers willing to take BTC should be trivial, but if you need a warehouse full of them...
    - chii 5y ago
      > who don't follow the ban lists would likely work, makes it their problem. which is how you launder money today! And dirty money is certainly worth less than clean money.
      - toss1 5y ago
        Of course it is, I said nothing different. I was responding to the question of "how would it work?", not "is it worth 100% of the same 'clean' funds?". Different circumstances and market conditions will make the discount variable.

vmception 5y ago

> I expect that the ratio between prices in tainted / clean BTC will grow if the set of tainted coins increases compared to clean ones. I don't. I expect the absurdity will become more clear and make the whole attempt to flag them irrelevant. for example, after a national or municipal government seizes bitcoin under some semblance of due process or even an actual criminal charge and reauctions them, we are supposed to pretend those bitcoins are magically clean? do all the exchange softwares update to know that? they still have the transaction history from the event that flagged them to begin with. the answer is easier when it involves a government you respect like when the US Marshalls auction off a drug kingpin's seized bitcoin. but what about a government you don't respect? welp a sovereign nation seized it so they're clean now. If so, some random jurisdiction with some level of sovereignty can just become the bitcoin washer as a service, if not then exchanges are acting too arbitrarily and are going to lose business for no legal reason. Exchanges flag bitcoin to stay within an imagined impending compliance burden of being able to prove they don't accept dirty money. If they flag bitcoin with the clearest outcome of having been seized by the state and reintegrated into the economy, then they have made a hopeless error. People with ambiguously acquired bitcoin already have a dozen ways of getting it into bank accounts and cash, and will have even more in the future. So it's just the merchants and exchanges that have to make sure they are attracting business. For those reasons I don't see a separate exchange rate forming, its an average of fungibility that leads to the same result.

toss1 5y ago

Which means that if you really want to clean dirty BTC, you need to simply use it to pay for miners, then mine clean BTC.

hamiltonians 5y ago
how would that work if it is unspendable
- toss1 5y ago
  Unspendable with who? Seems if you can't go to exchanges, going to private corps or individuals who don't follow the ban lists would likely work, makes it their problem. Of course, scale matters. Buying a couple of rigs off random sellers willing to take BTC should be trivial, but if you need a warehouse full of them...
  - chii 5y ago
    > who don't follow the ban lists would likely work, makes it their problem. which is how you launder money today! And dirty money is certainly worth less than clean money.
    - toss1 5y ago
      Of course it is, I said nothing different. I was responding to the question of "how would it work?", not "is it worth 100% of the same 'clean' funds?". Different circumstances and market conditions will make the discount variable.