4 ms·

Can anyone explain on a conceptual level how mixing can possibly work? I'm not thinking about implementation details, but more like boot prints in the snow. You

Can anyone explain on a conceptual level how mixing can possibly work? I'm not thinking about implementation details, but more like boot prints in the snow. You can stamp a big mess in the snow, but no matter how much you stamp about, there is still one set of your tracks entering and one set leaving. When all the transactions are clear to see in the blockchain, all the boot prints are right there.

wmf 13y ago
Nope, there are N entering and N identical leaving (in this case) so there's no way to know which outgoing transaction belongs to which person.
- desal 13y ago
  Does that actually matter? The way i understand it, Bob wants to send 1 BTC to Alice, and Charlie wants to send 1 BTC to Dave, and everyone wishes to do so anonymously. Through the wonder of mixing Bob's coin actually ends up with Dave. Unfortunately for Dave, Alice was a drug dealer and Dave gets arrested for receiving stolen property or proceeds from crime or some such. Except in reality the mixing is done with smaller parcels, and a larger number of users. Whether or not the feds want to go after you for receiving 27c worth of drug money is another matter entirely, but i can quickly see there being some negatives to using a mixing service.
  - wmf 13y ago
    It depends how you write the blacklisting/tainting rules, which may depend on money laundering regulations and legal standards of proof. You can say that transaction outputs are all tainted if one input is tainted (an or rule), outputs are tainted only if all inputs are tainted (an and rule), or outputs taint equals the average input taint. Mixing can defeat two out of three of these rules.
ohazi 13y ago
Imagine a bunch of people traveling in different directions in the snow. Rather than going directly towards their intended destination, everybody goes first to one particular spot, where there is one pair of boot imprints. You walk toward the bootprint, step into it, step out of it, and then continue on your merry way. When lots of people do the same, you see a bunch of tracks going into one bootprint, and a bunch of tracks going out. But because everybody was careful to place their feet into the one bootprint indentation, the person following your tracks won't know which of the many forward paths you took after you stepped out.
- sliverstorm 13y ago
  But what about the part where every boot has a distinct print? Or is that where the metaphor breaks down.
  - paulbaumgart 13y ago
    Everyone's wearing identical boots.
  - 21echoes 13y ago
    they trade/change boots at that convergent stomping point (i.e., use a new wallet address)
SilasX 13y ago
Well, we already have desired situation with a different kind of snow -- cocaine. Right now, most bills are (supposedly) tainted with cocaine. And yet holding bills with detectable cocaine is not admissible as evidence against you. That's what these pools are going for: so that every bitcoin has touched every transaction. So yes, you can prove that a bitcoin previously touched a crime at some point ... but that fact has zero evidential value.
- sliverstorm 13y ago
  Dollars are not an analogue though, because we don't have a record of every time a dollar bill changed hands. Or at least so my thinking goes.
  - SilasX 13y ago
    They're close enough for purposes of understanding the dynamics. For example, cash bills weren't well-mixed, then finding cocaine on your money would indeed be evidence that you were one or two levels removed from drug handlers, and may (legally and rationally) justify a look at the people you've been in contact with. Likewise, when it's not regular practice to mix up your bitcoins through pools, then holding a marked coin would be evidence of wrongdoing. (And I've argued elsewhere that that's also a reason for prosecuting mixing pools as money launderers!)

wmf 13y ago

Nope, there are N entering and N identical leaving (in this case) so there's no way to know which outgoing transaction belongs to which person.

desal 13y ago
Does that actually matter? The way i understand it, Bob wants to send 1 BTC to Alice, and Charlie wants to send 1 BTC to Dave, and everyone wishes to do so anonymously. Through the wonder of mixing Bob's coin actually ends up with Dave. Unfortunately for Dave, Alice was a drug dealer and Dave gets arrested for receiving stolen property or proceeds from crime or some such. Except in reality the mixing is done with smaller parcels, and a larger number of users. Whether or not the feds want to go after you for receiving 27c worth of drug money is another matter entirely, but i can quickly see there being some negatives to using a mixing service.
- wmf 13y ago
  It depends how you write the blacklisting/tainting rules, which may depend on money laundering regulations and legal standards of proof. You can say that transaction outputs are all tainted if one input is tainted (an or rule), outputs are tainted only if all inputs are tainted (an and rule), or outputs taint equals the average input taint. Mixing can defeat two out of three of these rules.

ohazi 13y ago

Imagine a bunch of people traveling in different directions in the snow. Rather than going directly towards their intended destination, everybody goes first to one particular spot, where there is one pair of boot imprints. You walk toward the bootprint, step into it, step out of it, and then continue on your merry way. When lots of people do the same, you see a bunch of tracks going into one bootprint, and a bunch of tracks going out. But because everybody was careful to place their feet into the one bootprint indentation, the person following your tracks won't know which of the many forward paths you took after you stepped out.

sliverstorm 13y ago
But what about the part where every boot has a distinct print? Or is that where the metaphor breaks down.
- paulbaumgart 13y ago
  Everyone's wearing identical boots.
- 21echoes 13y ago
  they trade/change boots at that convergent stomping point (i.e., use a new wallet address)

SilasX 13y ago

Well, we already have desired situation with a different kind of snow -- cocaine. Right now, most bills are (supposedly) tainted with cocaine. And yet holding bills with detectable cocaine is not admissible as evidence against you. That's what these pools are going for: so that every bitcoin has touched every transaction. So yes, you can prove that a bitcoin previously touched a crime at some point ... but that fact has zero evidential value.

sliverstorm 13y ago
Dollars are not an analogue though, because we don't have a record of every time a dollar bill changed hands. Or at least so my thinking goes.
- SilasX 13y ago
  They're close enough for purposes of understanding the dynamics. For example, cash bills weren't well-mixed, then finding cocaine on your money would indeed be evidence that you were one or two levels removed from drug handlers, and may (legally and rationally) justify a look at the people you've been in contact with. Likewise, when it's not regular practice to mix up your bitcoins through pools, then holding a marked coin would be evidence of wrongdoing. (And I've argued elsewhere that that's also a reason for prosecuting mixing pools as money launderers!)