4

Say someone sends bitcoin to an address. It is later determined that those incoming funds are tainted and the recipient wants no association. What is their recourse?

  • You should be aware that the concept of "tainted" coins is at best very controversial and at worst damaging to the Bitcoin ecosystem. It implies that Bitcoin lacks fungibility which is a crucial component of a useful currency. – Christopher Gurnee Apr 17 '15 at 16:24
7

The protocol doesn't include a way to reject transactions, for a variety of reasons (the protocol doesn't know which output is real and which is change; blocks can't be changed after being mined; etc) but it is possible to do something similar.

  • Accept payment, then return it

    Pick one of the funding addresses at random, then send the coins back to that address.

  • Accept payment, then destroy it

    Send the coins to an address that doesn't have a private key associated with it, like 1BitcoinEaterAddressDontSendf59kuE.

Implementations

To my knowledge, no client implements an easy way to do either of these things. The best way would be use coin control to select the offending output, then make a transaction that returned/destroyed it.

  • 4
    Note that in general it's a very bad idea to send coins back to one of the sender addresses without contacting and agreeing with the sender first. You can't assume the sender (still) has control over that address, so the coins might go to the wrong person or be lost completely. – Jannes Apr 17 '15 at 10:28
  • 5
    A third choice you have is to spend the coins as miner fees. That way you help secure the network a little instead of actually destroying the coins for eternity. – Jannes Apr 17 '15 at 10:29
  • @Jannes That's technically true, but 95% of the time, people who have control over an address have control over it 24 hours later. There are exceptions (shared send) but they're exceptions, not the rule. – Nick ODell Apr 17 '15 at 14:49
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    @NickODell Your 95% estimate seems dangerously high IMO.... if sent from an exchange or a web wallet, it's often the case that the payer does not control the private keys which sign the tx. – Christopher Gurnee Apr 17 '15 at 16:20
  • @NickODell Apart from being an dangerous estimate, even if it's 1 in a million: it will end up destroying money. So you have to assume the worst. That means only in the case where you actually want to destroy money, could you use that method. But if you want to actually destroy the money, the it's better to use option 2 (or 3). – Jannes Apr 17 '15 at 20:45
-3

Personally I would make a new wallet, then delete it. Mostly because I don't know how to spend it as a miner fee.

  • You seem to be getting the order of that wrong. When somebody sends you an unwanted payment, how does creating a new wallet provide any recourse? – Murch May 17 '17 at 16:51
  • Would you like to learn how? bitcoin.stackexchange.com/questions/12451/… is a good deep dive. Or much simpler, just send some tiny amount to yourself and make the rest the fee. How to do this depends on what wallet client you're using. – Jacob Ford May 29 '18 at 21:20

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