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Fist bitcoins in, First out.

Will this assumption allow individual bitcoin tracking possible?

example,

Addresses A, B and C each has 50 BTC

Transactions, 

  tx1 - A > D - 10 BTC (D - 10 BTC)
  tx2 - B > D - 15 BTC (D - 25 BTC)
  tx3 - C > D - 20 BTC (D - 45 BTC)

  tx4 - D > E - 20 BTC (E - 20 BTC, D - 25 BTC)

  Now,
    D has none of BTC received from A, 5 BTC from B and 20 BTC from C
    E, fist 10 BTC was received from A, next 10 BTC was received from B
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3

This is only true if one does not mix transactions. Otherwise you will have coins that are for example 50% from source A, 10% from B, 40% from C and so forth.

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  • you are right. mixing services only could make it very difficult. blockchain doesn't know anything about intermediate addresses.
    – vi.su.
    Feb 18, 2013 at 9:19
  • @vi.su. If someone set up a mixing service properly to completely separate various coins, it would be nearly untraceable, or at least highly deniable.
    – ThePiachu
    Feb 18, 2013 at 9:46

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