16

Technically it is possible to blacklist addresses, and it needs just the majority of the mining power to agree. The problem is arriving at the agreement: Nobody stands to gain from witch-hunts, so a consensus to block an address would have to be carefully built on solid proof, which is hard when there is no central organs with jurisdiction, nor a way to get ...


13

You can trace the coin back to its origin, the question is whether that information is meaningful. Say I steal 50 bitcoin. I can pass them around between several different Bitcoin accounts, all mine, and you can trace them. The problem is, you don't know whether any of those transactions are real. Say Jack has 50 bitcoins that come from a block reward and ...


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 ...


7

The other answers are correct, in that a mixed wallet can be used to hide tainted coins. However they miss an important point: the operator of the wallet service does have the knowledge required to trace the outbound transaction back to the original input coins, because both flows have to be associated with the wallet's internal representation of a customer ...


6

The term "Tainted Coins" is often misinterpreted as a measure of provenance. That's understandable considering the traditional definition of the word "tainted" coupled with the reality that many Bitcoins actually have been used for what would be considered nefarious purposes by standard societal norms. In fact, it is a common occurrence to be holding or ...


6

When you send coins to a large shared wallet, chances are that the coins you withdraw won't be the same as the ones you deposited. That's how you can sever the taint trail. The key is that the wallet must not only be large, but also shared between a lot of users. The taint on the original coins would never go away but could be diluted by mixing them with "...


5

There are a number of reasons why this kind of blacklisting is problematic in practice, but take it with a grain of salt, because I'm the creator of Wasabi, so I am biased. This Elliptic report identifies 0.65% of all Bitcoin transactions are mixing transactions. This means, if that kind of blacklisting would happen, they would have to blacklist most ...


4

The “taint” of a Bitcoin transaction evaluates the association between an address and earlier transaction addresses. The more “‘taint” the stronger the link between the two addresses. https://bitcoin-class.weebly.com/taint-analysis.html


4

I think I have an answer. It's not clear if this is how blockchain.info does it, but I'm not sure it matters, either. Taint is very similar to the everyday experience of diluting a liquid. Imagine starting with three glasses. One glass contains orange juice. The second contains water. The third is empty. Pouring some or all of the orange juice into the ...


3

The tool for complete history of all bitcoin minted already exist and its called blockchain. You can see all history here (random transaction selected) https://blockchain.info/tx/ff698f3e5321448d4d889fcd3c91f9e5f5767542d2f0fd7e4aa41a83abec3ab7 There is a term taint and it's meaning how two addresses are connected. It partially explained here What are ...


3

Fraud and money laundering are two different things. Fraud, or accepting or spending money under false pretenses, would be very difficult to detect on the blockchain because it requires outside knowledge. The way banks detect fraud is by using the context of what was purchased, and where. The blockchain doesn't contain that information, so supplemental ...


3

No and active work is being done to make this even harder as we speak. Fungibility is a necessity of a currency, black lists are not compatible with that.


2

Actually, yes, this is possible. However, your payment output might get split or combined with other payment outputs in later payments. Therefore, the graph will be less linear than you suggest: C ↴ ↱ H A → B → D → E → G ↳ F So, A would be sent to B, then B + C would produce D, D would be split up to E and F, E would further be split ...


2

Using a mixer helps preserve your financial privacy. The question is: who are you protecting your privacy from? Bitcoin transactions are public record, so anybody can view any historical transaction at their leisure. So when considering your privacy, there are a few different situations worth exploring, for example: An unrelated third party is looking at ...


1

AFAIK Coinbase looks for a five hops before / after incoming / outgoing TX. So adding extra hops will be enough for now. It can be automated with Samourai Wallet's Ricochet or my scripts for bitcoin-qt.


1

HD wallets help avoid reusing addresses when receiving payments because you can generate a new address each time. HD wallets also make backup of many addresses much easier: https://en.bitcoin.it/wiki/Deterministic_wallet You are correct that when you send a payment from an HD wallet that needs to combine Bitcoin from several addresses (because no single ...


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