Post
Topic
Board Bitcoin Discussion
Topic OP
Another shower thought about tainted bitcoins
by
witcher_sense
on 18/09/2020, 10:25:21 UTC
Another shower thought about tainted bitcoins and why it is pointless to call certain bitcoins dirty, illegal and for criminals. Imagine a transaction coming from twitter hackers, for instance. All the UTXOs involved in given transaction are now considered illicit. All bitcoins are now dirty. But what about a fee hackers need to pay in order to have their transaction mined?

Basically, imaginary twitter hackers used dirty bitcoins to incentivize miners, they merely bribed them. Fees is a part of coinbase transaction  (coinbase transaction is a transaction with which miners are paying rewards to themselves, it contains of block subsidy (new bitcoins) + transactions fees (sum of all commisions from all included transactions).

What is really interesting about a coinbase transaction is the fact it does not consume any existing UTXOs. What it means is that surveillance company like Chainalysis cannot figure out what part of fees included in coinbase transaction is still dirty. Now they have to call all bitcoins from given coinbase transaction illicit. Even "virgin bitcoin" can now be called illicit because some of the transactions included in a block were involved in criminal activity.

Mining can now be considered a means to launder money, since miners take dirty bitcoins and return clean ones via coinbase transactions. Every block is now tainted, demonized and is potentially serving criminals. Bitcoin is a tool for criminals. If your transaction is in the same block as imaginary twitter hackers' one, you are in trouble, you are criminal.