Re: How to have reasonable privacy safely when paying?

Quote from: LoyceV on February 14, 2024, 07:58:20 AM

Quote from: takuma sato on February 14, 2024, 06:16:21 AM

What I would like to know is a way to test your utxo before you send it into a KYC exchange, to know if they are tainted or not.

You should read [Blacklist] of unreliable, 'taint proclaiming' Bitcoin services / exchanges. "Taint" is a business model of chain analysis companies selling the notion of taint based on arbitrary conditions that can change at any moment. It's an attack on Bitcoin's fungibility and should be avoided. What happened to your money before you legally earned it is not your fault.

To quote myself on the subject:

Quote from: LoyceV on June 09, 2022, 08:39:08 AM

I've seen several posts lately from people willing to treat Bitcoin as non-fungible because they believe some coins are "tainted".
I'd say this is a severe threat to Bitcoin, and I wouldn't be surprised if governments use this because they can't stop Bitcoin in any other way. If people believe Bitcoin is "tainted", they won't accept it anymore. "We" should really inform people not to fall for this.
Nobody would reject a dollar bill because it has previously been used in a crime, despite the fact that 85 to 90% contains traces of cocaine. Claiming Bitcoin isn't fungible is just plain stupid.

This site explains very well what it's all about:

Quote from: http://diyhpl.us/wiki/transcripts/bitcoin-adam3us-fungibility-privacy/

Coin validation proposed to offer as a service to trace coins and try to give you a rating about how the history of the coin from your point of view and to offer that as a service to businesses. I think this could be quite dangerous because it goes back to that 17th century court case where now you could receive a coin that is perfectly valid at the time that you receive it, but a few weeks later a crime is uncovered and now your coin is tainted. So if this coin validation service is advicing many of the merchants where you would want to spend your coin at, it's tainted and now the merchant would refuse to accept your coin. That's a strange experience for you; you're holding a coin that you might have to sell at a discount to get rid of it. The aggregate effect of this might create a run on the bitcoin price. So it reopens this long-set legal principle that currency or currency units are all equal.

I can't stress enough how important this is!

Don't all mayor exchanges have Chainalysis or similar flagging software/service active? And if not, then it's just a matter of time they all do, probably legislation will force them to have them in place to stay in business. So all the liquidity will be sitting on these exchanges. You also have no control over who the person you send the coins to will be depositing them. Like I said, if someone pays you in BTC that is on some of these lists, and you pay to someone, then this someone puts it on Coinbase (most likely, most mainstream exchange) to sell, and this person gets asked where this money came from, this person will point to you. So yes, this is a huge problem when it comes to fungibility. A dollar bill is just a dollar bill. You are most likely just going to be spending it in a shop. People don't often spend BTC because it goes up in value, they will sell it for a profit in an exchange most likely in the future. It doesn't matter what is and isn't stupid, if someone makes a law around this and you end up in trouble it wouldn't matter, the consequences are real. So yes we should be pushing for this not to happen, but this is different than pretending to not care and just go around sending coins to exchanges without taking the necessary steps to not trigger these systems.