Post
Topic
Board Development & Technical Discussion
Re: Un-KYC crypto using the lightning network
by
Revoltec13
on 02/11/2024, 10:10:25 UTC
Would it be better solution to use a bridge between different crypto currencies?
I would be careful with "bridges", as most of them are partly centralized, and this is of course not good for privacy (neither too secure). You can never be sure one of these "bridge platform" custodians runs analytics software. And many of them make it possible to follow the "tracks".

IMO both Monero and Lightning offer both good privacy if you use them well. Use several transactions with different amounts with Monero or use several channels, also playing with amounts, if you want to do it via Lightning. And in both cases never deposit the "KYCed" and the "un-KYCed" coins on the same exchange or centralized wallet platform, nor use the same HD wallet (e.g. Electrum) for them. If you use HD wallets create two wallet files, one for KYCed and one for non-KYCed coins, connect both via Tor, and never connect them simultaneously.

I think if I had only basic technologic knowledge I would go for the Monero approach, of course also other privacy coins work (e.g. Grin).

Another technique to improve privacy are atomic swaps, i.e. trading one crypto for another one decentrally. Be aware that there are various techniques, only the technique with adaptor signatures improves privacy. A quite good option is: Atomic swap Bitcoin -> Monero, split the coins with XMR to variuos different accounts -> Atomic swap back to Bitcoin, but to different wallets, and never re-using any address in the process.

You can also use private exchanges, like those suggested in kycnot.me, at least for one of the Bitcoin <-> privacy coin exchanges.

I have done a bit more research and I'm thinking about avoiding Monero and mixers as it can give me problems with proof of source of funds later. Does anybody know if this is the same if you use atomic swaps but with other coins?

Does the atomic swap only work for Monero or does it also work with, for instance, USDT? That is, could I use atomic swap for BTC -> USDT -> BTC and still succeed to un-KYC my coins? Would this approach still create problems for future proof of source of funds?