@denlillaapan's question about money laundering makes me to ask:
The nature of bitcoin being a push network, you actually don't have any control over what you accept. Anyone can send to any address.
However, if you were a merchant and provided someone an address for payment and the payment came from the utxo where the stolen Liquid coins are, would you consider it an acceptable payment?
What if there are several transactions in between?
Bitcoin is fungible unless you make additional conventions that aren't in the protocol - i.e. what FATF does. I personally don't enforce FATF conventions on my Bitcoin. I also avoid parties that apply these additional conventions because I think that it is an attempt to attack Bitcoin.
Accepting a LN payment makes this a non issue.
Not entirely: What if the UTXO described in the OP was used to open a channel to your node?
The problem is, who decides which coins go on the blacklist? The fed? The fat toad guy?
If it's not fungible, then it's a control system.
These recent incidents are inevitable, and are providing huge incentives for Bitcoin/Crypto ecosystems to enhance security.
It’s still money, and I don’t think they were stolen; I think they were taken by force, because, after all, they did a job that allowed them to keep those coins.
The dumbest shit I have read all day.
Excellent – you’re free to agree or disagree.
I agree with you, but it is the nature of money that you want to be confident that others will accept it. how confident are you that others would accept such coins from you?
Depends the amount, I wouldn't mind if it is a small payment, but if it was for something like a house or car - idk if I would...
Good point! I'd probably hesitate too
yeah, I don't really care too much. I'm not responsible for the one-hop-prior (unless it's like stupidly immediate and right in front of me etc).
Cash had this problem since forever, and I think we had it pretty well sorted out, morally and legally speaking.
Also: IDGAF unless I think/suspect it difficult for me to offload the bitcoin in return.
Physical cash is more fungible than bitcoin UTXOs. Physical cash notes are almost identical except for the serial number, which doesn't have a history of previous transactions. UTXOs have a history and with the proper software can easily be traced automatically. The idea of Monero is to quite solve this exact issue. I think some solution (other than monero's) to make utxos in bitcoin more fungible will be beneficial.
Isn't this the whole problem? Sure it's no big if you know you have a trading partner who will accept the coins. the issue is how confident can you be in finding such a partner given that the coins come from a well known stolen address?
Cash has the advantage that most of us don't have access to a database of serial numbers and the movement of individual bills can be difficult to prove (how many people held this bill before you got it?)
true that... UTXOs are more tainted, by construction.
I came here to say that I don't think I've ever bothered to look at where the inputs came from for any utxo i've received, but your unless is relevant: do you think you would be able to spend such sats very easily if the there is a high-profile stolen utxo in the recent history?
Great question, bookmarked and I'll make sure I'll add to our next TM7 newsletter next month for the ~AGORA marketplace. I just release one today #1565349
Responding to your question: do you really think merchants have time to dive into these technicalities?
I mean, that's why we have lightning...
Imagine when someone is paying cash irl then you ask them where the money comes from, are they stolen? 😂
If I am a merchant I am focused on my business and the payment going through. I am not digging into where the payment came from.
Exactly, someone paid then you focus on the delivery or a million other things. Probably the last thing most merchants care about is where the money comes from.
if i were a merchant who accepts bitcoin, i probably wouldn't even know those coins were stolen.
economy is shit right now, merchants are struggling, wouldn't have time to read news and learn about the latest bitcoin hacks.
yes
Mario says accepting stolen property makes you a thief. Then you're no better than the IRS!
Of course some of you retards will find a way to rationalize it.
If you receive a dollar bill with a serial number that was listed as one that was stolen from a bank, would you accept that dollar bill? If that dollar bill had passed through several other hands since the bank robbery, would you still accept it?
I don't think most merchants have the time or even bother to trace the funds.
100%
It’s not normal for a merchant to accept Bitcoin without using the Lightning Network!
what if someone opens a channel to your node that uses such a utxo?
I don’t have any LN channels! Haha
...and then you'd be a little more protected, immediately.
The taint question has a clean technical framing: bitcoin has no concept of "stolen" at the protocol level — UTXOs are bearer instruments. What people actually trade with "taint" is counterparty risk: the probability that the coins get flagged by chain-analysis heuristics or traced back, and that a future counterparty or exchange then freezes/returns them.
A few practical layers people miss:
The deeper point: "yes, always" is what makes bitcoin fungibility an open engineering problem (coinjoin, LN, e-cash mints) rather than something you can assume.