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280 sats \ 5 replies \ @anon 11 Sep 2023 \ parent \ on: Utxo Dealership: forthcoming BTC privacy tool & winner of Tabconf 2023 Hackathon bitcoin
Why would a miner trade “tainted” coins for “virgin” BTC? I’d imagine it would cost more than a coinjoin
I think you maybe got it reversed? Miners create "virgin coins" in every bitcoin block. For them, the supply of "virgin coins" is abundant. But for everyone else, "virgin coins" are hard to come by. Lots of people want virgin coins but only miners have a steady supply of them. So miners can charge a premium for them. Plus, when a miner receives "tainted coins", they can use them as fees that they pay to themselves in a bunch of smaller transactions. I suspect there are ways of doing this that evade detection by chain analysts, allowing miners to effectively turn "tainted coins" back into "virgin coins" and resell them.
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"Plus, when a miner receives "tainted coins", they can use them as fees that they pay to themselves in a bunch of smaller transactions."
This is a service that has been missing for a long time.
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How does that work? Does the miner just try to tip themselves within their own block template?
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Transactions don't even need fees if they're not intended to be broadcasted to the rest of the network. So yes, they include in their own block template.
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