All bitcoins are created equal. But in the eyes of blockchain forensics firms, some bitcoins are more equal than others. If these companies are to be believed, coins that have been used in criminal transactions are ‘tainted,’ destined to be forever linked with nefarious activity. The reality, however, is far different, for ‘taint’ is solely in the eyes of the beholder – and most beholders aren’t Chainalysis.
Also read: Chainalysis Report Sheds Light on Darknet Markets and the Need for Onchain Privacy
Tainted Coins Are All in Your Mind
It’s long been known that freshly minted bitcoins can command a premium because there is no transactional history attached to them. If you want true onchain anonymity, mine some coins and then lock them away. The fewer times those coins turn over onchain, the fewer clues there are pointing to their current owner. The notion that coins might acquire taint, however, that makes them undesirable – or potentially even unlawful – to receive is a wholly subjective phenomenon. It’s one thing to flag a…