Published on: 2020-06-11T11:20:56+00:00
Bitcoin's fungibility and the discrimination between "clean" and "dirty" Bitcoins are under discussion. A user argues that Bitcoin should be designed without this distinction, as fungibility is crucial. They emphasize the importance of Bitcoin remaining neutral and independent of government control, serving as censorship-resistant money to provide freedom from tyranny. The use of protocols such as CoinJoin, CoinSwap, and PayJoin can offer plausible deniability to blockchain analysis entities, making it challenging for them to determine transaction nature. The user suggests that if "dirty" Bitcoins exist, anyone could pollute random addresses, making it impossible to prove self-transfer or unsolicited donation. UTXO censorship would not work, as customers can opt for services that respect freedom and avoid censorship.The author believes that Bitcoin should be designed to eliminate differentiation between "clean" and "dirty" Bitcoins, prioritizing fungibility. They argue that the distinction between these types of coins is defined by the ruling government, emphasizing Bitcoin's need to remain neutral and independent. Bitcoin's purpose is to act as censorship-resistant money, granting people freedom from tyranny. The author asserts that if anyone can determine a Bitcoin's cleanliness, something is amiss. Protocols like CoinJoin, CoinSwap, and PayJoin offer plausible deniability, spreading the entire "taint" collectively and hindering UTXO censorship. Customers can choose services that uphold freedom and refrain from censorship. Overall, the author advocates for designing Bitcoin to retain neutrality, independence from government control, and fungibility.The context explores taint analysis in Bitcoin transactions and strategies to resist it through involvement of other parts of the Bitcoin economy. Tainted coins possess less value compared to untainted ones, but taint is not universally agreed upon among Bitcoin users. Those attempting to impose taint globally face economic barriers due to limited reach, leading to jurisdictional arbitrage. Censorship resistance is crucial in thwarting global attackers who impose non-consensual taint views. CoinJoin and CoinSwap enhance censorship resistance by aggregating multiple UTXOs and creating new ones with shared taint, thereby spreading it. These protocols improve global resistance against potential global attackers using taint analysis.An email thread on bitcoin-dev highlights the flaws of CoinJoin, PayJoin, and CoinSwap concerning taint analysis. Taint analysis associates specific Bitcoin addresses with particular activities to attack privacy protocols. Coins are categorized as "clean," "dirty," or "suspicious." CoinJoins change a coin's history from clean to suspicious, increasing the risk of targeting by adversaries. PayJoin and CoinSwap do not signal a user's privacy preference, but they may still raise suspicion if the taint analysis algorithm tracks privacy protocol transactions. Involving other parts of the Bitcoin economy in transactions can resist taint analysis attacks. Using Bitcoin as money, earning it, spending it with merchants, who further spend it with others or pay employees, without taint analysis algorithms, offers protection. While unobservable privacy improves privacy and prevents censorship, it may not be a permanent solution to taint analysis. Utilizing Bitcoin as money away from censoring centralized choke points is the only lasting remedy.The author suggests that "super-clusters" can disrupt common input heuristics, making chain analysis techniques challenging for enforcement purposes. Adversaries deem CoinJoins suspicious, while PayJoin and CoinSwap go unnoticed. The author argues that the desire for privacy is assumed to be suspicious, but protocols or social changes could address the taint issue. They propose that PJ/CS does not solve the problem but alters it, leading to similar issues for users. Therefore, a protocol or social change may be necessary to tackle privacy concerns.CoinJoins explicitly convey the desire for privacy, making them suspicious to adversaries. In contrast, PayJoin and CoinSwap remain undetectable, solving this problem. However, this logic does not hold under scrutiny. Coin histories can be clean, dirty, or suspicious, and using a dirty or suspicious coin attracts unwanted attention. If starting with a clean history, CoinJoins render the new coin's history suspicious, eliminating the incentive to use it. With CoinSwap/PayJoin, the new coin can be clean or dirty, but risks persist. Starting with a dirty history, CoinJoins become more appealing as they make the new coin's history suspicious. Yet, CoinSwap/PayJoin still pose risks, potentially implicating users in unrelated dirty coins. Full adoption of any technique resolves the tainting issue, but PJ/CS does not ultimately solve it. Attaining unobservable privacy may be fallacious, necessitating protocol or social changes for tackling taint issues.
Updated on: 2023-08-02T02:22:33.024606+00:00