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RE: Our Bitcoins Will Be Taken/Frozen By the Miners; Involuntary INCOME Tax on Frozen Bitcoin!

in #bitcoin5 years ago (edited)

Is there any way to wash the taint of segwit from existing legacy addresses? Typically running bitcoin through an exchange will originate from a bech address before handing you your "1..." intended UTXO and a change address with a "3" back to the exchange.

The exchange will mostly likely give you back Bitcoins which are also tainted with SegWit lineage. That tainting is quite ubiquitous now in the circulating Bitcoin stock.

The only way is to get someone with Bitcoins that did not circulate much, to trade them to you. Or to mine your own. But you literally can’t mine your own, because the pools are also going to pay out in tainted Bitcoins at least until all pools adjust after the SegWit donations redeeming begins but then they will not likely be able to pay out small mining shares in Bitcoin because the blocks will be too congested. I had some links in my blog about this which go into more detail about virgin Bitcoin. I actually did research the pools looking for one that currently (before the SegWit donations taking begins) never comingled tainted with virgin Bitcoins for payouts, but could not find any. And I think there is a technical reason why they can’t offer it, e.g. PPS requires the miners to have a huge stock of capital for payouts during lean times due to variance. Thus pools may be further consolidated after the SegWit donations redeeming begins.

Then retire to some far away island devoid of capital controls...

That is denied access to the international banking system. Thus the equivalent of just burying your Bitcoin in the ground. Not a solution.

The only solution I can see is selling when the selling is good (i.e. before halving and/or later when donations taking slows down but the FATF has not yet ordered freezing all tainted Bitcoins yet). But then you have to make sure your PoSoF (proof-of-source-of-funds) is in order and also that you are not subject to capital controls. This is going to be a delicate balancing act. Timing is important.

Perhaps spending them to a Monero wallet about 2 weeks before the halving is the way to go?

BitBay Crypto Exchange to Delist Monero Due to Money Laundering Concerns

Another Crypto Exchange is Dropping Privacy Coin Monero Over Compliance Risk

Also still hoping to be able to buy a perfected anonymous altcoin (perhaps even via a DEX after the halving) that has a future as a unit-of-account and medium-of-exchange outside the mainstream banking system (i.e. a dark/black crypto cash economy), and/or buy mining equipment to mine such an altcoin.

I don’t trust Monero’s anonymity. Perhaps I should contemplate using Monera as a bridge to the next better altcoin. Yet I’m also concerned that the cryptocosm (other than legacy Bitcoin) will plummet in value. Bitcoin dominance may go close to 100%. So I would rather buy low than buy high and later sell low (Monero’s value may never recover relative to some nascent altcoin’s appreciation). Some new anonymous altcoin that is more perfected and undervalued.

Any other ideas? I probably already thought of all the possibilities.

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