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Are custodial lightning wallets with wallet of satoshi or blue wallet essentialy a coinjoin/mixing?
37 sats \ 10 comments \ @kilianbuhn 20 Mar 2022 bitcoin
I was thinking about the whole Wasabi fiasco. And then I basically got the idea that lightning transactions to a blue wallet lightning wallet and out of it is basically the same as mixing/coinjoin. From the outside the transactions are indistinguishableable from which account got which payment, right? Since it's all in one big lightning node.
I have not enough knowledge about analysing lightning the same way onchain transactions can be traced. Am I correct? Is this enough to wash sats and let them disappear in the void?
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17 sats \ 0 replies \ @DarthCoin 20 Mar 2022
In regards of using LN for losing trace of your sats I wrote these 2 guides:
  1. buy from an exchange BTC (use all fiat available, no worry, the world is not going to end), preferably from KYCnot.me
  2. split the total amount in smaller parts to withdraw, if you buy a big chunk from an exchange
  3. use LN-onchain swaps to convert, boltz.exchange, zigzag.io, coinos.io etc
  4. send your batch from exchange to one of these swaps (or use a LN exchange) to onchain address indicated
  5. have prepared a LN wallet to receive the converted sats (from onchain to LN): Blixt, SBW, BW, Breez, Electrum, Zeus, Zap etc
  6. Make the swap and receive into your LN wallet / LN node.
Alternatives directly on LN, privately, fast ⚡️ RoboSats - P2P Full private Exchange over Tor, LN escrow (HODL invoice) ⚡️ https://t.me/lnp2pBot - Telegram bot buy/sell P2P through LN ⚡️ https://t.me/BitcoinVoucherBot - Azte.co Telegram Bot buy BTC on LN
Here also you have a comparison guide about all LN wallets
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13 sats \ 4 replies \ @2big2fail 20 Mar 2022 freebie
yes. the difference is that all of these swap services and custodial wallets may log details of user activity and be used as means to identifying users but you are correct that the utxo you receive is different than the one you deposit if you go back on chain later
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10 sats \ 3 replies \ @DarthCoin 20 Mar 2022
And keep in kind an aspect that few users pay attention: through a 1M sats LN channel (just an example) you can pass through 1000x times more sats. Actually there's no limit. Just by using a private channel and/or trampoline and you have magnitude of privacy that you can't achieve with other tools. But yes, not many users know how to use this method.
I am actually happy that chain analysis are busy with coinjoin/whirlpools/etc meanwhile LN is doing its thing... in silence. :)
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10 sats \ 2 replies \ @2big2fail 20 Mar 2022
when lightning was emerging as a feasible network the founder of electrum referred to it not as a payment network but as a dark network
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10 sats \ 1 reply \ @DarthCoin 20 Mar 2022
....and I use a lot electrum with LN trampoline channels. Very good tool.
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0 sats \ 0 replies \ @2big2fail 20 Mar 2022
yes electrum is one of the most unsung lightning implementations. not only is it a completely independent python implementation it is a great desktop client
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5 sats \ 0 replies \ @thrown 20 Mar 2022
What you describe is how fedimints / chaumian mints work.
https://fedimint.org/
it is not how current custodial wallets work today, but i would hope that all custodial wallets become chaumian mints in the future.
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5 sats \ 0 replies \ @yoshi 21 Mar 2022
KYC exchange > Muun lightning wallet > Muun lightning wallet to BTC address.
Total cost to do this is usually less than $2. I’m lucky though as the exchange allows lightning withdrawals. Shout out to Bitaroo in Australia.
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5 sats \ 0 replies \ @ember 20 Mar 2022 freebie
Yes, I came to a similar conclusion about Liquid as a mixing service, here are my notes:
A federated sidechain network with cheaper, faster and confidential transactions. The federation is controls a multisig wallet. To peg in, one can run a node and make a BTC transaction into an address owned by the multisig, with a claim script to validate the liquid tokens on the other side. To peg out one must go through one of the federation members either through an exchange or a swap service like https://sideswap.io. There didn't seem to be peg out limit on that swap service but I haven't tried it yet The conversion rate is 99.9% so you're paying a 0.1% fee.
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0 sats \ 0 replies \ @stefandiamante 21 Mar 2022
I agree with the sentiments about using Lightning and Liquid for this purpose. I see coin mixing services as outdated with surveillance technology catching up and believe that the Wasabi drama is the beginning of the end for all of them. The arguments I'm now seeing on Twitter in favor of coin mixing services are a mix (pun intended) of fear-mongering and personal attacks. That's always a sign of a failing enterprise.
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