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With the FinCen regulatory discussions against mixers, and the hammer coming down on nodeless, I’m wondering if it’s more risky to buy bitcoin from a KYC institution and then coinjoin it, or to simply keep the KYC Bitcoin and use it on lightning network.
In the first case, if coinjoin/payjoin is outlawed, you could be in trouble by having simply used the services to hide your coins.
In the second, you could maybe argue that you weren’t evading regulations. CashApp uses lighting and allows payments to invoices… so that’s a legit end user offering (until it isn’t)
Thoughts?
Glad you've asked! 🏴‍☠️
First of all, don't be scared of 12 old dinosaurs who decided to rule the world. Be scared of the rest of us being retarded and comply out of fear. You have the hardest money ever invented, and you're thinking in $ terms.
Second of all, just buy KYC if you can. Every chance you get. It cost more but it pays off in the long run.
Third, if you're buying non-kyc, it's ok. We all are. Coinjoin those sats all fucking day. It takes time anyway. See, we got all the time in the world by our side. If you'd left that money in your bank, it probably would have been spent already anyway. This geriatric class can't even begin to understand what you know about Bitcoin, let alone Lightning. My friend, you are miles ahead of the people in power.
Fourth, use LN all day. I'd recommend following this method to manage your funds safely: https://darthcoin.substack.com/p/bitcoin-be-your-own-bank-think-like
Five and lastly, living on Bitcoin (or die trying) is the only way to feel completely secure, honestly. Otherwise you'll always end up wondering what your government will do next, and so on which is so unnecessary and tiresome.. 😌
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I honestly wonder how they can spot coinjoin addresses in services such as Samourai with all its security/privacy features.
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my point is that most people don't have the opsec skills to outsmart big data. it doesn't matter if you coinjoin/whirlpool into thousands of outputs that go off and do different things. You can simplify the graph traversal by targeting the person at the start of KYC instead of trying to trace backward from the point of offense. You don't need to traverse back from a channel open request and get lost in a coinjoin if you are looking to target a specific human and find out what they've done, just start with the human, examine all of their KYC outputs to flatten out all the coinjoins to specific Lightning Node channel open operations. If you find that all (or even a significant number) of the channel opens are children of coinjoins that this user originated with KYC, you found your node operator. It doesn't matter if you have a thousand or a million shuffled operations. This can be examined in a few seconds of compute.
Patterns of spending are an opsec vulnerability and doing something like running a business or operating a routing node are going to create a trail.
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yep, it is a small world, and an even smaller community.
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Thing is, when using coinjoin you're hiding your transaction history from everyone, including people you may wish to trade with in the future. You can rightly expect to be allowed some privacy in personal dealings. They'll insist on submitted records eventually, I guess.
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The thing I have a hard time with is thinking that they will just say, “oh well, the coins went from KYC to a mixer, I guess we lost that trail” instead of filing a law suit and compelling the individual to purger themselves in defense against hidden data collection that proves you either operated a node or donated to a go fund me or engaged in any other kind of commerce deemed illicit.
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So uh, don't use a mixer to hide funds that you have to identify to someone later?
There are other uses. It hides the incoming funds' sources pretty well.
Oh, and it's spelled "Perjur," not purger. ;)
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I'm surprised my phone didn't autocorrect to purdue or something, not sure where that spelling came from :)
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It also seems like wishful thinking to be able to hide a lightning node unless you fund everything from non-KYC coins or fund a wallet in one operation. If you have a regular stream of KYC coins going into coinjoin transactions that then can be correlated into outputs that later open channels for a particular lightning node, you can be sure your meatspace identity is attached to that node through analysis.
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