Bitcoin Taint Analysis Check

[info title="Editors note" icon="info-circle"]Bitcoin taint analysis check tools no longer appear available without a fee which likely may indicate a commercialization of the practice in the industry. Here's one authors theory on this topic.[/info]
Remember how we could once check the taint on a coin trail/address (Example: https://blockchain.info/taint/)?

Lets assume an exchange called localetherlitecashcoins.com decided to implement one of the Conbase type tracking systems and lets says this tracking system checked taint among other things.

Lets also assume that it could be plugged into the same system Coinbase [and others] use(s).

It is possible a third party is searching and implementing on-chain analysis for a number of companies.

Now we all know bitcoin is not anonymous. "Nothing new" I hear you say. Taint and analysis was very prevalent before but now appears to have gone corporate (they may have basically worked out a way to monetize the solution and persuading exchanges to use it).

For example, https://blockchain.info/taint/ used to be free but no longer works at all (404 error). Just try finding a new way to check taint on coins without a corporate plan.

The Good

As always, every cloud has a silver lining.

1. Clipboard virus – if it uses the same address can be stopped 
2. North Korea and the (alleged) wannabe virus – funds can be withheld 
3. Coins on exchanges become cleaner with a more provable history. 
4. The mixing services are hit. 
5. The scallywags, near do-wells, and general cads would have a harder time of shifting those old dodgy Mt Gox coins and the many other exit scams. 

The Downside

It's not a great leap to think that if you were to try and send coins to a tainted address with some simple coding it would set off the taint alarm and it could stop you from doing so, maybe even lock your account until support looked into it (you and the coins).

The blockchain is now being heavily tracked and it is an immutable ledger so you have the benefit of 20/20 hindsight. Lets also consider not having this "tool" in your arsenal to throw a spanner in the works of Mr K Jong-un, you could be accused of violating your AML/KYC requirements. 

It's an easy sell to the exchanges that are almost forced into tracking using it (regulatory reasons). Just add a weekend bot (replacing current and expensive weekend staff) and an A.I. that can do the locking, blocking, and account stopping 24/7. 

Coinbase has been exchanging bitcoin for tracking tokens. Who else is now required by regulation to do the same? 

[info title="Editors Note" icon="info-circle"]"Tracking tokens" refer to the "watermarking" practice where bitcoin ledger entries are hashed with additional data on the header which can in turn be used to trace where the user sends the bitcoin.
[/info]
So be careful, be very careful. Big bro (one for Nesbot & Trickster there) may be watching ever so slightly more.

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