Coin tainting in Bitcoin

by Albert Szmigielski Coin tainting in Bitcoin is a way to mark certain coins for the purpose of devaluing them. Since all transaction are stored on the blockchain, a history of a coin can be traced all the way to its coinbase transaction. This fact enables tracking of coins belonging to any address. Certain addresses can be marked by some powerful entity as bad. As a result peers may choose not to accept funds from those addresses. If these entities gain support of the core developers then a blacklist of addresses can be hard-coded into the Bitcoin core software. Coin tainting can be used to incorporate measures of accountability in Bitcoin, but can also lead to abuses of the system.

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