New to Busy?

How VeriBlocks helps clean Dirty Bitcoins?

4 comments

sames
64
4 months agoBusy3 min read

image.png

Bitcoin fungible qualities always been questioned. While Privacy on the Bitcoin mainnet is getting better via Wasabi wallet & Dandelion there still a long way to go. to be better.

Dirty Bitcoin are Bitcoin with a dark market/illicit history behind it. The blockchain itself technically does not discriminate (miners can in a very weird and often slow and a high failure rate process but lets ignore that...) but bitcoin services such as centralized Exchanges and payment processors such as Bitpay can blacklist the coins.

In theory discounted dirty bitcoin markets offer a steep discount for dirty bitcoin but no provable market has been found...

As you might of heard-Veriblock a service used to secure other blockchain using Bitcoin hashpower is taking up 30% of the network in as many call-inefficient way...

However an interesting prospective I found on Veriblock as a decentralized mixer/bitcoin cleaner.
When the bitcoin are turned/payed as fees the bitcoin are technically cleansed and can be reused to centralized KYC government friendly services...

Here how it works in a simplified manner:

In it’s most basic form, PoP is a 51% attack prevention mechanism. It allows VeriBlock to stay safe from potential double spend and race attacks.

It does this through saving the latest VeriBlock blockchain states onto the Bitcoin blockchain using the OP_RETURN function in Bitcoin.

PoP miners are incentivized to post these snapshots by a part of the VeriBlock block reward (officially 82.5 VBK per block, in reality the rewards are a bit lower, around 80–81 VBK).

The proof of this state is ca. 80 bytes in a bitcoin transaction. PoP miners send empty transactions with these proofs, which are then saved to the Bitcoin network. One entire Proof of Proof therefore costs a miner one Bitcoin tx fee.

The PoP rewards are unevenly split among the miners. The sooner one posts a PoP into a BTC block, the higher the reward. The lower the bitcoin fee they use, the lower the costs. In the end it’s a balance — PoP miners can overpay for endorsing blocks and have higher breakevens, but if they undershoot the fee, they don’t get in the next BTC block and don’t receive the best possible rewards.
Source: https://medium.com/@ambroidcrypto/veriblock-deep-dive-49c533e9c5e7

So basically miners in Veriblock network are effectively trading Bitcoins for Veriblocks coins. These Bitcoins are used to pay bitcoin tx fees which makes the bitcoin cleaned. The PoP miner receives “clean” VBK coins.
This a pretty cool development and wonder if it will be used?
There indeed ways to track the miner using dirty bitcoin but if done right it can't be traced...
image.png

Comments

Sort byBest