Definition of ‘Taint’ - Taint is the concept that certain bitcoin are riskier or less acceptable because of their previous owners or possible links to criminal activity.
What is Taint In Crypto?
Taint Definition - Taint is a condition that relegates a crypto coin to a position of distrust or nonacceptance as a result of a previous link to criminal activities or unlawful owners.
It is a concept that explains how some earmarked coins are riskier because of the method through which their previous owners got them, or their possible linkage to criminal activity.
Mostly, cryptocurrencies that are anonymous and untraceable can not be tainted as no one can track their previous owners on the blockchain.
Can Ethereum Be Tainted?
With the new Etherscan's ETH Protect tool, it may be easy for Ethereum to get tainted. The feature ensures that blockchain users can identify if the funds they have received have affiliations with malicious activities and trades. And this suits new users who are not conversant with the terrain to know who is who and what is what.
To taint an ethereum coin, the ETH Protect tool marks fraudulent addresses that have fraudulent funds so that other users can steer clear of these funds.
Mostly these funds are associated with hacks or scams. With the EtherScan feature, users can even track incoming funds alongside their history to ensure that incoming funds are clean and devoid of inconsistencies.
This feature came about as a result of the need to up the security of the blockchain by tracking the addresses of hackers and scam artists.
Which cryptocurrency is untraceable?
Not all coins on the blockchain have the anonymity feature. Even Bitcoin, the giant of the cryptosystem, cannot boast of anonymity. Its wallet records are accessible by the public. The conjoining of this factor alongside the KYC requirement for verification allows for taint and puts users at the risk of privacy invasion.
In other words, if your Bitcoin wallet is sitting empty and idle, you are anonymous. But if you have ever sent or received anything, law enforcement can use the KYC documents uploaded to an exchange to identify both the sender and receiver.
However, there are few coins and exchanges that do not follow this pattern. They are referred to as anonymous, privacy oriented, or untraceable coins. The best of this category of coins is the Monero (XMR) coin. It was the first altcoin to grow in popularity among all privacy-oriented cryptos. Other untraceable coins include Zcash (ZEC), PIVX (PVX) KOMODO (KMD) ZENCASH (ZEN), DASH (DASH).
Can all Coins be Tainted?
Not all coins have the ability to be tainted. Only coins that have records of the true identity of owners can be tainted. In fact, the claim that cryptocurrency is an autonomous method of making payment such that transactions will not be traced to its maker has been discredited.
If anything, transactions on the blockchain are more public than those of the traditional banking system. This is because there is no central authority that safeguards information. The information that is provided at the point of identity verification is accessible on the blockchain and can be used to trace transaction owners.
What is the implication of a Taint coin?
If you receive a tainted coin, there is a wide range of implications that may occur, with the majority being negative. However, the worst implication is the total loss in the value of the coin being held.
A tainted coin may eventually lose acceptance and tradability and become useless to its holder. And in another case, it may affiliate its new holder to fraudulent activities that he knows nothing of.