Is the Lightning Network anonymous?
For example if i send BTC from an KYC Exchange to WoS. Then send sats via lightning to another Wallet and then back on chain. Are these sats now considered non-kyc? π€
Discussion
I too, use this method.
From what I understand, the sats are accumulated into a pool. They are mixed with everyone else's in the pool. When you pay an invoice, you very well may not be using the sats acquired from the exchange.
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I read somewhere that yes, they do become non-KYC.
However, I'd rather hear from someone who really knows.
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The anonymity set (privacy) of the Lightning user, when sending a payment, is relative to the nodes and channels that it has as βneighboursβ. In particular, a routing node only knows the immediate preceding and following nodes: the routing node does not know whether its immediate neighbours in the payment path are the sender or the final recipient. Therefore, the anonymity set of a node in Lightning is approximately equal to its neighbours.
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Timing analysis and cooperation among custodial lightning providers could remove some privacy. Depends on who you are trying to be private from. Short answer is that it's not perfect but does increase privacy.
Once the BTC leaves an exchange, it's anyone's guess where they went.
I can "withdraw" to ANY wallet, technically a withdrawal could be a "send". It's absolutely impossible to know, for certain, where it went.
Wallets aren't KYC.
Nobody has been able to give me a decent answer here.
KYC SATs are not a thing. If SATs can be blacklisted, that's a different beast.
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Itβs not the sats that are kycβd. Itβs you. It will be difficult for chainalysis to determine who owned those sats, the deterministic links to those sats history would be broken, however there is still a record of your kyc exchange purchaseβ¦
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Mixing sats (whether with a good coinjoin or a custodial mixer) never removes KYC.
KYC is the record of your trades associated with your IRL ID. That NEVER goes away regardless of what you do.
Mixing at most gives you *forward* looking privacy, i.e. it prevents someone from deterministically figure out how you spend your coins.
The only way for avoid a KYC record is by buying from different small counterparties while providing minimal info, e.g. a p2p exchange.
Yes and No. the sats you got back is not linked to you but whatever you purchased earlier still is.
Thanks for the short and precise answer ππ«π
Itβs separated from your KYC exchange, but you have to think about every step. For example:
β’ WoS has your IP/device and they could be subpoenaed
β’ WoS also knows where the payment was sent to on LN
β’ Then whatever method you have for getting it on-chain needs to have extra privacy protection as well. Def need VPN or Tor to get good separation
What you *have* done is separate the on-chain trail. So Chainalysis doesnβt know shit & the only way to follow the trail is good olβ investigative work.
What you have obtained is potential privacy about which BTC you own. But using the KYC exchange means that the record of your purchase cannot be hidden and should be assumed is known by regulatory and govt agencies.
Thanks a lot for explaining π
The privacy topic would also make a good topic for another Basics episode πͺ
Thanks a lot for you great work mate π«π
Not the perfect example but its a bit like getting cash out of an ATM. Thereβs still a record of you acquiring the cash but not much of one after you took it out. Still KYC but youβve enhanced your privacy. Use Robosats for the next level up in privacy.
Thanks for the metaphor ππ«π