Hacker News Reader

Just curious but where do the funds go when the transaction is 'destroyed'?

Presumably they're just unspendable until the parties reach a resolution. If that never happens then everyone else's bitcoins increase in value a tiny bit, in theory.

Try explaining to your local regulators why your bitcoin balance has traces of illegal/laundered money in it...because a drug overlord's purchase was destroyed and the funds were gifted to the community.

No, not gifted to the community. More like, burned, and thus driving down inflation.

I believe the suggestion was to destroy the bitcoins, which implicitly makes everyone else's go up in value, rather than explicitly dividing it up and emailing it to every bitcoin user in the world.

Also, I imagine you'd explain it to regulators with "a drug overlord's purchase was destroyed and the funds were gifted to the community". They're not stupid - if I obtained a "tainted" bitcoin and emailed fractions of it to everyone I didn't like, I doubt the authorities would be naive enough to put all my enemies in jail.

Reply on news.ycombinator.com