The “taint” of a Bitcoin transaction evaluates the association between an address and earlier transaction addresses. The more “‘taint” the stronger the link between the two addresses.
The taint analysis highlights the differences in the order processes between Coinbase and Circle. In short, Coinbase processes orders with a peer-to-peer paradigm while Circle fills orders based on a reserve. Since Cirlce uses a reserve it has a lower taint in order to sever the link between addresses to increase anonymity to protect its reserve.
To perform your own taint analysis of an address go to: https://blockchain.info/taint/
From there you can enter any address for which you would like to perform a taint analysis on.
- For the Coinbase transaction, we had a taint of about 20% (https://blockchain.info/taint/17bWK1kGySckEV7jpNBHUmHuX1UoHeHoAs). Our address compared to the "major" address gave a 70% taint.
- But for the Circle transaction, we had a taint of just 0.8% (https://blockchain.info/taint/1LZpJP5zKGAXnH4SnJF98cVn7sBHJroViG). Our address compared to the potential reserve we would gave a 8% taint.
The taint analysis highlights the differences in the order processes between Coinbase and Circle. In short, Coinbase processes orders with a peer-to-peer paradigm while Circle fills orders based on a reserve. Since Cirlce uses a reserve it has a lower taint in order to sever the link between addresses to increase anonymity to protect its reserve.
To perform your own taint analysis of an address go to: https://blockchain.info/taint/
From there you can enter any address for which you would like to perform a taint analysis on.
Methodology
Begin by first setting up an account with the Bitcoin exchange. Proceed to submit a "buy" request in the exchange. Once your buy has been successfully executed, find the transaction address on the blockchain. You may then perform a taint analysis of the transaction by visiting: https://blockchain.info/taint/ and appending your address to the URL.