Buyers are willing to pay a premium for bitcoins that have seen little to no circulation. Mining company AmityAge estimates this premium to be between 5% and 10% above the market price.

This interest can be better understood from the perspective of a new owner. When acquiring these coins, they not only receive the bitcoins themselves but also a record of their previous transactions. In the case of freshly mined bitcoins, this record is just beginning. However, the very first transaction made by the buyer will add their details—addresses, amounts, and timestamps—to this ledger.

Together with the team from bitcoin mixer Mixer.Money, we explore why the market values coins with limited histories and how to maintain privacy when funds have already changed hands.

Starting Point

In a literal sense, coins without a past come into existence at the moment they are mined. These new bitcoins have had no previous owners, as they have not been used for payments or transactions.

They are created through a coinbase transaction, which opens each block. In standard transactions, the inputs refer to unspent transaction outputs (UTXO), linking them to prior operations. In contrast, a coinbase transaction has a unique input that does not reference any UTXO.

Through this mechanism, miners receive rewards in two parts: the newly minted coins and the fees paid by senders. Only the first part has never belonged to anyone before; the second consists of funds that have already been in circulation.

Technically, "virgin coins" refer to untouched outputs from coinbase transactions. However, the term is also applied to bitcoins that have just begun their journey from the miner. According to AmityAge, these are assets that have undergone no more than three transactions since being mined.

The protocol does not categorize these coins separately or assign them the status of "clean". They are valued for another reason: a shorter transaction chain is easier to verify. According to the company, demand for these coins comes from wealth managers, high-net-worth individuals, and institutional investors.

The transaction is structured as an exchange of bitcoins for bitcoins, with an additional payment. The buyer transfers their funds and in return receives coins with a brief transaction history from the miner. AmityAge acts as an intermediary, coordinating payments and conducting KYC/AML procedures for both parties.

The premium size varies based on demand, volume, and market conditions. There are no statistics available on transaction volumes for this service, so the 5% to 10% figure remains an estimate from the company.

Back in 2019, ForkLog examined the demand for "virgin" bitcoins. At that time, Flex Yang, CEO of Hong Kong-based Babel Finance, noted that buyers were willing to pay up to 20% more for coins without transaction histories.

The existence of such a premium raises questions about the interchangeability of bitcoin.

"Identical amounts can be valued differently depending on their origin. In our opinion, this practice distances bitcoin from the concept of digital cash. Privacy tools help maintain its interchangeability while protecting information about owners," said representatives from Mixer.Money.

The exchange with the miner does not erase anything. The client receives different UTXOs with distinct histories, while their previous transactions remain on the blockchain. They are merely paying extra for coins that are closer to the beginning of their narrative.

When History Becomes Personal

The very first transaction marks a new chapter in the life of freshly mined bitcoins. While one can pay for the lack of external transactions, their own dealings will still leave a trace.

Consider a buyer who has paid a contractor in bitcoins and now knows their address. If future payments are made to that same address, the buyer can see the amounts and timestamps of those transactions. Transferring funds to a new address will also leave a record that can be traced further.

This leads to a demand for a different type of coin: those whose subsequent movements are difficult to link to known addresses. These coins might have a long history of other transactions, but the owner is primarily concerned with ensuring that their income and savings remain concealed.

Centralized mixers accept funds and arrange payouts in a manner that complicates tracing deposits back to the received bitcoins. The goal of this exchange is to separate the user's future transactions from what is already known about them.

Third-Party Biography on Exit

At Mixer.Money, the "Full Anonymity" mode operates by passing incoming amounts through a premixer, splitting them into random parts, and sending them to exchanges with independent traders. The client receives payments from other participants on different platforms.

The system autonomously decides when to send a payout, how to divide it, and from which wallets to pay without making change. This design aims to prevent the matching of incoming and outgoing transactions based on amounts, times, and structures.

The bitcoins received have already been in circulation, with their trail leading back to exchange withdrawals. The service strives to ensure that it is difficult to link these to the user's deposit. In this model, "without a past" means without an obvious continuation of the owner's prior transactions.

For each request, Mixer.Money provides a guarantee letter with a digital PGP signature. This document outlines the transaction conditions and can be useful in case of disputes. Service data is deleted within 24 hours after the transaction is completed.

The mixer can be tested for free: a trial amount of 0.001 BTC will return to one address without any fees. ForkLog provided a step-by-step guide on how to use the "Full Anonymity" feature.

Next Transaction

After mixing, the history continues to grow, just like when purchasing from a miner. If the received bitcoins are combined with funds whose owner is already known, an observer may connect these addresses to a single individual. A similar outcome can occur if the coins are transferred back to an old wallet.

Thus, much depends on how the owner chooses to handle the payout. Common mistakes following work with a mixer are discussed in a separate analysis.

Freshly mined bitcoins have no previous owners. For coins that are already in circulation, the term "without a past" signifies something different: the ability to continue transactions without revealing one's financial history with each payment.