The way I see it, there two stages to money laundering:
The first is simply disassociating your money from the crime. If you robbed a bank this means swapping your bills for other bills. If you robbed MtGox or sold a bunch of coke on the silk road this means using a fuckton of mixers... but that is not a good solution as you have noted. Bitcoin does not lend itself to this at all. Honestly if I somehow found myself in the possession of a ton of prominently stolen bitcoins I would just write them off; the risk involved in recovery would be far to great. If it was just bitcoins I got from selling some coke on silk road then I would be more relaxed; a few (presumably) independent mixers over a few months would put me at relative ease. None of the money from this step is useful though.. not unless you are content with paying your rent in cash for a few years or blowing all your bitcoins on VPSs... For the money to become actually usable you need part two.
The second part is the traditional money laundering. Taking money that is assumed to be unconnectable with the crime and associating it with your identity in a way that appears legitimate. If you robbed a bank this means taking the bills that you got out of step one and finding a way to put them back into the bank. If you are selling coke in real life then this is actually the only step you need to worry about; take the cash you got for the coke, "spend" it at your bar, and deposit it at the end of the week in your bank account. If you mined a shitton of coins a few years ago and don't really care to explain that you are a miner, then this is the only step you need to worry about.
The idea of both the "freelancing" and "casino" ideas is to do only step 2; that is to say they are both just to associate money with your identity in an "official" way. Neither will work worth a damn for step 1... at least I wouldn't trust either of them for that.
The nice thing about bitcoin casinos is that they are easy to spin up. Just load one up, spam it all over the place over the period of a week. During that week you "gamble" with yourself, then you taper that down to simulate waning interest in your service. Rinse and repeat as often as you need more money, just rip off whatever the current preferred gambling/toy is in the community at the moment. Never keep them around long enough for them to be popular or unpopular, only new. With the freelancing idea you may eventually have to explain where you are getting your contracts, but with technically legal fly-by-night gambling schemes nobody would expect even you to know or care. Gambling sites involve far less fabricated story and background, which is to your advantage.
Which I would choose would depend on how much money I wanted to attach to my identity and how fast. For modest amounts quickly I'd make a gambling site. For large amounts infrequently but at steady interval, I would become a freelancer. That would be the better one to attempt to live off of. (Also I'm in the US, so a gambling site is a non-starter anyway.)
> With the freelancing idea you may eventually have to explain where you are getting your contracts
Ah, I thought you meant the otherway around. Hire a freelancer, tell them what to do, pay them with dirty money, sell their bits for clean money. I don't see how becoming the freelancer is a good idea; that doesn't scale unless you have extremely specialized knowledge and can blow through $1000/hour or whatever. But if you have extremely specialized knowledge, it's probably easy to de-anonymize you as a freelancer.
> Honestly if I somehow found myself in the possession of a ton of prominently stolen
> bitcoins I would just write them off; the risk involved in recovery would be far to great.
I think this is a great solution until something better is figured out. Also, you could just use them for other activities that are unrelated to you, as long as you're okay with that and very careful (don't let tracking pixels catch your browser, even if you're under Tor, etc.).
> blowing all your bitcoins on VPSs
Fascinating idea; you could blow your bitcoins on VPSs to mine more bitcoins. However, you will have to be sure that your VPS is not being logged. Otherwise those bitcoins will be tainted too. But you could probably just participate in a mining pool maybe, and have one mining-pool-account per VPS instance?
> The nice thing about bitcoin casinos is that they are easy to spin up. Just load one up, spam it all over the place over the period of a week.
Ehhh.. I am still skeptical. You could make the site claim it's been around for longer ("Copyright 2003"), and you could even re-purpose a bitcoin address that someone else was using before. But it is relatively easy to figure out a shift in the types of accounts that are sending in money, and use that to determine a change in ownership of the account to prove that the casino hasn't actually been around as long as it claimed. And if the bitcoin address has a previous public identity associated with the address, that's a dead give away that your casino was just using that history to seem more legitimate.
A crazy question: there's a kids restaurant called Chuck E Cheese. You pay for tokens to play games. From the games, many of them spit out tickets. With enough tickets saved, you can redeem them for prizes.
How is that not like gambling, and how do I run my own?
My recollection is that the prizes, once you adjust for the number of tickets required to get them and the difficulty and time involved in getting enough tickets, are severely marked up. There are undoubtedly more efficient ways to launder money. Not to mention that to do this with any significant sum you'd need a lot of people to be playing these games for a long time. Adults would raise a lot of suspicion, and kids would want to keep the prizes. The main value the restaurants like these offer is entertainment.
The first is simply disassociating your money from the crime. If you robbed a bank this means swapping your bills for other bills. If you robbed MtGox or sold a bunch of coke on the silk road this means using a fuckton of mixers... but that is not a good solution as you have noted. Bitcoin does not lend itself to this at all. Honestly if I somehow found myself in the possession of a ton of prominently stolen bitcoins I would just write them off; the risk involved in recovery would be far to great. If it was just bitcoins I got from selling some coke on silk road then I would be more relaxed; a few (presumably) independent mixers over a few months would put me at relative ease. None of the money from this step is useful though.. not unless you are content with paying your rent in cash for a few years or blowing all your bitcoins on VPSs... For the money to become actually usable you need part two.
The second part is the traditional money laundering. Taking money that is assumed to be unconnectable with the crime and associating it with your identity in a way that appears legitimate. If you robbed a bank this means taking the bills that you got out of step one and finding a way to put them back into the bank. If you are selling coke in real life then this is actually the only step you need to worry about; take the cash you got for the coke, "spend" it at your bar, and deposit it at the end of the week in your bank account. If you mined a shitton of coins a few years ago and don't really care to explain that you are a miner, then this is the only step you need to worry about.
The idea of both the "freelancing" and "casino" ideas is to do only step 2; that is to say they are both just to associate money with your identity in an "official" way. Neither will work worth a damn for step 1... at least I wouldn't trust either of them for that.
The nice thing about bitcoin casinos is that they are easy to spin up. Just load one up, spam it all over the place over the period of a week. During that week you "gamble" with yourself, then you taper that down to simulate waning interest in your service. Rinse and repeat as often as you need more money, just rip off whatever the current preferred gambling/toy is in the community at the moment. Never keep them around long enough for them to be popular or unpopular, only new. With the freelancing idea you may eventually have to explain where you are getting your contracts, but with technically legal fly-by-night gambling schemes nobody would expect even you to know or care. Gambling sites involve far less fabricated story and background, which is to your advantage.
Which I would choose would depend on how much money I wanted to attach to my identity and how fast. For modest amounts quickly I'd make a gambling site. For large amounts infrequently but at steady interval, I would become a freelancer. That would be the better one to attempt to live off of. (Also I'm in the US, so a gambling site is a non-starter anyway.)