Bitcoin has been around for about 6 years now and one of the main reasons for it to become popular is its use in illegal transactions. In its early days, bitcoin was adopted as a safe and anonymous payment method for buying, selling drugs and other contraband. Platforms like Agora and the now defunct Silk Road have been running exclusively on bitcoin.
As time progresses, these older bitcoins have seen a lot of transactions, many of them illegal. We know that the complete transaction history of each bitcoin can be accessed from the Blockchain. There are many tainted bitcoins out there which were part of illegal deals and some people may prefer not to use due to possible legal repercussions. This makes freshly minted bitcoins more attractive as they wouldn’t have a long transaction history.
Freshly minted bitcoins are usually awarded to miners and until now there was no single place available where one could exchange old bitcoin for newly minted ones. BlockTrail, the Amsterdam based Bitcoin API provider has announced the launch of its new bitcoin “exchange” Mint. Mint is one of the kind exchanges where one can exchange or swap their old bitcoins for freshly minted ones.
Mint intends to encash upon the impending scarcity of fresh bitcoins as the difficulty level of mining increases. Increase in difficulty levels will automatically result in reduced block rewards and once it happens there will be a dearth of fresh bitcoins. Mint’s business model challenges the concept of bitcoin fungibility as every bitcoin regardless of its age should have the same value. But BlockTrail’s CEO Boaz Bechar disagrees. According to him, fresh bitcoins should command more value than the older ones.
While defending Mint, Bechar argues that unlike other bitcoin transactions, Mint allows people to buy bitcoin whose source can be verified easily on the Blockchain and they are proud to be the first ones in the market to offer such service. Operational since July 9, Mint is currently charging 10% of the bitcoin value for swapping old bitcoins with newer ones.