Tyler Burns on Nostr: One of my favorite ways of "cleaning" KYC bitcoin that is very simple is to open a ...

One of my favorite ways of "cleaning" KYC bitcoin that is very simple is to open a private channel on a throwaway LN node to another random public LN node (over tor obviously). Then I'll funnel those funds inbound to my actual LN node over several transactions. I now have those funds for spending on my LN node without the funds being tied to the on-chain KYC UTXO.

You're basically ditching the KYC UTXO anonymously to a complete stranger while refilling your LN node (which is hopefully already funded with KYC-free bitcoin).

If I ever have to make an on-chain transaction as payment where I had to give my identity, I'll often also use this same technique with my change addresses from that transaction just to burn off the change on the lightning network to avoid contaminating other KYC-free I may have in my wallet.

Lightning Network is such an amazing privacy tool for bitcoin.