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I wonder if the recent price drop (from $280 to $180) is related to this.
They announced this before the price ran up to $280.
You don’t need to wonder, it’s specified in the post:

“we won't compromise on our principles and, to give one example, are not prepared to turn our back on digital privacy preserving technologies such as TOR and VPNs. We have now got to the point where it no longer looks feasible to run this service in a manner consistent with our core beliefs.”

This was announced weeks ago. Before the rise recently.
Anonymizing BTC via BTC -> XMR -> BTC seems hard these days.
bisq is the most anonymous way that i know of
Good luck spending the tainted BTC you buy on Bisq.
So they actually have measures to stop tumbled coins from re-entering the supply?
tainted BTC doesn't exist.
It absolutely does, there are plenty of BTC addresses that are tainted and not accepted by exchanges.
How does it work if you just send the entire “tainted” coin to a new address and then send that to the exchange? Sounds like smoke and mirrors to me
Very simply. They don’t allow coins with that lineage. There are so many people ignorant of the reality of bitcoins fungibility problem it amazes me.
If sent such tainted bitcoins, do the exchanges send them back, or seize them?
Coinbase won't let you sell tainted coins but will let you withdraw them. No exchange will seize them.
> ignorant of the reality of bitcoins fungibility

This is not an issue with bitcoin, but of exchanges. That's why I specifically asked if exchanges cared if taintedness was transitive.

I have to be blunt but this is a very basic property of the blockchain, which by design keeps an entire history of every single transaction (source and destination address) that is ever made.
This type of lack of understanding is rife. Makes me quite bullish on Monero when people realise how little privacy Bitcoin and crappy forks provide. Might see a signal type movement to Monero.
I don't think that irrational retail investors understand, or care to understand, Bitcoin or Monero implementation details. Bitcoin's valuation has little to do with its technical merits. It's all just internet money to most people.
Yea I agree right now.

But even showing a few newbie friends how I could see their balance and transactions after they sent me BTC or shared their address with me, baffled them, they couldn’t believe it.

People will start to care as they become extorted, or embarrassed. Privacy is a fundamental requirement of good money.

I think people will learn this over time and gravitate towards a better money for the internet.

What’s your Bitcoin address? I’ll send you some.
I doubt that the one valid use case for Bitcoin, purchasing things on the grey/black market, is impacted by tainted BTC.
The cool kids now launder their coins through mining rig rentals. Spend old coins, get new ones back.
Don't forget to buy carbon offsets
Can you buy those in BTC anywhere?
That's interesting, rig renting has been available for a while now but I never connected the dots and just assumed it just made sense for some people.
There's nothing stopping courts from demanding that XMR.to keep records of the chain of custody when users buy XMR via BTC on their service.

Almost all exchanges adhere to KYC laws, so there's a good chance that following transactions backwards will lead to an identifiable buyer or seller of Bitcoin.

What technical features of Monero make it a solution for actual anonymization of BTC?

Theoretically the conversion back to btc can’t be connected to the original btc->xmr conversion

(Edit: btc to xml would be a novel transaction. Curse you autocorrect)

FYI - this happened several months ago, before the BTC run up.
What's the alternative to buy XMR? Does anyone know of any major exchanges that support XMR?

I only found (Kraken) but it doesn't support where I am (WA state) and others either don't support it or support buying/selling but no sending to a private wallet.

Peer to peer buying with Bisq. You can buy or sell with/for BTC. There's an escrow system. Works well.
tradeogre but they told me it is classified as high risk
I run a cloud service where you can get a small amount of computing power as part of a larger free trial offer. The number of people who try to rip us off to run xmrig is simply astonishing. By my estimate you could only make $1-$2 a month per fake user but they still keep coming. This blog post's talk about the "Monero faithful" and the "community" seem quite ironic to me.
$1/m/fake user is still better than 0, therefore they will try to make thousands of fake users and hope some of them survive bans.
>This blog post's talk about the "Monero faithful" and the "community" seem quite ironic to me.

How is it ironic that people believe in the only digital money that doesn't enable mass surveillance? Because people try to profit off free computing? I don't understand

There's a huge difference in the motivations of miners and users. The latter group is being addressed here.
Alternative similar 'instant exchange' XMR-BTC services include SideShift, MorphToken, SimpleSwap, Xchange.me, Godex, ChangeNOW, Fixedfloat.