Pages:
Author

Topic: Bitcoin Violates Principle of Fungibility (Read 1567 times)

legendary
Activity: 2674
Merit: 1083
Legendary Escrow Service - Tip Jar in Profile
September 28, 2015, 07:09:44 AM
#27
stolen funds can always be laundered easily enough

Yes you could mix stolen coins, but at the end of the day someone somewhere is going to get tainted coins. Perhaps not the thief or scammer.



Most probably not the thieves or scammers. They would know how to wash these coins. And they could do it in a way that they would not reveal their identity.

This tainting idea would only hit the innocent bitcoiners hard. Scammers would not be affected. Or maybe some stupid ones would be.
legendary
Activity: 2492
Merit: 1473
LEALANA Bitcoin Grim Reaper
September 25, 2015, 04:14:16 PM
#26
stolen funds can always be laundered easily enough

Yes you could mix stolen coins, but at the end of the day someone somewhere is going to get tainted coins. Perhaps not the thief or scammer.



There is no such things as tainted coins.

Let's define "tainted coins".

Coins that can be linked to a theft or scam.

Now there is such thing as that because if businesses/exchanges decide not to accept those coins as "legitimate"...now you have tainted coins.

It may not be ACTUALLY tainted, but the fact that coins came from a particular address of a scam/theft ...does imply they can be viewed as TAINTED.

remember evolution and btc-e? Just a precedent that was set.

Didn't MTGOX do the same thing with bitcoinica?

 Smiley
hero member
Activity: 644
Merit: 504
Bitcoin replaces central, not commercial, banks
September 25, 2015, 03:52:49 PM
#25
stolen funds can always be laundered easily enough

Yes you could mix stolen coins, but at the end of the day someone somewhere is going to get tainted coins. Perhaps not the thief or scammer.



There is no such things as tainted coins.
legendary
Activity: 2492
Merit: 1473
LEALANA Bitcoin Grim Reaper
September 25, 2015, 03:50:35 PM
#24
stolen funds can always be laundered easily enough

Yes you could mix stolen coins, but at the end of the day someone somewhere is going to get tainted coins. Perhaps not the thief or scammer.

sr. member
Activity: 350
Merit: 250
stolen funds can always be laundered easily enough
legendary
Activity: 2674
Merit: 1083
Legendary Escrow Service - Tip Jar in Profile
Which exchange holds back tainted coins? I didnt hear from any.

AFAIR some exchanges ask you to provide personal information (ID, proof of residence) before releasing tainted coins back to you or allowing you to trade them.

Might be similar to banks where someone wants to pay its money in but one of the serial number matches one of a bank robbery or so. Though i guess at the end only stupid persons will be found that way. Real gangster most probably know how to wash that money. It should be the same for Bitcoin. So i guess again only the innocent will be catched.
legendary
Activity: 1554
Merit: 1021
Which exchange holds back tainted coins? I didnt hear from any.

AFAIR some exchanges ask you to provide personal information (ID, proof of residence) before releasing tainted coins back to you or allowing you to trade them.
hero member
Activity: 518
Merit: 500
Trust me!
Well that's only partly true. First, you can still decide whether to accept certain coins. Also, the same is true for regular FIAT money, money used in illegal activities may be denied, also you could perform a chemical analysis on regular bills or coins!
legendary
Activity: 2674
Merit: 1083
Legendary Escrow Service - Tip Jar in Profile
Which exchange holds back tainted coins? I didnt hear from any.

It was discussed but im not aware of anyone losing coins because of that.

Though it might be a good idea when exchanges keep an eye on coins that are from criminal cases though that only would work if a scammer would use such exchange to wash them. So i wonder if anybody would be found that way.

If coins would be withheld then everybody would be at risk getting tainted coins someday.
legendary
Activity: 938
Merit: 1000
BTC | LTC | XLM | VEN | ARDR
I don't follow...The same could be said about the lack of fungibility with fiat money associated with crimes. Some of the same problems and solutions with laundering fiat exist with bitcoin. Additionally, Fiat has a bigger problem because it is tainted at inception when it is created or minted to those who understand the inherent fraud that is occurring.

My thoughts exactly, the fact that it's tainted isn't recognisble by an exchange, so I don't follow your story, If I use "tainted" bitcoin, I never get a warning from Bittrex Grin
sr. member
Activity: 462
Merit: 250
I can draw your avatar!
Thats why im paranoid about using bitcoin before running coins throught a mixer, but then again how can u be sure that the mixer coins are legit??

You cannot be sure. That is why you mix, it does not clean the coins, it just obfuscates the transactions, the coin does not change. it is like sharing the tab with your friends, one of them has tainted money, you all put it in a big pile on the table, but because you have put too big a bill in it, you take the tainted money back as change for your share in the pile.
full member
Activity: 184
Merit: 100
Bitcoin FTW!

Bitcoin fungibility has been called into question, and it is becoming glaringly obvious that this poses a threat to the stability and long-term usage of such currency. Exchanges want nothing to do with these stolen funds, and therefore, lessen their value in relation to otherwise identical cryptocurrency units.

I hope this will not be the case. People have common sense, and they shouldn't ever agree to treat each bitcoin diffirently
legendary
Activity: 952
Merit: 1005
--Signature Designs-- http://bit.ly/1Pjbx77
Bitcoin fungibility has been called into question, and it is becoming glaringly obvious that this poses a threat to the stability and long-term usage of such currency. Exchanges want nothing to do with these stolen funds, and therefore, lessen their value in relation to otherwise identical cryptocurrency units.

The ledger on the blockchain just makes it easy to trace the source of the coins, and it is just as easy to sever the link too with mixers. Fungibility is not violated on a massive scale. Even when some people prefer virgin coins or untainted coins, it will not make bitcoin less stable, because the cost of making them "usable" again is low and fast.
member
Activity: 124
Merit: 11
Thats why im paranoid about using bitcoin before running coins throught a mixer, but then again how can u be sure that the mixer coins are legit??
hero member
Activity: 910
Merit: 1000
I appreciate the article and ideas being raised. But I think those companies that do implement black- or red-listing of addresses should be boycotted. I would also (probably) encourage boycotting of services that deny their customers freedom to use Bitcoin for particular services like gambling in Coinbase's case. Or in the very least make it very clear to those signing up to use their service.
legendary
Activity: 1554
Merit: 1021
If you suspect that a customer is paying with stolen money or trying to launder money you have to request further information about the source of the money regardless of the payment type. In this case it was known that the money was involved in crimes - of course the Bitcoins are worth the same, but the client should've been refused for being a criminal. AFAIR BTC-e allowed them to trade the coins tho.

Bitcoin is just more convenient to track for law enforcement and businesses.
hero member
Activity: 672
Merit: 500
Diginomics is a pay for article shit site

A short time back, they had a same article about fungibility. In that article they had talked about currencies with higher fungibility. In this paid article they just have Darkcoin/Dash being shown as a competitor to Bitcoin

Lets create a biased paid media blacklist
legendary
Activity: 2772
Merit: 2846
I have not heard of any coins refused by anyone due to "taint." If you had a coin that had at some point been through a wallet belonging to silk road et al you can still buy stuff at overstock or reserve travel at expedia and you could still buy things with it in the market place here.

Btc-e refused to deal with some coins from evolution.

Coinfire had a story about it.

Quote
In a surprise move, BTC-e has suspended withdrawals from the cryptocurrency exchange in an effort to stop coins from the Evolution theft being exchanged and withdrawn.

http://coinfire.io/2015/03/21/btc-e-suspends-withdraws-to-stop-stolen-coin-dump/

They updated it to say btc-e had no further comments to make.

Quote
Update: BTC-e admins have reached out to Coin Fire to state that withdrawals have been re-enabled and that they have no further comments regarding the situation moving forward regarding this or any other security issue. The staff member originally speaking with Coin Fire has informed our team to speak with the administrators only moving forward and reiterated that the exchange has no comment.
sr. member
Activity: 406
Merit: 250
I have not heard of any coins refused by anyone due to "taint." If you had a coin that had at some point been through a wallet belonging to silk road et al you can still buy stuff at overstock or reserve travel at expedia and you could still buy things with it in the market place here.
hero member
Activity: 1666
Merit: 513
Leading Crypto Sports Betting & Casino Platform
Fiat violates the principle of the Gold standard!!
Yeah, they always try to divert you from the facts...
Gold ain't fungible, neither are cryptos, both aren't money or violate fungibility rules.
I rather have money that breaks the rules and remains out of one entity's control.
Pages:
Jump to: