Topic: Decentralised crime fighting using private set intersection protocols - page 3. (Read 33406 times)

If I didn't think my blacklist providers or their investigators were abusing their authority, then I'd participate in this, and I probably wouldn't even feel like I was "compromising" in doing so.  If it proved effective, then I'd continue to participate.  At the very least it shows a good faith effort by the community, and helps build political capital.  And maybe it even helps to track down some legitimately shitty people.

As many others here, I'm very uneasy with the possibility of Bitcoin losing fungibility.

But anyway, this is undeniable:

It's perfectly possible to implement such thing. It's actually possible to implement much nastier things (think of a government-mandated whitelist). Mike Hearn has a point when he says that, in the event of a government trying to impose its regulation, the usage of a totally voluntary and decentralized system like this is preferable. But, should we be "compromising in advance"? Wouldn't that be "negotiating against ourselves"?

Governments can do much worse than killing Bitcoin fungibility. The problem, as always, are governments themselves, not this voluntary system Mike is proposing.

Perhaps we should focus on implementing p2p, anonymous mixing services. Such mixing systems would be essential to keep the "market-based checks-and-balances" Mike describes in OP, if such system ever comes to existence.

Whoa, ease off on the hyperbole.  I don't think you're giving our modern fiat currencies nearly enough credit (especially where physical cash will be phased out).  For example, how do you freeze an account under this proposal?  Can you still keep the existence of bitcoins you own secret?  Is (worldwide) coin mixing still a (potential) option when necessary?  Are anonymous, off-blockchain transactions still a (potential) option?

I also think you're underestimating how much serious coordination among all the governments of the world it would take to force a non-voluntary, repressive version of this that's actually effective.  This is not to say a voluntarily used version couldn't be effective - or at least more effective than the current tracking systems in place, whatever that's saying.  But it would at least be harder to abuse, and police would have to actually make phone calls and knock on doors, rather than simply scrape a database without any meaningful consent.

And all the while, as adoption spreads, the human component of the network expands, along with awareness of monetary privacy issues and the political capital required to actually resist, rather than simply hide from, such abuses of power.  I believe people would be much more willing to make a fuss about something that affects them directly, like being enlisted as spies to their fellow citizens, than the current situation where they never actually see the abuse of privacy.  I also believe more aware people will be more willing to adopt better solutions as they may arise.

This whole discussion shows one thing: Bitcoin is not safe because it is not anonymous enough.

We will have to find ways to make it resistant to control or come up with a better solution altogether.

Agreed, I quite like it.  It's amazing and disappointing how many people apparently lack reading comprehension, or the ability to understand an argument with a bit of subtlety to it.

Particularly when they've already had to make such steps in accepting bitcoin anyway.

Thanks for the informative and interesting post Mike.

Mike, did you say DMCA was "balanced"?  As are all laws written by industry.

In the present design, trackability and fungibility are more or less the same.  Trackability and fungibility are (or should be) distinct properties and the discussions should be independent.

I'm sorry, Mike, but this thread demonstrates quite clearly that Bitcoin is the most Orwellian currency in the history of mankind.  (Trackability)

Without fungibility, I think Bitcoin is doomed.  Rather than spending time figuring out how to ruin Bitcoin, effort should be spent on how to adapt Bitcoin (or another cryptocurrency) to be completely fungible.

Mike did you go and meet the CIA with Gavin, is this your brief, to see what the consensus is on this idea?


So many problems with this for a start you underestimate the size of the black market, if this was implemented every 3rd coin would be tainted thereby reducing spendable coins in the "normal economy",

Also you propose that anybody can lodge an addition to the blacklist with an acusation of fraud and the owner of these coins has no idea, sounds like flight lists, one should have the right to face his his accuser or at least know he has been accused!


Also this whole system would enforce guilt by association, If i live next door to Osama Bin Ladin and he seems like a pleasant guy so i do a small job for him and then I can't spend my money and have law enforcement after me.


Money is an exchange of labour or goods, I do not want my sweat going to waste because of some do-gooder- Statist-sheeple didn't like the guy I bought my bitcoins off.


Money should be neutral, nobody wants to know that the paper fiat they got given in change from the corner shop was used by some pedo, or hooker, some things we do not want to know.

This.

And on that note, let's let this thread die.

I think it is helpfull to think of Gold in this discussion.

Guld used in chrims is still just gold. No reason to blacklist it or burn it in hell.

Chriminals should be delt with in court not in the money transfer system.

This.

At this point, I'd really only want to know if I'm receiving stolen coins. I'm not sure how to implement this, other than some sort of insurance/revocation program. "If you want to ensure your stolen bitcoins may be returned, 1) use a monitor that alerts via email, SMS, or other electronic method, on withdrawals from each address 2) sign messages of 'stolen key' with your private keys containing BTC and keep paper backups of the signatures 3) input the signatures to our system as soon as they are stolen from. We will blast an alert to all participating clients that any BTC detected to be sent from your keys within {a certain period of time just before inputting the signatures} should be suspected stolen."

I'm not that familiar with it, but it seems sort of like a PGP revocation certificate.

Obviously there are some more details to work out, such as confirming identity of the original keyholder for returning their BTC safely, but I think it would deter crime, be pro-victim, and still maintain liberty. Much like concealed weapons under the clothes of law-abiders deter violent criminals because they don't know who is armed, the thieves would have to fear that they are dealing with a participating client who will see a red flag pop up when they receive the stolen BTC, and hold the coins for return to the victim rather than receive any benefit. The only way for thieves to get around this would be to immediately mix the coins at a service they know they won't be red-flagged at, or hope the reaction time of the revoker is slow, so they can benefit before then.

I don't think the comparison with Spamhaus as an example of how privately run blacklists can aide a community is very accurate. Spamhaus has made many mistakes with their blacklist, but that's okay because if you ignore Spamhaus the worst that can happen is that you receive spam.

On the other hand, if you ignore a Bitcoin "hint list", the end result could be much worse. You'd be settled with the tainted coins. If the "hint list" you ignored was from your government, you might go to jail or be aggressively interrogated to track the money if you transmit that money onwards.

So it'll be in your best interest to pay attention to as many official sounding "hint lists" as possible to avoid buying tickets in the go to jail lottery.

Now an excellent point here, I think, is that prosecution of individuals based on taint is of course already possible to do today with no change to the Bitcoin protocol. Your favourite evil government could announce a list of tainted coins and say they'll line you up against the wall if you don't surrender and report them in when you receive them.

The real question is, if Mike Hearn's idea was implemented and it staved off worse coin tain systems, would that be an improvement? This question can be considered independently from the wider question of what we can do to defend against taint tracking in general at the protocol level.

The solution is to let them try.

...and to fight back with more instruments of decentralization, not less.
...and to most certainly not aid them.


I dare not even get started on this line of anecdotal reasoning (which, by the way, was temporarily halted specifically because people vocally resisted and rightfully shamed supporters). Yikes. Meanwhile, many of those same entities are determined to bring more convincing, slippery-tongued legislation that will eventually pass because the system is inherently dictatorial. Regarding the US, a small group of [535+1+etc] kings/queens -- [Congress + Executives] -- ruling over and deciding everyone's fate and abilities is by no definition a "democracy" either.

Ah, I see. Well, I suppose it depends on how often people actually end up with tainted coins. In practice, I doubt it'd be very common - you have to identify particular funds as the result of some crime and want to catch up with the owners, which is itself not that common, and then as soon as the 'bad guy' puts the money through a nexus/participant in the system they can take some action and clear the taint by whitelisting the outputs. So the actual amount of time the taint lasts should be very low unless they try and keep the coins circulating in the black economy.

How often do you think you receive the proceeds of an identified crime today? Probably never. And when you do, how often is it a crime you would personally care about? Even less common, I bet.

So the practical impact on volatility might be very small.

Well... where to begin. So I've read the whole thing and here is why this is idea is unworkable (I didn't say bad.):

First, I support prevention of the violation of ownership of private property through tracking. Getting your car voluntarily protected by an agency which will monitor it's whereabouts and return it in case it's stolen or just make it so damn hard to steal and get away with it no one would even try? Yeah I'm down with that.

However Mike's idea is unworkable. For two reasons:

1) bitcoins are not unique like a physical car, they are all fungible, numbers in a ledger, you only think you can tell them apart by their trail of transactions but you can't really. It's just way too hard to know whether someone being on a blacklist actually committed that crime and it would simply punish way too many users through false positives and invade their privacy if you wanted to investigate every false positive not to mention this would cost a shit ton of bitcoins

2) it's unworkable for the same reason racism will bankrupt a business. If you are a business and you decide to discriminate against your customers, you'd need a really good monetary incentive to do so, otherwise someone else will open up the same shop and outcompete you simply because they by definition have a broader customer base. It's why banks like HSBC will launder money and it's why Bitcoin transactions can't be blocked. If the current providers of these services start to discriminate someone will open up shop and put them our of their business.


So, yeah. Instead of running after criminals, why don't we instead find ways to prevent crime? Why don't we figure out how to increase security, how to get each person personal protection, how to raise kids into better people etc. IMO that's a much more sensible route to take if one wants to reduce crime.

I'm not sure I expressed quite what I intended: I didn't mean that differently tainted outputs could be valued differently on an individual exchange. Your system seems to only reveal the tainted outputs to those that transact with them, the taint is therefore private data to these transacters and the blacklister while the taint is still being enforced. I was suggesting that this property of limited knowledge of the identity of tainted outputs in itself creates price uncertainty, as depending on the point in time that coins become listed, a given user could easily have accepted the coins before the taint was applied, and due to transaction finality, denied the opportunity to accept/hike/report/reject. This uncertainty about whether already accepted funds can have taint retrospectively applied damages Bitcoin's value storage property, and could justify wilder price swings.

I'd have to respectfully disagree with that reasoning then. If the thought is that appeasing authorities is ever a route one should take just to make bitcoin more traded, it's usually inconsistent with bitcoin. I would rather spread solutions that are less dependent on central authorities and utilize more aspects of information transmission and helping others to make it more traded. It's easy to trade bitcoin already. It will get much easier and secure with more hardware wallets. The most adult way to face this, from my perspective, is to both preserve the intrinsic properties of bitcoin and to support a bitcoin-based economy -- away from the constraints of outside forces. Tainting and limiting at the majority level is one of the greatest threats to an independent bitcoin economy.

It would be like scientists someday discovering a technique to implant gold with molecular signatures or additives and then heads of centralized gold exchanges promoting this "feature", where people give more power to other collectives (e.g. uncontrollable states and others) through gold tainting, merely to be in "compliance," merely so that gold itself can be traded more by the masses. That's somewhat circular reasoning too. That in and of itself would decrease the intrinsic property of gold: a substance essentially not prone to tampering and duplication at its fundamental level. Smelting/mixing pools would form. Then to combat mixers a collective could declare that too much taint in the mix needs to be further regulated, limited, or seized -- effectively fully controlling [people and their trade] completely when it comes to gold. It's just an analogy and it applies to anything.

That betrays the original aspect of bitcoins. If people really cared about fighting crime, they'd stop funding the largest entities' (various governments, shall we say) actions and sub-entities that directly perpetrate mass, global violence and bankroll war contractors and the prison industrial complex via draconian lawmaking. That's why a lot of people were originally choosing to use bitcoins in the first place: to ethically object to violence and promote peaceful trade. Funding "criminals" is a matter of perception that's contingent entirely upon choice and consent. For instance, I would think most people here support ending the drug war. Thus, people who support bitcoin as a mechanism of free trade for those reasons (ending the drug war) are conscientiously acting.

Bitcoin itself must -- ironically, in a sense, to some -- remain free/fungible for any entity that wishes to use and exploit it.

Crime is an artifact of perception; democracy (otherwise known as mob rule) is too. It requires significant proof and authority to even begin to support systems of law, judging, and jury -- which are often wrong or morally wrong -- let alone to allow Bitcoin as a so-called-independent medium to become subject to every whim of authoritative entities.

That's why it's special: ...like gold. ...like the internet. ...like free speech. ...so long as it's freer.


I was hoping someone would.  

OK, time to make a meme pic for good measure:

http://i.qkme.me/3tidx4.jpg


So true! That's a very good point as it wouldn't start fresh per se. There's far more understanding now of why bitcoin is/could be so valuable. There's a great movement behind anything that would preserve it or something better. Thank you.

SOPA didn't pass, did it?

You're quite right in that law making, democracy, the systems we have today are all flawed in many ways. But let me quote Churchill. Democracy is the worst form of government known, except for all the others.

I think most politicians will come to these debates without much of an opinion on Bitcoin. It's a new technology. It has benefits and costs, like any other. On one hand, maybe law enforcement is complaining about it. On the other hand, their constituents hate banks and are clamouring for a real alternative to the existing financial systems. So they're going to be looking for some kind of middle road that tries to make everyone happy, or at least, not too unhappy.

That's why it's worth thinking about reasonable proposals. Like I said, left to their own devices and if put under pressure lawmakers will come up with regulations that are completely un-Bitcoinish, because they will just automatically assume the state can be trusted, they'll impose lots of costly paperwork, etc. There won't be any real usage of advanced technology because they don't understand it.

A lot of law makers do understand this problem, by the way, they understand that the costs of regulations can be really high. It's quite common to see them propose that an industry self-regulates with actual, real laws only as a last resort. So if the Bitcoin world can show that it isn't just blowing off the whole issue of crime, that it's able to come up with interesting solutions to its own problems, that's a very strong argument for just leaving it alone.

I find this political view rather naive, as if this good faith act of providing a compromise will count for anything in the eyes of those who don't like Bitcoin. Instead it simply provides a platform and a foothold on which to build. You cite DMCA as a good example, but ignore SOPA 

This isn't really a compromise at all,
- the regulatory side are given a tool for free which may or may not be helpful, depending on the adoption of users (assuming no legislation to make it mandatory).
- the users of bitcoin get a more complicated system where some coins are less than others, in exchange for the hope that governments don't ask for more.

Yes indeed, increased complexity of valuing tainted coins is a problem. Probably the easiest way to solve it is just clear the taint. Exchanges already have to go through all the ID verification and AML stuff, file suspicious activity reports, etc. If you send some "hint listed" coins to an exchange, they could just file a report and then treat the coins as normal. Because they're a nexus lots of other people will accept their removal of the taint/hint.

By the way, whilst looking for info on how existing AML controls influence law cases, I discovered FinCEN publish a magazine for the banking industry that summarizes cases where police reports have been used. Here's an old one.

http://www.fincen.gov/news_room/rp/files/sar_tti_07.pdf

I think it's a pretty mixed bag. A lot of these are what you might call reporting violations - the "crimes" are meta-crimes, that is, if the AML system didn't exist then those people wouldn't have been considered criminals either. So they aren't really convincing for the value of the system. On the other hand, there are also a few real cases of fraud and embezzlement that were solved thanks to "following the money". In that report there's a case of a guy who was stealing money from a health insurance fund. Pretty nasty to screw with peoples health care in that way.

In fairness, this proposal does represent a well thought through attempt at a compromise; if I had significant numbers of coins stolen from me then perhaps I'd want a taint depth equivalent to Elvis' copyright extension (till they caught the thieving bastards!).

But the fungibility issue could have more macroscopic effects: multiple blacklists, each with differing reporting/fee hiking/acceptance across the network, all operating with a single USD price? Sounds unlikely. Not only could it justify more exchange rate volatility in general, it could also cause a more significant differing in the exchange rate in a given currency depending on the way each exchange handles flags.