Topic: Isn't it impossible to steal bitcoins anonymously? (Read 1697 times)

Oh,  Where I am at, if it is mine, and is stolen it is still mine if it is found, as far as physical goods. I dont know about cash and of course hypothetically bitcoin.

Did you read the entire thread?

bitcoins are anonymous way to trade and hey are non reversible so i don't think you can trace someone down if they steal your BTCBTCBTC

We are definitely in two different jurisdictions! In my country, and in the whole Europe as far as I know, it works like this: If I buy a property from you and I have no reason to suspect the fact that you are not the legitimate owner, that property cannot be taken away from me and given back to the original owner. He should go against the thief to have his loss refunded.  BUT, it's not enough to say that I must be in good faith: if I failed to make any reasonable check about the legitimate property, I would not be in good faith. Typical example could be the following: I go to a local market where a guy i selling a bunch of car radio sets, all in perfect conditions (or even new) at a price that is way too low to be legitimate. I can't be in good faith as it's quite obvious that something is wrong.

However a physical item, the same rule doesn't apply? or is that jurisdictional also.  The guy who bought my equipment paid a normal price for it, and really had no way to know it was stolen, but he is still out the money and the equipment. Is it not like that everywhere?

So sad cause of this! That's really bad that you can't do anything with it. It would be better at least to block these coins as you can block your credit card if it is stolen

If this reply was directed to me, I wasn't talking about hacking, say for example a retail store uses the same wallet address for all of its transactions.  I follow my coins to the retail store btc address, I can send the 5-0 down to that store and tell them they have my bitcoins now, they probably didn't steal them, but they have them, just like my piece of equipment, I can prove they are mine(with the blockchain) will the police take them and return them to me,(even if they cant determine who the thief is)

Depending on the jurisdiction and the applicable Law, usually a third party in good faith will not see the money he received confiscated and returned to the owner. Just like in the case you mentioned. Unless you can prove that the third party was aware or could have reasonably know that those funds where coming from an illicit activity.

I have a semi relevant question that I am curious if anyone has the answer.  A while ago I had a piece of equipment stolen from me.  I later found that equipment in the hands of someone who purchased it from the thief.  The sheriff took the equipment and will return it to me, and the guy who bought it is just screwed.  When someone steals your bitcoin, then the thief sells the bitcoin.  I (for some reason or another) find out who has my btc(the guy who bought it, not the thief) do you think the law would view it as my property and return it to me?  How would that work?  I would assume if someone steals my cash, then goes to walmart and buys a flatscreen, and it can be proven he used my stolen cash to buy it, the police wouldn't take cash  from walmart and give it back to me(would they?)

I guess it all depends on two factors: 1) how smart the thief is  2) WHO is investigating

1) I take for granted that anyone with sufficient knowledge to hack an exchange obviously is smart enough to kow what to do to keep himself as anonymous as possible. Even so, all humans can make mistakes.

2) People her on the forum or on reddit have proven to be extremely good in following bitcoins while hopping from an address to another. Unfortunately, they don't have subpoena powers, while LEAs have.

We all know about Bitcoin's pseudonimity, sure, bitcoins moving between addresses can't tell you who's owing them. The only hope here it's hoping for a stealer's mistake. If the purpose of the theft is to obtain a gain out of it, this guy, sooner or later, will have to a) spend or b) sell those coins.

a) Spend: is there any place where you can spend those coins anonymously? Sure, you can go and buy stuff at one of the increasing number of physical shops around the globe and you will never be asked to reveal your identity, but I think it's not a great option if you have stolen a lot of money. Or they can be spent at online shops, in which case it may leave some kind of trace, an IP or a mail address. Here a thief can make a mistake and reveal something about himself and if you are a LEAs investigating, you can obtain that information (let apart difficulties in obtaining mutual legal assistance, obviously).

b) Sell: the most anonymous way would be to sell those coins face to face to individuals on localbitcoins or similar, no questions asked, no identity disclosed (apart from the fact that the buyer can one day recognise you if asked by the Police).. still it depends on how many bitcoins one has stolen, good luck trying to sell 50.000 bitcoins to individuals. Or you can sell them at MtGox one of the surviving exchange: since they all more or less implement KYC obligations, the only way to go undetected would be providing fake documents (like using one of the leaked identities from Gox).

Bottom line, depending on the money involved and the thief ability, there is room to steal bitcoins and go away with them, but it is constantly becoming harder and, especially if there is not much money involved, I seriously doubt that LEAs, which would have the power to fully investigate a theft and ask information from exchanges, internet providers, etc., are going to deal with it.

+1

Not entirely true primarily because you could split the coins up (if they were a large sum) and have them mixed with other coins over a large number of repetitions. This would essentially make it almost impossible to track as you cannot tell who is the recipient among the long list and that is only for a single mix. If you were to mix it many times over it would be nearly impossible to be certain that you got the right address and am not mixing it up.

You can watch them travel, but you don't want at which point the actual thief got cash for them.
Even after he has cashed out, they will still continue to travel but this time will be in the hands of unsuspecting and innocent individual.

Perhaps.  However there also seems to be a trend toward anonymity and decentralization in general. (TOR, etc).  Good chance
that in the future, "IP tracking" will mean diddly.

My $.02.

Right now that is true.   I imagine in the future...  the KYC requirements for financial institutions such as Exchanges, merchant transaction processors, and retail establishments will include  uploading a list of all Bitcoin wallet addresses / public keys  associated with their exchange and any customer of their exchange, to a law enforcement database  with the customer name.

Law enforcement and the NSA will have network taps in place all over the world  capturing all the peer to peer traffic on the Bitcoin network,  so they can know from what region, and possibly from what IP address  any transaction originated.

There is a GREAT potential for law enforcement monitoring and tracking down these things;  once  Bitcoin payment technology becomes more mainstream -- which would appear to be the trend.

Correct me if I'm wrong, but there's no actual "coins" to track, only balances in wallets.  If I receive a stolen coin to a wallet with 10 coins , then send 1 coin to a friend, it can't be said whether I have the stolen coin still, or my friend has it...and even this is a simplified abstraction as others were explaining on the 'riddle' thread. It all boils down to transaction inputs and outputs. There are no individual coin files.  All this makes tracing, and tracking difficult.

One needs to be very knowledgeable, very intelligent, even very wise to determine which things COULDN'T be done.

If there EVER was any fear of NSA tracking, how about going the MaidSafe route? Maybe not with MaidSafe itself (though I don't know anything wrong about them), but at least with their idea.

Implementing Maidsafe wouldn't necessarily eliminate the standard Internet. At least not for a long time. But it would start to make tracking more difficult. Seems to me that things like Bitcoin would be the easiest things to track in the face of MaidSafe.

The best benefit we would derive from complete anonymity would be that people would start to take responsibility for their own lives. Thieves might win temporarily, but in the end, they would lose their position as trustworthy. This is the problem right now with governments and banks. They appear trustworthy, but we are seeing that they are not and have almost never been.

The things we need for good trustworthiness are the things being done by Bitquick, LocalBitcoins, Bitcoin-otc and the escrow like that from Blockchain.info. That's all we need, plus the common sense gained from personal experience, or from mentor guidance.

lol, yes I can see now that we would essentially need to have a 1984 scenario play out in order to track something like this in an absolute fashion. Although if the promise of quantum computing pays off at least some of the things you mentioned would be possible. I didn't know that services like bitmixer existed- that pretty much nullifies bitcoin address tracking right there... I guess the thieves win in these instances.

Although- what if all bitcoin mixing services agreed to not accept coins from known illegal sources? Bear with me here... But what if an organization were founded that did nothing but track coins that were stolen in a way similar to what I suggested previously (watching the coins as they go from address to address ala "stolen gnome" style). Then, exchanges like bitmixer could cross check any incoming bitcoin mixing requests they get against the addresses provided by the organization? So there would be some sort of paper trail. Granted- ALL bitcoin exchanges would need to be doing this in order for it to be effective. But if they all did it it would actually benefit everyone because the general public would feel more confident using bitcoin as a currency and thus the overall value and use of bitcoin would increase.

Or would doing something like this invalidate some crucial part of what makes bitcoin relevant in the first place?

Or, you could be like the NSA. You could use the essentially limitless funds of the global bankers - via the U.S. borrowing system that maintains its status for borrowing from the banks because of the promise to repay through the IRS taxes of the people - to build a cubic mile or two of communications and computer equipment, including hard drives.

Then all you need to do is record and correlate all Internet communications, single out the ones that occur simultaneously with Bitcoin transactions showing up in the blockchain, and attach those to the correct ISP. This will, at least, give you the ISPs info about the bitcoin thief. If it is important to you, you might even locate his electronic position and hack his computer. If he has protected himself sufficiently from hacking, you will always be able to get a general, if not exact, physical location. You can send in your CIA comrades if he is foreign - former KGB if he is in Russian states - or the FBI if he is local (U.S.).

In doing this there is always the time lag in the gigantic NSA communications. But, currently communications worldwide are not sufficiently large to make this into much of a problem. As communications grow, as people use the Internet more and more, as more countries come online, the NSA will, of course, also be updating their abilities with the latest technology. And if they can get the first practical quantum computers that are built, they might actually be able to entirely control and reroute all communications without anyone knowing it. Actually, they are on the verge of doing this in some countries (the U.S.) now.

Next, taking over the world by coup. The NSA, the new world government. I wonder who really runs the NSA.