Topic: The problem of stolen coins - page 2. (Read 8955 times)

Best post I've read today! Freedom over safety, always!

Top of the page, it says experimental, beta.

The way with tech. means the next iteration will improve, not devolve

Banker's pocket change is decreasing .... cryptocoin tech. is increasing. Place your bets, pick your battles, we are on journey not in a war.

And what rule of law applies with regards to the Linode fiasco, or stolen bitcoins in general? What law enforcement agencies are involved? Where were the reports filed? Nobody is going to be prosecuted for this or any other bitcoin theft, ever. Even if Mr. Wright does manage to track down whoever was responsible for the Linode hack, there is very little that can be done. Especially if the guilty party resides in a jurisdiction such as Russia.

Not having any repercussions for stealing bitcoins only encourages more theft. You have a system where thieves can repeatedly rob the banks and suffer no consequences for it. Then you blame the bank for not having enough security. Classic. You will never gain the trust of the masses that you need in order to make Bitcoin succeed that way. Again, you are essentially asking regular people to keep their money at the First Bank of Somalia. Although at this point it may actually be safer in Somalia.

The lack of trust will be a large part of what keeps Bitcoin from ever being more than niche market for libertarians, anarchists, some geeks, and few speculators. There will never be any kind of enforcement mechanisms with regards to Bitcoin, which is why the entire market cap will never be worth more than some banker's pocket change.

So if MtGox starts confiscating (not just putting accounts on hold for investigation) it may be time to start boycotting Gox. I don't use it anyway because I don't want to give them that kind of personal information they require and I need reliable and quick SEPA transactions. At other exchanges I trade with people directly and noone wants my private info. We need to get some more official statements from Gox concerning their actions. At the moment they simply doubt that they will receive any of the stolen coins, but sooner or later they will get there.

The example with chairs above unfortunately doesn't fit our case because chairs are not used as a currency or to exchange value. So, don't mix apple with pears or bitcoins.

MtGox is doing just that. Status quo. It's hard to boycott the leader and people don't give a fuck until they perceive it affects them.

OF COURSE THEY SHOULD.  But that isn't what is being discussed at all.

When someone steals something the rule of law applies.  It is the responsibility of law enforcement not a currency to ensure assets are recovered and dishonest people punished.

That has nothing to do with an ad-hoc non-fungible tainted coins nonsense.

That's all find - but it might not mean much what we decide here - if a court sends an order to MtGox to return stolen bitcoins could they not cooperate?

The problem with chairs is that they can be stolen. It's interesting that chair designers are most interested in comfort and looks, and not in the fact that their products can be stolen.

Tainted coins = Your plan is too complex therefore it will fail

The later is more likely.  I mean for the casual user Bitcoin is already too complex.  In time easier clients and more direct fiat to Bitcoin access will make Bitcoin more accessible.

The concept of "tainted coins" is fucking stupid.
Bitcoin has irrevocable transactions .... PERIOD.  If you advertise it does but then it doesn't it is going to confuse less savy users.

Say a user who buys some Bitcoins from someone tries to use them and finds out they are tainted?  So he is just SOL now?  Do you think he is going to call Bitcoin a scam?  Think he is going to encourage other people to use it.

Protect your coins because they are irreversible.  People trying to change that with complex "taintendess" bullshit will be the ones who destroy Bitcoin.  Not the banks, not some rogue entity with a 51% attack, not governments short sighted Bitcoin users who can't grasp the concept of irreversible.


So community, it Bitcoin irreversible or not?

Yes, the only reasonable solution is to make it easy to secure coins (and for people to actually do it). If "tainted" coins become a thing, the endgame is either a spectrum of taintedness on all coins or no one using the system anymore.

There is no solution but to up the security measures. I'm afraid everything else will eventually destroy bitcoin. Whoever did the theft has managed to make a lot of people nervous about obtaining tainted coins at exchanges. Normally, flooding the markets with stolen coins would drive down prices, perhaps cause further panic selling and yet be an opportunity for other to buy coins cheaply. Now, people might think twice before buying again if what they are buying may in part be stolen. Also, it's not going to get better, depending on how tainted is too tainted to resell. I'm in fact thinking about selling out even my mined coins if there are further signs that money/coins will be stopped from flowing freely. So, if MtGox f**** up and not just investigates but confiscates stolen coins for real, I'm going all out.

As you know, Bitcoins can't be counterfeited. And the way bitcoins become tainted is that somebody claims they were stolen. In some cases the robbery of bitcoins are easy to prove, in other cases... you get the point.

So, what's your suggestion for a solution to this problem? How do we deal with stolen coins?

Where are you getting this 800,000 number?

Stolen btc are a problem, currently there are over 800.000 stolen bitcoins... so the most wealthy people in our new economy are criminals... awesome! thats what we wanted all along... oh wait, thats what we already have today... criminals ruling the world...

You seem to believe there are no successful bank robberies anymore? prolly nothing that's given publicity, and reasonably so, but there are actually many successful bank robberies nowadays.


So you're putting note checking and blockchain scrutinizing at the same level? do you honestly believe the common folk can be reasonably expected to have knowledge of the working in the blockchain?


Trading BTC isn't just for nerdy businesses... in theory it's for everybody.


No. But the reality is that you can do very little to find out who stole the money, and what's happening now is that the burden of proof is being switched over, ending with presumption of innocence.

Let's say someone sells a product or service in the Silk Road and then simply doesn't want to tell MtGox (many things that are legal in some places are serious crimes in Japan). Coins lost? this concept of taint is not even explicitly defined anywhere in the community. How much taint is enough taint to warrant getting your coins confiscated in an exchange unless you disclose the origin of your transactions fully? this opens the door to things like regional boundaries for money and government taxation. My stance about this is total opposition.

This whole concept introduces a big degree of uncertainty about fungibility. It undermines bitcoin massively. I'm really not ready to accept any coins right now with all this mess going on, I will just mine for the time being. Considering alternative cryptocurrencies at this point but most if not all of them are prone to the same problems. Might start coding my own but I have too much in my plate already.

In other words: don't get your coins stolen. Problem solved. The way the protocol works right now, having private keys in a shared medium is RECKLESS and is akin to leaving your wallet with your credit cards and their pins written onto them in a bar.

TLDR: criminal individuals are a problem but criminal government and institutions are a bigger problem. The whole point of bitcoin is not to let them take control of what you do with your money. "Money does not commit crimes. People commit crimes."

TLDR2: anonymity can be opt-out, as in you proving beyond protocol means that you did some transaction. What it cannot be is opt-in (you have to give proof of origin for your transactions beyond protocol means, on demand). In this case there is barely any anonymity at all. Even having it opt-out requires some infrastructure to guarantee it holds, like exchanges who give clear conditions on the BTC they accept and such.

Meanwhile back in the real world....a lot of the time money involved in bank robberies has usually been tainted by the dye pack exploding. Try spending some of that tainted money. It is a great deterrent that banks use to try and keep down robberies, not that it always works, b/c there will always be people stupid enough to try and rob them. Then there are counterfeit bills, which are also a form of stolen money. When a person tries to use a counterfeit bill and it is detected, they lose the bill(s). And they have some 'splainin' to do. Businesses that have not done due dilligence on the money they are given and try to deposit a counterfeit bill at the bank lose that money. Nobody reimburses them, it is a loss. It encourages the business to check the bills more thoroughly the next time.

I don't see what the issue is in doing due diligence and seeing where the coins being paid to you are coming from via the blockexplorer. There are very very few bitcoin businesses that require instantaneous action upon receiving bitcoins. Most can wait at least an hour or so before taking action. More than enough time for the receiver to check out the incoming transaction. Plenty of time while waiting on the standard 6 confirmations, actually. And still far less hassle than paypal.

You want people to trust Bitcoin, you want them to use it as a store of value, a currency. And you want to have absolutely zero consequences when a thief steals it, or rips people off. It is kinda like asking people to bank in Somalia. This is one of the many reasons why widespread adoption of Bitcoin will not happen.

If others take these measures, your BTC are less valuable. Simply because a number of users won't take them.

It's not something you can just decide upon. The moment distinguishing on origin becomes commonplace, there is no opt-out.

not necessarily

you don't have to convert those bitcoins to fiat money, you can use them in the bitcoin economy

if there are less bitcoins exchangeable for fiat, that makes them more valuable too, and those bitcoins that are tainted still hold the same value even though they're not exchangeable

but yeah better if bitcoin2 doesn't have this problem

Now imagine you sell something and then find out they paid you from a tainted account. What do you do? you just have a tainted account now. Best case scenario, you made an account solely for that sale, worst case scenario your account with all it's coins is also tainted.

Someone said in a previous post that you have to give it all back to their original owner (let's say Bitcoinica or Slush) and take the hit yourself. You can also try to be a bit of a bitcoin policeman and hold the sale until you verify ownership thoroughly. In any case the whole system suffers. If this becomes commonplace then Bitcoin is fucked, we'd need to work in a system where this is not possible.