4 ms·

Imagine that on average 1 unspent output gets signed over to 3 unspent outputs. 1 -> 3 -> 9 -> 3³ -> 3⁴ ... 3^n outputs that would need to be restituted. Imagi

Imagine that on average 1 unspent output gets signed over to 3 unspent outputs. 1 -> 3 -> 9 -> 3³ -> 3⁴ ... 3^n outputs that would need to be restituted. Imagine the average number of times that an unspent output gets spent a year is 50. So, this means that after one year, it will be necessary to hunt down name, address, and whereabouts of up to 3⁵⁰ unspent output owners, many of which will turn out to be the same persons, but you cannot know that upfront. The more time passes by, the worse the problem gets. So, that means that you could easily end up suing something like 100,000 individuals in 190+ jurisdictions. That is even more unrealistic than the failed attempts of the MPAA trying to sue bittorrent users. You see, someone sitting on stolen bitcoins will keep exchanging them back and forth for other cryptocurrencies until he has nothing left from his original stash. Therefore, you will most likely not even be able to sue the original thief.

seanhunter 9y ago
I know what the blog article says, but I don't think that's how this works. They don't generally go after the 100k end people who have fragments of the stolen coins in your example, they just go after the 3 who received the stolen coins and say they have to make restitution. Otherwise you could get out of any financial liability for receiving stolen goods just by flipping to someone else. One of the things that regulators, prosecutors and counsel for wronged parties take into account is how likely they are to get restitution based on a particular construction of the case, so they may choose to pursue a party where the theory of liability is a bit tortuous if it allows them to sue a party with deep pockets where they are more likely to be able to get restitution for example. I am familiar with how tracing cash and securities transactions on behalf of wronged parties was done in a couple of frauds and that's how it worked there (although those cases didn't involve bitcoin it must be said). //edited to explain more clearly that I had read the article so understand the point the parent was making in that context
- mapumpum 9y ago
  So, now you need the identities along the transmission chain too, up to: 1+3¹+3²+3³+3^n = (3^(n-1)-1)/(n-1). It only makes the problem worse. Most of these identities cannot be recovered. It is not realistic to believe that the first 3 identities in the chain will be recovered. It may very well end up being identities further down the chain. Furthermore, you will still need to try until you can find an identity in a jurisdiction in which you can sue. Imagine that you find someone at step 12 with some fraction of the coins, who lives in Japan, and who bought the coin fractions at an exchange. Are you sure that the Japanese courts will cooperate with your recovery efforts? By the way, the MPAA mostly stopped suing bittorrent users in Europe and elsewhere, because "Pirate parties" started springing up and gaining increasingly more elected seats. At that point, we are no longer talking about what the law would be, but what it should be, and things started looking bad for the MPAA. So, they backed off. Suing lots of random people on rather flimsy grounds would very soon get political too. Furthermore, as Von Clausewitz nicely argues in "Vom Kriege", war is just the continuation of the political negotiations but then by other means. So, that would be the next step, if even the political confrontation would fail. It was not that the MPAA was ever going to win.
  - tromp 9y ago
    > 1+3¹+3²+3³+3^n = (3^(n-1)-1)/(n-1) Sorry to be pedantic, but this contains 3 [sic] errors. 1) it's missing a ... denoting n-4 terms between 3³ and 3^n 2) the exponent on the right should be n+1 instead of n-1 3) the denominator on the right should be 3-1 instead of n-1

seanhunter 9y ago

I know what the blog article says, but I don't think that's how this works. They don't generally go after the 100k end people who have fragments of the stolen coins in your example, they just go after the 3 who received the stolen coins and say they have to make restitution. Otherwise you could get out of any financial liability for receiving stolen goods just by flipping to someone else. One of the things that regulators, prosecutors and counsel for wronged parties take into account is how likely they are to get restitution based on a particular construction of the case, so they may choose to pursue a party where the theory of liability is a bit tortuous if it allows them to sue a party with deep pockets where they are more likely to be able to get restitution for example. I am familiar with how tracing cash and securities transactions on behalf of wronged parties was done in a couple of frauds and that's how it worked there (although those cases didn't involve bitcoin it must be said). //edited to explain more clearly that I had read the article so understand the point the parent was making in that context

mapumpum 9y ago
So, now you need the identities along the transmission chain too, up to: 1+3¹+3²+3³+3^n = (3^(n-1)-1)/(n-1). It only makes the problem worse. Most of these identities cannot be recovered. It is not realistic to believe that the first 3 identities in the chain will be recovered. It may very well end up being identities further down the chain. Furthermore, you will still need to try until you can find an identity in a jurisdiction in which you can sue. Imagine that you find someone at step 12 with some fraction of the coins, who lives in Japan, and who bought the coin fractions at an exchange. Are you sure that the Japanese courts will cooperate with your recovery efforts? By the way, the MPAA mostly stopped suing bittorrent users in Europe and elsewhere, because "Pirate parties" started springing up and gaining increasingly more elected seats. At that point, we are no longer talking about what the law would be, but what it should be, and things started looking bad for the MPAA. So, they backed off. Suing lots of random people on rather flimsy grounds would very soon get political too. Furthermore, as Von Clausewitz nicely argues in "Vom Kriege", war is just the continuation of the political negotiations but then by other means. So, that would be the next step, if even the political confrontation would fail. It was not that the MPAA was ever going to win.
- tromp 9y ago
  > 1+3¹+3²+3³+3^n = (3^(n-1)-1)/(n-1) Sorry to be pedantic, but this contains 3 [sic] errors. 1) it's missing a ... denoting n-4 terms between 3³ and 3^n 2) the exponent on the right should be n+1 instead of n-1 3) the denominator on the right should be 3-1 instead of n-1