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How is it that this can't be prevented by the Bitcoin network? The network should be able to mark coins stolen and unusable...oh wait it can't. Because in order

How is it that this can't be prevented by the Bitcoin network? The network should be able to mark coins stolen and unusable...oh wait it can't. Because in order to do that you'd need a trusted third party to verify the coins were stolen defeating the purpose of a distributed ledger that doesn't require third party trust. Yet another shortcoming of trying to replicate cash.

Scarbutt 9y ago
If someone stoles cash from you, how do you mark that cash as stolen?
- dmoy 9y ago
  I read GP the other way around - by mimicking some of the behavior of cash (inability to mark as stolen), Bitcoin runs into some problem (combating fraud).
- murph-almighty 9y ago
  FWIW banks will record serial numbers of bills that go missing after a robbery.
  - jhall1468 9y ago
    And then it gets laundered and stays stolen. But that's only banks.
  - refurb 9y ago
    Is that actually true? I've heard it as well, but it seems like an impossible task for a bank. Are they scanning all the bills that come in? Which bills are in which teller's drawer? I doubt it. If they received new bills in sequential order from the mint and had them stolen, I could see how they would know the numbers. But then again, what's the point? Your average business isn't going to scan numbers, so by the time the bills pop up again, you have no idea the path they took. I've heard that serial numbers from ransom money would be recorded. That makes a bit more sense as they are one-time events and there is value in knowing if you find money it came via the ransom.
    - enraged_camel 9y ago
      Yes, bills are scanned and the system checks to see if they are marked as stolen.
      - glenneroo 9y ago
        Is that why small bills are preferred? Because they are less likely to be scanned? Or is another Hollywood fallacy that I've come to believe?
      - refurb 9y ago
        Why? If they turn up stolen, what can they do with the info?
    - musicPants 9y ago
      Tellers used to have at least one packet of money in each of their drawers that have their serial numbers recorded. If they get robbed they are supposed to include it depending on the relative safety of the situation. I believe new bills from the federal reserve are also sequential and an inventory of those are probably recorded when they are accepted and counts are verified. At least that is how I remember it from about 15 years ago.
  - dragonwriter 9y ago
    I’ve heard that's true of some of the serial numbers of bills stolen, but only because banks track a small and segregated set of bills in each tellers drawers, not because they track all serial numbers, and isn't used so much to find thieves and to confirm them once other mechanisms have caught them.
- rafiki6 9y ago
  That's my point, why are we attempting to replicate a broken system but digitally?
phil21 9y ago
> Yet another shortcoming Really depends on your point of view. The entire use-case of Bitcoin is that no one can reach back in time and "undo" transactions. There is no point for it to exist otherwise. It's a feature, not a bug.
- loceng 9y ago
  And then we'll all be forced to accept it from criminals for payment - or there will be a governing body/platform you must put transactions through to decide if it is usable (stolen) or not?
  - candiodari 9y ago
    The thing is that for every other currency the governing body/platform cannot be trusted, as has been clearly proven many times, but even the Fed proved it cannot be trusted in 2008-2009 (and before that in 2001). The organisations these governments put forth as arbiters are, of course, are much worse. Pretty much every bank of any size has been caught embezzling, unilaterally cutting people's accounts, and worse. In many cases for very petty reasons, or just for a quick buck. So what exactly is your suggestion ? Is bitcoin more or less trustworthy than BAC, WFC, which are the organisations the Fed chooses to represent it to normal Americans ? More trustworthy. No doubt about that whatsoever.
- rafiki6 9y ago
  Read the whole sentence I wrote. "Yet another shorting coming of trying to replicate cash." The problem isn't the blockchain. The block chain is all good and well. The problem is the anonymity associated with the transactions. There has to be a balance between anonymity and security of transactions.
JakeWesorick 9y ago
Could the community as a whole black list a bitcoin address so they could at least not spend the money they stole? Are you able to track the history of who was a previous owner of the bitcoin? Seems like a major issue. If these hacks keep happening thieves are going to own more bitcoin they the rest of the community.
- ahoka 9y ago
  That would require appending to the consensus rules, which is effectively a hard fork.
  - michaelsbradley 9y ago
    Tezos allows for blockchain consensus rule/s to evolve over time, which is a pretty cool idea, though the project seems to be struggling with management problems after having raised hundreds of millions in USD.
  - fauigerzigerk 9y ago
    Why would it be a hard fork? Anyone can freely decide not to buy bitcoin from specific addresses without any change to the software running the blockchain nodes.
- rafiki6 9y ago
  See the problem is, how can you trust the claim of coins being stolen to begin with? A common scenario would be I buy something with the coins and then I decide to claim they were stolen thus making the coins useless.
siculars 9y ago
Who is the "trusted third party", the arbiter of such disputes? Is it the government that relies on civil forfeiture laws to keep the lights on in many local municipalities? Which government? The US? EU? China? Russia? Best you can do is start a tainted coins site and record it there.
- rafiki6 9y ago
  That's exactly my point. That's the main issue here. This is a short coming of cash, so why are we trying to replicate it? A truly decentralized system can exist that ties value to an individual instead preventing these things.
sowbug 9y ago
May I suggest that you extend RFC 3514 to include Bitcoin transactions? Bitcoin didn't invent crime. It's not going to stop it, either.
lawn 9y ago
You can flip the argument around: Credit card chargeback fraud is extremely common. Accepting irreversible payments would be better for these cases as the customer cannot pay, walk out with goods and keep their money. It's much harder for a public company to actively defraud their customers so this is actually more sane. Also cash has the exact same properties.
- ForHackernews 9y ago
  > Also cash has the exact same properties. I mean, sort of. There are logistics that make stealing $70m worth of physical cash difficult.
  - lawn 9y ago
    Alright sure. You can however protect $70M Bitcoin easier so it balances out I'd say.
    - hinkley 9y ago
      They've done such a successful job we're talking about it on Hacker News...
      - lawn 9y ago
        Yes. Inside job perhaps.
- rafiki6 9y ago
  As I mentioned, a short coming of trying to REPLICATE cash.

Scarbutt 9y ago

If someone stoles cash from you, how do you mark that cash as stolen?

dmoy 9y ago
I read GP the other way around - by mimicking some of the behavior of cash (inability to mark as stolen), Bitcoin runs into some problem (combating fraud).
murph-almighty 9y ago
FWIW banks will record serial numbers of bills that go missing after a robbery.
- jhall1468 9y ago
  And then it gets laundered and stays stolen. But that's only banks.
- refurb 9y ago
  Is that actually true? I've heard it as well, but it seems like an impossible task for a bank. Are they scanning all the bills that come in? Which bills are in which teller's drawer? I doubt it. If they received new bills in sequential order from the mint and had them stolen, I could see how they would know the numbers. But then again, what's the point? Your average business isn't going to scan numbers, so by the time the bills pop up again, you have no idea the path they took. I've heard that serial numbers from ransom money would be recorded. That makes a bit more sense as they are one-time events and there is value in knowing if you find money it came via the ransom.
  - enraged_camel 9y ago
    Yes, bills are scanned and the system checks to see if they are marked as stolen.
    - glenneroo 9y ago
      Is that why small bills are preferred? Because they are less likely to be scanned? Or is another Hollywood fallacy that I've come to believe?
    - refurb 9y ago
      Why? If they turn up stolen, what can they do with the info?
  - musicPants 9y ago
    Tellers used to have at least one packet of money in each of their drawers that have their serial numbers recorded. If they get robbed they are supposed to include it depending on the relative safety of the situation. I believe new bills from the federal reserve are also sequential and an inventory of those are probably recorded when they are accepted and counts are verified. At least that is how I remember it from about 15 years ago.
- dragonwriter 9y ago
  I’ve heard that's true of some of the serial numbers of bills stolen, but only because banks track a small and segregated set of bills in each tellers drawers, not because they track all serial numbers, and isn't used so much to find thieves and to confirm them once other mechanisms have caught them.
rafiki6 9y ago
That's my point, why are we attempting to replicate a broken system but digitally?

phil21 9y ago

> Yet another shortcoming Really depends on your point of view. The entire use-case of Bitcoin is that no one can reach back in time and "undo" transactions. There is no point for it to exist otherwise. It's a feature, not a bug.

loceng 9y ago
And then we'll all be forced to accept it from criminals for payment - or there will be a governing body/platform you must put transactions through to decide if it is usable (stolen) or not?
- candiodari 9y ago
  The thing is that for every other currency the governing body/platform cannot be trusted, as has been clearly proven many times, but even the Fed proved it cannot be trusted in 2008-2009 (and before that in 2001). The organisations these governments put forth as arbiters are, of course, are much worse. Pretty much every bank of any size has been caught embezzling, unilaterally cutting people's accounts, and worse. In many cases for very petty reasons, or just for a quick buck. So what exactly is your suggestion ? Is bitcoin more or less trustworthy than BAC, WFC, which are the organisations the Fed chooses to represent it to normal Americans ? More trustworthy. No doubt about that whatsoever.
rafiki6 9y ago
Read the whole sentence I wrote. "Yet another shorting coming of trying to replicate cash." The problem isn't the blockchain. The block chain is all good and well. The problem is the anonymity associated with the transactions. There has to be a balance between anonymity and security of transactions.

JakeWesorick 9y ago

Could the community as a whole black list a bitcoin address so they could at least not spend the money they stole? Are you able to track the history of who was a previous owner of the bitcoin? Seems like a major issue. If these hacks keep happening thieves are going to own more bitcoin they the rest of the community.

ahoka 9y ago
That would require appending to the consensus rules, which is effectively a hard fork.
- michaelsbradley 9y ago
  Tezos allows for blockchain consensus rule/s to evolve over time, which is a pretty cool idea, though the project seems to be struggling with management problems after having raised hundreds of millions in USD.
- fauigerzigerk 9y ago
  Why would it be a hard fork? Anyone can freely decide not to buy bitcoin from specific addresses without any change to the software running the blockchain nodes.
rafiki6 9y ago
See the problem is, how can you trust the claim of coins being stolen to begin with? A common scenario would be I buy something with the coins and then I decide to claim they were stolen thus making the coins useless.

siculars 9y ago

Who is the "trusted third party", the arbiter of such disputes? Is it the government that relies on civil forfeiture laws to keep the lights on in many local municipalities? Which government? The US? EU? China? Russia? Best you can do is start a tainted coins site and record it there.

rafiki6 9y ago
That's exactly my point. That's the main issue here. This is a short coming of cash, so why are we trying to replicate it? A truly decentralized system can exist that ties value to an individual instead preventing these things.

sowbug 9y ago

May I suggest that you extend RFC 3514 to include Bitcoin transactions? Bitcoin didn't invent crime. It's not going to stop it, either.

lawn 9y ago

You can flip the argument around: Credit card chargeback fraud is extremely common. Accepting irreversible payments would be better for these cases as the customer cannot pay, walk out with goods and keep their money. It's much harder for a public company to actively defraud their customers so this is actually more sane. Also cash has the exact same properties.

ForHackernews 9y ago
> Also cash has the exact same properties. I mean, sort of. There are logistics that make stealing $70m worth of physical cash difficult.
- lawn 9y ago
  Alright sure. You can however protect $70M Bitcoin easier so it balances out I'd say.
  - hinkley 9y ago
    They've done such a successful job we're talking about it on Hacker News...
    - lawn 9y ago
      Yes. Inside job perhaps.
rafiki6 9y ago
As I mentioned, a short coming of trying to REPLICATE cash.