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I have a question related to this that someone expert in Bitcoin could answer. Could the victim monitor where the bitcoin (we assume) went to using the public

I have a question related to this that someone expert in Bitcoin could answer. Could the victim monitor where the bitcoin (we assume) went to using the public blockchain record? Then, trace it every step of the way (and in whatever chunks it divides into) until it reaches the account of a publicly identifiable entity? At that point, there might be legal recourse in recouping stolen goods (at least, this is how it works in the UK with stolen physical goods.. even if someone "legitimately" buys them, they can be reclaimed).

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brianpgordon 7y ago
Truly big heists like the Mt. Gox collapse have received research attention, yes. There are some firms which will follow the transactions and try to find patterns. However, for a relatively small amount like this it's probably futile. It's trivial (though costly) to run the funds through a public mixer several times, or to trade it for Monero, which has a ledger that's much more difficult to analyze.
drexlspivey 7y ago
Kinda but it's hard and there are measures to counter this. There is one thing called coinjoin which attempts to tumble coins. Imagine you stole 10 btc and you split it to 10 outputs of 1 btc each. Then you use 2 of them to perform a coinjoin with several other people where in a single transaction 10 inputs of 1 btc (2 of them yours) produce 10 outputs of 1 btc (again 2 of them yours). There is no way to tell which coin is which anymore. Of course this requires some degree of interaction with other people but in other coins such as grin that use the mimblewimble protocol this happens automatically for every block. Another thing you can do is try to do an atomic swap with someone on another blockchain i.e Litecoin. In this case you send your coins to a specific script address, the other person sends his LTC to another script address and you effectively swap BTC with LTC.

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brianpgordon 7y ago

Truly big heists like the Mt. Gox collapse have received research attention, yes. There are some firms which will follow the transactions and try to find patterns. However, for a relatively small amount like this it's probably futile. It's trivial (though costly) to run the funds through a public mixer several times, or to trade it for Monero, which has a ledger that's much more difficult to analyze.

drexlspivey 7y ago

Kinda but it's hard and there are measures to counter this. There is one thing called coinjoin which attempts to tumble coins. Imagine you stole 10 btc and you split it to 10 outputs of 1 btc each. Then you use 2 of them to perform a coinjoin with several other people where in a single transaction 10 inputs of 1 btc (2 of them yours) produce 10 outputs of 1 btc (again 2 of them yours). There is no way to tell which coin is which anymore. Of course this requires some degree of interaction with other people but in other coins such as grin that use the mimblewimble protocol this happens automatically for every block. Another thing you can do is try to do an atomic swap with someone on another blockchain i.e Litecoin. In this case you send your coins to a specific script address, the other person sends his LTC to another script address and you effectively swap BTC with LTC.