4 ms·

From what I've been told, yes....they can be used when stolen; it's kinda the whole untraceable, distributed nature of it all.

by onedev 13y ago

steveklabnik 13y ago
> untraceable This is wrong. Every single transaction is saved, by everyone. It's the core of how the protocol works. That doesn't mean there aren't ways to obscure who controls the wallets, but it's not untraceable, and 'distributed' has nothing to do with privacy.
- grey-area 13y ago
  I find this point a very interesting one. Everyone insists that transactions are saved and traceable (which of course they are), but I've never heard of anyone finding out who stole their coins and getting them back. People just seem to accept after a break-in that the money is gone and there's nothing they can do about it. That's not acceptable to me in a currency, particularly not one that people use as a store of value long-term. So it is effectively untraceable even if technically you can trace the anonymous transactions. The important part of that statement, which was not wrong, is they can be used when stolen. This is my biggest reservation about bitcoin - they have taken the worst attributes of paper cash (pretty anonymous, not tied to a verifiable identity), and replicated them in a digital currency. If I'm transacting with someone I want to know who they are, in case of fraud or theft. People even openly run money laundering operations (mixing), and the community put up with it! In contrast, most people never store large values of money in actual paper cash anymore, they store it in a bank, which has identification and laundering checks, proper tracing of accounts to identities, immediate yet reversible transactions, and compensation if money is stolen. Bitcoin doesn't come out well in that comparison. The other reservation I have about it is the lack of regulation - these exchanges which hold the money of lots of people are not regulated as banks are. No-one knows exactly what security they actually have (as opposed to say they have), sometimes people don't know who's behind them (I remember that 17 year old from Singapore talking here about starting one[1]), and there's no protection against market manipulation, speculation and cornering, or it seems against online theft. Given they have become so valuable so quickly, you can be quite sure the market is heavily manipulated, perhaps even in advance of thefts like this in order to gain the maximum benefit. What is the cause of the huge recent spike in prices for example? If bitcoin is to work as a currency and a store of value (the traditional roles of money), it does need regulation and verification, but I find it hard to see how that would come about, given the lack of a central authority and the lack of will to deal with incidents like this. I'd love to see a digital currency that tried to emulate the advantages of digital cash, while doing away with the ability of a central government to print the currency ad infinitum - that's the big downside of our current state-backed currencies - it seems Bitcoin is not that currency. [1] https://news.ycombinator.com/item?id=2973301 https://news.ycombinator.com/item?id=2973301
  - steveklabnik 13y ago
    > The important part of that statement, which was not wrong, is they can be used when stolen. I think the important part that's missing is this: If you have the proper opesec, BTC is anonymous. The 'BTC is anonymous' meme does nothing more than help people who don't know what they're doing get busted. It's like Sarah Palin's email account getting hacked because she picked security questions that were well-known. Even if you're not doing anything nefarious, you may want to keep certain transactions private. "BTC is anonymous" means that some people who don't fully understand how BTC works will be doing things they _think_ are private but actually are not. And if you think people know how BTC work, just examine this thread.
    - grey-area 13y ago
      As an interested bystander who doesn't know much about bitcoin I'm genuinely curious if you can address any of the criticisms above or what you think about them. I'd love to see digital currencies outside state control thrive but am hesitant to use things like Bitcoin given the explicit lack of regulation and controls. The anonymous, unregulated side of it is the least attractive to me - I'd prefer it were not at all anonymous, because of all the issues raised by that - it leads directly to incidents like this IMO.
      - steveklabnik 13y ago
        Oh, I'm sorry if I gave a pro-bitcoin impression. I think BTC is nothing more than a curiosity. Your criticisms are spot on. I won't ever use BTC for anything.
  - psionski 13y ago
    The most recent spike is due to Baidu starting to accept Bitcoin and people speculating (not unreasonably) that nothing in China happens without the government's approval. Combine this with the fact that the Chinese are getting sick of receiving worthless American paper for their labour, which just gets devalued when they have accumulated enough of it. People are thinking China will switch to XBT and as a result it will become the new international currency (because, let's face it, whatever China says, the rest of the world must follow - if they decided to stop supplying us, we're dead - we don't have factories anymore, everything tangible that we had is now over there). About the lack of regulation and verifiable identities - that's the allure of it :) It's not just the lack of inflation, it's the whole "Wild Wild West" atmosphere :) Like, remember the Internet before the old people and politicians found out about it?
tiglionabbit 13y ago
But they are traceable. There is a public record of every wallet address the bitcoin has touched. If those who it was stolen from reveal their wallet addresses, it should be possible to track down the coins and find out who the thief was.
- M4v3R 13y ago
  You can still use a "mixing" service, which takes many coins from many sources and mixes it in a way that you can't tell anymore what is the source of Bitcoins you received. Blockchain.info operates one of these.
  - biff 13y ago
    Interesting thought. Could there be "shunned" Bitcoins where, if they held certain blacklisted wallets in their history, businesses and users would choose not to accept them? One could imagine people still choosing to trade in these Bitcoins, but that such a penalty would forevermore reduce their value next to "unshunned" coins. Could legit businesses and people using Bitcoin collectively reduce the value of stolen Bitcoins in this fashion to discourage it without directly discovering who misappropriated them...?
    - steveklabnik 13y ago
      If you think that a pile of anonymous people on the internet are going to respect a 'stolen' flag with no real downsides, I've got a bridge to sell you... Also, this is ignoring the entire problem of 'who decides what stolen means in a totally decentralized protocol?' That's non-trivial in and of itself.
      - TheMakeA 13y ago
        I think you might be able to just start and end with the laundry cleaners. Blockchain.info could just decide that they won't wash coins that they know were from a high profile hack like this.
yelnatz 13y ago
It's traceable... But no one's gonna stop them from using it, and if you're the receiver, you wouldn't care where it came from.

From what I've been told, yes....they can be used when stolen; it's kinda the whole untraceable, distributed nature of it all.

by onedev 13y ago

From what I've been told, yes....they can be used when stolen; it's kinda the whole untraceable, distributed nature of it all.

steveklabnik 13y ago

> untraceable This is wrong. Every single transaction is saved, by everyone. It's the core of how the protocol works. That doesn't mean there aren't ways to obscure who controls the wallets, but it's not untraceable, and 'distributed' has nothing to do with privacy.

grey-area 13y ago
I find this point a very interesting one. Everyone insists that transactions are saved and traceable (which of course they are), but I've never heard of anyone finding out who stole their coins and getting them back. People just seem to accept after a break-in that the money is gone and there's nothing they can do about it. That's not acceptable to me in a currency, particularly not one that people use as a store of value long-term. So it is effectively untraceable even if technically you can trace the anonymous transactions. The important part of that statement, which was not wrong, is they can be used when stolen. This is my biggest reservation about bitcoin - they have taken the worst attributes of paper cash (pretty anonymous, not tied to a verifiable identity), and replicated them in a digital currency. If I'm transacting with someone I want to know who they are, in case of fraud or theft. People even openly run money laundering operations (mixing), and the community put up with it! In contrast, most people never store large values of money in actual paper cash anymore, they store it in a bank, which has identification and laundering checks, proper tracing of accounts to identities, immediate yet reversible transactions, and compensation if money is stolen. Bitcoin doesn't come out well in that comparison. The other reservation I have about it is the lack of regulation - these exchanges which hold the money of lots of people are not regulated as banks are. No-one knows exactly what security they actually have (as opposed to say they have), sometimes people don't know who's behind them (I remember that 17 year old from Singapore talking here about starting one[1]), and there's no protection against market manipulation, speculation and cornering, or it seems against online theft. Given they have become so valuable so quickly, you can be quite sure the market is heavily manipulated, perhaps even in advance of thefts like this in order to gain the maximum benefit. What is the cause of the huge recent spike in prices for example? If bitcoin is to work as a currency and a store of value (the traditional roles of money), it does need regulation and verification, but I find it hard to see how that would come about, given the lack of a central authority and the lack of will to deal with incidents like this. I'd love to see a digital currency that tried to emulate the advantages of digital cash, while doing away with the ability of a central government to print the currency ad infinitum - that's the big downside of our current state-backed currencies - it seems Bitcoin is not that currency. [1] https://news.ycombinator.com/item?id=2973301 https://news.ycombinator.com/item?id=2973301
- steveklabnik 13y ago
  > The important part of that statement, which was not wrong, is they can be used when stolen. I think the important part that's missing is this: If you have the proper opesec, BTC is anonymous. The 'BTC is anonymous' meme does nothing more than help people who don't know what they're doing get busted. It's like Sarah Palin's email account getting hacked because she picked security questions that were well-known. Even if you're not doing anything nefarious, you may want to keep certain transactions private. "BTC is anonymous" means that some people who don't fully understand how BTC works will be doing things they _think_ are private but actually are not. And if you think people know how BTC work, just examine this thread.
  - grey-area 13y ago
    As an interested bystander who doesn't know much about bitcoin I'm genuinely curious if you can address any of the criticisms above or what you think about them. I'd love to see digital currencies outside state control thrive but am hesitant to use things like Bitcoin given the explicit lack of regulation and controls. The anonymous, unregulated side of it is the least attractive to me - I'd prefer it were not at all anonymous, because of all the issues raised by that - it leads directly to incidents like this IMO.
    - steveklabnik 13y ago
      Oh, I'm sorry if I gave a pro-bitcoin impression. I think BTC is nothing more than a curiosity. Your criticisms are spot on. I won't ever use BTC for anything.
- psionski 13y ago
  The most recent spike is due to Baidu starting to accept Bitcoin and people speculating (not unreasonably) that nothing in China happens without the government's approval. Combine this with the fact that the Chinese are getting sick of receiving worthless American paper for their labour, which just gets devalued when they have accumulated enough of it. People are thinking China will switch to XBT and as a result it will become the new international currency (because, let's face it, whatever China says, the rest of the world must follow - if they decided to stop supplying us, we're dead - we don't have factories anymore, everything tangible that we had is now over there). About the lack of regulation and verifiable identities - that's the allure of it :) It's not just the lack of inflation, it's the whole "Wild Wild West" atmosphere :) Like, remember the Internet before the old people and politicians found out about it?

tiglionabbit 13y ago

But they are traceable. There is a public record of every wallet address the bitcoin has touched. If those who it was stolen from reveal their wallet addresses, it should be possible to track down the coins and find out who the thief was.

M4v3R 13y ago
You can still use a "mixing" service, which takes many coins from many sources and mixes it in a way that you can't tell anymore what is the source of Bitcoins you received. Blockchain.info operates one of these.
- biff 13y ago
  Interesting thought. Could there be "shunned" Bitcoins where, if they held certain blacklisted wallets in their history, businesses and users would choose not to accept them? One could imagine people still choosing to trade in these Bitcoins, but that such a penalty would forevermore reduce their value next to "unshunned" coins. Could legit businesses and people using Bitcoin collectively reduce the value of stolen Bitcoins in this fashion to discourage it without directly discovering who misappropriated them...?
  - steveklabnik 13y ago
    If you think that a pile of anonymous people on the internet are going to respect a 'stolen' flag with no real downsides, I've got a bridge to sell you... Also, this is ignoring the entire problem of 'who decides what stolen means in a totally decentralized protocol?' That's non-trivial in and of itself.
    - TheMakeA 13y ago
      I think you might be able to just start and end with the laundry cleaners. Blockchain.info could just decide that they won't wash coins that they know were from a high profile hack like this.

yelnatz 13y ago

It's traceable... But no one's gonna stop them from using it, and if you're the receiver, you wouldn't care where it came from.