6 ms·

You don't have to seize them. You can just declare that funds will not be accepted from any wallets that receive Bitcoin from the flagged wallet. If an entity w

by natrius 13y ago

You don't have to seize them. You can just declare that funds will not be accepted from any wallets that receive Bitcoin from the flagged wallet. If an entity with enough market power started flagging wallets, services would quickly build in functionality to reject funds from flagged wallets.

Houshalter 13y ago
That would be a disaster. People would immediately dump all the worthless "flagged" coins on markets and services that haven't had time to respond to the new protocol. Those people would go bankrupt overnight, possibly before they even have time to realize it's happening and shut down.
gst 13y ago
And how would this work in practice. Let's assume you have one "clean" Bitcoin and I have one stolen/flagged Bitcoin. I'm now sending you 0.1 Bitcoins and you don't know that those are flagged. So how would this influence your remaining Bitcoins? If you send 0.1 Bitcoins to someone else: Would you sell the stolen Bitcoins first? Would you sell the clean Bitcoins first? Are all of your coins tainted by a given percentage? (Yes, I know that just receiving those coins would create a separate input that you can ignore in order to avoid tainting your coins. But at some point clean and flagged input will be merged together into a single one.)
- eterm 13y ago
  You sell the clean first. You are assumed to always be holding 0.1 dirty coins, so you must keep a balance > 0.1 at all times to avoid spending the dirty coins.
  - gst 13y ago
    So now let's assume I'm selling something on an auction site and someone pays me with coins where I assume it's likely that they are stolen (but I don't have any definite knowledge about that). For some reason I now need to refund the buyer. Do I now first need to transfer all but 0.1 coins to somewhere else, so that I can send the remaining 0.1 coins back?
    - eterm 13y ago
      Why are you dealing with money that you're assuming that is likely stolen? If they turn out blacklisted then you're out of pocket. Because bitcoin does not support refunds or chargebacks you must transfer clean money to refund them. Bitcoin has weaknesses, the way it deals with "change" and indeed the need for change is one of them. Bitcoin should have dealt with the change issue by instead of the splitting happening at the receiver end and sending back change, the splitting should have happened at the sender end so only the correct amounts were ever sent.
      - yebyen 13y ago
        That's not really how it works. The sender does the splitting, but he has to send the change somewhere, and customarily it's sent to a new address. The receiver doesn't even have to be online, you don't get your change from them, so the only way you'd get blacklisted coins in change is if you already had some blacklisted coins in the inputs you were using to begin with.
    - Dylan16807 13y ago
      >Do I now first need to transfer all but 0.1 coins to somewhere else, so that I can send the remaining 0.1 coins back? You make it sound like this is a burden. It seems easy to me, as long as you track taint per-output rather than per address. Just pretend people followed best practices and used a unique address for every output. So let's take eterm's suggestion that clean coins always come out first. So all we need to do is build a transaction with at least .1 tainted coins, put the non-refund coins as the first output, and put the .1 tainted coins as the second output. First output is an address we control, second output goes back to the person we're refunding. That's assuming you already mixed up your coins and can't just send back the exact same transaction they sent you in the first place.
  - pbhjpbhj 13y ago
    Can't you do two simultaneous transactions? At all times you're doing a transaction with an untransacted balance > 0.1.
- natrius 13y ago
  Every wallet that receives funds from the flagged wallet is tainted until they send it back to that wallet. All of the funds, not just the tainted amount.
  - gst 13y ago
    This doesn't work in practice. Transactions using Bitcoin "addresses" are just one (out of many) transaction types. As far as I understand the protocol it's possible that you receive those coins via a transaction type that doesn't have an associated Bitcoin sender address.
    - dllthomas 13y ago
      "Every wallet that receives funds from a tainted wallet becomes tainted" doesn't (in any way I see) conflict with the notion that there are transactions without a sender.
      - gst 13y ago
        I meant the "until you send it back part". If "every wallet becomes tainted" and "you can't send it back" this would make it trivial for an attacker to taint a large number of wallets in the Bitcoin network.
        dllthomas 13y ago
        If there is no sender, how does the receiver become tainted?
  - dllthomas 13y ago
    "[...] until they send it back to that wallet." Or forfeit it to the feds, at which point they can mark them untainted before they auction them off.
    - pbhjpbhj 13y ago
      Doesn't tainting then become "assigning to the USA government"? Why should that be the case?
- deleted 13y ago
  [deleted]
driverdan 13y ago
There is no way this kind of feature would be added to the Bitcoin protocol.
- natrius 13y ago
  I'm not suggesting that it'd be in the protocol. It'd be in wallets. If you send Bitcoin to my wallet from a tainted address, my client would automatically send it back to you.
  - deleted 13y ago
    [deleted]
  - yebyen 13y ago
    Not every client or wallet supports ownership of addresses. You could be sending coins back to a hot wallet, where they're indistinguishable from coins that I don't own and they don't even come back to my wallet balance. You could say "not my problem" but that's adding a lot of overhead to the brain of my wallet's mixing service that we didn't have to deal with before :)
deleted 13y ago
[deleted]
- deleted 13y ago
  [deleted]

by natrius 13y ago

Houshalter 13y ago

That would be a disaster. People would immediately dump all the worthless "flagged" coins on markets and services that haven't had time to respond to the new protocol. Those people would go bankrupt overnight, possibly before they even have time to realize it's happening and shut down.

gst 13y ago

And how would this work in practice. Let's assume you have one "clean" Bitcoin and I have one stolen/flagged Bitcoin. I'm now sending you 0.1 Bitcoins and you don't know that those are flagged. So how would this influence your remaining Bitcoins? If you send 0.1 Bitcoins to someone else: Would you sell the stolen Bitcoins first? Would you sell the clean Bitcoins first? Are all of your coins tainted by a given percentage? (Yes, I know that just receiving those coins would create a separate input that you can ignore in order to avoid tainting your coins. But at some point clean and flagged input will be merged together into a single one.)

eterm 13y ago
You sell the clean first. You are assumed to always be holding 0.1 dirty coins, so you must keep a balance > 0.1 at all times to avoid spending the dirty coins.
- gst 13y ago
  So now let's assume I'm selling something on an auction site and someone pays me with coins where I assume it's likely that they are stolen (but I don't have any definite knowledge about that). For some reason I now need to refund the buyer. Do I now first need to transfer all but 0.1 coins to somewhere else, so that I can send the remaining 0.1 coins back?
  - eterm 13y ago
    Why are you dealing with money that you're assuming that is likely stolen? If they turn out blacklisted then you're out of pocket. Because bitcoin does not support refunds or chargebacks you must transfer clean money to refund them. Bitcoin has weaknesses, the way it deals with "change" and indeed the need for change is one of them. Bitcoin should have dealt with the change issue by instead of the splitting happening at the receiver end and sending back change, the splitting should have happened at the sender end so only the correct amounts were ever sent.
    - yebyen 13y ago
      That's not really how it works. The sender does the splitting, but he has to send the change somewhere, and customarily it's sent to a new address. The receiver doesn't even have to be online, you don't get your change from them, so the only way you'd get blacklisted coins in change is if you already had some blacklisted coins in the inputs you were using to begin with.
  - Dylan16807 13y ago
    >Do I now first need to transfer all but 0.1 coins to somewhere else, so that I can send the remaining 0.1 coins back? You make it sound like this is a burden. It seems easy to me, as long as you track taint per-output rather than per address. Just pretend people followed best practices and used a unique address for every output. So let's take eterm's suggestion that clean coins always come out first. So all we need to do is build a transaction with at least .1 tainted coins, put the non-refund coins as the first output, and put the .1 tainted coins as the second output. First output is an address we control, second output goes back to the person we're refunding. That's assuming you already mixed up your coins and can't just send back the exact same transaction they sent you in the first place.
- pbhjpbhj 13y ago
  Can't you do two simultaneous transactions? At all times you're doing a transaction with an untransacted balance > 0.1.
natrius 13y ago
Every wallet that receives funds from the flagged wallet is tainted until they send it back to that wallet. All of the funds, not just the tainted amount.
- gst 13y ago
  This doesn't work in practice. Transactions using Bitcoin "addresses" are just one (out of many) transaction types. As far as I understand the protocol it's possible that you receive those coins via a transaction type that doesn't have an associated Bitcoin sender address.
  - dllthomas 13y ago
    "Every wallet that receives funds from a tainted wallet becomes tainted" doesn't (in any way I see) conflict with the notion that there are transactions without a sender.
    - gst 13y ago
      I meant the "until you send it back part". If "every wallet becomes tainted" and "you can't send it back" this would make it trivial for an attacker to taint a large number of wallets in the Bitcoin network.
      - dllthomas 13y ago
        If there is no sender, how does the receiver become tainted?
- dllthomas 13y ago
  "[...] until they send it back to that wallet." Or forfeit it to the feds, at which point they can mark them untainted before they auction them off.
  - pbhjpbhj 13y ago
    Doesn't tainting then become "assigning to the USA government"? Why should that be the case?
deleted 13y ago
[deleted]

driverdan 13y ago

There is no way this kind of feature would be added to the Bitcoin protocol.

natrius 13y ago
I'm not suggesting that it'd be in the protocol. It'd be in wallets. If you send Bitcoin to my wallet from a tainted address, my client would automatically send it back to you.
- deleted 13y ago
  [deleted]
- yebyen 13y ago
  Not every client or wallet supports ownership of addresses. You could be sending coins back to a hot wallet, where they're indistinguishable from coins that I don't own and they don't even come back to my wallet balance. You could say "not my problem" but that's adding a lot of overhead to the brain of my wallet's mixing service that we didn't have to deal with before :)

deleted 13y ago

[deleted]

deleted 13y ago
[deleted]