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I don't see any particular reason why bitcoin thief could not be dealt with using existing legal systems. Yeah, you've got the "find the thief" problem, but th

by Crito 13y ago

I don't see any particular reason why bitcoin thief could not be dealt with using existing legal systems. Yeah, you've got the "find the thief" problem, but that is nothing fundamentally new. I mean, the US legal system seems to be handling the "bitcoin drugdealer" problem fairly well.

dragonwriter 13y ago
> I mean, the US legal system seems to be handling the "bitcoin drugdealer" problem fairly well. The SEC is also prosecuting the "bitcoin ponzi scheme" problem, as well.
rayiner 13y ago
I see drug dealing using Bitcoin different than theft of Bitcoin. Silk Road involves using Bitcoin to subvert meat space laws. Stealing Bitcoin doesn't, any more than killing someone and taking their gold in an online game. In a narrow sense, the point of Bitcoin is that you don't need a centralized power issuing currency. But in a larger sense, the community embraces the idea that you don't need centralized power to make markets viable, in general. To validate those ideas, we should let Bitcoin evolve in a way where the government doesn't use its monopoly on violence to protect interests denominated in Bitcoin.
- fnordfnordfnord 13y ago
  So you think it is right for people to steal Bitcoin because Libertarian-ism? So, it's okay with you if people take up the use of violence in retribution for Bitcoin theft? Part of the reason people willingly grant the gov't a monopoly on the use of violence is that the gov't will ostensibly attempt to use it to achieve order.
- girvo 13y ago
  Stealing bitcoin does violate meatspace laws... Also, I just realised there is an interesting parallel between IP/Copyright law, and Bitcoin ownership. I need to think on this some more.
- Crito 13y ago
  Anyone wanting to use their stolen bitcoins will likely have to interact with people in meat space though. Be it going through an exchange which will necessarily need their information to get them their money, buying drugs, selling them locally, etc. I mean, how much of half a billion are these thieves going to spend on anonymous VPNs and tipping people on reddit? Sooner or later, somebody sitting on 500MM is going to start itching for a few kilos of coke or a new yacht. And mixers? Anyone who's stolen 500MM worth of bitcoins probably won't trust mixers... I sure as hell wouldn't if it were me because if I were running a mixer and saw those coins, I'd steal them again myself. Why the hell not steal from a thief? I figure there are two ways this will play out: 1) The thief does nothing with the coins and goes uncaught, having performed the theft only 'for the lulz'. 2) The thief begins using the coins, and eventually somebody somewhere catches up with him. Hopefully for the thief, the law catches him first. I don't think decentralized issuing authority is important to whether or not the legal system can effectively prosecute thieves. The general anti-government attitude may preclude victim cooperation with law enforcement, but I think in this particular case there is too much money at stake to bet on all of the victims taking an ideological stance against using every tool at their disposal. (Keep in mind that by no means all* of the MtGox victims are crypto-anarchists or anarcho-capitalists. There are plenty of regular hapless "investors" too, or just regular old technology enthusiasts who like playing around with new technology. There isn't really a shared bitcoin mentality or political stance, only perhaps a majority that share vaguely similar libertarian-bent ideas.)
  - MichaelGG 13y ago
    Why wouldn't a mixer steal from a thief? To keep their credibility? To continue to get business? If you're gonna get a 3% cut to launder a lot of BTC, are you gonna just jack the entire first 100BTC order? Or let it pass and keep your 3BTC and hope for repeat business? Of course you wouldn't send all the BTC at once through the mixer in one transaction.
    - Crito 13y ago
      That's why a mixer wouldn't steal from a small-fry thief. But a chance at 6% of all bitcoins? Every man has his price, and mine is far lower than that. I'd sooner take even a fraction of that then continue a 3% cut of day-to-day transactions. To avoid the mixer stealing from him, the thief could split the stash and send it to many different mixers, but he would be taking the chance that the mixers are not actually run by the same person, and that the people running the mixers do not communicate with each other. If I went through the hassle to set up a mixer, I would be sure to do it several times over just in case this very thing ever happened to me. What would I do with the tainted bitcoins after stealing them from the thief? Probably just sit on them. Sit on them on the off-chance that I ever became desperate enough to attempt to use them.
- dragonwriter 13y ago
  > Silk Road involves using Bitcoin to subvert meat space laws. Stealing Bitcoin doesn't Bitcoins are intangible personal property. Taking control of other people's intangible personal property without their consent, or through consent obtained fraudulently, does, in fact, violate laws on the books. Hence the SEC prosecution of Bitcoin Savings and Trust for operating a Ponzi scheme in which both the the investments and the fraudulently promised returns were bitcoins, not fiat currency. The whole idea that Bitcoin is outside the scope of "meat space laws" is, despite its popularity, false.
  - rayiner 13y ago
    I should clarify: I'm not saying that Bitcoin is, as a legal matter, outside the scope of meat space laws. I'm suggesting it would be an interesting sociological experiment for courts and law enforcement to treat Bitcoin as something that is not protectable property. So it would still be illegal to sell drugs for Bitcoin (just as it would be illegal to give them away), but it would be legal to engage in a Bitcoin-denominated Ponzi scheme. And Bitcoin-denominated contracts would be legally unenforceable for lack of consideration. It would be fascinating to then see if the market could develop responses to deal with bad actors.
    - Crito 13y ago
      Perhaps to even it out you could treat "sale" of drugs for bitcoins as merely one person 'gifting' drugs to another, since the payment would not actually be in something recognized as having value. You'd be left with nailing people for possession and perhaps distribution but not sale. Honestly I think you've got it backwards though. Going after ponzi schemes and fraud is a much better use of resources than going after completely honest and on the level drug transactions^. Prioritize crimes with victims, not de-prioritize them. ^ Yeah, DPR was slime. Obviously he shouldn't receive immunity for hiring hit-men just because he also deals drugs. We don't arrest people for selling car insurance, but if an insurance salesman hires a hitman obviously that is still a crime that needs to be dealt with.
      - rayiner 13y ago

by Crito 13y ago

dragonwriter 13y ago

> I mean, the US legal system seems to be handling the "bitcoin drugdealer" problem fairly well. The SEC is also prosecuting the "bitcoin ponzi scheme" problem, as well.

rayiner 13y ago

I see drug dealing using Bitcoin different than theft of Bitcoin. Silk Road involves using Bitcoin to subvert meat space laws. Stealing Bitcoin doesn't, any more than killing someone and taking their gold in an online game. In a narrow sense, the point of Bitcoin is that you don't need a centralized power issuing currency. But in a larger sense, the community embraces the idea that you don't need centralized power to make markets viable, in general. To validate those ideas, we should let Bitcoin evolve in a way where the government doesn't use its monopoly on violence to protect interests denominated in Bitcoin.

fnordfnordfnord 13y ago
So you think it is right for people to steal Bitcoin because Libertarian-ism? So, it's okay with you if people take up the use of violence in retribution for Bitcoin theft? Part of the reason people willingly grant the gov't a monopoly on the use of violence is that the gov't will ostensibly attempt to use it to achieve order.
girvo 13y ago
Stealing bitcoin does violate meatspace laws... Also, I just realised there is an interesting parallel between IP/Copyright law, and Bitcoin ownership. I need to think on this some more.
Crito 13y ago
Anyone wanting to use their stolen bitcoins will likely have to interact with people in meat space though. Be it going through an exchange which will necessarily need their information to get them their money, buying drugs, selling them locally, etc. I mean, how much of half a billion are these thieves going to spend on anonymous VPNs and tipping people on reddit? Sooner or later, somebody sitting on 500MM is going to start itching for a few kilos of coke or a new yacht. And mixers? Anyone who's stolen 500MM worth of bitcoins probably won't trust mixers... I sure as hell wouldn't if it were me because if I were running a mixer and saw those coins, I'd steal them again myself. Why the hell not steal from a thief? I figure there are two ways this will play out: 1) The thief does nothing with the coins and goes uncaught, having performed the theft only 'for the lulz'. 2) The thief begins using the coins, and eventually somebody somewhere catches up with him. Hopefully for the thief, the law catches him first. I don't think decentralized issuing authority is important to whether or not the legal system can effectively prosecute thieves. The general anti-government attitude may preclude victim cooperation with law enforcement, but I think in this particular case there is too much money at stake to bet on all of the victims taking an ideological stance against using every tool at their disposal. (Keep in mind that by no means all* of the MtGox victims are crypto-anarchists or anarcho-capitalists. There are plenty of regular hapless "investors" too, or just regular old technology enthusiasts who like playing around with new technology. There isn't really a shared bitcoin mentality or political stance, only perhaps a majority that share vaguely similar libertarian-bent ideas.)
- MichaelGG 13y ago
  Why wouldn't a mixer steal from a thief? To keep their credibility? To continue to get business? If you're gonna get a 3% cut to launder a lot of BTC, are you gonna just jack the entire first 100BTC order? Or let it pass and keep your 3BTC and hope for repeat business? Of course you wouldn't send all the BTC at once through the mixer in one transaction.
  - Crito 13y ago
    That's why a mixer wouldn't steal from a small-fry thief. But a chance at 6% of all bitcoins? Every man has his price, and mine is far lower than that. I'd sooner take even a fraction of that then continue a 3% cut of day-to-day transactions. To avoid the mixer stealing from him, the thief could split the stash and send it to many different mixers, but he would be taking the chance that the mixers are not actually run by the same person, and that the people running the mixers do not communicate with each other. If I went through the hassle to set up a mixer, I would be sure to do it several times over just in case this very thing ever happened to me. What would I do with the tainted bitcoins after stealing them from the thief? Probably just sit on them. Sit on them on the off-chance that I ever became desperate enough to attempt to use them.
dragonwriter 13y ago
> Silk Road involves using Bitcoin to subvert meat space laws. Stealing Bitcoin doesn't Bitcoins are intangible personal property. Taking control of other people's intangible personal property without their consent, or through consent obtained fraudulently, does, in fact, violate laws on the books. Hence the SEC prosecution of Bitcoin Savings and Trust for operating a Ponzi scheme in which both the the investments and the fraudulently promised returns were bitcoins, not fiat currency. The whole idea that Bitcoin is outside the scope of "meat space laws" is, despite its popularity, false.
- rayiner 13y ago
  I should clarify: I'm not saying that Bitcoin is, as a legal matter, outside the scope of meat space laws. I'm suggesting it would be an interesting sociological experiment for courts and law enforcement to treat Bitcoin as something that is not protectable property. So it would still be illegal to sell drugs for Bitcoin (just as it would be illegal to give them away), but it would be legal to engage in a Bitcoin-denominated Ponzi scheme. And Bitcoin-denominated contracts would be legally unenforceable for lack of consideration. It would be fascinating to then see if the market could develop responses to deal with bad actors.
  - Crito 13y ago
    Perhaps to even it out you could treat "sale" of drugs for bitcoins as merely one person 'gifting' drugs to another, since the payment would not actually be in something recognized as having value. You'd be left with nailing people for possession and perhaps distribution but not sale. Honestly I think you've got it backwards though. Going after ponzi schemes and fraud is a much better use of resources than going after completely honest and on the level drug transactions^. Prioritize crimes with victims, not de-prioritize them. ^ Yeah, DPR was slime. Obviously he shouldn't receive immunity for hiring hit-men just because he also deals drugs. We don't arrest people for selling car insurance, but if an insurance salesman hires a hitman obviously that is still a crime that needs to be dealt with.
    - rayiner 13y ago