19 ms·

Mt. Gox's Bitcoins are being sold on Bitstamp?

124 points by Andrew_Quentin 13y ago

jrlocke 13y ago
What if there was a way to tag bitcoins as stolen and declare them null and void? Would this not disincentivize thieves? Could we prevent abuse of such a system?
- tinco 13y ago
  Would it disincentivize exchange developers to have sane security architectures? Who would declare them null and void? What's to stop any movement from declaring non-stolen bitcoin as null and void?
- Mchl 13y ago
  Question 1: Who would have the power to do that?
  - orthecreedence 13y ago
    The US government, obviously.
- iancarroll 13y ago
  That would be centralizing the system, no?
- annon 13y ago
  Since there is a fixed number of bitcoins, there would still be incentive by causing faster deflation by removing coins from the pool.
- r0muald 13y ago
  I think that would require an authority deciding whether bitcoins were truly stolen. Otherwise, couldn't anyone could just claim a transaction was a theft?
- DomBlack 13y ago
  The problem with the tagging approach, is how would you verify the tag was genuine? You would have to add some sort of central authority which every peer could implicitly trust and that would undermine the whole concept of bitcoin...
- atmosx 13y ago
  It's a very interesting development as it shows that stolen bitcoins can be tracked indefinitely unlike FIAT. Now, what you propose though, is against the freedom bitcoins is assumed to stand for (on the ethics side). On the technical side that's very possible, as of today, if everyone plays along and I mean literally everyone, especially mixers. How could one track down bitcoins flushed into public mixers? I guess they could do this as well, if the BTC were tagged and thus refused by the mixers or even worst hold captives and resend them to original issuer. However, you only need 1 TOR hosted mixer to lose track of the wallets. On the other side imagine the practical chaos: I make a huge transaction of non-tangible goods in a situation where you can't prove that the service/product was delivered. Then I just tag these bitcoin that once belonged to my wallet as stolen if the other party doesn't give them back :-) you see where this is going right? :-)
  - gutnor 13y ago
    > unlike FIAT. Actually, unlike any commodity or any currency with a physical representation. What makes other currency not traceable is the notes and coins, not the fact that they are fiat or not. side note: has "fiat" now become synonymous with non-crypto currency the same way hacker has become a swear word ?
    - baddox 13y ago
      He doesn't say that fiat is the only untraceable form of currency.
    - Klinky 13y ago
      Yes fiat has become a word of derision amongst the cryptocoin community, completely ignoring the fact that cryptocoins are essentially a form of fiat currency. Many crypto fans sidestep the fact that cryptos also don't have intrinsic value, and the networks aren't as a decentralized as one would think(handfuls of devs, early adopters, and pool and exchange operators hold a large sway over the networks and future of the coins).
    - atmosx 13y ago
      I can't speak for others, but I have nothing against FIAT :-)
- deleted 13y ago
  [deleted]
- cbhl 13y ago
  In theory, this is already possible. Anyone can patch the client to reject transactions containing such coins; the key is getting enough adoption for it to be meaningful. (I imagine starting by forking mining-specific applications like cgminer would be more effective than forking the client apps, since you really want to get 51% of the network to reject these transactions for it to mean anything.)
  - stormbrew 13y ago
    cgminer never sees anything but the block header, it makes no decisions at all about which transactions to include in a block. The client is still the thing that does that.
- Lerc 13y ago
  The term used for this is coloured coins. It's possible to do, and there are forms of coloured coins in use. The question is not of how to do it, but whether it is desirable to have coloured coins. It's like adding a new rule to how a piece moves in chess. You could easily imagine some of the advantages caused by a change, but not all of the consequences.
  - waterlesscloud 13y ago
    That's not what colored coins are. Colored coins are coins which have been used to mark ownership of another asset, like say a share of stock.
    - TophWells 13y ago
      Whether or not it's the same thing, it uses the same mechanics. You can link the output of one transaction to the input of the next, and construct a chain of transactions that says "This 0.125 BTC transaction uses bitcoins that were originally stolen from MtGox / bitcoins that were originally in the pile designated as marking ownership of my shares of stock". The question is whether that's a meaningful thing to measure. If you have bitcoins that are more valuable than normal, because they're shares of stock, then you'll make sure they're not mixed with "normal" coins. That's the idea of the Coloured Coins project. But if you have bitcoins that are less valuable than normal, because they're stolen goods, then you'll try hard to disguise that fact. You'll immediately spend them on goods or currency, or deposit them into a Coinbase account and then withdraw them later (so you get different coins back), or just throw them into a mixer with the other coins that need to be laundered. The person who ends up holding the tainted coins could be perfectly honest, and have acquired them from a perfectly honest source, who in turn acquired them from a perfectly honest source. Is it fair to tell them that their money is suddenly worthless, when they had no way of knowing anything was wrong?
    - Pacabel 13y ago
      What prevents a particular mark from being interpreted as some measure of validity, though? If such marking can represent ownership of another asset, could it not represent some other concept, too?
- fragsworth 13y ago
  This is a really contentious issue. Depending on how late the coins are marked as stolen, some number of legitimate transactions may have been made with them. What burden does this place on users to be certain that they're receiving "legitimate" coins?
- thefreeman 13y ago
  there is no such thing as an individual "bitcoin". It's just a numerical balance associated with a wallet. There is no way to mark a certain subset of bitcoins as invalid. At best you could flag wallets, and any wallets who've made transactions with those wallets, etc., etc. which is basically what the people on reddit are doing to "trace" the coins. But, as many have mentioned before, it is not a very accurate way to trace the transactions especially if a service like a tumbler is used.
  - TophWells 13y ago
    Correct.
  - wmf 13y ago
    To understand tainting you really need to work on the level of outputs, not wallets.
- saalweachter 13y ago
  You could set up an independent organization to track and identify stolen coins, and then convince merchants and exchanges to voluntarily refuse transactions involving them. If a few large entities refused to do business with addresses linked to stolen coins -- and the tainted addresses were fairly few in number -- then a lot of actors would be forced to follow suit to maintain their relationships with the initial core group of boycotters. If you want the BTC network itself to reject stolen bitcoins, there's no need to stop there: if you had community agreement, you could just as easily reverse thieving transactions and make the victims whole.
- joeblau 13y ago
  > What if there was a way to tag bitcoins as stolen and declare them null and void? When you say that sentence, replace the word bitcoins with gold. I say this because in essence, bitcoins are a finite resource that have perceived value. They also are harder to obtain the more people mine them. Now think about what would happen if someone stole gold and an authority (which doesn't exist) declared the stolen gold null and void. Someone, somewhere with lower ethics would be very happy to take the "null and void" gold because the fact that it's stolen has absolutely impact on it's value.
  - gus_massa 13y ago
    Gold is much easier to melt and cast in new “clean” ingots. It’s not possible to trace it, so nobody could declare some of it void. But each Bitcoin transaction is public, so it’s easy to see the origin of each Bitcoin. But I think this idea has many technical and psychological problems . You essentially need to fork the Blockchain and convince the “51%” to use the new fork where these Bitcoins are illegal. Doge recently changed some details of the mining procedure using a hard fork, but they have a strong central organization and they pretend that Doge is not a serious coin. An equivalent change in Bitcoin would be much more difficult.
    - sentenza 13y ago
      Is it really not possible to trace gold? I was under the impression that for much of the gold out there you could use the "footprint" of contaminations in the gold to infer the age (since mining) and procedence to a certain degree. Of course, if you melt it in a top-notch facility, they'd probably be able to heat out the contaminants (or remove them chemically?), but people trading in stolen or otherwise "hot" gold probably don't have access to such facilities.
      - gus_massa 13y ago
        I guess that removing the contaminant traces is very difficult or impossible (unless you have a very hi-tech facility), adding a few contaminants looks easier. Anyway, mixing gold from different source should give a new contaminant composition that makes it very difficult to trace.
- cLeEOGPw 13y ago
  You can modify clients to reject coins from the given address. If more than 50% of the network has modified clients, it will be very hard to spend the coins for thief.
- runeks 13y ago
  > What if there was a way to tag bitcoins as stolen and declare them null and void? Would this not disincentivize thieves? It would both disincentivize thieves and honest users. It was decided in a legal case over 300 years ago in Scotland that it would ruin the point of money if stolen money were - like all other goods - the property of their original owner: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2260952 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2260952 I think it makes sense to apply the same principle to bitcoins.
tinco 13y ago
This seems a bit silly. Why is this made public? If this was a private conversation then they could set a trap. Now whoever is making these transactions will simply stop and wait for a new opportunity.
- danielweber 13y ago
  The blockchain is public information.
  - mbreese 13y ago
    That's not the question... the question was why put this on pastebin and have it posted to HN. If this was communicated in a more private manner, you could have actually done something with the information, such as find the people who are moving these coins. Now, if there is anything nefarious going on, the parties responsible probably know that others are watching.
    - dreen 13y ago
      If he figured it out, so can anyone else. Disclosing the find levels the playing field for any eventuality.
atmosx 13y ago
Did this guy leave an email, bitmessage address or anything???? How is Nejc suppose to reply?
- nwh 13y ago
  Its a "public" copy of the message, it's been no doubt emailed to the person in question as well. Posting it here, on reddit and on bitcointalk is just the author being pushy.
  - atmosx 13y ago
    Oh, didn't get that, you're right.
nwh 13y ago
Bear in mind that the connection between these addresses is tenuous at best. There's very little to suggest that the same person owns all of these transactions. The paths are fairly convoluted, it could be a normal user or a mixer or an internal wallet. You'd never know by design. As I've mentioned before, this sort of thing is usually correct in that same way a broken clock is.
- tibbon 13y ago
  Agreed- it is very hard to tell who is holding the currency due to tumbling and all. But if it all does condense down to one wallet, or a set of transactions that is suddenly happening on this one service... then it does smell funny. If it should turn out that the owner of the account is someone affiliated with MTGox, then I can only imagine that shit will hit the fan.
- sillysaurus3 13y ago
  I hope you'd agree with "Jed McCaleb once controlled the donation address 1EuMa4dhfCK8ikgQ4emB7geSBgWK2cEdBG." While it's unclear precisely how that donation address is related to all of this, I assume that people traced money flowing out of it and into an Mt. Gox cold storage wallet, thus establishing that the person who controlled the donation address was involved with the people who control the cold storage addresses. If so, then it's hard to see how to disagree with "If the Bitstamp address 1PAzo was funded with coins deposited by Jed McCaleb or one of his associates, and simultaneously two Mt. Gox cold storage wallets were depleted, and the chain of withdraws eventually lead from the cold storage wallets to 1PAzo, then it's extremely likely that Jed or an Mt. Gox owner is trading Mt. Gox cold storage coins on Bitstamp." It sounds like you're worried that a chain of transfers doesn't prove ownership. For example, someone could randomly send all their bitcoin to someone else for no reason. But in practice, the only reason to give large amounts of BTC to someone else is either because you're buying something from them, repaying a debt, or you're cooperating with them. Regardless of which of those it turns out to be, the Mt. Gox cold storage wallets are the property of the Mt. Gox customers. Using them to buy something or repay a debt would be fraud. Transferring them to an associate with the intent of laundering them via Bitstamp would also be illegal, of course. I can't think of any other explanations for why the BTC would change ownership except perhaps that they were stolen yet again. But theft can be ruled out if the identity of the Bitstamp account turns out to be a cohort of Mt. Gox. (You mentioned that it could be a mixer, but that can be ruled out in this case because it'd make no sense for Mt. Gox to launder bitcoins and then deposit them into a bistamp account that has someone's real-world identity attached to it. Also, when bitcoins are being mixed using a mixer, it transfers the coins in a pretty distinctive way that indicates a mixer is being used, such as by randomizing the BTC amounts rather than always transferring e.g. 150BTC or 50BTC or some other nice-for-humans value. I assume that if a mixer is being used here, it'd be possible to show that the transfers are behaving in a way consistent with a particular bitcoin mixer implementation.) Since there are no plausible explanations about how the bitcoins might change ownership, why would it be unreasonable to proceed with the assumption that the ownership hasn't changed, unless proven otherwise?
falconfunction 13y ago
So are bitcoins going to have a modifiable value based on being tainted?
- yetfeo 13y ago
  blockchain.info has a method of tainting and tracking coins: https://blockchain.info/tags?form_type=1 https://blockchain.info/tags?form_type=1 Taint is viewable using "Related tags" and "Taint Analysis" on address pages.
  - nwh 13y ago
    It's widely regarded as complete bullshit and can be fooled by almost anybody who cares to.
DigitalSea 13y ago
Seems like people are clutching at straws here. We shouldn't go making fact-less accusations that the coins are being sold when we technically don't have any proof, the link is very weak at best. Given Mt Gox's collapse and surprising lack of security or due-care, it wouldn't surprise me if it were true, but there is a massive if there.
jackgavigan 13y ago
Bitstamp is domiciled in the UK. https://www.bitstamp.net/about_us/ https://www.bitstamp.net/about_us/ UK law prohibits handling stolen goods. http://www.legislation.gov.uk/ukpga/1968/60/section/22 http://www.legislation.gov.uk/ukpga/1968/60/section/22
- msantos 13y ago
  But does the English law recognise bitcoins as "goods"? Bitstamp Limited is registered in the UK, but the trading address is a proxy run by UK PLC (http://www.ukplc.com/contact-us.html http://www.ukplc.com/contact-us.html) Bitstamp is owned by a couple of Slovenian chaps: https://www.duedil.com/company/08157033/bitstamp-limited/people https://www.duedil.com/company/08157033/bitstamp-limited/peo... https://twitter.com/nejc_kodric https://twitter.com/nejc_kodric https://twitter.com/damijanmerlak https://twitter.com/damijanmerlak
- runeks 13y ago
  The question, as msantos points out, is whether bitcoins are money or goods. If they are money, then handling stolen bitcoins are not illegal, and the rightful owner of them doesn't even have the support of the legal system to get them back: http://en.wikipedia.org/wiki/Nemo_dat_quod_non_habet http://en.wikipedia.org/wiki/Nemo_dat_quod_non_habet I would argue that bitcoins are money, and not goods. Goods have use value, bitcoins do not - they only have exchange value. They have no use in and of themselves. TL;DR: Even if you can prove that someone else holds a dollar bill that was stolen from you at some point, you do not necessarily have the right to get it back.
  - fabulist 13y ago
    I agree, but people have found some pretty creative "use values" for bitcoins: http://www.righto.com/2014/02/ascii-bernanke-wikileaks-photographs.html http://www.righto.com/2014/02/ascii-bernanke-wikileaks-photo... tl;dr by sending bitcoins to an fake address, you can use put an ASCII Ben Bernanke in the Blockchain.
    - runeks 13y ago
msantos 13y ago
I wonder if this is true (March 20, 2014): "is #bitstamp about to become another #mtgox ? Uk trader seeks high court injunction to cease Uk trading operations" https://twitter.com/frankieterrier/status/446638248761503744 https://twitter.com/frankieterrier/status/446638248761503744 "#bitstamp getting sued for $1.2m Uk trader seeks freezing of assets in high court action. #bitstamp not processing withdrawls." https://twitter.com/frankieterrier/status/446637903721287680 https://twitter.com/frankieterrier/status/446637903721287680
- zby 13y ago
  There is no thread at https://bitcointalk.org/index.php?board=85.0 https://bitcointalk.org/index.php?board=85.0 about that - so I guess it is just a manipulation attempt.
cordite 13y ago
Why is Bitcoin getting so many features on HN?
- pistle 13y ago
  Because a not-insignificant-enough number of "smart" hacker news folks got very burned by a get rich quick scheme and they won't let it go. Snake oil and charlatans? There's an app for that. The cognitive dissonance is maddening. Something so esoteric and technical, which required great intelligence to even use, let alone build the cottage industry around... continues to make these intelligent young, white, libertarians look like simple con targets. The shovel and panning sellers made loads (mining rigs and exchanges). Everyone else who hasn't exited is holding the bag. If you lived through the dotcom bubble, this is a repeat in slowreck motion. People will lose 95-100% of their investments until the rest freak out and bolt. Very smart, young, white guys built up expensive trading stations and lost their shirt daytrading on dotcoms. It's like buying a mining... nevermind - nobody's listening.
  - cordite 13y ago
    I enjoyed reading to the bitter end. Have you seen the movie Dot-Con by Frontline?
  - venus 13y ago
    This is an excessively cynical, misanthropic view of events. I know a lot of people who could be described as "long bitcoin" and while there's no doubt a few opportunistic types, most are genuinely excited and actively involved in something they truly believe in. Your bitter prognostications about "young white libertarians" says more about you than anything else, IMO. And invoking the dot com bubble doesn't help your point - the internet was, indeed, the next big thing, but the bubble was misinformed and 10 years too early. Long term, though, "dot com" was and is real, and many are hoping and working towards cryptocurrencies travelling the same path.
    - clef 13y ago
      Sometimes I still can't get my head around how something that isn't real is worth anything... Argh, I must be too old to understand now :) I was closely involved in a startup in the first bubble, I remember the hopes and dreams and hype and VCs throwing tons of money to invest into ludicrous stuff,and coffee machines so big and expensive... It looks all the same now, the rich want to get richer and call it "innovation" (I saw a prototype of something huge that was "invented in the 90's by some young fellows, unfortunately it was too early, way too early...and saw it again "invented" by someone else many years later and called "Facebook") and the young programmers (they're called hackers now I believe) were just happy to code and get their pat on the back, feeling special,with stock option promises (I was one of them, I must be an old hacker now :) ... So many smart people working super hard( although pizza and wine at midnight was cool)... Do you feel special and useful guys? Or does it take $19B to be real special? But still, HN kicks ass no matter what :)

124 points by Andrew_Quentin 13y ago

What if there was a way to tag bitcoins as stolen and declare them null and void? Would this not disincentivize thieves? Could we prevent abuse of such a system?

tinco 13y ago
Would it disincentivize exchange developers to have sane security architectures? Who would declare them null and void? What's to stop any movement from declaring non-stolen bitcoin as null and void?
Mchl 13y ago
Question 1: Who would have the power to do that?
- orthecreedence 13y ago
  The US government, obviously.
iancarroll 13y ago
That would be centralizing the system, no?
annon 13y ago
Since there is a fixed number of bitcoins, there would still be incentive by causing faster deflation by removing coins from the pool.
r0muald 13y ago
I think that would require an authority deciding whether bitcoins were truly stolen. Otherwise, couldn't anyone could just claim a transaction was a theft?
DomBlack 13y ago
The problem with the tagging approach, is how would you verify the tag was genuine? You would have to add some sort of central authority which every peer could implicitly trust and that would undermine the whole concept of bitcoin...
atmosx 13y ago
It's a very interesting development as it shows that stolen bitcoins can be tracked indefinitely unlike FIAT. Now, what you propose though, is against the freedom bitcoins is assumed to stand for (on the ethics side). On the technical side that's very possible, as of today, if everyone plays along and I mean literally everyone, especially mixers. How could one track down bitcoins flushed into public mixers? I guess they could do this as well, if the BTC were tagged and thus refused by the mixers or even worst hold captives and resend them to original issuer. However, you only need 1 TOR hosted mixer to lose track of the wallets. On the other side imagine the practical chaos: I make a huge transaction of non-tangible goods in a situation where you can't prove that the service/product was delivered. Then I just tag these bitcoin that once belonged to my wallet as stolen if the other party doesn't give them back :-) you see where this is going right? :-)
- gutnor 13y ago
  > unlike FIAT. Actually, unlike any commodity or any currency with a physical representation. What makes other currency not traceable is the notes and coins, not the fact that they are fiat or not. side note: has "fiat" now become synonymous with non-crypto currency the same way hacker has become a swear word ?
  - baddox 13y ago
    He doesn't say that fiat is the only untraceable form of currency.
  - Klinky 13y ago
    Yes fiat has become a word of derision amongst the cryptocoin community, completely ignoring the fact that cryptocoins are essentially a form of fiat currency. Many crypto fans sidestep the fact that cryptos also don't have intrinsic value, and the networks aren't as a decentralized as one would think(handfuls of devs, early adopters, and pool and exchange operators hold a large sway over the networks and future of the coins).
  - atmosx 13y ago
    I can't speak for others, but I have nothing against FIAT :-)
deleted 13y ago
[deleted]
cbhl 13y ago
In theory, this is already possible. Anyone can patch the client to reject transactions containing such coins; the key is getting enough adoption for it to be meaningful. (I imagine starting by forking mining-specific applications like cgminer would be more effective than forking the client apps, since you really want to get 51% of the network to reject these transactions for it to mean anything.)
- stormbrew 13y ago
  cgminer never sees anything but the block header, it makes no decisions at all about which transactions to include in a block. The client is still the thing that does that.
Lerc 13y ago
The term used for this is coloured coins. It's possible to do, and there are forms of coloured coins in use. The question is not of how to do it, but whether it is desirable to have coloured coins. It's like adding a new rule to how a piece moves in chess. You could easily imagine some of the advantages caused by a change, but not all of the consequences.
- waterlesscloud 13y ago
  That's not what colored coins are. Colored coins are coins which have been used to mark ownership of another asset, like say a share of stock.
  - TophWells 13y ago
    Whether or not it's the same thing, it uses the same mechanics. You can link the output of one transaction to the input of the next, and construct a chain of transactions that says "This 0.125 BTC transaction uses bitcoins that were originally stolen from MtGox / bitcoins that were originally in the pile designated as marking ownership of my shares of stock". The question is whether that's a meaningful thing to measure. If you have bitcoins that are more valuable than normal, because they're shares of stock, then you'll make sure they're not mixed with "normal" coins. That's the idea of the Coloured Coins project. But if you have bitcoins that are less valuable than normal, because they're stolen goods, then you'll try hard to disguise that fact. You'll immediately spend them on goods or currency, or deposit them into a Coinbase account and then withdraw them later (so you get different coins back), or just throw them into a mixer with the other coins that need to be laundered. The person who ends up holding the tainted coins could be perfectly honest, and have acquired them from a perfectly honest source, who in turn acquired them from a perfectly honest source. Is it fair to tell them that their money is suddenly worthless, when they had no way of knowing anything was wrong?
  - Pacabel 13y ago
    What prevents a particular mark from being interpreted as some measure of validity, though? If such marking can represent ownership of another asset, could it not represent some other concept, too?
fragsworth 13y ago
This is a really contentious issue. Depending on how late the coins are marked as stolen, some number of legitimate transactions may have been made with them. What burden does this place on users to be certain that they're receiving "legitimate" coins?
thefreeman 13y ago
there is no such thing as an individual "bitcoin". It's just a numerical balance associated with a wallet. There is no way to mark a certain subset of bitcoins as invalid. At best you could flag wallets, and any wallets who've made transactions with those wallets, etc., etc. which is basically what the people on reddit are doing to "trace" the coins. But, as many have mentioned before, it is not a very accurate way to trace the transactions especially if a service like a tumbler is used.
- TophWells 13y ago
  Correct.
- wmf 13y ago
  To understand tainting you really need to work on the level of outputs, not wallets.
saalweachter 13y ago
You could set up an independent organization to track and identify stolen coins, and then convince merchants and exchanges to voluntarily refuse transactions involving them. If a few large entities refused to do business with addresses linked to stolen coins -- and the tainted addresses were fairly few in number -- then a lot of actors would be forced to follow suit to maintain their relationships with the initial core group of boycotters. If you want the BTC network itself to reject stolen bitcoins, there's no need to stop there: if you had community agreement, you could just as easily reverse thieving transactions and make the victims whole.
joeblau 13y ago
> What if there was a way to tag bitcoins as stolen and declare them null and void? When you say that sentence, replace the word bitcoins with gold. I say this because in essence, bitcoins are a finite resource that have perceived value. They also are harder to obtain the more people mine them. Now think about what would happen if someone stole gold and an authority (which doesn't exist) declared the stolen gold null and void. Someone, somewhere with lower ethics would be very happy to take the "null and void" gold because the fact that it's stolen has absolutely impact on it's value.
- gus_massa 13y ago
  Gold is much easier to melt and cast in new “clean” ingots. It’s not possible to trace it, so nobody could declare some of it void. But each Bitcoin transaction is public, so it’s easy to see the origin of each Bitcoin. But I think this idea has many technical and psychological problems . You essentially need to fork the Blockchain and convince the “51%” to use the new fork where these Bitcoins are illegal. Doge recently changed some details of the mining procedure using a hard fork, but they have a strong central organization and they pretend that Doge is not a serious coin. An equivalent change in Bitcoin would be much more difficult.
  - sentenza 13y ago
    Is it really not possible to trace gold? I was under the impression that for much of the gold out there you could use the "footprint" of contaminations in the gold to infer the age (since mining) and procedence to a certain degree. Of course, if you melt it in a top-notch facility, they'd probably be able to heat out the contaminants (or remove them chemically?), but people trading in stolen or otherwise "hot" gold probably don't have access to such facilities.
    - gus_massa 13y ago
      I guess that removing the contaminant traces is very difficult or impossible (unless you have a very hi-tech facility), adding a few contaminants looks easier. Anyway, mixing gold from different source should give a new contaminant composition that makes it very difficult to trace.
cLeEOGPw 13y ago
You can modify clients to reject coins from the given address. If more than 50% of the network has modified clients, it will be very hard to spend the coins for thief.
runeks 13y ago
> What if there was a way to tag bitcoins as stolen and declare them null and void? Would this not disincentivize thieves? It would both disincentivize thieves and honest users. It was decided in a legal case over 300 years ago in Scotland that it would ruin the point of money if stolen money were - like all other goods - the property of their original owner: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2260952 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2260952 I think it makes sense to apply the same principle to bitcoins.

tinco 13y ago

This seems a bit silly. Why is this made public? If this was a private conversation then they could set a trap. Now whoever is making these transactions will simply stop and wait for a new opportunity.

danielweber 13y ago
The blockchain is public information.
- mbreese 13y ago
  That's not the question... the question was why put this on pastebin and have it posted to HN. If this was communicated in a more private manner, you could have actually done something with the information, such as find the people who are moving these coins. Now, if there is anything nefarious going on, the parties responsible probably know that others are watching.
  - dreen 13y ago
    If he figured it out, so can anyone else. Disclosing the find levels the playing field for any eventuality.

atmosx 13y ago

Did this guy leave an email, bitmessage address or anything???? How is Nejc suppose to reply?

nwh 13y ago
Its a "public" copy of the message, it's been no doubt emailed to the person in question as well. Posting it here, on reddit and on bitcointalk is just the author being pushy.
- atmosx 13y ago
  Oh, didn't get that, you're right.

nwh 13y ago

Bear in mind that the connection between these addresses is tenuous at best. There's very little to suggest that the same person owns all of these transactions. The paths are fairly convoluted, it could be a normal user or a mixer or an internal wallet. You'd never know by design. As I've mentioned before, this sort of thing is usually correct in that same way a broken clock is.

tibbon 13y ago
Agreed- it is very hard to tell who is holding the currency due to tumbling and all. But if it all does condense down to one wallet, or a set of transactions that is suddenly happening on this one service... then it does smell funny. If it should turn out that the owner of the account is someone affiliated with MTGox, then I can only imagine that shit will hit the fan.
sillysaurus3 13y ago
I hope you'd agree with "Jed McCaleb once controlled the donation address 1EuMa4dhfCK8ikgQ4emB7geSBgWK2cEdBG." While it's unclear precisely how that donation address is related to all of this, I assume that people traced money flowing out of it and into an Mt. Gox cold storage wallet, thus establishing that the person who controlled the donation address was involved with the people who control the cold storage addresses. If so, then it's hard to see how to disagree with "If the Bitstamp address 1PAzo was funded with coins deposited by Jed McCaleb or one of his associates, and simultaneously two Mt. Gox cold storage wallets were depleted, and the chain of withdraws eventually lead from the cold storage wallets to 1PAzo, then it's extremely likely that Jed or an Mt. Gox owner is trading Mt. Gox cold storage coins on Bitstamp." It sounds like you're worried that a chain of transfers doesn't prove ownership. For example, someone could randomly send all their bitcoin to someone else for no reason. But in practice, the only reason to give large amounts of BTC to someone else is either because you're buying something from them, repaying a debt, or you're cooperating with them. Regardless of which of those it turns out to be, the Mt. Gox cold storage wallets are the property of the Mt. Gox customers. Using them to buy something or repay a debt would be fraud. Transferring them to an associate with the intent of laundering them via Bitstamp would also be illegal, of course. I can't think of any other explanations for why the BTC would change ownership except perhaps that they were stolen yet again. But theft can be ruled out if the identity of the Bitstamp account turns out to be a cohort of Mt. Gox. (You mentioned that it could be a mixer, but that can be ruled out in this case because it'd make no sense for Mt. Gox to launder bitcoins and then deposit them into a bistamp account that has someone's real-world identity attached to it. Also, when bitcoins are being mixed using a mixer, it transfers the coins in a pretty distinctive way that indicates a mixer is being used, such as by randomizing the BTC amounts rather than always transferring e.g. 150BTC or 50BTC or some other nice-for-humans value. I assume that if a mixer is being used here, it'd be possible to show that the transfers are behaving in a way consistent with a particular bitcoin mixer implementation.) Since there are no plausible explanations about how the bitcoins might change ownership, why would it be unreasonable to proceed with the assumption that the ownership hasn't changed, unless proven otherwise?

falconfunction 13y ago

So are bitcoins going to have a modifiable value based on being tainted?

yetfeo 13y ago
blockchain.info has a method of tainting and tracking coins: https://blockchain.info/tags?form_type=1 https://blockchain.info/tags?form_type=1 Taint is viewable using "Related tags" and "Taint Analysis" on address pages.
- nwh 13y ago
  It's widely regarded as complete bullshit and can be fooled by almost anybody who cares to.

DigitalSea 13y ago

Seems like people are clutching at straws here. We shouldn't go making fact-less accusations that the coins are being sold when we technically don't have any proof, the link is very weak at best. Given Mt Gox's collapse and surprising lack of security or due-care, it wouldn't surprise me if it were true, but there is a massive if there.

jackgavigan 13y ago

Bitstamp is domiciled in the UK. https://www.bitstamp.net/about_us/ https://www.bitstamp.net/about_us/ UK law prohibits handling stolen goods. http://www.legislation.gov.uk/ukpga/1968/60/section/22 http://www.legislation.gov.uk/ukpga/1968/60/section/22

msantos 13y ago
But does the English law recognise bitcoins as "goods"? Bitstamp Limited is registered in the UK, but the trading address is a proxy run by UK PLC (http://www.ukplc.com/contact-us.html http://www.ukplc.com/contact-us.html) Bitstamp is owned by a couple of Slovenian chaps: https://www.duedil.com/company/08157033/bitstamp-limited/people https://www.duedil.com/company/08157033/bitstamp-limited/peo... https://twitter.com/nejc_kodric https://twitter.com/nejc_kodric https://twitter.com/damijanmerlak https://twitter.com/damijanmerlak
runeks 13y ago
The question, as msantos points out, is whether bitcoins are money or goods. If they are money, then handling stolen bitcoins are not illegal, and the rightful owner of them doesn't even have the support of the legal system to get them back: http://en.wikipedia.org/wiki/Nemo_dat_quod_non_habet http://en.wikipedia.org/wiki/Nemo_dat_quod_non_habet I would argue that bitcoins are money, and not goods. Goods have use value, bitcoins do not - they only have exchange value. They have no use in and of themselves. TL;DR: Even if you can prove that someone else holds a dollar bill that was stolen from you at some point, you do not necessarily have the right to get it back.
- fabulist 13y ago
  I agree, but people have found some pretty creative "use values" for bitcoins: http://www.righto.com/2014/02/ascii-bernanke-wikileaks-photographs.html http://www.righto.com/2014/02/ascii-bernanke-wikileaks-photo... tl;dr by sending bitcoins to an fake address, you can use put an ASCII Ben Bernanke in the Blockchain.
  - runeks 13y ago

msantos 13y ago

I wonder if this is true (March 20, 2014): "is #bitstamp about to become another #mtgox ? Uk trader seeks high court injunction to cease Uk trading operations" https://twitter.com/frankieterrier/status/446638248761503744 https://twitter.com/frankieterrier/status/446638248761503744 "#bitstamp getting sued for $1.2m Uk trader seeks freezing of assets in high court action. #bitstamp not processing withdrawls." https://twitter.com/frankieterrier/status/446637903721287680 https://twitter.com/frankieterrier/status/446637903721287680

zby 13y ago
There is no thread at https://bitcointalk.org/index.php?board=85.0 https://bitcointalk.org/index.php?board=85.0 about that - so I guess it is just a manipulation attempt.

cordite 13y ago

Why is Bitcoin getting so many features on HN?

pistle 13y ago
Because a not-insignificant-enough number of "smart" hacker news folks got very burned by a get rich quick scheme and they won't let it go. Snake oil and charlatans? There's an app for that. The cognitive dissonance is maddening. Something so esoteric and technical, which required great intelligence to even use, let alone build the cottage industry around... continues to make these intelligent young, white, libertarians look like simple con targets. The shovel and panning sellers made loads (mining rigs and exchanges). Everyone else who hasn't exited is holding the bag. If you lived through the dotcom bubble, this is a repeat in slowreck motion. People will lose 95-100% of their investments until the rest freak out and bolt. Very smart, young, white guys built up expensive trading stations and lost their shirt daytrading on dotcoms. It's like buying a mining... nevermind - nobody's listening.
- cordite 13y ago
  I enjoyed reading to the bitter end. Have you seen the movie Dot-Con by Frontline?
- venus 13y ago
  This is an excessively cynical, misanthropic view of events. I know a lot of people who could be described as "long bitcoin" and while there's no doubt a few opportunistic types, most are genuinely excited and actively involved in something they truly believe in. Your bitter prognostications about "young white libertarians" says more about you than anything else, IMO. And invoking the dot com bubble doesn't help your point - the internet was, indeed, the next big thing, but the bubble was misinformed and 10 years too early. Long term, though, "dot com" was and is real, and many are hoping and working towards cryptocurrencies travelling the same path.
  - clef 13y ago
    Sometimes I still can't get my head around how something that isn't real is worth anything... Argh, I must be too old to understand now :) I was closely involved in a startup in the first bubble, I remember the hopes and dreams and hype and VCs throwing tons of money to invest into ludicrous stuff,and coffee machines so big and expensive... It looks all the same now, the rich want to get richer and call it "innovation" (I saw a prototype of something huge that was "invented in the 90's by some young fellows, unfortunately it was too early, way too early...and saw it again "invented" by someone else many years later and called "Facebook") and the young programmers (they're called hackers now I believe) were just happy to code and get their pat on the back, feeling special,with stock option promises (I was one of them, I must be an old hacker now :) ... So many smart people working super hard( although pizza and wine at midnight was cool)... Do you feel special and useful guys? Or does it take $19B to be real special? But still, HN kicks ass no matter what :)