Bitcoin Forum

I was thinking about writing a program to do the following if no one else has done it first:

Problem: Ponzi Scheme operators can, at a glance, seem legitimate. Payouts can appear to be the same as a real mining operation. When a scheme is revealed people will have lost hundreds of thousands of dollars, there will be no one to take responsibility, and legitimate companies suffer from reduced business because people have no idea who to trust.

Solution: All Bitcoin has a point of origin. Even a scam has to use real Bitcoin that is tracked. The idea is for a program to look at a transaction ID, look at the source Bitcoin, and figure out the exact dates and locations that all the Bitcoin was generated in. It would track the total number of transfers it took for the Bitcoin to go from it's origin to the payout destination and compare this value to each other and give a high/low value. It would also compare the date of origin margin. It would use this information to advise the user as to the likelihood of the coin being genuinely mined by the given service.

If it could then be applied as an app for an Electrum module and/or the Coinbase API it could also provide real time protection. For example, a scam artist might try to fool people by leasing hashing power at least initially and then switch over to being a ponzi scheme. If at any point the address receives Bitcoin from a non-genuine mining source it could alert you so that you can take the appropriate action.

What this won't solve: If a scam artist takes your money to buy real mining hardware and never runs it as a Ponzi scheme, but then decides to stop paying you shares it won't be able to catch that. However, if it's possible to track the Bitcoin to specific mining pools it might be possible to track the location of the mining hardware to at least some degree, but I'm not yet sure how possible that is.

Would there be demand for such a program? Do any similar programs exist? I have experience programming, but I have not yet programmed for Bitcoin so I feel this would be a good program to write to get myself familiar with everything. I would of course plan to release it open source in the hopes that others can make sure I did everything correctly and for the utmost transparency.

There are already some projects like that, but most in the nature of larger coin/chain analytic companies flagging 'tainted' addresses/transactions and track where the money goes and what addresses have had questionable or confirmed blacklisted coins. However, none of these are widely used for several reasons, the biggest two of which being that first and foremost, money is money to most people, and they don't care of it was stolen at one point -- especially if it is more than one degree from that theft. The other reason however, is that it is generally considered to be against bitcoins nature; It is for that reason it will never be implemented in reference, but also why the window is open for people like you who might want to provide that service publicly. It does however get increasingly more complex and difficult to implement once you start dealing with greater levels of depth and the mixing with a great deal of other inputs and outputs over and over.

I don't think you'll be able to do that. Ponzi owners can always use any new address and you can't block them all from all wallets etc.
But you can do & suggest these steps;
1- click Profile
2- click  Ignore Boards Preferences
3- tick  Investor-based games
4- click Change profile button.
You're good to go; ignored "some" of the ponzis...

This could be interesting. You could have it see if the Bitcoin a few transactions back is coming from a known address used by a pool. You could also see if the Bitcoin a few transactions back is coming from a coinbase transaction because that would prove that they are either solo mining or in their own pool.

That's not the approach I would take at all. I'm not talking about black listing coins or implementing some kind of ban system. I'm talking about determining if the origin of the coins being paid were genuinely mined or not. It wouldn't be designed to track beyond that.


If that were true it would mean that most people don't care if they are really supporting the Bitcoin network or not. I, for one, want to make honest long term investments. The dollar in my hand may or may have at some point in it's life been stolen from someone, and sure, it is not relevant to me if it was, but I would care if the person pays me with money they stole.


How is it against Bitcoin's nature?


Who said anything about blocking? I'm not suggesting anything so drastic. I don't think anyone should ever implement blocking.

It doesn't matter how many times you change your address. A given coin is tracked by the network from the point of it's minting. All I want to do is arm the users with the ability to see at a glance if the operation is legit or not. What they do with that information is still up to them.


I don't think I would even have to go that far. The issue with going back to a known pool is that there may be a pool that I don't know about and it could also introduce a problem where inclusion of such a list would sanction the contents of it. I think it would be far simpler to first look at the transaction, track the source of all the coin to it's different sources, and run a comparison.

if i good your thoughts right that is a really good theoretical idea. But i doubt that it will work in practice.

Address doesn't show anything about it's owner if I give you my address you would know it's mine because I tould you but it could be my friend's address. Ofc that it would work and we would get hundreds or sometimes thousands of addresses

Wouldn't it be possible to scan through addresses associated to a Ponzi and see how "far" they are from a fresh block mining address? That could be useful.

So, ponzi shows address 1Ponzi..... Scan that address and any address that has sent that address BTC (Yes I know, Could be a monster list) see how far it is away from fresh mined coins, Doesn't really prove anything as such but could be a nice indicator.

It's useless because if the creator doesn't send money to the ponzi address then we would get a list of people who "invested" in it. In this case the address is not bound to the owner so it would be hard to connect them.

This would be a complex app but to detect a Ponzi you might input the following:
You check the whois of the website, most Ponzi maintain their webhosting but change their domain names, you can mark your bitcoin before sending it, if it is too good to be true then it is.