Bitcoin Forum

anybody feel like posting a quick and dirty guide to tracing bitcoins and watching transactions? With all this cuda scamming going on I think a bunch of amateur investigators could be useful. if we can watch transactions we might be able to pin him down.

Ah, I read, and see about the scam.  However, isn't a good portion of the point of bitcoins anonymity?  I mean, he could create a new wallet, transfer the coins there, then they're scott free.

If we begin tracking coins through the network, that utterly destroys any anonymity.  My guess is that it would also have significant scamming implications in and of itself.

So...someone scams you - if you fall for the scam, tough luck, no redress.  Unless the system isn't nearly so anonymous as people claim.

The system relies on being able to trace the history of a coin to make sure it's not bifurcating in it's history.  The anonymity comes in the fact that there's no identity attached to your purchases, not in the fact that you can't correlate purchases together.  Theoretically, there's systems in place to help obfuscate such connections between income and purchases, but I believe it'd still be possible to trace the history of coins through "some entity".  Likewise, there'd be no way for him to transfer said coins into another wallet without a transaction, which is, effectively, public record.

Think of it as people know that a transaction happened between two addresses, but they don't know who those people are or what the purchase was for.  At least, this is my understanding of the system.

While this is true, the fact remains that the coins cannot be made "dirty money" without ripping someone off.  Take the following chain of events:

Scammed Person ----->Scammer ----->New Account

Now, it could be that the scammer made a new bitcoin address and moved the "dirty" coins there.  Or, it could be that he paid someone for a service using the "dirty" cash.  If we take the cash from "New Account," we risk ripping off an honest businessman and damaging the reputation of the bitcoin system.

Thus, unless the money is sitting in the account paid by "Scammed," (which makes the scammer an idiot), there's nothing we can do without undermining Bitcoin.

There's no way to do this is there?

This is where a web of trust reputation ratings service comes in.Bitcoins are half the answer you need to factor in the human element.

No no, we don't take the money from the scammer/honest businessman.  We can't. ;)

One possibility, though, is to implement a secondary client where specific coins are marked as "dirty money" on a secondary DHT.  Anyone running this client would be notified when they've recieved "marked" money.  If they know who it is they're dealing with, they know he's the scammer and can report it to the community... or something.

( Disclaimer:  Completely freeballing ideas off the top of my head here ;) )

I think we should try to track the payment JUST TO SEE IF WE CAN.

How much info is there in the system?  If we don't know this, how can we trust anything?!?

Unless I'm misunderstanding, we know the coin can be traced through BitCoin addresses, but that doesn't tell us who or even how many people have had the coin.

I didn't read all the posts, but one way to lose track of your bitcoins is to transfer them to the the Bitcoin Market in a few bundles, let them set for a few days and then withdraw them in different sized bundles. Who knows whose bitcoins you'll get back since everyone just deposits into a big pool and withdraws different amounts from the same big pool. But remember that all the many trades don't mix them up, just the deposits and withdrawals.