Bitcoin Forum

Me being oblivious to much of the inner workings of the Bitcoin protocol, someone else suggested that doing a "hard wired" transfer of the contents of the wallets being locked up in Gox should be possible through a wallet update if it reaches a 51% consensus amongst miners.

This is a technical subforum, so my question is not about short-circuiting the legal system or debating if this is a purist libaritarian thing to do.

Long term this will show resilience amongst Bitcoiner's as a self governing community, and in some way comparable to correction on the hard fork a while back, where consensus was reached quickly and an update was implemented to bring the network back in sync.

Short term speculators that think this will have a negative effect on price, think again. If we get a reputation as a democratic consensus driven payment system also, more will trust Bitcoin, and that will have a positive effect on price. Think of it like the dye bomb system implemented in banks.

In effect the consensus principle would act as a global Bitcoin banking authority in cases like that.

The wallets in question would be announced beforehand and anyone claiming ownership other than the curators would have a possibility to protest the suggestion.

So my question,: Is it possible to delete a known wallet and make it's balance appear in a new one with not lost keys (under the pretence that coins locked out in Gox are proper identified)?

Has the Foundation taken a position on that question, to anyone’s knowledge?

No it is not possible.

Also, bitcoin is a consensus system (not a 51% democracy), so even there was a way to do it (which there is not), it would require a consensus of all nodes, and not just 51% of the miners.

People tend to mis-understand what a 51% attack is and think that there is a "voting" system whereby if 51% of miners agree to something it happens.  That's not how bitcoin works.

Well MtGox hasn't even admitted to losing a private key.  The bankruptcy procedure reported bitcoins being stolen not lost.

You can't change Bitcoin, you can only fork it.  A fork that is controversial has no chance of consensus (being accepted by all users, merchants, developers, etc).  As Danny points out, people often attribute magical powers to miners.  Miners set the consensus on transaction order, nothing else.   An invalid block is still invalid even if 51%+ of miners build off of it.

You can fork the Bitcoin network to do anything you want, you could fork it so the block reward is 1 billion bitcoins per block.  The question is how many people will use your work.  Also you can't stop the existing fork as long as at least one copy of that blockchain exists.

The idea brings up a lot of moral hazards.  If it was done (and I don't think it has a chance in hell) then MtGox is "too big to fail" and you have essentially just recreated the existing broken financial system.  There will always be someone who wants just one more "one time exception".

Edit: I lost BTC but still hate the idea of a fork.

Thank you, my bad then. The idea is an interesting one though as it would solve the "poof gone" problem without needing financial backing, it would scratch on the integrity of each coin though, which is something we don't want either, and one could argue that Bitcoin would be centralised in a sense by such a move, if there was an authority that could suggest which coins were bad.

Yes, but the coins would be worthless.

There'll always be someone, and AFAIK it's been done before (generation of 184 billion BTC).
So the real question could be: why not now? After all, we're still in beta.

Seriously though, I personally wouldn't want a MtGox-fork (and I do have skin in this game).

I totally agree with the reservations here, but my question was if it could be done technicaly, and the answer was No.

That's also reassuring that the law cannot either decree a certain version of Bitcoin-qt to be Kosher and others not, as that would open for govt confiscation also if Bitcoin one day finds itself totally integrated into a regulatory framework.

Technically it can be done.  It would be a half a dozen lines of code max.  It could probably be done in an hour.   Anyone can fork Bitcoin to make any change.  The trick is can you convince people to use the fork?  To date all existing forks have been non-controversial with near universal support. 

It isn't a technical problem, it is a consensus problem.

The answer "no" is not correct. The answer is just more complex than a simple yes.
Basically, yes, it can be done. It could even be done under regulatory force.

But the outcome would not be "Bitcoin with a twist", but Bitcoin + "Bitcoin with a twist", and practically no one would use the latter.

Technically what could be done?  How difficult it would be to do would depend a lot on what problem you think you are trying to fix.

As you point out, even if software changes can be made to compensate for the problem that is being addressed, there is a consensus problem that is insurmountable.

Aha, then I misunderstood the first answer. Consensus is also about being afraid to be left out, So if there is a sentiment by most, to restore the coins to a recoverable wallet for everybody’s greater good, then the minority would feel a lot of peer pressure to update their wallet?

If you start 'rolling back' the ledger (even if just specfic addresses) my confidence in the system would then be zero. Zero trust = zero price.

Or to avoid confusion you could say that the result would be Bitcoin (where the "problem" still exists and is not changed), and a new alt-coin (lets call it adjust-a-coin) that is not bitcoin at all, and that would need to convince everyone that it would be better to use the "adjust-a-coin" alt cryptocurrency instead of any of the 100's of other alt-coins.

Personally, I think dogecoin has better long term prospects.

The problem proposed in the OP would be to give MtGox "lost" bitcoins back.   That would be trivially simple to do in code.  MtGox creates a new address, a "super user trusted" exception to the coinbase rules coded in the client which allows a single future block to contains a coinbase of 750,000 newly minted coins to that address. MtGox pays a miner to create a block with that coinbase tx and TADA you just fork the network.

Now the question is would anyone use that fork over the existing one?  I wouldn't for the moral hazard and other reasons.  I seriously doubt it would gain a consensus or even a super majority but those are "people problems" not technical ones.


Any change can be made to the protocol at any time through the use of a fork, the "hard part" is just convincing people to use it.

That would be you and me, but there might be people who might gain confidence in a "regulated" Bitcoin…
I need to stop playing devil's advocate, I'm all opposed to a fork and even thinking about it makes me sick ::)

Which doesn't change the fact that it "could" technically be done.  One can point out the correct answer while not advocating its use.  It is like asking if you shoot someone in the head is there a good chance they will die.  The answer is yes but the yes doesn't imply support for that action.

So, the idea doesn't involve taking the coins back from the people who have them now?  It would just perform a "Quantitative Easing", and instantly inflate the supply by 750,000 bitcoins? So the eventual maximum coins minted would be somewhere around 21,750,000?

Just want to make sure I understand the specific technical resolution we are trying to discuss, before too much confusion leads to unproductive discussion.

Yes and no. The basic idea is, if MtGox really just lost the keys to a 750K BTC wallet (which is a rumor), it would be technically possible to create a fork of Bitcoin where the original MtGox wallet is made unspendable by code and at the same time 750K new BTC are created in an address where MtGox has control. No need to inflate the total Bitcoin supply.

Or you end up with two totally incompatible "Bitcoin"s each supported by a group of users but where tx are not compatible between each other.  Both claim they are the real Bitcoin and the resulting confusion kills off the project.   Most people are pragmatic and aren't going to support a fork unless it has near universal support.   The only forks to the network which have succeeded have been pretty mundane non-controversial fixes or enhancements (additional features like P2SH).

Ok, I misunderstood the original question.

I thought it was widely accepted that the bitcoins were taken from MtGox.  If that were true, then they have most likely already circulated throughout the bitcoin economy and are well mixed into many people's wallets. I thought the original question was if these bitcoins could technically be taken back from all the wallets where they now have spread and given to MtGox.

I hadn't yet heard the rumor that MtGox "lost" the private keys to 850,000 worth of bitcoin addresses (Note, that in the press release that I saw this morning from their bankruptcy announcement they claim that in addition to 750,000 of clients bitcoins, MTGox is also missing 100,000 of the company's bitcoins)

It's technically possible to build a calculator that concludes "2+2=5" any time it would be convenient for that to be true. That wouldn't make the calculator any less broken.

However if you convinced everyone on the planet that 2+2 does equal 5 then the calculator wouldn't be broken all the old incompatible ones would.   That is the point.  Bitcoin works on a consensus, if you want to change it you need the support of a consensus.  This isn't a technical problem, it is a very difficulty social/human barrier (for good reason).

No, it would just mean that humanity had somehow simuntaneously lost the capability to do arithmetic.

Couldn't All of it be put back into the blockchain to be re-mined including the seized BTC. add it back in and go back to a block size of 50 BTC to help BTC rebound    

I'm sure MTGOX would LOVE to have the blockchain rolled back to a certain point in time so they can retrieve lost/stolen coins.

Not gonna happen in any meaningful way to allow them to dig themselves out of this hole.

If the coins are indeed lost then I thank them for the kind 5-7% donation to my current holdings of bitcoin in terms of value.

"four" and "five" are simply agreed upon language constructs.  Language can be changed by consensus.

GoxNumbering System
One
Two
Three
Five
Four
Six
Seven
...

Not if all of humanity decided to pronounce the shape "5" with the word "four", and the shape "4" with the word "five"  ;)

But I think we are getting a bit off topic here.

Bah, you're too fast.  Beat me to it.

You assume everything else is equal, not considering bad PR.

My question was to a special lost keys  scenario. If the coins are stolen, they are the property of the thief now and no fork should take them away from him.

You guys think you're being clever by talking about semantic representations instead of the underlying concepts, but you're not.

You entered this discussion without reading the whole thread before.

Apparently the consensus amongst rumour posters is that the FBI seized the coins on Feb. 7'th, so the case is not about lost keys, but theft. Therefore my question is no longer relevant.

Personally I think that forcible coin seizures is an issue that Bitcoin or some cryptocurrency will have to address eventually but it probably won't find much support here yet. It just seems kind of contradictory to have a decentralized, libertarian, etc. currency that can be easily taken over by Uncle Sam pointing a gun at a few of the largest holders.

Violence has always been the strongest argument.

Maybe a crypto currency that is both physical and virtual at the same time?:

A public ledger file on all physical coins in existence. The coin itself being a hardware key salted uniquely and verifiable publicly?

That would be like "digital gold", authorities would have to search you to confiscate it. There would be no mining incentive and their creation would be centralised. The hardware coin would be handed over as payment and would be checked against the public shared file before each transaction. I wouldn't be of much use on-line... Crappy idea, sorry.

Look what I found casascius suggested some time ago (2011), and, wonder what, he was thinking of a hypothetical MtGox 500K BTC screw-up. Boy, did he misunderestimate MtGox ;D

WVote within ten minutes LOL, spot on about Mt.Gox.

I don't understand why everyone would be so against it. It's not bailing out Gox. It's bailing out the people (that's real people some of whom are committing suicide) that invested in Gox. And it's about creating a unique reputation for Bitcoin compared with fiat that will drive adoption, and reverse this PR.

In a regulated exchange you have to keep reserves, and you have to ensure them, and you have to take industry dictated security precautions with it. But if it goes missing it's never seen again. Bitcoin has the opportunity to be better.

Citibank just lost $400m, which is never coming back. Imagine if Bitcoin could show the world that it could fix those problems. If you're worried about setting a precedent, set some rules. 5% or more of total coins in circulation. Forensically traceable to the owner. The evidence presented to the miners that will vote. The new keys passed into the control of an administrator who's job it is to return the coins, bypassing Gox completely.

At the moment the public perception of bitcoin has been retarded by 2-5 years. Forking the chain could advance it by as much.

If the FBI want's to confiscate money they won't do it through control of the blockchain, they'll use the courts. If some authority tries to unjustly confiscate users coins, they won't get the anonymous votes.

No, "fixing" this problem would kill bitcoin.

If someone can create new coins out of thin air, then bitcoin's supply is no longer limited.  If someone can move coins without proving the private key, then your coins are no longer yours.

Bitcoin's value comes from the usefulness of these properties.  Without them, there is no point.

The good news is that no one can force anyone else to accept changes they dislike.

If you think it is a good idea, do it. This is open source software. Then you can see how many people agree and switch you your Gox-coin. Let us know when the fork is ready.  Talking does nothing to help these people.