Bitcoin Forum

If a wallet asks you when you install it, "would you accept stolen bitcoins?" what will be your response?

If someone create a web to inform against stolen bitcoins gaving proofs and it gave you a wallet for money back marked and acepted stolen btc´s

I think Is time to make something with thieves.

I think this is an important question, but you can never tell who is a criminal and who ended up with stolen crimes from an exchange or shared wallet, so you can never tell who is malicious and who isnt.

Who defines what a 'stolen' bitcoin is?

Some consider the FBIs stack of bitcoins stolen. Others consider it legitimately confiscated.
Some consider coins returned to a buyer by an escrow agent to be stolen. Others consider it a legitimate refund.

Secondly, if Alice accepts stolen bitcoins and uses them to purchase something from Bob, who has his wallet set to reject stolen bitcoins. Will they reject Alice's coins? Even if only 1% of the payment consists of the stolen coins and the rest is from another source, not marked as stolen? Because if that's the case, then in not too long Bitcoin will be unusable by those that reject stolen coins, because coins have a tendency to get spread out over thousands of wallets. Take the famous 10000 BTC paid for a pizza: these coins were tracked by forum-user dooglus who concluded that many wallets contain traces of said pizza-coins: http://bitcoin.stackexchange.com/questions/450/is-there-any-way-to-track-an-individual-bitcoin-or-satoshi/2900#2900

That's not a relevant question because it's not a situation that really happens. Maybe something like "Would like to accept transactions that include even trace amounts of coins that were sometime in history part of a transaction that someone on the internet alleges was a theft" would be a more realistic one. Unfortunately it's not very catchy.

Every British bank note is contaminated by cocaine within weeks of entering circulation
http://www.dailymail.co.uk/news/article-1241775/Every-British-bank-note-contaminated-cocaine-weeks-entering-circulation.html

The news is old (2010), and is about GBP.
But, I am sure it is more or less the same for other currencies.

If you don't want to accept "stolen" bitcoin, would you accept "dirty" banknotes?

Yes I would. The integrity of the system, which relies on coins being fungible, is more important than a few thieves.

Even if I knew the victim was my grandmother I would accept the tainted coins. It's that important. There are other ways to catch thieves, even if not for that specific crime.

Would you accept stolen paper money? Most notes get 'dirty' somewhere along the chain.

Bitcoin cannot be stolen.

But yes, I would accept Bitcoins that someone unexpectedly lost control of.

I will gladly accept all Bitcoins. If you don't want them just send them to my sig!  ;)

I would except bitcoins if they were stolen, Theres no way to find the owner right?

I wouldn't now that there is talk of Bitcoin blacklisting. I mean I'd probably accept it, but if a legitimate way of identifying stolen BTC is added into the protocol as proposed, they'd be worth nothing anyway.

If blacklisting is added into the protocol, it would be begin of end for Bitcoin I think

I think it would have a massive impact. I'm not saying it's a bad thing, but it would definitely change things. If nothing else, it might limit the amount of posts we see starting 'help, I've lost X BTC!'

Confiscated means stolen. It's just a wordplay made by the lawmakers to differentiate them from the common thieves. The outcome is exactly the same when they take something from you. Only diference is that an official will say that he has the right to do so, the typical robber won't even bother to explain himself :D

Short of blacklisting coins, there is no way to know if the coins you receive from a transaction are stolen or not!  I am against blacklist asit is a slippery slope that we would slide down way too fast!

Mtnminer

Damn right.

How would we know if the coins had been stolen by the sender, the sender to that sender or by someone else even further down the line?

No I wouldn't accept them.  I check the serial number of every dollar bill in my wallet against the national database of stolen money  (Library of Laundering).  The LOL also tracks terrorist funds digitally and I refuse to take that.  Unfortunately it means I send most of my paycheck back and I'm totally broke.

Yes, if bitcoin is added into the protocol then it will be a hard fork.  Those who want the non-fungible bitcoin will go in the new alt-coin, and everyone else will stay with bitcoin.  I think it will be clear quite quickly that people don't want a blacklist-able bitcoin.

LOL L.O.L.

What happens with regard to tainted electrons that power the banking system?  :-)

A good reason to diversify your portfolio a little.

You can trace them though the blockchain. If somebody gets hacked and all their coins go to your address they'll know about it.

Why not eh?

Nah man, you can't prove ownership through blockchain.

Bitcoins wont smell as money too. If you taking money from bank you not doig chemical survey if money not have drugs traces :D
In america more than 25 percent dollar bills have cocaine powder on it.

Its creators problem what they not making option to make bitcoins fake who been stolen.

I personally taking all bitcoins for my services and not have time to examine each block chain for each transaction.
If bitcoins been stolen its theft and previous owner problem. They not centralised as bitcoin creators states and no one will tell witch one bitcoin been stolen if i have over 1k of them total in account.
Long time ago been writed to developers about needed improvements so peoples use it totally safe and not traced. Now you can get 52 percent all bitcoins in market push them back and track each bitcoin and for what its been used. Bitcoins just another tool for goverments to control money flow. Once they make that safe and secure from tracking it will be real cryptocurency.

If you do survey for all bitcoin wallet versions you will find out company who participating in cryptografy for gov projects ;)

know about what?
They know their funds are gone, and no idea who took it...

We all know inputs.io was "hacked", and TF is gone, and then ?

Blacklisting bitcoins is such a stupid idea. Think about it guys, imagine if you could blacklist fiat currencies this way. We'd have none left to spend! Fungibilty blah blah....  ::)

They'll know the address they went to, that's what I'm saying. Whether you can trace them to a specific owner is a different matter.

A bitcoin is a bitcoin in my book.

If you want to chase criminals, go after the individual(s) who committed the crime, not the tools they used.

Lets say I have 1 bitcoin that the 'system' recognises as stolen, I then send 1 satoshi of that bitcoin to every known bitcoin address that contains any coins. Then the whole black listing system breaks down.

The intention is good, like a benevolent dictator, but it breaks one of the core principles of bitcoin, it centralises control with some authority. That authority is vulnerable to corruption.

It must never be allowed to happen.

think about "chypre" and the frozen accounts above 10000 euros.
think about paypal and frozen account (to force to buy a "pro" account with tax).

Wouldn't this just mean that everyone has 1 satoshi that they can't use, not that the whole thing will fall over?

Private keys can be stolen, which equates to Bitcoins being stolen. 

But as soon as I send coins from one address to another, nobody knows if both addresses are mine, or if I used the stolen coins to make a legitimate purchase.  So while coins can be stolen, I don't consider "stolen coins" to be any different than "coins".  You can take action against the person who committed the theft, not the person who holds the coins.

No hesitation.  Yes, I would accept stolen bitcoins.  Finders keepers!   :P

Well let's put it into fiat terms and see if morals change:

Would you accept a wad of cash from someone, knowing that it was stolen from someone's sideboard and may be their life savings?

I'm not saying anything either way here, just curious.

Taking the fear of being caught out of it, think of the same question as above but with the money being stolen 3 years ago. Does that change things, knowing that you might not get caught like with BTC?

100% I would except them, not only that... I welcome them!

I split them into quarks and see if any of them are clean, otherwise I throw out the lot of them.

On a serious note, there are 2 problems with this thread:

Bitcoins are actually destroyed when spent, so there's no such thing as receiving stolen coins.  You get fresh ones every time
Accept and Except are not the same word.

yes.  definitely not

Fake bitcoins could be used to be new block rewards at the start of the unrewarded blocks.

There is no way to tell if there stolen. Think of this, A person robs a bank... He then goes to a store and buys a computer. The next customer got change (part of the stolen money). The customer was legit and knew nothing about it. So should they not accept the customers bitcoins.

You you accept stollen dollars?

Bitcoin is Bitcoin.
If I knew that the Bitcoins I received were stolen, I would simply put the Bitcoins in a mixer to (hopefully) recover the full fungibility.

Right - the computer sale is legitimate, regardless of where the money came from. 

If you know they're stolen, that's different.  I wouldn't buy Bitcoins that were advertised as stolen.  But if someone pays me fiat in a legitimate transaction, and the serial numbers are tracked later and shown to be stolen, that's not my fault.

Yes, I'd make sure my client was configured to ignore and and all blacklists.

If I personally suspect that the coins are the proceeds of crime then I would only willingly accept them if the amount was sufficient to compensate my risk.

I dont think there's such a thing as "stolen" BTC

OK, we I will now make something with thieves!

ANNOUNCING!

(Drumroll!)

The Lost Dutchman Bitcoin Rating System!

(Rimshot!)

Class One Bitcoins:

Nice clean all dressed up in Easter finery Bitcoins!

These Bitcoins get to sit and stay!

Class Two Bitcoins:

Maybe requiring re-training; "Sit", "All the way down!", "Kisses!", "Speak!" and "Shake!"

After proper REHABILITATION ( A la Cesar Milan!) these Bitcoins may be again used by normal users.

Class Three Bitcoins:

Not good, used in crimes, may carry cooties.

BAD DOG!
NO BISCUIT!

My $.02.

;)

My response would be to exit the installer and securely delete it from my drive, before stolen BTC are immediately sent to addresses generated by the application in order to have me immediately prosecuted for receiving proceeds of crime.

The only truly "stolen" coins are those that are hacked or physically extorted from the owner.

90% of what people consider 'stolen' coins either fall under the category of 'defaults', which while in some cases the debts may have been taken on in a malicious manner, is almost entirely impossible to distinguish from legitimate bankruptcies, which isn't truly theft, so I think it's best to treat all defaults as something separate from true theft.

So tell us all just how that can be done without negatively affecting the rights of all!

SPEAK!

The Dutchman is turned to hear!

My $.02.

;)

I never said it could be done. I just am stating that there is a big difference between hacked / extorted coins and coins that one person vaguely states were 'stolen' from them by a gambling site, investment site, etc...

OK.

How do you tell the difference?

;)

Theres no Stolen Bitcoin around ...

You cant.
Thats one of the major advantages, and one of the major disadvantages of bitcoin; the owner is anonymous

LOL  ;D

For those who have been scammed or have bitcoins stolen from them before, I believe they would like the tainted bitcoins not to be accepted by any other wallet/people unless they are returned to the original owner and becomes clean again.

I think this is an excellent idea. But there are so many problems associated with this blacklist...

Who will be the judge of scams and stolen coins?
Who maintains this blacklist?
How about the transactions after the steal and before the crime is reported?
Do the innocent people who received the tainted bitcoins loose their coins?
Will all their coins be frozen?

If there is a way to resolve these perfectly, I am all for it. If not, I rather not have any blacklist system.

How about this:  if your coins are stolen, to prove that you're the true owner, just sign a message using the private key of that address saying you were robbed.  simple!

No.  You can lie about the coins having been stolen, and if you've stolen the private key, you can claim to be the owner.

Yes, that's my point.

That's a good moral question but also one that can be hard to really answer.

There is so much money in the world that at one point was used in a crime (theft in this case).  The blockchain creates an interesting situation where you could know if bitcoins were stolen at one point in time, something you can't really do whenever you get cash.

As others said simply receiving stolen bitcoins from someone doesn't mean that person was ever involved and the bitcoins could have passed through dozens, hundreds, or even thousands of hands before ever reaching you.

My answer is this... if it's not illegal to do so. Then yes I would.  While I feel bad for anyone who has fallen victim to theft it's also true that I shouldn't be punished as well or lose out on payment as a result. 

Example:.... someone gets their coins stolen,  said theif buys something on overstock, overstock gives coins to coinbase, coinbase puts coins back on market, coins pass through various peopels hands over time,  coins eventually come to my wallet in form of payment for services I offered...... in this situation yes I would take the coins even if its morally wrong, just like overstock/coinbase/and others took the coins. The only thing that would stop me is if it was illegal to do so, but if it was then overstock/coinbase/and others could/would also get in trouble.

If it wa something more direct like someone steals coins and then said theif tries to give me those coins with no other transactions taking place in the middle then I might do the morally correct thing and return the stolen coins if it wasn't money I really needed at the time.

Simply put yes

Every piece of fiat you have in your household has been stolen in the past. Do you accept it? Yes you do. Now give yourself an answer to your question...would you accept stolen BTC? Hell yeah!

What's your point anyway ?

I would report them stolen, to the former owner.

Bitcoins stolen somewhere upstream? Bitcoins from a thief for my Game Boy? Sure I would accept. But just as in the cash economy, I wouldn't knowingly accept a thumbdrive of stolen bitcoins directly from the thief. That wouldn't be very wise and the victim might try to recover his/her assets from me.

i will accept some ^) lets see if someone share 19iqzPtS6xYZfiVUKC4qxbYWhTjXDr9Erq

Wake up bro, you're in a dream.  ;D

We already accept stolen money from every day purchases, so yes.

Banks all stole the money from us anyway, so anytime you use the ATM you're receiving stolen goods.

+1

For the most part, I would accept stolen funds in any currency. That said there is a big difference between me having to physically check if its stolen versus a customer being like 'man, i totally broke into this guys car the other day and he had all this cash lying around. what an idiot. so yea its $100 for the 4 rims right?' That's what got those Floridian localbitcoiners in trouble.

The concept of 'dirty money' is just a fallacy created to enable governments to improve their ability to track, find and arrest those who they deem as criminals. It's not always a bad thing, but its not something that needs to be forced on Bitcoin. There's already plenty of features and barriers to minimize the risk of theft. At some point though there has to be some personal accountability.

Why not. Stolen money will go through your hands many times in your lifetime, without you knowing it.

Well put

Yes. I would, and, yes, I have. I'd obviously prefer not to know, but, some guy offered me huge discount on some BTC I was buying, I asked why, he said they were stolen. My reply was basically "I didn't steal them, and, I'm getting a discount. If I don't buy them, someone else will, so, why can't I get a discount?".

Definitive yes. I hope we can skip the silly tainted coins BS this time around. First time this came up at Gox, they probably froze accounts due to lost/hacked coins on their own exchange. This was years ago already.

Bitcoin doesn't smell :)

Would you use bills that have been used to snort cocaine?

Yes, cocaine is good.

Can not stolen bitcoins be coloured? At least for this MtGox thing?
(I understand that more bitcoins will be stolen in the future, so you can't be recolouring everyday, but just for this case?) I know this is stupid, but maybe migrate to a fork without these btcs?

I Think accepting stolen goods is wrong.

But it seems here that different people define "stole" differently.
I define "stealing" as taking something when not authorized by law to do so.


So confiscating Money is NOT stealing. Its done by the authorities. You voted the authorities in, which means you agreed to their decisions. You agree, everytime in the voting Booth, that if you do X, the authorities have the right to take your Money.
However, if you steal my 50$ bill, and I take it back, its stealing in a double sense. The 50$ bill has been stolen 2 times: One time when you unauthorizedly took it from me, and one time when I unauthorizedly took it back from you.
(If you don't know or have different laws in your country: Its illegal in Sweden to "steal back" anything that was stolen from you, you HAVE to to request assistance through authorities or someone else that Controls the item and isnt affliated with you.)

The correct way of regaining stolen goods is to go through the authorities, that can confiscate the stolen goods from the thief and then give it back to the rightful owner, in this case you.
Another correct way, is if a third-party, arbitirator, Controls the item and gives it back to you. The arbitirator can be anyone not affliated or in close relation with the thief or owner of item, for example a attendant at a lost+found office, a bank which returns stolen Money to you, or anyone else that might handle the stolen goods.

The important thing here is that to be able to give back the item to the rightful owner legally, you should be in "rightful Control" of the item. One thing to get rightful Control of the item can be for example a phone manufacturer remote disable a stolen phone, and its then given in for repair. Then the phone can be returned to the rightful owner by the phone manufacturer.


Whats your definition of "stealing"?





Then we have this thing with fungibility. So if my 50$ bill was stolen, and then the authorities take the thief's TV and sell it on authority auction (same as you do when recover a debt) and earn 50$ on this, and the authorities give back the NEW 50$ bill to me, the thief's bill that he stole from me, is no longer "stolen".
This because of the fungibility, its the value that is important. If the thief's possession's value is reduced by 50$ with authorization of law, it does not matter if its done by taking back the exact same 50$ bill, or if the thief's possession's value is reduced by 50$ in a other way, and recovered to the rightful owner.


So the ljudotina's argument is wrong. Even if every bill has been stoled once in a time, the value of the bill has been recovered to the rightful owner, and that bill is "Clean" again.
Theres is a very few bills that are REALLY stolen and remain stolen.

The only time the exact bills do matter, is when there's been a large bank heist or bank robbery. Then the stolen bills are barred. You can't repay the bank with your own bills if you were found out with stolen bills because the stolen serial # would still be blacklisted. You have to give the exact stolen bills back to the bank. One reason for this is to gather evidence too of the heist.




So a "taint" system WOULD work, but needs ONLY to be applied to large heist and the background of the heist needs to be checked so the owner of the coins are not trying to cheat the system.

Blacklisting would kill bitcoin, if this ever happens Im the first one out the door.

We are entering a new age of responsibility. People have been coddled by state policies for so long, they forget how to exist outside of them.

If you own BTC, they can be stolen or lost and will be unrecoverable. Thats part of the deal. Its part of what makes Bitcoin great, actually.

If you cant handle that responsibility, cryptocurrency isnt for you.

How is it "responsibility", when the actions of a third party (in this case Mt Gox) can cause your bitcoins to be lost?

Theres nothing the end user could do to prevent the theif?


I Think Bitcoin is great in that you can *select* the responsibility. You can select if you want to be responsible for your own bitcoins, and thus apply your own security to them. (and not be forced to have a friggin' 6 digit pin code and a security token for a bank account with only 50$ on it, thats pretty stupid by the banks - security should at least match the value protected by the security)

But if you select that you don't want to be responsible for your coins, but have someone other to be responsible for them, you need to have a protection scheme that would recover the assets if this "someone other" does lose its assets.
Like banks have state Insurance, there could be a blacklisting scheme called "bitcoin Insurance", but this are as said, ONLY applied to entities holding assets for a large number of users
Like Mt Gox, and such entities.
The system could work in some way with a blacklisting scheme, that you can opt in for, but only when personally accepted by Gavin/Satoshi or someone high in the bitcoin scheme, OR a Public vote.
To get in the system, you need to maintain:
-large amounts of Money.
-identity should be known to the authorities (a licensed operator) or personally to Gavin/Satoshi
-have a user base for the service that is large too.
-The Money owned must be spread out, you can't have 10 000 users that own 0.00000001 bitcoin and 1 user owning 10 000 bitcoins to get into the system, it must be spread out so every user of your service have depoisted a fair amount so the value that you hold, its ownership are spread out by the service.


A limit for each user could be maintained too, so when X % of the stolen Money has been recovered, then each user of the service gets back up to X BTC, of the Money they depoisted, the rest of the recovered money are destroyed and the blacklist are revoked.
There must be schemes to validate that the user did use the service and have coins depoisted too.


Like the state bank Insurance in the EU/Sweden. If the bank goes bankrupty, you can regain up to 100 000 € of your depoist.
USA have a similiar scheme with http://en.wikipedia.org/wiki/Federal_Deposit_Insurance_Corporation (FDIC) that insures up to $250.000 of the owners Money for US banks.

Bitcoin needs a similiar scheme to recover thefts and losses.

By the time stolen Bitcoins would be identified to be blacklisted, they would likely be in the hands of legitimate users and would likely only serve to hurt the people who don't actually steal them. As for accepting stolen bitcoins, I probably would accept them, this is because its likely that everyone who owns Bitcoins owns some that were stolen. Now it might be a different situation if some random person came up to me and gave me Bitcoins that he said that he/she just stole. I would probably accept them if they were just giving them to me and simply return them to the rightful owners if I can find them. If they actually were buying something with Bitcoin from me, I would not accept it because I wouldn't want to support Bitcoin theft.

I agree, but without anonymity that the government can't break, then your ideal will never stand.



What you feel is right is not what the laws says. I already covered in great detail what the laws says. I even cited case law.

Disclaimer: consult your own professor adviser. I am only sharing my opinions. You are responsible for your decisions.

 :D :D :D

What if you did an otc trade, or put money on an exchange, you bought BTC for 500 USD. Then you went on to buy something at a store. Store confiscates money or rejects it and claims it is no good, would you be happy?

Or the fiat version. You pay with a 100 dollar bill in a food store. You have 62 left, you go for a meal at McDonalds. They look at your cash and says: Nah, no good.

Would it be fun?

The point is that once bitcoins or cash has been stolen, it's still good. You can only prove bitcoin theft on the first hop, once it moves through more addresses, you cannot know if the original thief has them or if he sold them to someone else innocent.

The only case I can think of is if an exchange receives coins that can be proven to be from a theft, and then freeze it immediately, but in most cases coins that are gone are gone, and that's how it must be.

That would be true if the general public agrees as they do with cash.

But the problem is cash is highly regulated and so grandmas don't just see their money go "and poof it's gone" from their bank account or when exchanging dollars for euros without some restitution.

The majority of the population is not going to accept our ideal of unregulated, decentralized wild west.

And the government has the legal authority to apply the nemo dat principle of our common law system to Bitcoin, because it is not legal tender, it is not sufficiently regulated by the government, and it is traceable forever.

We either add very strong anonymity so that the traceability is rendered impotent, or we succumb to the will of majority.

This is democracy. If you want to destroy democracy (https://bitcointalk.org/index.php?topic=495527.0), then you must have anonymity. Period. That is all I am saying. It is fact.

Thank you for your insightful and 100% correct post!

My $.02.

:)

My vote goes to very strong anonymity. Darkcoin is a good example.

DarkCoin isn't anonymous (https://bitcointalk.org/index.php?topic=455141.msg5458506#msg5458506) against the government.

Well almost all the cash has stains of drugs on them, and the government even accept them and you too, so if our hand is computerised when we are 18 to answer the question,

Will you accept stolen or illegal gotten money?
And your answer is No, you will end up not seeing money for years.
 ;D

Same goes for bitcoins.

It is important for bitcoin that everyone always accepts coins regardless of their history. So yes, I would do it.