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1  Bitcoin / Bitcoin Discussion / Re: Criminal Wallet Address Database? on: June 16, 2011, 12:36:15 AM
Most probobly a payment to a merchant would be made with partially tainted and partially clean bitcoins.  As time goes on more and more transactions each would have a small amount of taint in them.  And we are supposed to do something about this?

This is exactly how real world cash works as well.  I bet some of the cash in your pocket (if you have any) has at once time been either stolen, used for drugs or other illegal acts.  Cash is that way.  

The goal isn't to attack the tainted funds, the goal would be to trace the transactions to hopefully, eventually lead back to the identity of the thief such that he can be found out and be punished / sued in a civil suit. With cash, it's harder to trace the order and how the transactions took place. However, like mentioned, the thief would have to inadvertently give himself away in some fashion by tying multiple of his addresses to his real identity. This would provide sufficient evidence for law enforcement to act. 

We need to protect our private property rights. However, like any free market, I'm fairly certain a solution will evolve to deal with this. I'm just trying to put some ideas out there in the hopes that somebody adopts the cause.
2  Bitcoin / Bitcoin Discussion / Re: Criminal Wallet Address Database? on: June 15, 2011, 11:17:23 PM
So, where those stolen coins go will be public, but as others have pointed out, there are relatively simple ways to obfuscate that trail so much that it becomes impossible to track them down to the individual that stole them.

Yeah, the individual would have to be stupid enough to attach his real ID to one, or a few of his addresses in some shape or form and make a transaction where his real identity is known. Probably multiple transactions to acquire a reasonable burden of proof.
3  Bitcoin / Bitcoin Discussion / Re: Criminal Wallet Address Database? on: June 15, 2011, 10:16:17 PM
Well, at least we you don't know what laundering is, or how it works here in btc land.

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Money laundering is the practice of disguising the origins of illegally-obtained money. Ultimately, it is the process by which the proceeds of crime are made to appear legitimate. The money involved can be generated by any number of criminal acts, including drug dealing, corruption, accounting and other types of fraud, and tax evasion.[1] The methods by which money may be laundered are varied and can range in sophistication from simple to complex.

I'd say that since all transactions can be viewed by everyone on the network... it's pretty hard to launder the money. I guess they'd send the funds to Mt Gox and cash out and then buy back in at a different address? At that point, I guess there isn't much you could do. Although, if there was a way to report theft in a reliable manner without it being susceptible to abuse, the individual would have to tie cashing out from Mt Gox with a name and and an account of some sort such as Dwolla. I think it would be entirely possible to trace the laundering route.


Next question is, how do you prove it is actually stolen? Some people would lie about this, to either try and get their legitimately spent money back, to tarnish a name, to get a story publicized...etc.

I agree, abuse would be a problem. Perhaps you'd have to make an actual police report and provide evidence you did so there would be legal ramifications for lying? I have no clue... once again, I'm just trying to have an open brainstorming session here. I want to hear everyone's ideas.

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How do you distinguish between a thief sending some BTC to an address of their own vs. them paying someone for something with those coins? If you start to refuse tainted coins and can't make that distinction, you end up punishing people who were simply unlucky enough to get paid with stolen coins.


This is also a very good point. The goal of this database would be to assist the catching of thieves, not to demonize people recieving tainted coins. The transactions obviously wouldn't be demanded to be reversed. It would merely be used to help pinpoint the person who originally stole the funds and perhaps assist in bringing them to justice.

4  Bitcoin / Bitcoin Discussion / Re: Criminal Wallet Address Database? on: June 15, 2011, 09:26:10 PM
Infeasible.

Why wouldn't [the criminal] launder it? Why wouldn't [the merchant] accept it?

You might be able to "taint" the chain, but given the network, infeasible.
 

The criminal could launder it to another account, but all the transactions that are made from the account are known... so it will also be known what addresses the bitcoins are sent to from the fradulant account as well. The individual who stole the funds would eventually be pinpointed. Also... if it's known the address stolen funds are associated with, merchants could decide to refuse business if they want.

But yeah, obviously, there would be a lot of problems with application. Just trying to think of a way to address theft.

It seems to me preventing abuse would be very, very difficult.

I agree with this, I was just putting ideas out there.
5  Bitcoin / Bitcoin Discussion / Re: Criminal Wallet Address Database? on: June 15, 2011, 09:12:16 PM
I can write something that can make it easy to track transactions if there's enough interest *cough*donate*cough*.  Grin

I was thinking of something along the lines of an online community site. Thefts would be reported and then there would be some way to clarify that they were actually stolen. Whenever a merchant is about to make a sale, they can type in the address they recieve the transactions from to see if it's associated with an address known to have stolen funds.

This would make it easy for us to report thefts to law enforcement and eventually return the funds to their proper owner. A detective for hire site if you will? There needs to be some sort of mechanism to protect private property ^_^. 

6  Bitcoin / Bitcoin Discussion / Criminal Wallet Address Database? on: June 15, 2011, 08:10:55 PM
In light of the individual who just had his account hacked and 500k worth of bitcoins stollen... I thought of an idea.

We know the wallet address that recieved the funds... Since we know the wallet address, couldn't we track the transactions this guy makes and note them somewhere? It's very likely that eventually, the individual exposes his identity by ordering something. It would be possible to track the exchanges made to and from the address that recieved the stolen funds.

Perhaps there should be a database that tracks addresses known to be involved with theft such that merchants would have the option to check addresses and help catch the criminals. Although, it would have to be designed so that it could not be abused such that the likelihood of it being used to harm someone innocent is minimalized.

Just an idea.
7  Bitcoin / Bitcoin Discussion / Re: Mt Gox monetary withdrawal taking 7 days, is this normal? on: June 11, 2011, 08:30:49 PM
I thought about this, and I am worried that it might have been sent to the wrong account. However, the the trade history does not show the dwolla account it was sent to, merely a large reference number that only mt gox can interpret. I guess ill have to wait for a response, but ill ne waiting for a while considering they are 13 hours different from us.
8  Bitcoin / Bitcoin Discussion / Re: Mt Gox monetary withdrawal taking 7 days, is this normal? on: June 11, 2011, 07:32:03 PM
Bump. I sent another email to support@mtgox.com. Probably just a bug
9  Bitcoin / Bitcoin Discussion / Mt Gox monetary withdrawal taking 7 days, is this normal? on: June 11, 2011, 04:41:08 PM
Hey, so I withdrew 1000 dollars from mt gox  into my dwolla account about a week ago. I sent an email to adam (magicaltux) and was told that my withdrawal would be marked for retirement and would go out the same day last Wednesday. However, the funds have still not shown up in my dwolla account. Anybody else having similar issues?
10  Bitcoin / Pools / Re: Cooperative mining (640Ghash/s) on: June 03, 2011, 07:00:35 PM
Hey slush, I was just wondering why my share was so low on this round.



Thanks ^_^,
11  Bitcoin / Mining support / Re: connection problems with guiminer and deepbit on: May 27, 2011, 12:15:38 AM
I have the same problem... it randomly disconnects.

Thought it might be power, so I added another power supply... didn't work.

Now, I'm messing with the flags to see if it increases stability. Example, right now I'm only using -v and still getting the same Mhash rate, so that's good. Hopefully, that might solve the problem.
12  Bitcoin / Mining / Re: Does the Intel D975XBXLKR support 3 video cards? on: May 25, 2011, 06:28:31 AM
Same with me... 3 x 5850s... No problem, same mobo.
13  Bitcoin / Mining / Re: Is rig building still profitable? on: May 23, 2011, 06:34:15 PM
Rig building can still be profitable. Right now it appears that it may not be as profitable as purchasing Bitcoins directly, but these conditions may change. We do not know for certain how market conditions will change. I look at mining as a means to acquire Bitcoins, just as purchasing Bitcoins is a means of acquiring them. The actual trade-off between the two acquisition strategies my seem a bit counter-intuitive... As price increases difficulty increases even faster, this advantages purchasing Bitcoins and dis-advantages mining, but as price drops the rate of Difficulty increase will also adjust downward over time, which favors mining.

These two scenarios will always be in tension. Instead of betting whole-hog on one or the other I think a balanced approach is best. If rig building is negatively impacting your ability to make sufficient purchases of Bitcoins then scale it back and use available capital to purchase Bitcoins. A good place to start is an even distribution, for every unit of your local currency you spend on mining spend an equivalent amount on the purchase of Bitcoins, it will become apparent to you over time where the optimal distribution is for your particular risk/return needs...

In order to make this decision it can be useful to limit the number of variables you are looking at, one of these variables is time horizon. Pick a point of time in the future and set some goals for what you want your portfolio to look like on that date. My analysis of the way Bitcoin markets may behave favors looking at January, 2013 as an important time horizon because this is when the block bounty is due to be slashed in half. At this point in time I want as much of my local currency converted into as many Bitcoins as I can manage. The reason I want this is that I think that the sudden constraint on the number of new Bitcoins entering the economy will contribute to a higher exchange rate. I also think that the reduced block bounty will lead to a decrease in the rate of growth in Difficulty, and that after a few months of this we will be primed for a renaissance in mining with new, more efficient technology, and I want to be prepared with enough capital to get into it... This is an event I do not see will be repeated with subsequent halving in the block bounty, it will be a unique event that will definitely separate the professionals from the hobbyists, as only professional miners will be prepared for it.

I like your strategy, hope you don't mind if I adopt it :-P.
14  Bitcoin / Mining / Re: Is rig building still profitable? on: May 23, 2011, 03:54:42 PM
With current difficulty plotted to go up 100% this morning - anyone who is building a rig for mining is going to have a long wait to pay it back.

I know that alot of people don't quite grasp the power of doubling - but it's real. I'm fairly certain most of this capacity is being brought online by those that do the simple calculations without really looking at difficulty increases, trade differences, etc.

However, a lot of the more effective mining gear for the price (I.E. 5850s, 5870s, etc.) have gone out of stock and/or greatly increased in price. I recently bought two 5850s for 140 dollars and one 5850 for 180 dollars. I have them overclocked to obtain around 960 Mhash/sec total. Since I bought them, they're now back to selling for ~300 dollars if you can even find them. This is going to edge people out of the game.


I have been in business for myself for the last 15 years, working in the networking/technology centers. I have a datacenter and thought to myself - well things have gone well - this looks like a nice little side income - so I started to crunch the numbers and came up with the fact that if you want to build rigs as a business, or are continuing to buy them *right now*. If our present course stays true, you will be waiting a long time to get your money back.

If you think that rig building is still going to be lucrative enough to continue to fund new hardware purchases with a reasonable ROI time, you might be suprised. Taking the 50%-100% difficulty increases we have (and will) continue to see in the coming months - I would like to present some basic numbers:

Let's take an example $6000 investment I was contemplating to get ~5000MH up and running for a period of 6 months (with .09kwH commercial electricity) from today.

First some assumptions:

Mining Rigs Cost: $6000
Electricity Cost for 6 months: ~$1000
Weekly Bitcoin Rise: 8%
Weekly Difficulty Rise: 100% (based on our next difficulty projection continuing from 500000+ as seen at bitcoin.sipa.be)

At the end of 6 months difficulty is @: 999424000 and Bitcoins are trading against the USD for: 1 Bitcoin=16.49626495810

Assuming you don't sell your bitcoins early and wait for the 16.49 price you will yield: $5628 Gross

Subtract: your $6k in equipment, $1k in electricity and you end up with a loss of $1372 - lets say you sell the rigs for $1500, well you just made $128.

Shorter times don't help - they just make the hurt worse - assuming 3 months your total value of generated bitcoins is ~$2032USD - it doesn't take a genius to figure out that spending $6500k over 3 months to yield $2032 does not == profit.

Perhaps you say 100% difficulty increase isn't realistic, ok take the numbers down to 50% and your 3 month profit is: $5079 - still short of the $6500. Again this assumes that bitcoins continue to go up in price.

This of course assumes that Bitcoins rise *every week* by 8%. That means in 6 months bitcoins are trading at ~$45 USD per bitcoin. If you are relying on bitcoin trading stronger against the dollar to float your mining business model - my suggesting would be to buy bitcoins instead of rigs.

Oh, there's definitely no doubt that buying bitcoins is greatly more profitable than buying mining hardware. However, I feel as though the difficulty is going to level out or drop as people begin to realize it's not profitable. Those people will then drop out and there will probably be a mass sell off of hardware I would figure. The difficulty would then adjust for those people that are still hanging on I feel. Again, the bitcoin price is what is going to dictate if people deem it is profitable or not to mine.

I do feel as though a 100% weekly increase is somewhat unrealistic. The difficulty is probably going to level off. People are simply getting into mining now because bitcoins are 7 dollars apiece.

 

If you took that $6000USD you would have spent on hardware and instead put it into coins RIGHT NOW - then you would have bitcoins worth ~$45,000USD in 6 months and ~$17,000 in 3 months. A far better profit margin, with alot less work.

Me personally, I'm spreading my bets by reducing the size of the hardware to something I could use as a decent gaming rig when I'm done and putting the rest in bitcoins. To help the economy along, I will also be accepting bitcoins at my business (currently customizing a shopping cart for it).


That's a good idea, I'm going to consider doing this as well.
15  Bitcoin / Pools / Re: Cooperative mining (390Ghash/s) on: May 23, 2011, 02:02:33 PM
Quick question, is this normal, considering my average?



Odd how it's normally 0.07 to 0.08 but then one round it was randomly 0.002.

Thanks,
16  Bitcoin / Mining / Re: Is rig building still profitable? on: May 23, 2011, 07:09:54 AM
I'm thinking that once it becomes uneconomical to operate a miner, a lot of people are going to drop out of the game. When this happens, we'll likely see a mass exodus of miners. What will then likely happen is that we'll have less computing power to discover blocks and the difficulty will have to decrease. The people who never stopped mining following the exodus would then be in prime condition to take advantage of the rebound would they not?

People think that the difficulty can only increase, but it's possible for it to decrease in order to meet the block production rate is it not? We're also assuming that the value of the coins doesn't increase. If the value decreases AND the difficulty increases, then we'll definitely see an exodus and the greater likelihood of a corrective decrease am I right? It might be a matter of who can operate at a loss the longest.  

It's like the stock market, if you really think bitcoins have a lot of value and will eventually increase, you'll be able to hold onto your shares as opposed to selling them off.
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