Blocks & fraudulent transactions

[Geremia]

Since a block includes several transactions, what if a block includes a fraudulent transaction? Do miners' confirmed blocks include fraudulent transactions? If so, how are they flagged as fraudulent? thanks

[rayflammerex]

I also want to know what happened if someone edited their balance? It won't get enough confirmation to get through so it won't be in the transaction block?

[Geremia]

"A transaction is a signed section of data that is broadcast to the network and collected into blocks." ("Transaction" on Bitcoin wiki)

This would imply that even fraudulent transactions are in blocks. (BTW, here's an instructive block viewer.)

"After a transaction is broadcast to the Bitcoin network, it may be included in a block that is published to the network."
What determines if it's included?
"The classic bitcoin client will show a transaction as 'n/unconfirmed' until 6 blocks confirm the transaction. … Coins generated aren't considered confirmed by the Bitcoin protocol for 100 blocks. … The classic bitcoin client won't show generated coins as confirmed until the 120th block. " ("Confirmation" on Bitcoin wiki)

Thus if 6 blocks go by and it's not confirmed, then it's fraudulent?

[Geremia]

I think the answer to my questions might have to do with Merkle trees:

Merkle root
    Every transaction has a hash associated with it. In a block, all of the transaction hashes in the block are themselves hashed (sometimes several times -- the exact process is complex), and the result is the Merkle root. In other words, the Merkle root is the hash of all the hashes of all the transactions in the block. The Merkle root is included in the block header. With this scheme, it is possible to securely verify that a transaction has been accepted by the network (and get the number of confirmations) by downloading just the tiny block headers and Merkle tree -- downloading the entire block chain is unnecessary. This feature is currently not used in Bitcoin, but it will be in the future.

(source)

[Deafboy]

There is no such thing as fraudulent transaction on bitcoin network, and there is no such thing as balance on the bitcoin network.
Read this post explaining the transaction confirmation process.

[Geremia]

There is no such thing as fraudulent transaction on bitcoin network, and there is no such thing as balance on the bitcoin network.
Read this post explaining the transaction confirmation process.

Okay, but there can be counterfeit coins, no?

I'll read your link; thanks

[Explicit]

I thing that it sould vbe defined what a "fraudulent transaction" is.
If someone has stolen BTC 100 from someones wallet, this could be understood as a fraudulent transaction.
It would be recorded in the blockchain, but you would have no possible way of knowing who is behind this transaction.
Correct me if I am wrong.

[ISAWHIM]

There is no such thing as fraudulent transaction on bitcoin network, and there is no such thing as balance on the bitcoin network.
Read this post explaining the transaction confirmation process.

Okay, but there can be counterfeit coins, no?

I'll read your link; thanks

No...

All "coins" are accounted for... they had to be "found", and only exist because they were "found", to begin with.

Finding a coin is not "fraud", it is called "reward" for "mining", and for tracking/encoding/decoding the billions of individual transactions along the way...

You can't "inject" coins into any transaction that didn't "come" from somewhere... Besides altering the other people's data, which would fail that altered block, you would still have to have that "found" bitcoin to inject... and if you "found it", then it isn't fraud... (It's a loop!)

There is a fixed number of coins that can EVER be found, and they are self-regulated by the discovery process itself. The faster we find them, the harder they get to find. The more of them there are that are found, the less of them there are to find...

Once ALL are found... there will HAVE to be a transaction-fee demanded for all transactions, otherwise no-one will have incentive to run the system that delivers transactions. Again, that is a self-regulating system.***

***Or they have to change the "code" to allow "111111111111djsljfsdfosduf8sd7f98" instead of the "000000000000000dfssd897f69s" hashes we find now. (Zero's lead-in to all hashes, that is what makes them difficult to find, and unique.)

[ISAWHIM]

I thing that it sould vbe defined what a "fraudulent transaction" is.
If someone has stolen BTC 100 from someones wallet, this could be understood as a fraudulent transaction.
It would be recorded in the blockchain, but you would have no possible way of knowing who is behind this transaction.
Correct me if I am wrong.

They can only do that if they have your pass-key...

Yes, if they had the key to your house, and no-one saw them, they would "get away" with it.

That isn't fraud, that is just an unapproved transaction.

Fraud is "fake"... You can't fake a transaction. That transaction has to actually occur, physically.

No, there is no "buyer/seller" protection. This is just like handing someone CASH, without a RECIEPT... However, some places DO offer "secure" and "safe" transactions, to "trusted" sources. They even offer "protections", but that is not "part of bitcoin", that is a third-party, which is essentially turning it into "paypal" or "bank" or "credit-card", and has more limitations and added expenses, and "warrants as legal grounds of records for taxation and identification", if that is what you are looking for. (eg, protection)

[Explicit]

Thanks for providing a clearer explanation of "fraudulent transaction".