Decentralised crime fighting using private set intersection protocols

[malevolent]

First Jeff Garzik says to the WSJ: "We want to work with authorities".
Now Mike Hearn with this post.

Can I say these 2 dudes are now officially creeping me out without you guys calling me paranoid?  

This is sad. ''He who sacrifices freedom for security deserves neither''

I wouldn't be surprised if Bitcoin was to be forked, with some people continuing to use normal Bitcoin and some following Mike's steps in using its castrated counterpart, preferably with in-built tools aiding the State in controlling its minions' monies.  

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[Peter Todd]

"A pack of wolves and a flock of sheep voting on what's for dinner" is the phrase that immediately springs to mind. You forget how easily these systems are exploited, and assume that ordinary human beings are clinically rational automatons.

Mike has been advocating for removing the blocksize limit, which even he thinks can lead to there being only a few hundred, and as little as a dozen, validating nodes handling Bitcoin. Implement blacklists on that tiny number of validating nodes and you now have Bitcoin under central control, and opposing that control will be extremely expensive to downright impossible.

Not to mention how with small blocksizes the lack of privacy inherent in Bitcoin - every transaction goes on the public blockchain after all - puts you on an equal footing with big businesses and governments in monitoring and auditing the actions of other Bitcoin users. On the other hand, with large blocks you can't afford the computer equipment required to run a validating node, and thus while you have no ability to to monitor the network and follow the movement of funds but they do.

EDIT: s/will lead/can lead/

First Jeff Garzik says to the WSJ: "We want to work with authorities".
Now Mike Hearn with this post.

Can I say these 2 dudes are now officially creeping me out without you guys calling me paranoid?  

This is sad. ''He who sacrifices freedom for security deserves neither''

I wouldn't be surprised if Bitcoin was to be forked, with some people continuing to use normal Bitcoin and some following Mke's steps in using its castrated counterpart, preferably with in-built tools aiding the State in controlling its minions' monies.  

Well removing the blocksize limit is a fork, and more to that, it's not a technical "bug-fix" fork like is happening on May 15th - it will radically change what Bitcoin is.

re: Jeff Garzik, I can't speak for him, but personally I would be happy making a similar statement myself. But there is a big difference between working with authorities and educating them about how Bitcoin works and what the vulnerabilities are and introducing brand new vulnerabilities into the system itself.

[v3miner]

I typed out maybe 8 different, very long, detailed responses to this, but in the end all I can really say is meh... not a fan.

I can't see it being terribly useful beyond the transaction immediately following the "taint".

[Mike Hearn]

retep, please don't put words in my mouth. I have never said I think there will be a few hundred or a dozen validating nodes, where did you get that from? Nobody knows how many there will end up being, but on a global scale I'd expect hundreds of thousands if not more.

Regardless, the entire point of this proposal is it is not state control. It's a system based on majority consensus, just like Bitcoin. malevolent clearly hasn't read what I wrote because there's no fork of Bitcoin needed. Checking blacklists is an optional extra layer on top.

[malevolent]

Regardless, the entire point of this proposal is it is not state control. It's a system based on majority consensus, just like Bitcoin. malevolent clearly hasn't read what I wrote because there's no fork of Bitcoin needed. Checking blacklists is an optional extra layer on top.

Well, I can admit I hyperbolized, hence the use of the '::)' smiley at the end. What I wrote is what can happen - first we start with your proposal, 5 years later we end up with developers being paid by govt. agencies to introduce some change or two in the protocol that may aid in tracing 'laundered' coins, of course the change could at first and second sight appear to most insignificat enough as to make it easy to convince most of the network to adapt for their own safety; how many people are there out there that are very well-versed with the Bitcoin protocol, cryptography and networks among the Bitcoin users as to not be fooled by this? I am sure less than 50%  . The point I am trying to make is that what you are proposing is not something that should be of Bitcoin developers' concern and that you should remain neutral. Let the state figure it out for themselves because your solution, despite good intentions, may be a step back from what Bitcoin was destined to become.

[Carlton Banks]

Regardless, the entire point of this proposal is it is not state control. It's a system based on majority consensus, just like Bitcoin.

No Mike, it's nesting an undefined number of majority consensus systems within Bitcoin, and these will be based on the moral judgements of potentially pernicious actors. The whole point of Bitcoin is to de-politicise money, and you're attempting to argue for an overlay that explicitly politicises transaction acceptance. Continue with this, and you will end up arguing in favour of a different protocol to the one that users want. Majority consensus does not make for a good solution to every problem, hence voting rights being rescinded from the mentally deranged.   

[FreddyFender]

[miscreanity]

That's why it's important to have credible proposals that meet-in-the-middle with acceptable compromises for everyone.

This is a trend toward mediocrity, diluting what's good about the system. It's as bad as gold derivatives.

So long as none of this enters the protocol itself, it may be very difficult to gain widespread usage of such blacklists - or hard to act upon. May it remain disused and ignored for as long as possible.

[redbeans2012]

What about someone else who Bob paid money to? Their coins are also tainted. They're in a fashionable chain of restaurants and when they try to pay the bill, their transaction is flagged too! The restaurant owner also calls the police and describes the guy at the table, the response is "ah nope, that's not him", the bill is paid and the guy goes on his way - moderately inconvenienced for a few minutes, but not hopelessly so. What's more, because the restaurant chain is big, well known, and has policies for what blacklists they check and what they do, they are a nexus. When the chain pays its waiters at the end of the day it puts the salary outputs onto its own whitelist and then when the waiter spends his money, nothing is flagged.

Is that all that would happen? Wow. People calling the cops on me cause someone gave me tainted coins and I used them.

I do not like this idea

[DigitalHermit]

This concept has been discussed at length before and vigorously rejected:

https://bitcointalk.org/index.php?topic=85433.0

Following these principles merely serves to destroy the important property of Fungibility which all currencies should have. Any attempts to move in this direction should continue to be rejected for this reason alone.

[OutCast3k]

WUT? This is a terrible idea!

[SimonL]

Mike, this is vigilantism at it's utter worst. It would drive people away from Bitcoin faster than you can say, "we're taking 10% for all accounts over 100k Euros and 6% for all accounts under 100k Euros", noone can ever be certain the coins they currently hold will be accepted under a system like this. It also completely ruins the fungibility of Bitcoins that makes it such a good form of money.

We have courts and agencies in each country to deal with crimes committed on sovereign soil, this is their problem, not the Bitcoin network's. No person should EVER have to prove their innocence in order to spend their money. To think that it is the network's moral responsibility to ostracise payments based on an arbitrary and nebulous consensus is manifestly absurd. This kind of dangerous interference subverts due process in the country where the crime is being committed and would completely undermine the trust people have in the value of Bitcoin as a store of value.

Since when did we get the right to assign ourselves the position of multinational and morally righteous financial police?

[Dansker]

HATE TO SAY I TOLD YOU ALL SO:

https://bitcointalk.org/index.php?topic=114372.0

But I did...

I don't know if it's good or bad I predicted this last year...

[Jaagu]

This concept has been discussed at length before and vigorously rejected:

https://bitcointalk.org/index.php?topic=85433.0

This not the first time Mike is taking up the same rhyme:

Freezing BitCoin addresses by regulating miners
April 17, 2011
by Mike Hearn
https://bitcointalk.org/index.php?topic=5979.0

There is some hidden agenda, isn't it?

More on the same topic:

What if bitcoins that can be tracked back to Silk Road are declared 'illegal'?
June 22, 2011
https://bitcointalk.org/index.php?topic=20979.0

Governments/regulators may eventually actually *like* Bitcoin. - coin blacklists
December 02, 2011
https://bitcointalk.org/index.php?topic=53539.0;all


EDIT:
My opinion: Bitcoin (as public ledger) is information. 'Tainted'/blacklisted/whitelisted coins are censorship in the purest form. When has censorship served for the good of humankind?

[Carlton Banks]

This concept has been discussed at length before and vigorously rejected:

https://bitcointalk.org/index.php?topic=85433.0

This not the first time Mike is taking up the same rhyme:

Freezing BitCoin addresses by regulating miners
April 17, 2011
by Mike Hearn
https://bitcointalk.org/index.php?topic=5979.0

There is some hidden agenda, isn't it?

More on the same topic:

What if bitcoins that can be tracked back to Silk Road are declared 'illegal'?
June 22, 2011
https://bitcointalk.org/index.php?topic=20979.0

Governments/regulators may eventually actually *like* Bitcoin. - coin blacklists
December 02, 2011
https://bitcointalk.org/index.php?topic=53539.0;all

And he didn't get a good response then, either.


Mike Hearn clearly advocates Bitcoin as a means of diminishing financial liberty, not that of improving it. Please go somewhere else with this Mike, I am beginning to find your rhetoric rather deceitful. By all means, create an establishment conformant alt-coin, but stop trying to turn Bitcoin into one. Satoshi's intentions quite clearly never included rationalising for increased state control of the monetary system, in fact, it was quite clearly and consistently the precise opposite.

[wareen]

This concept has been discussed at length before and vigorously rejected:

+1

I can only reiterate my concerns, but this is a very important topic and seeing Mike Hearn continue to vote in favor of it is even more unsettling. While your approach is intriguing from a technological point of view, the scenarios you describe don't seem very plausible to me and once such a system would be in widespread use it will just provoke countermeasures resulting in an arms race that will only lead to Bitcoin being a miserable experience for everybody in the end.

As the recipient of a transaction you will always bear the risk of receiving coins that will end up being blacklisted, because the crime of the sender was not yet reported or the verdict was not yet final (assuming the verification process is at least somewhat thorough). This will lead to everyone applying the most restrictive blacklists with the fastest and least false negative prone approval process possible before accepting any payment.

Yes. The assumption is that if Bob is really a human rights activist, then he either won't get blacklisted (because that kind of nonsense would result in people quickly abandoning the list), or he'll be able to persuade whoever he trades with not to report him. That lack of central control is key.

A decentralized blacklist approach sounds nice, until you factor in that most people are neither interested in nor able to personally assess the guilt of some suspect. Just have a look at how much debate there is over the scammer label in this forum and how time consuming these debates are. Do you really think each and every merchant will take the time to listen to your life story before accepting your payment? Who is going to pay for that time and effort? Also this merchant will have to convince their supplier as well to take the money, etc. Adding coin mixing to that equation will make it even more complicated.

Don't get me wrong: the fact that some crimes (especially corruption) will be much harder to trace with Bitcoin is one of my biggest concerns about Bitcoin in general, but I just don't see tainting coins as an acceptable way to go.

Think about it this way: would you argue that it is justified to require all Internet communication to be personalized and enforcing crime blacklists at the TCP level? Surely this would be an even more effective measure against crime but where do you draw the line?

Bitcoin is a tool for payments and not a tool to prevent or punish crime or to enforce arbitrary social concepts of justice!

[Jaw3bmasters]

Lets see....

Mike wants Bitcoin to be more appealing to mass adoption by giving Governments options.

But isn't that pointless since Cryto-currency is open-source?

How can this be implemented on all alt-coins to fight AML?

[phelix]

The problem I see is that users will converge on a set of blacklists whether they agree with the reason for blacklisting or not. Here's how (so you can explain what I've missed )

Suppose someone obtains some coins through a drug deal, and I don't care about that, so I happily accept his drug money for some other service. When I later try to spend that drug money, a large number of people refuse to accept, so I'm forced to use clean money for that transaction. This essentially means that the drug money is unspendable, and hence worthless, or simply worth less than clean money. I decide I'm not making that mistake again, so even though it's against my political principles, I refuse to accept drug money in future. I'm now one more person who has cut off anyone using drug money.

Combine the above with the fact that the majority of people don't want any trouble at all - even when completely innocent, and so will choose not to accept money on any of the blacklists run by governments, and you end up with a situation where your money is worth the most if it's not on any of the blacklists.

People in general are lazy, stupid and only willing to fight for their political beliefs when they personally are being persecuted, so I think the idea that we'll have some happy equilibrium representing what the majority believe in will not happen.

No, it would not converge. Should something like this ever reach a critical mass it will grow like cancer. The cleaner the coins the better so everybody tries to subscribe to as many lists as possible and goes down as many levels as possible.

This is a very bad idea.

Should it ever take foot there will soon be a new system to replace Bitcoin that is more anonymous and immune to this kind of control.

[d'aniel]

I'm curious about how people here would react if it became clear that a government ban on Bitcoin was being considered for the reasons Mike mentioned, and your political action wasn't likely to change this outcome.  Would you be willing to compromise and participate in such a self-policing proposal?  Would you thumb your nose at the authorities, and let them ban it?  Or would you perhaps go along with this for Bitcoin, but while participating in an underground fork (which avoids the chaos of transactions being valid on both chains somehow) whose focus was on extreme technical countermeasures to censorship and surveillance?  Or some other option?

[mik3]

This is bad