Federal Accounting @ Home

[markm]

A lot of what one hears about BitCoin seems to focus on the privacy and anonymity possibilities.

But the other side of the coin is the transparency.

Instead of wondering how many bitcoins some department or other has in their BitCoi account, everyone can simply see for themselves provided it is known which account that department's bitcoins are held in...

-MarkM- ("Banking by the people, for the people!")

[genjix]

no. you can only see the coins held by a certain key.

you do not know all the keys a wallet holds.

and if they use a mixnet anonymiser then they can move funds between keys.

[markm]

Hmm, thanks. I somehow had the impression the miners know the money payload (amount of coins being transferred) as well as knowing the fee portion of the transaction. I guess if even they don't know how much money each transaction to an account is putting in the account this whole thing is an even more amazing feat than I had so far realised.

-MarkM-

[pc]

What's public is how many coins each address has. What's not public is who owns which addresses. If somebody wanted to be auditable, they'd basically have to send all of their coins to their publically-known address after each transaction they did, and then people could verify that the person who controlled that address controlled at least that many coins. You'd also need to solve the problem of determining who exactly controls the address. I can tell you an address, but really the only way that I can think of to prove to you that I own it is for me to perform a transaction that you securely tell me to do (tell me in a GPG message to transfer X coins to myself, for instance, where you specify X), and then for me to do it.

For instance, the EFF has posted an address of 1MCwBbhNGp5hRm5rC1Aims2YFRe2SXPYKt, which if you click on you can see the history of donations to that address. You can see that some spends from it have happened, so it's likely that some of those transactions have "change" that still belongs to the EFF, or maybe they've just split their funds across multiple wallets for security purposes. But you can total up their receipts via that address, so it's possible to audit that they've received at least X bitcoins. But they could have received bitcoins in another way (perhaps a large donor wants to give anonymously, so they created a new address just for that person to give them them), and there's really no telling how they spent that money. There's also no telling what procedures the EFF has in place for securing their wallet(s) and what people have permissions to spend their bitcoins. Pretty much all you can tell for certain is that the address that was posted on their web site has received at least X bitcoins, not who put that address up or what has been done with it. (And I'm not trying to pick on the EFF in any way; they're just the first high-profile address that came to mind, and it's conceivable that they'd want to advertise that they've received X bitcoins so far in donations in an advertising campaign or something, and I'm just saying that they could do that in an way that people could verify.)

[markm]

Thank you. That is what I originally thought.

One could see how much bitcoin had been sent to the IRS's official income tax submissions account, and each some span of time - day, week, month, whatever - the mint could put all their bitcoins into their Bitcoin Reserve We Mint Money Based On account, for example.

We wouldn't know the Black Ops Account contains *all* the funds available for Black Ops, but we could know the FBI did have at least X amount of weekly operating budget on hand at the start of the week.

I'd figure you don't want them to find some billionaire's account no one knows belongs to the billionaire and claim that is the missing paperclips fund account so you'd have some kind of tell the address first then put the bitcoins in it system, like maybe a jury of 12 peers of the realm each holding 1/12 of a private key to the treasury is each going to be issued their part of the key of account {accountid}, then 15 minutes later (to allow for network latency) X amount of national funds will be sent to the account.

Problems like oops stupid clerk moved wrong megabillion are good as they tell us what more we should think about.

(And maybe hint how much pressure bitcoin or a similar currency could come under to somehow "reverse" transactions. Maybe as simple as well just have the recipient send it back duh?)

-MarkM- (Its true, I don't know how many peta or terra million a megabillion is! (Due to I'm not getting a percent of it...))

[genjix]

We wouldn't know the Black Ops Account contains *all* the funds available for Black Ops, but we could know the FBI did have at least X amount of weekly operating budget on hand at the start of the week.

You can't if they're generating a new address per person and a new address at regular intervals. You would only know the funds for one address that is shown to you, and assigned to you.

Unless they choose to use one address for their entire account.

[markm]

Yeah well I am not exactly suggesting gov't can't hide stuff from the people if they put their mind to it!

-MarkM- (Government by open accounting advocates for open accounting advocates!)