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Author Topic: Mike Hearn, Foundation's Law & Policy Chair, is pushing blacklists right now  (Read 83649 times)
BitDreams
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November 15, 2013, 12:24:00 AM
 #161

Countries A,B,C,D are adversaries. A steady stream of tainted coins flows from adversaries to neutral countries who then spend them back to adversaries who have little choice but to consider them whitelisted just through the nature of separation. Run simulations through your mind.

That steady global stream should be plenty enough to keep the bloodhounds occupied for a long, long while.

Pot is legal in how many countries? Well guess where the green coins are flowing? Those countries deal with neighbors. Those neighbors, willing to whitelist

For something truly despicable? Maybe some international cooperation that would be just as transparent to individuals as it is to government, no hiding for the hiders with bitcoin.

Have there not been many debates since bitcoin has been traded about individuals following the chain? It is inevitable as has been mentioned above. Throw government a bone, you know they are going to take it anyway.

Global government because of bitcoin? BRING IT. The entire world would be the audience every single step of the way with cooperation, survival and sustainability regulated transparently and malintent identified and crushed.

Or am I hallucinating?

my amature opinion - everything is a buying opportunity even if the price just flattens out...
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November 15, 2013, 12:26:27 AM
 #162

This is the wet dream of every government being able to mark the money in a persons pocket useless. Claiming that the dollar note he has was used 10 trades before by a drug dealer. So you have a dollar note but its worth nothing.

In fact its even worse. Its the hostile take-over of bitcoin. Bitcoin wont be free anymore. It would be ruled by the ones that decide what coins are worth something and what coins arent. And this authority of course let themself pay for the allowance to use your money. And you identity on top.

I knew it was a stupid move to start a centralized bitcoin organisation that have the power to change bitcoin at the same time because of the power they have about the official wallet. They didnt implement the possibility to fork bitcoin yet. Which should be doable in case bitcoin foundation draws a stupid move. Only with the ability to fork the wallet the real bitcoin network could move on. Though it wouldnt help much with tainting in this case.

Of course anyone can create such a server but it only matters if someone believes in it and think coins are less worth then. The bitcoin foundation and the official wallet development should be divided. It shouldnt be possible to implement a change that is automatically auto-updated for a big part of the bitcoin network. Thats simply way too dangerous. When i read how many members of the foundation seems to like the idea i wonder if its best to close bitcoin foundation. Its an attack point against bitcoin and with the might about the official wallet its an effective attack point.

The following is a good explaination of the problem in another thread:

But isn't the purpose of CoinValidation to label adresses and not coins?

I don't get why the fungibility of coins is destroyed if only adresses are impacted?

All previous addresses that received the coin are listed on the public blockchain ledger.  From what was said I believe Coin Validation plans to look at the history of the addresses associated with coins.  If your coin was used 10 transactions ago by a silk road user, (eg seen entering the silk road address) then likely implications are you will not be able to spend your coin on any site using their system.

They hope it will be viral, ie because you dont want to hold coins you cant spend, you may also refuse to accept coins they do not white list.  Having them validate your coins will not be free and the uncertainty arising from not knowing if your coins will suddenly become less spendable will create fungibility problems.

There are costs associated with the fraud tracing validation, blacklisting and payment revocation.  eg its bad for merchants too, they cant rely on receiving money they can spend themselves.  This is why credit cards are expensive for merchants (3-5% + 30c).  This is one thing that makes bitcoin attractive for merchants and users - the fees are close to zero in comparison.  Coin blacklist/whitelistng (just different names for the same trend) damage the underlying  irrevocability which enables low cost transactions, and pulls bitcoins transaction cost up towards credit cards and paypal.

The problem is when fungibility degrades because everyone is mutually scared of accepting blacklisted coins the utility of the coin goes down, the cost of using the currency goes up and so its price falls.  It might literally collapse if the feedback loop picks up momentum as people sell non-white listed coins at steeper discounts in a race to the door.

This makes as much sense as a $100 note in your pocket disabling itself because 10 previous holders ago, someone stole it from a convenience store.

Someone posted on reddit about a 17th centur scottish court case (cant find the link now), where a bank was able to prevent legislation that would've had that implication - if you're left holding a stolen note, you lose it.  The court rejected the case based on the argument that doing so would be unfair and also destroy the fungibility and value of the currency.  Coin Validation want to reopen that 17th century mistaken (but defeated) court case.

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November 15, 2013, 12:26:58 AM
 #163

Technically this is achievable without any change in bitcoin client or protocol, no one can prevent FBI from doing this in their own database

And the coins redlisted in one country will be moved to another country where no similar tracking exists, they circulated there for a while and changed owner for many times, eventually when they returned to the original country, anyone can claim them as clean. There will be many companies established in other countries to clean the coins for a fee, in Russia or China  Cheesy


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November 15, 2013, 12:27:43 AM
 #164

If the foundation chooses to support this idea, it will be the day when Bitcoin splits. In one way or another, there will be two different Bitcoin protocols, be it in the form of an altcoin or as a hard fork. I hope they make the right decision, which is obvious in my mind.

mikes idea is not acceptable of course. it will be interesting so see, what the devs of Litecoin will do...

What can they do?  There's not much anyone can do about things like this.  As Carlton has already pointed out, this isn't a protocol change.  Tracking coins and creating whitelists/blacklists/redlists/bluelists is possible and open for anyone to do due to bitcoin's (and all other cryptocoins) design.

Its different. If a average joe creates such a list on its server it doesnt matter. But if the bitcoin foundation changes the official wallet and shows tainted coins it will have a bad effect.

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November 15, 2013, 12:29:49 AM
 #165

We can all relax in the long term.

I have confirmation from gmaxwell that the whole transaction history can be completely encrypted in the blockchain, but also that we can be sure that the sanctity of the 21 million limit, or that checking that people can't claim to have not received money that we know we did send etc.

Can SCIP be used to prove the monetary base, whilst keeping tx's secret?

Maybe Bitcoin culture won't accept it by the time it's achievable. Perhaps living out the realities of taint-lists will not be as much a nightmare as what's possible. But there will always be the possibility at least of a competing altcoin that can solve this problem at a technical level, without compromising any of the original tenets of Bitcoins goal. Could be the only altcoin worth something in BTC value, or possibly at all. We will see.

Vires in numeris
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November 15, 2013, 12:31:31 AM
 #166


Is there an alternative solution to dealing with these problems which do not involve a taint list?

Well, education in good practices using computers and the internet is the best solution to ransomware. It's never happened to me.

Stolen funds can be very effectively dealt with by encouraging a culture of well designed hardware wallets. This increases the required sophistication of an effective attack enormously, a talented hacker would have to work hard, and any successful efforts would only be useful against a single hardware wallet firmware (which should be update capable to fix any exploitable bugs).

Merchants that choose to insist on linking purchases to an identity can use the future Bitcoin Identity Protocol to do so. These ID's could be the most powerful identity information tool conceived, and when I say that, I mean powerful to the user, not to those that want to track your identity. Whole other topic, but I am impressed by the proposed scheme.

Mike Hearn knows and explicitly advocates for all these approaches, apart possibly from the solution to ransomware, but who could honestly say don't endorse that.

No amount of education will help once governments decide it's a good idea to sponsor the creation of randomware. I think you underestimate the level of sophistication this ransomware could take and underestimate the seriousness of the threat.

I agree with the use of the Bitcoin identity protocol. That should be what they push and not this coin taint stuff.
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November 15, 2013, 12:31:45 AM
 #167

I'm disappointed that Mike Hearn would advocate for the use of blacklists, tainting and reduced fungibility of bitcoin . As one of the significant members of the The Bitcoin Foundation, he has the ability to make this kind of scheme a reality. For someone who just went on a rant against the NSA for violating Google's privacy, this kind of betrayal of the bitcoin user's privacy is really heinous. Who will dictate what constitutes a crime? Who will dictate when a bitcoin will no longer be listed? I doubt that he's given much thought to such questions beyond "whatever the police say", which, in this current political climate, is a very ignorant stance. I suggest those who want to keep bitcoin a viable and fungible currency let Mr. Hearn and all of the The Bitcoin Foundation members know that this idea should not be implemented and produce policy positions rejecting it.

I opened a new topic on the Bitcoin Foundation's forum:

Deep concern about the foundation's chairman of Law and Policy (Mike Hearn) pushing for coin taint

Me, and many others in the bitcoin community are deeply concerned about Mike Hearn pushing for coin taint.  We feel that if the Bitcoin Foundation is even going to consider mentioning this in the upcoming government meeting, that we can no longer stand behind them.  This is serious.  Coin taint is even worse than increasing the 21 million limit.  Since the chairman of Law and Policy is involved here, I would like to call for a vote against this, and a clear stance from the Bitcoin Foundation.  I know many of the board members are supporters of mixing coins even more, so something like this can never happen again.  It would be a good message to the bitcoin community to confirm that the foundation supports keeping coins anonymous, instead of going in the opposite direction.

Yes!

this is the core of the issue, it doesn't really matter that some poeple are working on bitcoin red-list or wtv. what matter is the Foundation should stand WITH us not against us on these core issues.

we the poeple have made it clear from day one that tainting coins is a bad idea for so many reasons. to see the Foundation back a project like this is wrong, it is wrong!

we should be seeing the FBI working on these projects and then we should see the Foundation discredit their efforts and explain why such a schemes just wont work. the problem with this is that it won't stop bitcoin money laundering that at all (it will just make it 3 hops harder, not much harder) and actually end up causing problems for innocent people and bitcoin itself.

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November 15, 2013, 12:35:00 AM
 #168

Countries A,B,C,D are adversaries. A steady stream of tainted coins flows from adversaries to neutral countries who then spend them back to adversaries who have little choice but to consider them whitelisted just through the nature of separation. Run simulations through your mind.

That steady global stream should be plenty enough to keep the bloodhounds occupied for a long, long while.

Pot is legal in how many countries? Well guess where the green coins are flowing? Those countries deal with neighbors. Those neighbors, willing to whitelist

For something truly despicable? Maybe some international cooperation that would be just as transparent to individuals as it is to government, no hiding for the hiders with bitcoin.

Have there not been many debates since bitcoin has been traded about individuals following the chain? It is inevitable as has been mentioned above. Throw government a bone, you know they are going to take it anyway.

Global government because of bitcoin? BRING IT. The entire world would be the audience every single step of the way with cooperation, survival and sustainability regulated transparently and malintent identified and crushed.

Or am I hallucinating?

my amature opinion - everything is a buying opportunity even if the price just flattens out...

No, this is smart. The elevated value of green addresses can be used against these schemes. Register a green address, then use it only for laundering CoinSwapped money. The problems created are displaced, and new opportunities are created. I really hope these listing companies can be bankrupted though their lack of foresight, they should watch more Tom and Jerry.

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November 15, 2013, 12:35:31 AM
 #169

If the foundation chooses to support this idea, it will be the day when Bitcoin splits. In one way or another, there will be two different Bitcoin protocols, be it in the form of an altcoin or as a hard fork. I hope they make the right decision, which is obvious in my mind.

mikes idea is not acceptable of course. it will be interesting so see, what the devs of Litecoin will do...

What can they do?  There's not much anyone can do about things like this.  As Carlton has already pointed out, this isn't a protocol change.  Tracking coins and creating whitelists/blacklists/redlists/bluelists is possible and open for anyone to do due to bitcoin's (and all other cryptocoins) design.

Its different. If a average joe creates such a list on its server it doesnt matter. But if the bitcoin foundation changes the official wallet and shows tainted coins it will have a bad effect.

It doesn't matter who creates the list.  If the list is trusted by enough people, and governments mandate that businesses register or only accept from "verified" bitcoins on some approved list, then you get the same thing.  Again, it doesn't matter if everyone's complaining prevents the Foundation from implementing something like this, because there's really nothing that can be done to prevent somebody from doing it and from governments from legislating for it.

When I use the word "higher" in a sentence I actually mean lower.
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November 15, 2013, 12:36:17 AM
 #170

I agree with the use of the Bitcoin identity protocol. That should be what they push and not this coin taint stuff.

Like I say, the supreme irony is that Mike Hearn advocates both.

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November 15, 2013, 12:37:01 AM
 #171

If the foundation chooses to support this idea, it will be the day when Bitcoin splits. In one way or another, there will be two different Bitcoin protocols, be it in the form of an altcoin or as a hard fork. I hope they make the right decision, which is obvious in my mind.

mikes idea is not acceptable of course. it will be interesting so see, what the devs of Litecoin will do...

What can they do?  There's not much anyone can do about things like this.  As Carlton has already pointed out, this isn't a protocol change.  Tracking coins and creating whitelists/blacklists/redlists/bluelists is possible and open for anyone to do due to bitcoin's (and all other cryptocoins) design.

Its different. If a average joe creates such a list on its server it doesnt matter. But if the bitcoin foundation changes the official wallet and shows tainted coins it will have a bad effect.

It doesn't matter who creates the list.  If the list is trusted by enough people, and governments mandate that businesses register or only accept from "verified" bitcoins on some approved list, then you get the same thing.  Again, it doesn't matter if everyone's complaining prevents the Foundation from implementing something like this, because there's really nothing that can be done to prevent somebody from doing it and from governments from legislating for it.

i agree, but the foundation MUST be on our side of the debate.

and they are not!!  Shocked Shocked Shocked

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November 15, 2013, 12:40:50 AM
 #172

Ok, re-reading it more calmly Mike isn't proposing it or taking any stance he's looking for ideas on any aspect of it. It already exists, it can be done using the just the blockchain so I'd guess discussion should be as much about possible ways of preventing tracking as about ways of implementing it. That works both ways, making it hard for a government to track coins and extort 50% of your holdings also makes it hard to track the those extorting coins out of the little old granny with cryptolocker. That makes it a lot bigger issue than it seems, tracking can already be done but for now its restricted to specialists.

The problem is that the government could be behind both of these instances. A government can create cryptolocker ransomware technologies and spread it viral to tax the entire Bitcoin community by preying on the weakest members. It will be something governments could sponsor and use to steal money and I would not be surprised if a government were behind cryptolocker.

So it's a very serious problem which I think people on this forum are underestimating. Cryptolocker could destroy Bitcoin just like the blacklist can.
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November 15, 2013, 12:47:07 AM
 #173

So it's a very serious problem which I think people on this forum are underestimating. Cryptolocker could destroy Bitcoin just like the blacklist can.
Come on... Ransomwares are old story.

http://en.wikipedia.org/wiki/AIDS_%28trojan_horse%29

Seriously, this is just anecdotal.

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November 15, 2013, 12:54:15 AM
 #174

So it's a very serious problem which I think people on this forum are underestimating. Cryptolocker could destroy Bitcoin just like the blacklist can.
Come on... Ransomwares are old story.

http://en.wikipedia.org/wiki/AIDS_%28trojan_horse%29

Seriously, this is just anecdotal.

Advanced persistent threats can exist in any and every one of our computer systems. At any time a government can flip a switch and force us to pay some tax in Bitcoins? Just because it's not a new concept it does not mean that governments around the world are not assembling cyber armies and militias to do exactly this kind of stuff.

So if Bitcoin were made completely anonymous then what could we do to protect ourselves from government sponsored attacks on Bitcoin users whether by phishing, by bribery, by ransomware extortion, malware, or anything else?
Remember this: http://en.wikipedia.org/wiki/Sony_BMG_copy_protection_rootkit_scandal
Sweeping the problem under the rug will not help Bitcoin go mainstream. People like us might be considered security experts but the vast majority of Bitcoin users of the future will not be and we don't want the reason for Bitcoin to fail to be that hackers can manipulate and target the users.
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November 15, 2013, 12:59:33 AM
 #175

I find it encouraging to read all of these responses. Everybody in the community understands that removing the fungibility of coins will most likely lead to Bitcoin's demise.

I'm going to repost this because I think Melbustus is spot on:

A few points:

1) This is obviously a terrible idea. Anything that reduces fungibility inherently reduces bitcoin's properties as an ideal money, and to me, that makes this whole experiment much less interesting.

2) I believe Mike's motivations are pure, in that he wants to prevent the situations he alludes to (the old lady getting taken by CryptoLocker). Unfortunately it's an ugly slippery slope littered with good intentions. The treatment eventually becomes far worse than the disease.

3) Unfortunately if black/red lists *can* happen, they will. This has been a known issue for a while, and it's not surprising that people are starting to implement such ideas. The counter-measures MUST BE TECHNICAL. If Mike flipped his opinion, it'd still happen. If CoinValidation disappeared, it'd still happen. Boycotting people, business, the foundation, etc, is not an effective response. Either tech like CoinJoin or ZeroCoin becomes production-ready, or we end up with a sea of "these-coins-are-special" lists.


For the record, if these list services develop and gain marketplace traction without any technical means to make them irrelevant, I'm done with bitcoin (that's a tough statement for me to make). And, no, I don't have any interest in doing anything illegal with bitcoin... It's just clear that a robust redlist ecosystem will create a gradient of coins, which will make things ugly, difficult to understand/manage, and ultimately a couple orders of magnitude less useful and interesting than bitcoin currently is.

I think we should all be thinking of how best to direct our attention towards projects/innovations which will solve this problem.
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November 15, 2013, 01:01:18 AM
 #176

Where is Jon Matonis in this conversation? My understanding is that he is opposed to such things, it would be nice to hear from him on this.
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November 15, 2013, 01:01:43 AM
 #177

Advanced persistent threats can exist in any and every one of our computer systems. At any time a government can flip a switch and force us to pay some tax in Bitcoins?

No, they cannot.

And...

Have you been hit by a ransomware before?
Do you know anyone who have been?

Quit being paranoid. Ransomware did exist, still exist, and will exist. With no more power than they had before, provided you have a safe backup of your wallet.

[OVER] RIDDLES 2nd edition --- this was claimed. Look out for 3rd edition!
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November 15, 2013, 01:05:39 AM
Last edit: November 15, 2013, 01:23:43 AM by DoomDumas
 #178

Really ?  the idea of 'redlisting' coins is very bad.

I'll oppose as much as I can, as a miner, and as a user.

It makes me wonder "where this come from ?"  Mike personal oppinion ?  I dont think so.. seems like he's being influence / get presure from some entity that dont like Bitcoin.

Just to propose this is Anti-Bitcoin IMO !

We cant let it be !

Edit : The "treat" that seems to motivate such redlisting are actually done with current money, and they are not killing the use of money.  I dont think that the principle "to protect the old lady from extorsion by a malware" is a sufficient reason.  The old lady should ask a cimputer tech to repair her computer.. This is an education issue, not a Bitcoin issue..
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November 15, 2013, 01:13:15 AM
 #179

The essence of crypto-anarchism is that one does not generally need to fight oppressive systems of social organization directly, instead we use technology to make those modes of organization obsolete.

This is the way forward. Technology, not politics.

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November 15, 2013, 01:25:29 AM
 #180

The essence of crypto-anarchism is that one does not generally need to fight oppressive systems of social organization directly, instead we use technology to make those modes of organization obsolete.

This is the way forward. Technology, not politics.

Well said.. If something does work properly, instead of trying to patch/fix it, why not create something else, something new that make the issue non-existent.  This is Bitcoin.  Cope with it or stick to other form of exchange.
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