Should core bitcoin developers freeze stolen Mt.Gox bitcoins?

[V4Vendettas]

I'm very sorry for MtGox victims, but we cannot abandon our principles every time that disaster strikes.

I don't think a 6% disaster is likely to strike again.

Devs have made decisions like this before and the block chain has been rolled back.

“Those who surrender freedom for security will not have, nor do they deserve, either one.”
― Benjamin Franklin

As a Brit it irks me I had to post an American quote   but yea what this dude said.

If the bitcoin foundation or any organisation was able to do as the OP said I would drop Bitcoin in a second.

Freedom as in letting thieves roam free, or as is free to be ripped off?

Are you dropping your UK pounds?

Mostly on btc and mining hardware yes and I do hope that's OK with you.

Its an ugly world out there full of all shades of grey not just black and white buddy.

[medUSA]

Why should the devs not freeze "stolen" Inputs.io coins or "stolen" 50btc coins (and many others) and freeze "stolen" Gox coins?
Because the amount is higher? more users involved? foundation members lost coins?
For whatever reason there is, the principle is the same:

Should not blacklist any bitcoins, fungibility is essential

[riekinho]

The scariest question is not should they but CAN THEY FREEZE coins?

If they can I am going to sell all of my Bitcoins at once. It means that USA can buy off entire Bitcoin ecosystem for a 3-4 days worth of money printing.

[retrend]

The scariest question is not should they but CAN THEY FREEZE coins?

There would be a fork and the bitcoin foundation would lose any control over the client if they tried something like this.  

[wumpus]

The scariest question is not should they but CAN THEY FREEZE coins?

The devs can't, but all (51%+) miners could work together to censor transactions. They would not be able to seize the coins, just prevent any transaction spending them from being confirmed.

[zylstra]

Lawlessness and decentralisation aren't the same thing. We could have a structure that allows for a decentralised decision to freeze these coins. Call it a "democracy". Miners vote, majority wins.

There's a real legal issue here, in that stolen goods remain the property of the victim. Imagine these coins enter general circulation and a credible law enforcement agency goes after them. (Edit: With half a BILLION dollars in play that's not such a far fetched scenario). Every satoshi you buy or receive as payment has a 7% chance of being a stolen one, and is recoverable by your national law enforcement in the US/EU/Asia. Bitcoin is super traceable. So the criminals will launder the coins and you and I will end up with them in our wallets and then comes a knock at the door with a legal order to reposes them. Unless you live in Nigeria.

Yes it sets a precedent. A really healthy one. Where do you draw the line? I don't know, but somewhere lower than 7% of the entire economy. Let the miners vote.

Not changing the way we do things after a disaster is really stupid thinking. You think after the Turkish earthquake they didn't upgrade the building code? After the Indonesian Tsunami they didn't create an emergency evacuation plan? Bitcoin is in it's infancy. It's not in it's final state. It's allowed to evolve. Regardless of how you were effected by Gox, or what you think of the victims decision making, this incident is a massive crisis for Bitcoin adoption. I think its sets the currency back years in the eyes of the next wave of adopters.

Creating a system that's perceived as fairer, and self policing would reverse that set back. For the future of bitcoins I say yes. Freeze them and return them.

Edit: punctuation

Brilliant, brilliant, brilliant.  This is exactly the same conclusion that I came to last night after I logged off but before I read your post.  This is exactly the crux of it.  Bitcoin is semi-democratic.  The 51% "attack" is not an attack but a vote!

This is so important that I think it warrants its own discussion, https://bitcointalk.org/index.php?topic=509778 . (Or perhaps this has also been discussed before?)

[Keyser Soze]

In short, no, because it destroys fungibility.

Some questions to keep in mind:

Who is able to freeze coins? (You already said miners)
What happens in disputes?
Who has the ability to unfreeze coins? Only miners?
How do you propose miners keep track of the stolen coins?
How can coins be unfrozen?
Who pays for this system?

As an example, what happens if coins I hold are unjustly frozen? What do I do?

It would also be near impossible to achieve consensus for this type of change in Bitcoin.

[Kluge]

Everyone can refuse service, and you may pressure them into refusing service if you don't like the particular bitcoin or want them to implement some kind of taint analysis engine using some kind of blacklist.

Otherwise, feel free to waste your time trying to fork it yourself.

[cr1776]

No!
Thread no.47 on this subject gets the same answer as the others: blacklisting bitcoins will destroy the value of the currency.

I think it is around thread 47,000!   :-)

Freeze-coins are not bitcoins, but an alt-coin.

[zylstra]

In short, no, because it destroys fungibility.

Some questions to keep in mind:

Who is able to freeze coins? (You already said miners)
What happens in disputes?
Who has the ability to unfreeze coins? Only miners?
How do you propose miners keep track of the stolen coins?
How can coins be unfrozen?
Who pays for this system?

As an example, what happens if coins I hold are unjustly frozen? What do I do?

It would also be near impossible to achieve consensus for this type of change in Bitcoin.

fungibility is not the issue here.

What happens in disputes?  A judge decides.
Who has the ability to unfreeze coins? Only miners?  The miners will unfreeze coins on the decision of a judge.
How do you propose miners keep track of the stolen coins?  Perhaps the miners will place the coins in a temporarily locked wallet.
How can coins be unfrozen?  The coins are returned to the rightful owners after a democratic court determines who they are.
Who pays for this system?  A percentage of the stolen coins may be used to pay for any management of the system.  Similar to the taxes we pay to support our justice system.

[wallstreetcoiner]

Before I write a full argument for why the core developers should consider asking the mining community to freeze Mt. Gox’s stolen BTC (the coins mentioned here, for example, http://www.coindesk.com/gox-money-moving-through-block-chain/ ), I would like to ask your opinion.  What is it?  Yes, you.

Cryptocurrencies like Bitcoin (BTC) and Goldcoin (GLD) must remain decentralized. This is a really bad idea in my opinion.

[tvbcof]

If the Bitcoin developers and the Bitcoin Foundation would like to address some of the design deficiencies in Bitcoin, they should totally do this.

The effect would be to severely damage and possibly completely kill Bitcoin and allow systems which were architected with more brainpower and more benefit of hindsight to get a toe-hold and rise to the top.  This may very well be the most efficient way of getting robust cypto-currency solutions into widespread use.

[Keyser Soze]

fungibility is not the issue here.

Fungibility most certainty is the issue. Under these rules, if miners believe that coins I hold are stolen and freeze them, I can no longer spend them. These frozen coins would differ from other non-frozen coins. Who would accept any coins if they could be frozen some point in the future by a third party?

What happens in disputes?  A judge decides.
Who has the ability to unfreeze coins? Only miners?  The miners will unfreeze coins on the decision of a judge.

So miners can decide to freeze my coins, then I have to prove my ownership of the coins to a judge if the miners are wrong?

How do you propose miners keep track of the stolen coins?  Perhaps the miners will place the coins in a temporarily locked wallet.

The question was more about how miners will determine which coins are stolen and which are not. I should have made that more clear.

How can coins be unfrozen?  The coins are returned to the rightful owners after a democratic court determines who they are.

What defines a democratic court? Keep in mind that the person defending ownership of the coins could be from any country.

Who pays for this system?  A percentage of the stolen coins may be used to pay for any management of the system.  Similar to the taxes we pay to support our justice system.

So a portion of the coins pay for administration of this system and I assume the rest goes to the person they were originally stolen from?

Generally you will find that current bitcoin users will be against a system where their coins can be taken, without permission, by a third party. Decentralization is a very important benefit of bitcoin, creating a taint system (freezing/blacklisting/whitelisting/ect) greatly diminishes that benefit.

[grifferz]

So they implement that.  Criminals start to only steal 0.99% as they know they can get away with that.  So it now changes or we just accept it? 

One answer could be vote.

Just like in every other incarnation of this exact same suggestion, we reach the point where the OP is asked to spec exactly how this would work. You say vote, sounds like you have it all figured out, so why not ask any of the major mining pools right now if they would consider taking your suggestion on board.

If they say yes, then maybe the idea is worth exploring. If they say no then you aren't going to get what you suggest.

Everything else is just going to be posturing.

[zylstra]

Everything else is just going to be posturing.

Who, me?  Posturing?  

[BurtW]

The devs can't, but all (51%+) miners could work together to censor transactions. They would not be able to seize the coins, just prevent any transaction spending them from being confirmed.

You (and the rest of you who keep saying this) don't know what the hell you are talking about, do you?

If 51% of the miners refuse my "dirty" transaction that still leaves 49% that will accept it.  So my confirmation time goes from an average of 10 minutes to an average of 20 minutes and you have done nothing.

Repeating over and over that getting 51% of the miners to refuse the coins you don't like will stop them from moving does not make it true.

Learn how something actually works before you try to fix it.

[BurtW]

Everything else is just going to be posturing.

Who, me?  Posturing?  

I think posing is a more accurate description than posturing.

[Keyser Soze]

You (and the rest of you who keep saying this) don't know what the hell you are talking about, do you?

If 51% of the miners refuse my "dirty" transaction that still leaves 49% that will accept it.  So my confirmation time goes from an average of 10 minutes to an average of 20 minutes and you have done nothing.

Repeating over and over that getting 51% of the miners to refuse the coins you don't like will stop them from moving does not make it true.

Agreed, the link you provided in the other thread explains it very well.

https://bitcointalk.org/index.php?topic=352734.0

[grifferz]

Everything else is just going to be posturing.

Who, me?  Posturing?  

http://dictionary.cambridge.org/dictionary/british/posturing

Prove it's not just posturing by taking the next step: ask the mining pools if they are interested in your proposal.

[BurtW]

How do you propose miners keep track of the stolen coins?  Perhaps the miners will place the coins in a temporarily locked wallet.
How can coins be unfrozen?  The coins are returned to the rightful owners after a democratic court determines who they are.
Who pays for this system?  A percentage of the stolen coins may be used to pay for any management of the system.  Similar to the taxes we pay to support our justice system.

Three glaring example of how you have no clue as to how the thing you are trying to "fix" operates at a fundamental level.  None of this is even possible.

NOT.  POSSIBLE.

Miners cannot "place the coins in a temporarily locked wallet" because they can only send them where the owner wants to send them (or not, but then another miner will).

NO ONE can return "coins .. to the 'rightful' owners" except the current owner.

It is not possible to take "a percentage of the stolen coins" unless the current owner gives them to you - and they may not want to do that.