Should core bitcoin developers freeze stolen Mt.Gox bitcoins?

[zylstra]

I have not heard back from Eligius, http://eligius.st/~gateway/contact .
I have not heard back from BTC Guild, support@btcguild.com .
My questions to GHash, https://support.cex.io/hc/en-us , have been forwarded to the CEX.IO supervisor.  I have not heard back from the supervisor yet.

I have emailed each lead developer listed here, https://bitcoin.org/en/development .

If you have a closer connection to any of these people please ask them their opinion on the stolen coins.  Of course I would be interested to hear it.  My letter is posted below in case you would like to use it.

Considering that the stolen Mt. Gox coins are a large percentage of the bitcoin economy (somewhere in the 6% range), if a majority of the other miners and developers were advocating freezing Mt.Gox's stolen bitcoins would you join them in that endeavor?  If not, what percentage of the miners and developers would have to be for freezing the stolen coins for you to join them?

If you are not interested in freezing the coins for a 6% theft, for what stolen percentage would you consider freezing coins?  25%?  80%?  99%?

Disregarding your economic interest do you believe that a move like this (for 6%) is in the best interest of bitcoin and the bitcoin community if the community moves as a whole?  If not, and you have time, I'd like to hear your rationale.

I will update you on any responses I receive that I have permission to share.  

At what point will you concede that no one with a leadership role considers this a good or workable idea?

When I hear/read something to that effect that is spoken/written by them.

[BurtW]

Thanks for doing that zylstra.

[grifferz]

I will update you on any responses I receive that I have permission to share. 

Thank you!

If you do receive any responses from any mining pool I actually think it may justify starting a new topic along the lines of "I asked mining pools about freezing stolen coins and this is what they said" because I don't recall any other similar thread getting that far recently, and a lot of people are probably writing this topic off as being the same as those.

[Fuddlynn]

no, but they can help with getting justice, preventing this from happening again, and tracking the funds.

If there was a like button I would use it here.

This seems to be seriously lacking in the BTC community which is hurting it.  The "if you were so stupid as to keep your BTC in MtGox, you deserve to loose your shirt" mentality stacked on top of the silence when it comes to any attempt at justice is read by the general public as a protocol that could never be trusted.

Regulation is not the same as centralization.

[ljudotina]

I think that BTC developers should feed the poor, cure all diseases and of course freeze stolen mtgox btc....

[BADecker]

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.

The Bitcoin core Devs don't need to get into the middle of a fight between people and the exchanges. Such interference would look bad to as many people as it would look good. Then there would be people who would attempt to sue the core Devs for the interference.

While I never used MtGox, I also was taken in by what seemed to be their stability. Their crash is a good reminder to me that Bitcoin is FREE to use, and that means free from standard security as well as free from the banking industry's supposed security. Since Bitcoin is free for me to use without interference, if I use my freedom, I need to learn to take responsibility for my actions.

If we all had done the secure thing, if we all had transacted in small amounts so that we wouldn't lose much when failure came, Bitcoin would not have had the wild fluctuations that it has had. It would be far more stable as a medium of trade. Its foundations would be stronger, and we would have more people moving into it for buying and selling, rather than for speculating.

Keep the core Devs out of the battles. They have enough to do simply considering the technical side of things.

[zylstra]

None of the pools responded.  Four of the seven developers responded.  One half-heartedly gave permission to share his response.  Three others did not give their permission.

Some responded that they couldn't freeze the coins, others that they would if the rest of the community decided to freeze the coins.

Developers, if I have shared too much of what you shared with me, please PM me and I will delete this post.  (I figure if I didn't include your name then I'm adhering to what we agreed, but if that's not how you read it let me know.)

[gwlloyd]

I think even if it were easily possible without horrible code changes that it would set an extremely bad precedent and put developers in the firing line (as others have pointed out). Gox had some kind of weird authority about it despite being next to useless for the best part of 2013 and having warning flags written all over it. Many other services that have lost coins due to hackers have been, or at least seemingly been, far more professional and secure. Just because it is a large amount of coins I don't see that the case is any different to that of a tiny little exchange/site.

Hopefully this is the last of the infancy hacks, dark net hacks will continue but I hope that the rest of us on the clear net are kept safe from it all and that everyone starts to think more carefully about their coins (who on earth would have had more than a couple of months salary on Gox!).

Keep your long trades on paper, not an exchange.

[pungopete468]

OP, what you're suggesting isn't possible in Bitcoin by design. The blockchain can't just be altered by the dev team in the manner that this scenario would require.

The block which contains the MtGox transfers also contain numerous other legitimate transactions that occurred around the same time period before that block was solved.

The hash of a block is a long string of characters representing the entire hash of the previous block, a time stamp of when the current block was created, and all of the transaction data contained within the current block. If a single transaction is changed, the resulting block hash will be completely different. When a block is solved, a new block is instantly created and the cycle is repeated.

All of the blocks solved from then up until now rely on the hash of the block containing those MtGox transactions. Every block is dependent on the data contained within the previous block remaining concurrent. Changing something in a past block would cause a cascading failure event. The change would be rejected.

Each and every block uses the hash of the previous block in its algorithm. If you change the content of a block, the hash changes with it. If the hash of the next block does not check-out against the hash of the previous block it will be discarded. The blockchain from that moment forward and every transaction that occurred from that block onward would need to be reverted as if it never happened for such a change to be accepted...

The protocol will not allow the coins to be "frozen" since the act of freezing them would destroy the concurrency of a known good chain where the inputs and outputs are proven. The alteration would be discarded the same as a "double-spend" attempt.

Bitcoin can't do what you're asking it to do regardless of what the core devs think about the Gox situation... Bitcoin has no conventional "core" in that unilateral "source-code" alterations are not possible. If the community wishes to implement an improvement they must do it by consent. Community consent has limits in that it still doesn't mean they can change the content of a previous block. Improvements can only be implemented from an unsolved block onward. The only way to go back would be to discard all transactions that took place in the chain between the block in question and the current unsolved block.

Bitcoin isn't about Anarchy, it's governed by the most absolutely infallible system of law on the planet; math... The problem with math is that it cares nothing for emotion. If you have unspent outputs and the private keys to control them; nobody can stop you from spending them. That's not Anarchy, that's equality and neutrality...

[zeeshanblc]

I'm against about forking bitcoin and freezing the stolen funds what is the difference between governments freezing bank accounts?

More people would lost trust to bitcoin if this happen. Price would crumble and I'm seeing a new coin will replace bitcoin.

[spooderman]

OP, what you're suggesting isn't possible in Bitcoin by design. The blockchain can't just be altered by the dev team in the manner that this scenario would require.

*snip*

thank math.

Just thought I would re-visit this thread to say:

NO

...in response to the OPs question.

[5flags]

In addition to "NO!" I would like to add:

Massive thefts are an inevitable and necessary part of Bitcoin's evolution. Too many people are overlooking the primary goals of Bitcoin, namely being a decentralised, trustless, digital currency. The majority of Bitcoin users are trusting centralised authorities. This requires a mental shift which will be facilitated by pain.

We need decentralised exchanges as a priority.

[bryant.coleman]

None of the pools responded.  Four of the seven developers responded.  One half-heartedly gave permission to share his response.  Three others did not give their permission. Some responded that they couldn't freeze the coins, others that they would if the rest of the community decided to freeze the coins. Developers, if I have shared too much of what you shared with me, please PM me and I will delete this post.  (I figure if I didn't include your name then I'm adhering to what we agreed, but if that's not how you read it let me know.)

Really sad to hear this. No one will use Bitcoins if they are frequently stolen and resold. Just look at the past 3 months or so. More than 1 million coins (including those in Mt Gox) have been stolen and their real owners have been left with little or no support. Some people will claim that this happens with the fiat as well. But in fiat, does this much amount (8% of the total money in circulation) gets stolen in just 3 months?

[jparsley]

They can make a list of addresses to blacklist.

[5flags]

Really sad to hear this. No one will use Bitcoins if they are frequently stolen and resold. Just look at the past 3 months or so. More than 1 million coins (including those in Mt Gox) have been stolen and their real owners have been left with little or no support. Some people will claim that this happens with the fiat as well. But in fiat, does this much amount (8% of the total money in circulation) gets stolen in just 3 months?

If people were giving cash to street vendors for them to look after, I guarantee that the theft rate would be 90+%. The problem is that people are giving their Bitcoins to any old website operator for them to look after.

If you don't control the private key to your coins, you don't have your coins. This needs drilling in to people.

[Onar]

I agree to that its not about undesentrilising bitcoins. if bitcoin is going mainstream it needs to evolve. Keep the desentrilisation, but its not said that there can be introduced security measurements and other that makes sure if you steal large amounts they get freezed and useless. This will slow down the blackhats and other bad people.

A other option could be to create a ideal organisation, and the bitcoins that get seased immediatly after a big theft like in MTgox before inocent people receive them.  The coins that were stolen, and will not receive them back, but the thief will not enjoy them either. But the humans threw the organisation benefits. This will in the long run teach the professional thievs that its not worth time to use time on this, and this behaviour would disappear and be history.

In general I think its wrong to think about bitcoin as a Anarchy heaven. I do not sure if the anarchists even know what they want to achieve with anarchy. With anarchy society totaly brakes, down, for instance no food production and other. Where will you as a anarhyst get food. Where will you get electricity, noone are producing it or the equipment needed to produce it. Go and live as a farmer in the stone age, then you can not sit with the computer and enjoy programming. Also in general to get anarchy to build a new society does not work, because the society need to be broken down completly. The only thing it leads to is pain and suffering, then war, then death and more war before a new order is growing with the survival of the fittest mentality. And the new order will in the long run somehow look similar to something that already existed previously. Somehow there will be leaders, governmental looking structures and so on and things just repeat itself. In general the strongest and meanest and the one with biggest muscles or weapons becomes the chief until the next one kills him. Anarchy will lead us toworse times we hopefully never will see again. Some parts in the world its still that way. Look at north korea for example where citizens been killed, starved and even worse where an elite dictates how thing will be...Just my unedited thoughts.  
 

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

[scottsecret]

This would really hurt BTC as it would no longer be decentralized and people would have more faith in fiat.  It isn't fair to people who received stolen funds without knowledge.

[dogechode]

The thing is, with Mt. Gox, they didn't even notice the coins were missing for years (supposedly.) So at this point, isn't it likely that those coins have been transferred many times and could be in the hands of completely innocent people who were not involved with the theft but received bitcoins as payment or purchased them, and didn't know they were buying coins that were stolen from Mt. Gox? I mean, are you going to prosecute someone because a $20 bill in their wallet was used in a drug transaction 2 years ago? Absurd.

[5flags]

This would really hurt BTC as it would no longer be decentralized and people would have more faith in fiat.  It isn't fair to people who received stolen funds without knowledge.

As soon as a private key loses the ability to access the relevant funds - Bitcoin is broken. Game over.

It's the user mind set that needs to change, not the protocol. If you wouldn't send cash in an envelope to a PO Box in Poland, why would you send Bitcoins to the same guy if he ran a website?

[bryant.coleman]

If people were giving cash to street vendors for them to look after, I guarantee that the theft rate would be 90+%. The problem is that people are giving their Bitcoins to any old website operator for them to look after.

If you don't control the private key to your coins, you don't have your coins. This needs drilling in to people.

Bitcoin will never become mainstream, if you limit them to the tech savvy. And for heavens sake, a lot of people who lost their money in Gox were actually tech savvy! The difference between theft using fiat and that using Bitcoin is:

1. Theft using fiat: Strong chance of the perpetrator getting caught and sent to the jail. The victim gets support from the society and the authority.
2. Theft using Bitcoin: Almost no chance of catching the perpetrator. The victim is shunned and accused of carelessness.