[2019-01-22] Cambridge Scholars Invent Scheme to Track Stolen Bitcoin

[buwaytress]

The article.

What do you think of this? Cambridge scholars who seem to think the law tells us FIFO is the way to go in tracing Bitcoin theft.

Taintchain website doesn't seem to work anymore. My first impression, looking at the slides, is that it seems to completely ignore that FIFO doesn't necessarily work with more advanced clients. I mean, I've used coin control ever since I started using my client, and with all kinds of ways to spend UTXOs, I don't see how it's very reliable.

[squatter]

The article.

What do you think of this? Cambridge scholars who seem to think the law tells us FIFO is the way to go in tracing Bitcoin theft.

Taintchain website doesn't seem to work anymore. My first impression, looking at the slides, is that it seems to completely ignore that FIFO doesn't necessarily work with more advanced clients. I mean, I've used coin control ever since I started using my client, and with all kinds of ways to spend UTXOs, I don't see how it's very reliable.

You're right, the analysis seems wrong. Anyone manually choosing UTXOs won't spend that way, and it would be really naive to assume that thieves will always spend using wallet defaults. Is FIFO even part of the default spending logic in any prominent Bitcoin wallets? I've never looked into it. I always choose UTXOs manually for privacy reasons.

[buwaytress]

The article.

What do you think of this? Cambridge scholars who seem to think the law tells us FIFO is the way to go in tracing Bitcoin theft.

Taintchain website doesn't seem to work anymore. My first impression, looking at the slides, is that it seems to completely ignore that FIFO doesn't necessarily work with more advanced clients. I mean, I've used coin control ever since I started using my client, and with all kinds of ways to spend UTXOs, I don't see how it's very reliable.

You're right, the analysis seems wrong. Anyone manually choosing UTXOs won't spend that way, and it would be really naive to assume that thieves will always spend using wallet defaults. Is FIFO even part of the default spending logic in any prominent Bitcoin wallets? I've never looked into it. I always choose UTXOs manually for privacy reasons.

Yeah, I'm thinking now of all the types of wallets, and the ones mainstream are most likely to use. Based on my experience:

1. Most people use clients like mine, but probably never choose utxos to spend. But even with defaults, wallets I think try to spend the biggest inputs first, and combine only when the spend is bigger. FIFO may have been a thing when coin age and priority levels were calculated for picking txs out of mempool but not any longer.
2. Many people use exchanges and other web wallets... any deposits they accept are almost immediately consolidated by the web wallet, and any spend users make are coming from batched transactions.

But maybe they know something I don't.

[Harlot]

The question is will they able to find the the criminals first before it completely disappear? I know how stolen crypto works they are broken down to smaller pieces and then sent to multiple addresses some even go to exchanges to be changed into different crypto and fiat so could they find the culprit before they are completely gone forever?

[Betwrong]

~. But even with defaults, wallets I think try to spend the biggest inputs first, and combine only when the spend is bigger. ~

I'm pretty sure this is how it works by default, and I can't imagine how can it be otherwise. I've never checked it myself though. So it would be interesting to read any objections.


While looking for info on the topic I came across this thread:

https://bitcointalk.org/index.php?topic=576337

which, I think, could be a good source of information for the Cambridge team to try out their system.

Also I found this article by Wired that basically saying the same things as BitcoinNews', only it was published eight months ago.

https://www.wired.com/story/bitcoin-blockchain-fifo-dirty-coins/

[buwaytress]

~. But even with defaults, wallets I think try to spend the biggest inputs first, and combine only when the spend is bigger. ~

I'm pretty sure this is how it works by default, and I can't imagine how can it be otherwise. I've never checked it myself though. So it would be interesting to read any objections.


While looking for info on the topic I came across this thread:

https://bitcointalk.org/index.php?topic=576337

which, I think, could be a good source of information for the Cambridge team to try out their system.

Also I found this article by Wired that basically saying the same things as BitcoinNews', only it was published eight months ago.

https://www.wired.com/story/bitcoin-blockchain-fifo-dirty-coins/

Yeah, I came up against that older news as well. I think last week, these guys (1 of them anyway) presented his paper in a slideshow at some other conference, updating with some of their sampling, which suggested a smaller range of taint results, when compared to haircutting. I just thought it's interesting that these Cambridge guys are coming up with what seems even to a modest user like myself, a flawed method, when they're the same guys who're behind the only academic benchmarking survey I know for Bitcoin (well, it's a crypto benchmarking but Bitcoin's the chief currency they studied).

The benchmarking's also typically sound looking... but perhaps if proper experts were to scrutinise, it'd come up short.

[pixie85]

The question is will they able to find the the criminals first before it completely disappear? I know how stolen crypto works they are broken down to smaller pieces and then sent to multiple addresses some even go to exchanges to be changed into different crypto and fiat so could they find the culprit before they are completely gone forever?

Even if it would work you can keep tracing Bitcoins only as long as they end up exchanged into fiat money because only then you can trace it to someone's bank account that will have strong kyc procedures. If the money becomes spent it gets much more difficult.

If they run it through a mixer it gets even more complicated and finally they can go to an exchange with weak KYC and upload fake or bought document buy a privacy coin and they're gone.