Good news: Zhoutong will buy 40k bitcoins to return to his client

[finway]

And the hacker can't sell his coins.

[HorseRider]

Zhoutong need not buy the bitcoin at once. He can earn the bitcoin he needed in the next 3~6 months.

[matthewh3]

And the hacker can't sell his coins.

How come the cracker can't sell the stolen BTC.

[N12]

Has zhoutong said so? Nope. So stop your penny stock rumors. Thanks.

We know he holds enough Bitcoin profits to be able to cover this.

[finway]

And the hacker can't sell his coins.

How come the cracker can't sell the stolen BTC.

Because Mtgox will ban them.

[finway]

Has zhoutong said so? Nope. So stop your penny stock rumors. Thanks.

We know he holds enough Bitcoin profits to be able to cover this.

He can't be holding 40k Bitcoins ?

If he do, he's really bullish!  

He should buy them ASAP.

[matthewh3]

And the hacker can't sell his coins.

How come the cracker can't sell the stolen BTC.

Because Mtgox will ban them.

What I should have said is how will they know the BTC are stolen?

[finway]

What I should have said is how will they know the BTC are stolen?

I don't know, ask MtGox, they've done so before.

[N12]

Has zhoutong said so? Nope. So stop your penny stock rumors. Thanks.

We know he holds enough Bitcoin profits to be able to cover this.

He can't be holding 40k Bitcoins ?

If he do, he's really bullish!  

He should buy them ASAP.

Yes, I have heard him say that he holds quite a lot of Bitcoins, as he is bullish long term.

MtGox holds lots of Bitcoin profits, too. They don’t sell them either.

[farfiman]

What I should have said is how will they know the BTC are stolen?

I don't know, ask MtGox, they've done so before.

They can track the address's  - but the the coins are being spread around to many wallets
and probably will be diluted so much that it will very hard to catch.

They coins can be sold very very slowly and not necessarily through mtgox

[finway]

They can track the address's  - but the the coins are being spread around to many wallets
and probably will be diluted so much that it will very hard to catch.

They coins can be sold very very slowly and not necessarily through mtgox

I bet you're right.

[BkkCoins]

If he's bullish then presumably he would wait and buy on dips. He could handle withdraw demands from offline holdings and replenish on dips thus stabilizling the market. Whether that's in his best interest I don't know. Maybe he makes more off certain kinds of market volatility. Whatever the case my impression is that he's plenty smart enough to figure out the best way to handle it for his best long term interest.

[ultima]

There is no way to ban hacker's address. He can move them around thru different bitcoin services, then sell them OTC or use them to buy something, then what? Someday you will get some of the coins that came from his address and mtgox will blame you. This is stupid, but completely expected from mtgox.

[lonelyminer (Peter Šurda)]

There is no way to ban hacker's address.

Well, if the majority of miners refuse to process transactions originated by thiefs, then the address would effectively become banned. Think of it as a "51% defense" (homage to 51% attack).

[Nefario]

The most likely action the thief will take will be to use the coins on SilkRoad. They don't need to cash out on any of the normal exchange.

Right now they're worth less than a clean bitcoin but still have value, and will be traded into oblivion in the black markets until they eventually seep out into the general economy.

[ultima]

Well, if the majority of miners refuse to process transactions originated by thiefs, then the address would effectively become banned. Think of it as a "51% defense" (homage to 51% attack).

The same problem is still there. I sell something for bitcoins (instant purchase), the hacker immediately spends his bitcoins (before some central authority decides to ban the address) and I am left with a bunch of worthless bitcoins in the end.

This would undermine the whole p2p currency, "controlled by no one" concept. I think every sane miner would stop using a pool that would try to control the network in any way.

So, yes it could be done, but it would destroy bitcoin as we know it.

[Bro]

There is no way to ban hacker's address. He can move them around thru different bitcoin services, then sell them OTC or use them to buy something, then what? Someday you will get some of the coins that came from his address and mtgox will blame you. This is stupid, but completely expected from mtgox.

no it's not stupid, it's ethical and it is the bitcoin community regulating itself ( buying/selling drugs? cool  Stealing bitcoins? not cool)

those bitcoin services will have to check if these bitcoins are suspicious before accepting them, otherwise they might have worthless bitcoins in their hands

[jwzguy]

How would you check them?

Banning coins is much more detrimental to Bitcoin as a whole. It destroys confidence in the system.

MtGox has temporarily locked accounts in order to to try and trace stolen coins, but I don't know of any instances where they confiscated any.

[Bro]

How would you check them?

I suppose they go through all the parent transactions. If these stolen coins go through an anonymizer, or other stolen coins from another hack, Mtgox will ban every transaction that are child transactions of bitcoins that come out of that anonymizer.

I don't blame them.

> Banning coins is much more detrimental to Bitcoin as a whole. It destroys confidence in the system.

Seems to me like the system is evolving. Nothing you can do about it, except starting a different cryptocurency.
In the end, if it regulates itself, Bitcoin might end up looking just like the current banking system and that would be logical, since this is a deterministic system after all.

[jwzguy]

How would you check them?

I suppose they go through all the parent transactions. If these stolen coins go through an anonymizer, or other stolen coins from another hack, Mtgox will ban every transaction that are child transactions of bitcoins that come out of that anonymizer.

I don't blame them.

> Banning coins is much more detrimental to Bitcoin as a whole. It destroys confidence in the system.

Seems to me like the system is evolving. Nothing you can do about it, except starting a different cryptocurency.
In the end, if it regulates itself, Bitcoin might end up looking just like the current banking system.

Not MtGox. How would you check them? Are we going to have to ask MtGox permission before exchanging any Bitcoin? Any business that's accepting BTC will have to send queries to MtGox to see if it's "ok" to accept coin from a customer? That's ludicrous.

If Bitcoin "evolves" into the current banking system it will lose a lot of its inherent value.