How to avoid thefts using stolen bitcoins.

[musician]

Let me start that this might sound stupid, since I have no idea about any technical thing about bitcoins, programming, etc, but I was reading about the guy who lost over 1000 bitcoins and came up with this. You tell me if it's posible, realistic or it's not. Here we go:

Someone creates a business called X, and what it does is the following: once you are robbed, you send them the adress and number of btcs stolen. Since this moment, the ddbb from X monitors the blockchain from those btcs, adding each adress to the ddbb. At the same time, exchanges, bitcoin shops, and gateway payments are connected to that ddbb, so since the moment they receive btcs from an adress that is on the ddbb would raise a red flag and freeze the btcs.

Obviously, since someone reports would have 24/48 hours to prove they were stolen ( screenshots, police reports, etc). And also, for a business to be connected to that ddbb would add value to their work.

Good idea? Stupid?

[1714118137]

1714118137

[TsuyokuNaritai]

The main problem with this is that BTC would then no longer be fungible.

[CIYAM]

The idea is nothing new (google "bitcoin blacklisting") and unfortunately has the problem that "how do you know it was really stolen?" (not saying that Klee's case is not legit).

You end up with some sort of "centralised blacklist" that then destroys the "fungibility" of Bitcoin (same as if you were given a $10 note that turned out to be stolen do you think it is fair that you should lose that $10?).

This is why comparisons with "gold" make quite a bit of sense when it comes to Bitcoin as people can "melt down UTXOs" through mixers such that it is practically impossible to tell who are "the thieves or the innocent victims".

[R2D221]

This was also proposed for the FBI seized coins, and most people didn't really like the idea. The problem is that a central authority regulating this would make Bitcoin centralized, which makes it more vulnerable.

[franky1]

Let me start that this might sound stupid, since I have no idea about any technical thing about bitcoins, programming, etc, but I was reading about the guy who lost over 1000 bitcoins and came up with this. You tell me if it's posible, realistic or it's not. Here we go:

Someone creates a business called X, and what it does is the following: once you are robbed, you send them the adress and number of btcs stolen. Since this moment, the ddbb from X monitors the blockchain from those btcs, adding each adress to the ddbb. At the same time, exchanges, bitcoin shops, and gateway payments are connected to that ddbb, so since the moment they receive btcs from an adress that is on the ddbb would raise a red flag and freeze the btcs.

Obviously, since someone reports would have 24/48 hours to prove they were stolen ( screenshots, police reports, etc). And also, for a business to be connected to that ddbb would add value to their work.

Good idea? Stupid?

say you had 1btc stolen
the theif can deposit it into bitstamp and instantly withdraw 1BTC. he has 1BTC but the address it came from is different. this is because the coins mix together. (research: mixers) in bitstamps wallet system, so now the thief can go to local bitcoins free and clear to cash out, while you are tagging unsuspecting other people, whom unluckily get those coins mixed in with their withdrawals.

the other thing is that the theif can move the btc into other addresses he does own, splitting the coins inot small amounts of 0.001 amounts meaning you now have to tag 100 addresses in the 5 minutes it takes for him to form a 100 address multisend. he then in the next 5 minutes moves each cointo a single address and repeats the process again.. withing 15 minutes you could easily end up with 300 addresses you have to tag.. never knowing if its truly him or a deposit/withdrawal from a service/mixer.

[InwardContour]

Let me start that this might sound stupid, since I have no idea about any technical thing about bitcoins, programming, etc, but I was reading about the guy who lost over 1000 bitcoins and came up with this. You tell me if it's posible, realistic or it's not. Here we go:

Someone creates a business called X, and what it does is the following: once you are robbed, you send them the adress and number of btcs stolen. Since this moment, the ddbb from X monitors the blockchain from those btcs, adding each adress to the ddbb. At the same time, exchanges, bitcoin shops, and gateway payments are connected to that ddbb, so since the moment they receive btcs from an adress that is on the ddbb would raise a red flag and freeze the btcs.

Obviously, since someone reports would have 24/48 hours to prove they were stolen ( screenshots, police reports, etc). And also, for a business to be connected to that ddbb would add value to their work.

Good idea? Stupid?

The moment that you attempt to freeze the coins it would make it a very bad idea and it would make bitcoin no longer fungible.

One possible variation to this plan would be that the identity of the customer would be provided to the company "x" however even this is not the greatest of ideas because it is very well possible that the coins have traded hands several times prior to the customer coming into "possession" of the coins.

[Meuh6879]

if you don't trust a commercial ... don't use it 
scam always exist even if you use bitcoin in all this world.

if you want buy a think in aliexpress from a "lost" china store ... with a wire money, you don't have an escrow to save money.
many business must secure is product stock to sell locally.

many customers don't find or read the real adress of a seller in a site before buying.
they are dumb and for this, they loose BTC.

not a problem for me.

[harles9]

I've only ever actually purchased bitcoin hardware from Newegg (only once I learned quickly that it was not worth it... one of my first forays into mining, lol).
And KNC.

Fortunately, KNC actually delivered but it seems like not everyone has these experiences...

[BittBurger]

Why would this affect fungibility?

The OP is not talking about a central authority doing anything that would stop the Bitcoin economy from functioning as normal.

From what I am reading - he's just talking about a notification and monitoring system.

And you dont need blacklisted or marked coins to do it either.  Just the blockchain.

The thief tries to cash out and the bank is notified that its stolen funds, simply by following the trail of public transactions on the blockchain.

Nothing more than passive monitoring and alerts.

The bank doesn't "freeze" the coins in some strange, abnormal way.  They simply don't let the thief have them.  The coins are still completely viable and would simply be held in an account and returned to the victim.

Im not seeing what is wrong with this idea, except for the risk of "mixers" and the like.

But a company providing this service will no doubt recover people's money quite often.   There will be "smarter" thieves who can figure ways around it, but just like with everything else, a large portion of thefts are done by idiots.

[allthingsluxury]

This idea was floated out there before.

[InwardContour]

Why would this affect fungibility?

The OP is not talking about a central authority doing anything that would stop the Bitcoin economy from functioning as normal.

From what I am reading - he's just talking about a notification and monitoring system.

And you dont need blacklisted or marked coins to do it either.  Just the blockchain.

The thief tries to cash out and the bank is notified that its stolen funds, simply by following the trail of public transactions on the blockchain.

Nothing more than passive monitoring and alerts.

The bank doesn't "freeze" the coins in some strange, abnormal way.  They simply don't let the thief have them.  The coins are still completely viable and would simply be held in an account and returned to the victim.

Im not seeing what is wrong with this idea, except for the risk of "mixers" and the like.

But a company providing this service will no doubt recover people's money quite often.   There will be "smarter" thieves who can figure ways around it, but just like with everything else, a large portion of thefts are done by idiots.

The OP says that once the stolen coins are sent to a merchant/exchange they would be frozen. This would imply that this company would act as a central authority (or simply act as an authority) that would freeze "stolen" coins

[musician]

Why would this affect fungibility?

The OP is not talking about a central authority doing anything that would stop the Bitcoin economy from functioning as normal.

From what I am reading - he's just talking about a notification and monitoring system.

And you dont need blacklisted or marked coins to do it either.  Just the blockchain.

The thief tries to cash out and the bank is notified that its stolen funds, simply by following the trail of public transactions on the blockchain.

Nothing more than passive monitoring and alerts.

The bank doesn't "freeze" the coins in some strange, abnormal way.  They simply don't let the thief have them.  The coins are still completely viable and would simply be held in an account and returned to the victim.

Im not seeing what is wrong with this idea, except for the risk of "mixers" and the like.

But a company providing this service will no doubt recover people's money quite often.   There will be "smarter" thieves who can figure ways around it, but just like with everything else, a large portion of thefts are done by idiots.

The OP says that once the stolen coins are sent to a merchant/exchange they would be frozen. This would imply that this company would act as a central authority (or simply act as an authority) that would freeze "stolen" coins

Obviously what I meant is that once is clear the victim is really the victim (if that makes any sense) the bitcoins would be returned to the victim.

[InwardContour]

Why would this affect fungibility?

The OP is not talking about a central authority doing anything that would stop the Bitcoin economy from functioning as normal.

From what I am reading - he's just talking about a notification and monitoring system.

And you dont need blacklisted or marked coins to do it either.  Just the blockchain.

The thief tries to cash out and the bank is notified that its stolen funds, simply by following the trail of public transactions on the blockchain.

Nothing more than passive monitoring and alerts.

The bank doesn't "freeze" the coins in some strange, abnormal way.  They simply don't let the thief have them.  The coins are still completely viable and would simply be held in an account and returned to the victim.

Im not seeing what is wrong with this idea, except for the risk of "mixers" and the like.

But a company providing this service will no doubt recover people's money quite often.   There will be "smarter" thieves who can figure ways around it, but just like with everything else, a large portion of thefts are done by idiots.

The OP says that once the stolen coins are sent to a merchant/exchange they would be frozen. This would imply that this company would act as a central authority (or simply act as an authority) that would freeze "stolen" coins

Obviously what I meant is that once is clear the victim is really the victim (if that makes any sense) the bitcoins would be returned to the victim.

But even if the victim really had their coins stolen it would not necessarily mean that the person who sent the coins to the exchange is the thief

[Elwar]

Step 1: Watch the blockchain for any huge transactions from one address to another
Step 2: Claim that a huge transaction was actually stolen money from my address
Step 3: ?? your idea ??
Step 4: Profit!

[Meuh6879]

and what ?

bitcoin are unstolled ... and can't be recover.

detective job is a scam "by essence" in bitcoin environment.

[DannyElfman]

Step 1: Watch the blockchain for any huge transactions from one address to another
Step 2: Claim that a huge transaction was actually stolen money from my address
Step 3: ?? your idea ??
Step 4: Profit!

As crazy as this sounds, this is actually what the OP is suggesting to do.

Anyone can easily track bitcoin though the blockchain, and there is no real reason to need a company to do this for stolen coins.

[PolarPoint]

What if the thief start sending small amounts to thousands of addresses owned by others? Then these get mixed into tens of thousands clean bitcoin? Should the exchange stop accepting every single one of those coins?

[roslinpl]

I must say this is a problem for Bitcoiners when their coins get stolen ...

I think that hackers are kinda happy that Bitcoin was created in other way than we are ...
They have so many chances to get people's coins ... and then well ... chances that they will get caught are lower than than that they will somehow withdraw it with no tracking possible

And this is a problem I must say.
But you have to remember that most of the hackers are doing really simple tricks and you are able to secure yourself ...


Almost every video about "how to get started with Bitcoin"  is sharing main security steps which you HAVE to take if not you are placing yourself in a risky situation.

Strong password. Never stored! Just in a brain or a sheet of a paper cut in a half and placed in two different secure places.

-Layer security  ex.Firewall = mininum 2x firewall - router + OS

and be AWARE of phising e-mails! ALWAYS check what is a LINK connected to a button "login" in your e-mail from FB or Twitter or ANYTHING else (Forum/etc).

Bitcoin is a digital currency.

If you are hodling - store COLD-STORAGE (offline!)

For spendings follow security steps and decrease the risk!

Regards..

[Bibop]

Problematic issue..
everybody wants to prevent that but no one can profit from that process.
service that will take the responsibility for the stolen btc's will have to deal with a lot of issues between both sides that payed and got stolen.

the closest way I could think of is just like real money - an insurance for btc.
in our world the thieves not always can be catch but money can restore any bad feelings

[pirsquared]

I must say this is a problem for Bitcoiners when their coins get stolen ...

I think that hackers are kinda happy that Bitcoin was created in other way than we are ...
They have so many chances to get people's coins ... and then well ... chances that they will get caught are lower than than that they will somehow withdraw it with no tracking possible

And this is a problem I must say.
But you have to remember that most of the hackers are doing really simple tricks and you are able to secure yourself ...


Almost every video about "how to get started with Bitcoin"  is sharing main security steps which you HAVE to take if not you are placing yourself in a risky situation.

Strong password. Never stored! Just in a brain or a sheet of a paper cut in a half and placed in two different secure places.

-Layer security  ex.Firewall = mininum 2x firewall - router + OS

and be AWARE of phising e-mails! ALWAYS check what is a LINK connected to a button "login" in your e-mail from FB or Twitter or ANYTHING else (Forum/etc).

Bitcoin is a digital currency.

If you are hodling - store COLD-STORAGE (offline!)

For spendings follow security steps and decrease the risk!

Regards..

If you HODL store it CODL!