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Author Topic: A Warning Against Using Taint  (Read 15898 times)
dscotese
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June 04, 2012, 06:12:38 PM
 #1

The following proposal has been characterized as a horrible idea (see replies), so I thought it would be fair warning to others who explore the idea.

The Personal Blacklist
I propose a new feature called "blacklist".  This feature allows the user to enter BC addresses into his own personal blacklist because they want to know when they receive BC that came from a certain address.  I think the user should also be able to set a threshold so that any transactions from the blacklisted address that are under that threshold would be ignored handled as if they came from a good address. [Added with title change:] The user should also be able to establish a whitelist so that any transactions coming from whitelisted addresses would not be searched back any further.

The Search
Whenever the user receives BC, the feature will search back through the blockchain to find all the transactions that added funds to that address to see if any of them are in the blacklist.  It does this recursively til it finds either an address in the blacklist or all the blocks that created all the BC that ever found its way into the senders address.

The Output
If the generation blocks for all bitcoin are found without finding any blacklisted addresses, the user gets a happy Message.
If an address is found that is in the blacklist then the user gets the following information:
Some of this bitcoin comes from Blacklisted address XXX:
Block#Date/TimeAmountSent ByReceived By
#//::#BCXXXYYY1
#//::#BCYYY1YYY2
#//::#BC......
#//::#BCYYYnZZZ
ZZZ is the user's address.

At this point, the user can either request the sender to send non-stolen bitcoins and provide the thief's address to the sender who can add it to his own blacklist, and probably a link to posts on the internet that explain the theft.

This will have the effect of dividing the BC community into those willing to accept stolen bitcoin (either because they don't know, or because they don't care) and those who aren't.

But what if your address holds stolen bitcoin?  That would be detected when you add a thief's address to your blacklist.  At that point, you get several lists just like the one above, one for each sender who has sent stolen BC to your address.  It's up to you to figure out what to do about it.

This proposal only empowers Bitcoin client users to have more information about their counterparties.  I suspect and hope it would grow into a major headache for bitcoin thieves.  It will certainly be a headache for all BC users who have a lot of transactions, but only if people with great goods and services who accept BC decide to refuse service to recipients of stolen funds, and use low thresholds.  So the effectiveness/headache tradeoff is in the hands of the users, where it should be, and the more work we put into it, the more the thief suffers.

Comments?

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June 04, 2012, 06:18:37 PM
 #2

You introducing a system that imposes a form of taint does nothing to prevent theft but does make using Bitcoin a hassle for those who are innocent.

Therefore I do not support this and will vigorously reject any movement towards this initiative and any like it.

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June 04, 2012, 06:26:11 PM
 #3

You introducing a system that imposes a form of taint does nothing to prevent theft but does make using Bitcoin a hassle for those who are innocent.

Therefore I do not support this and will vigorously reject any movement towards this initiative and any like it.

A huge +1.

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June 04, 2012, 06:30:36 PM
 #4

You introducing a system that imposes a form of taint does nothing to prevent theft but does make using Bitcoin a hassle for those who are innocent.

Therefore I do not support this and will vigorously reject any movement towards this initiative and any like it.

+1

Couldn't have said it better.

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June 04, 2012, 06:39:27 PM
 #5

You introducing a system that imposes a form of taint does nothing to prevent theft but does make using Bitcoin a hassle for those who are innocent.

Therefore I do not support this and will vigorously reject any movement towards this initiative and any like it.

As someone who coded this sort of thing to watch addresses, I can tell you is it definitely technically feasible, but like Stephen says, I would wholeheartedly disagree with using it. You're going to find that huge numbers of coins are "tainted" illegitimately (accidental sends could give a blacklisted address the power to blacklist other addresses) so any blacklist is going to eventually include coins that were sent in error or even completely legitimately.

Specifically I take issue with this:
Quote
I think the user should also be able to set a threshold so that any transactions from the blacklisted address that are under that threshold would be ignored.

What user would want to use a client that could ignore that their own wallet has Bitcoin in it? Why would we want the network to essentially *destroy* coin in the first place? It just doesn't make sense.

Also, Bitcoin works very hard to return us back to the "buyer-beware" type system of handling financial transactions, any departure from this system returns us closer to a "lobby-owned" currency, whereby small groups control what is and is not currency, and ensure that others don't ever have enough of it. Long live the Blockchain.

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June 04, 2012, 06:46:19 PM
 #6

You introducing a system that imposes a form of taint does nothing to prevent theft but does make using Bitcoin a hassle for those who are innocent.

Therefore I do not support this and will vigorously reject any movement towards this initiative and any like it.

Would you consider a proposal that involved no taint to be like it?

Would you consider a proposal that does nothing to prevent theft but reduces the benefits to the thief (without taint) to be like it?

I'm trying to develop a sense of the philosophy behind BC that you hold.

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June 04, 2012, 06:55:02 PM
 #7


Specifically I take issue with this:
Quote
I think the user should also be able to set a threshold so that any transactions from the blacklisted address that are under that threshold would be ignored.

What user would want to use a client that could ignore that their own wallet has Bitcoin in it? Why would we want the network to essentially *destroy* coin in the first place? It just doesn't make sense.

Also, Bitcoin works very hard to return us back to the "buyer-beware" type system of handling financial transactions, any departure from this system returns us closer to a "lobby-owned" currency, whereby small groups control what is and is not currency, and ensure that others don't ever have enough of it. Long live the Blockchain.

Ahh - my bad.  Poorly explained.  Allow me a rewrite:
I think the user should also be able to set a threshold so that any transactions from the blacklisted address that are under that threshold would be handled as if they came from a good address (I made this change in the OP with strikeout too).

The second part of what you said gets more to the point that I think Stephen made.  When I subtract out the misuderstanding I introduced, this objection still has a tiny bit of relevance, but theft is theft no matter how careful buyers should be, and I am interested in making it more costly.  Before I abandon that interest, I will attempt to create a method that doesn't make using BC more of a hassle, but rather less.

Perhaps the theft could be turned into an opportunity for new BC users.  If the mechanism that makes theft less attractive allows the victim to reward anyone willing to help, then people might view this more as an opportunity rather than a hassle.

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June 04, 2012, 07:09:05 PM
 #8


Specifically I take issue with this:
Quote
I think the user should also be able to set a threshold so that any transactions from the blacklisted address that are under that threshold would be ignored.

What user would want to use a client that could ignore that their own wallet has Bitcoin in it? Why would we want the network to essentially *destroy* coin in the first place? It just doesn't make sense.

Also, Bitcoin works very hard to return us back to the "buyer-beware" type system of handling financial transactions, any departure from this system returns us closer to a "lobby-owned" currency, whereby small groups control what is and is not currency, and ensure that others don't ever have enough of it. Long live the Blockchain.

Ahh - my bad.  Poorly explained.  Allow me a rewrite:
I think the user should also be able to set a threshold so that any transactions from the blacklisted address that are under that threshold would be handled as if they came from a good address (I made this change in the OP with strikeout too).

The second part of what you said gets more to the point that I think Stephen made.  When I subtract out the misuderstanding I introduced, this objection still has a tiny bit of relevance, but theft is theft no matter how careful buyers should be, and I am interested in making it more costly.  Before I abandon that interest, I will attempt to create a method that doesn't make using BC more of a hassle, but rather less.

Perhaps the theft could be turned into an opportunity for new BC users.  If the mechanism that makes theft less attractive allows the victim to reward anyone willing to help, then people might view this more as an opportunity rather than a hassle.

We are going to see these kind of systems sooner or later.
Bitcoin however can not be froozen. (Or well I think there was a discussion in which some miners could freeze coins?)
But its not as easy to freeze.

The only problem with such a system is that it can be abused. You need to be sure that the theft was really a theft and not just someone who claimed that some adress with coins belonged to them and in that way decrease the value of another holders assets.

So first you need verified adresses.

I think we will see three kinds of markets, black market, grey and white.
Most Bitcoiners love the anonymity Bitcoin can provide, so do not expect lots of coiners to like this idea though.

Ofcourse I think its inevitable in the long run and the thing that will make sure that Bitcoins are legal.



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June 04, 2012, 07:15:02 PM
 #9

You introducing a system that imposes a form of taint does nothing to prevent theft but does make using Bitcoin a hassle for those who are innocent.

Therefore I do not support this and will vigorously reject any movement towards this initiative and any like it.
+1
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June 04, 2012, 07:16:32 PM
 #10

Not a good idea.

Makes BTC way more complicated to use and worse it gives miners a huge incentive to f*ck us all:

1. Mined coins (and transactions?) are always "pure".
2. Miners hold such coins.
3. Miners are today huge pools that the average user have little control over.
4. Miners simply need to declare a bunch of coins tainted and suddenly THEY hold significantly more proportionally.

Also a thief would ALWAYS get to spend his BTC as he would always be the FIRST to know about his crime, people like ME would get stuck holding the bag!

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June 04, 2012, 07:56:23 PM
 #11

Not a good idea.

Makes BTC way more complicated to use and worse it gives miners a huge incentive to f*ck us all:

1. Mined coins (and transactions?) are always "pure".
2. Miners hold such coins.
3. Miners are today huge pools that the average user have little control over.
4. Miners simply need to declare a bunch of coins tainted and suddenly THEY hold significantly more proportionally.

Why would you bother accepting the claim of a miner who you recognized could f*ck us all?  You would control your own blacklist.  Perhaps you feel there are too many sheep using bitcoin?

Also a thief would ALWAYS get to spend his BTC as he would always be the FIRST to know about his crime, people like ME would get stuck holding the bag!

Several bitcoin users could find out who the thief is if they knew that they were paid from one of his addresses.  We're ignoring that knowledge.  It sounds like most people replying to this thread want to keep ignoring it.  I don't, so I guess I should build the tool and then offer it to anyone else who wants it.  You might still end up holding the bag, but perhaps my efforts will inspire the victims (bitcoinica, MtGox, etc.) to offer you a reward.  Yes, I agree it's disruptive, but it's not like I'm building a nuclear weapon.

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June 04, 2012, 08:01:20 PM
 #12

You introducing a system that imposes a form of taint does nothing to prevent theft but does make using Bitcoin a hassle for those who are innocent.

Therefore I do not support this and will vigorously reject any movement towards this initiative and any like it.

I will throw my +1 behind this.  I will go so far as to taint innocent users, offer coin melting services, drop tainted coins into transaction fees (and thus propagate them to thousands of innocent miners).

A currency is fungible.  Period.  If it lacks fungibility it is no longer a currency and the entire rational for Bitcoin ceases to exist.

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June 04, 2012, 08:11:24 PM
 #13

You introducing a system that imposes a form of taint does nothing to prevent theft but does make using Bitcoin a hassle for those who are innocent.

Therefore I do not support this and will vigorously reject any movement towards this initiative and any like it.

Would you consider a proposal that involved no taint to be like it?

Would you consider a proposal that does nothing to prevent theft but reduces the benefits to the thief (without taint) to be like it?

I'm trying to develop a sense of the philosophy behind BC that you hold.

It's nice that you guys back up Stephen's post.  I suppose that by proposing something that alarms you, I get the cold shoulder?  I'm hoping you just quoted his reply before you got to my questions...  but I've seen lots of +1s for Stephen and no answers.  I still have hope.

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June 04, 2012, 08:18:59 PM
 #14

Take the hint already.

My personality type: INTJ - please forgive my weaknesses (Not naturally in tune with others feelings; may be insensitive at times, tend to respond to conflict with logic and reason, tend to believe I'm always right)

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June 04, 2012, 08:53:10 PM
 #15

It's nice that you guys back up Stephen's post.  I suppose that by proposing something that alarms you, I get the cold shoulder?  I'm hoping you just quoted his reply before you got to my questions...  but I've seen lots of +1s for Stephen and no answers.  I still have hope.

I read you questions and clarifications a they are nonsensical.

Saying you will develop a system which doesn't involve "taint" is splitting hairs.  Are you blacklisting coins based on their indirect origin?  Then it is taint.  Giving it a new name won't change anything.

Saying you will develop a system which makes Bitcoin "easier" is just hypocritical.  All coins are worth 1BTC.  That is easy.  Any other system is less easy.  Less fungible, less useful, and thus produces less value.
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June 04, 2012, 09:11:41 PM
 #16

You introducing a system that imposes a form of taint does nothing to prevent theft but does make using Bitcoin a hassle for those who are innocent.

Therefore I do not support this and will vigorously reject any movement towards this initiative and any like it.

Would you consider a proposal that involved no taint to be like it?

I'm not sure what you are describing so can't answer that.

Would you consider a proposal that does nothing to prevent theft but reduces the benefits to the thief (without taint) to be like it?

I'm trying to develop a sense of the philosophy behind BC that you hold.

Here's a proposal that would be acceptable.  Let's say Bitcoinica claims coins are stolen.  I trust Bitcoinica was honest in that claim.  The very first spend from the thief happens to be with me, in exchange for, oh ..., say Liberty Reserve.  I stiff the thief by not sending the Liberty Reserve, but I forward to an escrow the bitcoins I received until Bitcoinica and the thief work things out.

That's acceptable.  I will take any heat I receive as a result.

It is possible the person I am trading with was not actually the thief though.  Perhaps that party I am dealing with exchanged cash with the thief and got the private key in exchange.  That would be stupid to do and I would argue that the reason for transacting in that manner was more likely than not an effort to launder the stolen money to me [edit: transact in a deceptive manner with me].  And that wouldn't be acceptable to me.

Also possible is that in my hypothetical scenario, Bitcoinica wasn't actually defrauded.  That's why I'ld send funds to an escrow so that further details could be brought into the light.

That's the philosophy I hold.

[Update: I probably didn't win any brownie points with that response.  But I did mean to qualify that as something I'ld find acceptable to do only on 100% (not 99.99999%, but 100%) pure coins that were claimed to have been stolen.]

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June 04, 2012, 09:30:21 PM
 #17

A currency is fungible.  Period.  If it lacks fungibility it is no longer a currency and the entire rational for Bitcoin ceases to exist.

Ding, ding, ding. This is why von Mises was so right.

Quote
It is impossible to grasp the meaning of the idea of sound money if one does not realize that it was devised as an instrument for the protection of civil liberties against despotic inroads on the part of governments. Ideologically it belongs in the same class with political constitutions and bills of rights.

Gold and silver are the primary forms of sound money and a major element is their unalienableness. BitCoin ..... is a little more complex but the argument could be made it is sound money. Gold or silver do not care who the 'owner', 'possessor', etc. are because all of those questions are artificial constructs forming The Matrix.

BitCoin, even more so than gold or silver in absence of a compromised network, is perhaps the most unalienable commodity and least able to be imposed upon by restraints on alienation.

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June 04, 2012, 09:38:45 PM
 #18

sunnankar: It's spelled Bitcoin and bitcoins.

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June 04, 2012, 09:51:42 PM
 #19

I think what bitcoin's honest users need is not a system of following taint but a system of following and ensuring reputation.  Something better then btc-otc ratings or following users on this board. 

What I would propose is a site with both proof of stake, proof of past transactions and proof of digital identity.  Basically it would be btc-otc ratings on steroids. 

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June 04, 2012, 11:18:00 PM
 #20

You introducing a system that imposes a form of taint does nothing to prevent theft but does make using Bitcoin a hassle for those who are innocent.

Therefore I do not support this and will vigorously reject any movement towards this initiative and any like it.

+1

tainted coins are bull. if this happens i will only use USD instead - at least those are hard to counterfeit Tongue
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June 04, 2012, 11:27:58 PM
 #21

You introducing a system that imposes a form of taint does nothing to prevent theft but does make using Bitcoin a hassle for those who are innocent.

Therefore I do not support this and will vigorously reject any movement towards this initiative and any like it.

+1

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June 05, 2012, 12:04:02 AM
 #22

All the +1s are because Stephen articulated the essence of the answer in a precise manner. One thing to remember is that you cannot prevent people from sending you coins if they know your address. It's a feature that is built into the fundamentals of the system.

Of course, it is certainly possible to track and trace whatever you want, and you are welcome to do so. But building it into the official client is pointless.

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June 05, 2012, 12:16:36 AM
 #23

You introducing a system that imposes a form of taint does nothing to prevent theft but does make using Bitcoin a hassle for those who are innocent.

Therefore I do not support this and will vigorously reject any movement towards this initiative and any like it.

+another

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June 05, 2012, 12:19:26 AM
 #24

You introducing a system that imposes a form of taint does nothing to prevent theft but does make using Bitcoin a hassle for those who are innocent.

Therefore I do not support this and will vigorously reject any movement towards this initiative and any like it.

Would you consider a proposal that involved no taint to be like it?

Would you consider a proposal that does nothing to prevent theft but reduces the benefits to the thief (without taint) to be like it?

I'm trying to develop a sense of the philosophy behind BC that you hold.

It's nice that you guys back up Stephen's post.  I suppose that by proposing something that alarms you, I get the cold shoulder?  I'm hoping you just quoted his reply before you got to my questions...  but I've seen lots of +1s for Stephen and no answers.  I still have hope.

That's because it's been done to death on this very forum.

The perfect response is now two lines long and 20 posters quoting it.

Since you missed the summary: Coins are coins.

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June 05, 2012, 12:32:41 AM
 #25

The coins are already tainted.  The choice is whether or not to make it easier to see.  Right now, it's very difficult.  I don't see a problem with making it easier.  For example, I support the second amendment, because when everyone has a gun, the bad guys worry more about getting shot and therefore do less damage.  The "taint" is really up to the user anyway, programmatically based on the threshold which I originally misrepresented in the worst way, but also in real time when they see how many transactions have passed between the thief's address and their counterparty's.

It is possible the person I am trading with was not actually the thief though.  Perhaps that party I am dealing with exchanged cash with the thief and got the private key in exchange.  That would be stupid to do and I would argue that the reason for transacting in that manner was more likely than not an effort to launder the stolen money to me [edit: transact in a deceptive manner with me].  And that wouldn't be acceptable to me.
This helps me understand you better.  Your goal is to avoid inconveniencing anyone who may have received stolen coin.  This is a goal I agree with.  It is already possible for any user receiving it to inconvenience the sender, and my proposal makes it easier, but doesn't require it.  I think I can go further toward agreeing with you by suggesting that one choose not to inconvenience a sender of "tainted" coin unless the tainted coin comes from a victim who has offered a reward - and even then, it's better to invite the sender to participate in the back-tracking rather than refuse to honor the transaction.

[Update: I probably didn't win any brownie points with that response.  But I did mean to qualify that as something I'ld find acceptable to do only on 100% (not 99.99999%, but 100%) pure coins that were claimed to have been stolen.]
Oh you did win brownie points.  Your concern for the "hapless" middleman is something I should have considered in my original proposal.

If the +1s don't have the same objection (inconveniencing the hapless middlemen), I'd appreciate more explanation from you.

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June 05, 2012, 01:06:49 AM
 #26

Can you seriously not see the foolishness of suggesting people, once they receive coins for which there was a mere accusation of theft made many transactions ago, that they'll turn around and tell the sender: "hey these coins were once accused of being stolen and I'm now going to keep/delete/return them, so if you still want to do this deal with me, you need to send me new coins.."

Are you really this thick to suggest something like that?

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June 05, 2012, 01:17:04 AM
 #27

Can you seriously not see the foolishness of suggesting people, once they receive coins for which there was a mere accusation of theft made many transactions ago, that they'll turn around and tell the sender: "hey these coins were once accused of being stolen and I'm now going to keep/delete/return them, so if you still want to do this deal with me, you need to send me new coins.."

Are you really this thick to suggest something like that?

If you do try that then you are not an honest user.

If you say "this item costs 3BTC from any address except 1blehkljf or 1crapjkfd or 1pointlessjkfs5lkj or 1lamejkeil3q or..." then you are nuts but not dishonest I guess.

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June 05, 2012, 01:57:22 AM
 #28

A big problem with tracking 'taint' is that it quickly gets everywhere.  MtGox mixes most of the coins they receive into a few large value addresses, so once they've accepted tainted coins you're getting tainted coins pretty much every time you withdraw from them.

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June 05, 2012, 02:01:48 AM
 #29

A big problem with tracking 'taint' is that it quickly gets everywhere.  MtGox mixes most of the coins they receive into a few large value addresses, so once they've accepted tainted coins you're getting tainted coins pretty much every time you withdraw from them.

Oh dooglas, I've been meaning to tell you, your last deposit to Seals was rejected. About 6 steps back some mybitcoin coins got mixed in. So yeah.. please resend your deposit.

Since this is serious business I'm not going to assume anything. I'M TOTALLY KIDDING. WE'LL NEVER DO THAT.

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June 05, 2012, 02:31:16 AM
 #30

I think what bitcoin's honest users need is not a system of following taint but a system of following and ensuring reputation.  Something better then btc-otc ratings or following users on this board. 

What I would propose is a site with both proof of stake, proof of past transactions and proof of digital identity.  Basically it would be btc-otc ratings on steroids. 

We need DROs ( Dispute Resolution Organizations ) in the Bitcoin world. They would provide a form of law and order yet do it in an anarchist and decentralized manner.
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June 05, 2012, 05:52:12 AM
 #31

A big problem with tracking 'taint' is that it quickly gets everywhere.  MtGox mixes most of the coins they receive into a few large value addresses, so once they've accepted tainted coins you're getting tainted coins pretty much every time you withdraw from them.

In other words, when you look at the previous addresses through which the coin(s) came to you, it would make sense for the blacklist to stop when it hits a MtGox address.  So getting your BC from MtGox or another another assumed-reputable - let's say "whitelisted" - address prevents the report from showing it as tainted.  It's a good argument for having a whitelist too.

The fact that coin passed through an MtGox account in the past gives MtGox some ability to earn any reward offered by victims, but I haven't found any reward offered by victims.  Has anyone?

If you found out that a chain of transactions that didn't include any MtGox (or other well-known) addresses preceded your receipt of bitcoin started with one of the addresses used in a heist and the victim of that heist was offering rewards, would you just ignore it, talk to your counterparty, or report it to get a reward?  Would the size of the reward matter?

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June 05, 2012, 06:00:41 AM
 #32

1MFGnisygrRQhFPj7WGapJW7Noh7i3DE2T  Just send tainted coins here and ill send you an indulgence. If the pope can sell them so can I.

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June 05, 2012, 06:02:03 AM
 #33

A big problem with tracking 'taint' is that it quickly gets everywhere.  MtGox mixes most of the coins they receive into a few large value addresses, so once they've accepted tainted coins you're getting tainted coins pretty much every time you withdraw from them.

In other words, when you look at the previous addresses through which the coin(s) came to you, it would make sense for the blacklist to stop when it hits a MtGox address.  So getting your BC from MtGox or another another assumed-reputable - let's say "whitelisted" - address prevents the report from showing it as tainted.  It's a good argument for having a whitelist too.

The fact that coin passed through an MtGox account in the past gives MtGox some ability to earn any reward offered by victims, but I haven't found any reward offered by victims.  Has anyone?

If you found out that a chain of transactions that didn't include any MtGox (or other well-known) addresses preceded your receipt of bitcoin started with one of the addresses used in a heist and the victim of that heist was offering rewards, would you just ignore it, talk to your counterparty, or report it to get a reward?  Would the size of the reward matter?

What the hell are you talking about?

Why not just keep the whole thing and call it your reward if you are a thief?

To break it down one more time.

Person A steals and buys candy from Person B who buys sex toys from Person C who tips Stripper D who deposits the money with you (lucky girl). Now you notice that once upon a time someone reported a theft so you confiscate the girl's money and get your reward. (I bet you'll want to subscribe to the service that accepts all reports and offers fat rewards, eh!?)

Probably Stripper D, now learning about the various taint reporting sites, goes and reports the same coins to have been stolen by you. But it's not all bad maybe the coins will find their way back to you again and you can claim that reward too.

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June 05, 2012, 06:06:24 AM
 #34

Sorry, but

You introducing a system that imposes a form of taint does nothing to prevent theft but does make using Bitcoin a hassle for those who are innocent.

Therefore I do not support this and will vigorously reject any movement towards this initiative and any like it.

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June 05, 2012, 06:55:08 AM
 #35

You could try doing a third party thing. But then everyone would have a reason to mix their money into Mt Gox every now and then.

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June 05, 2012, 07:52:52 AM
 #36

You introducing a system that imposes a form of taint does nothing to prevent theft but does make using Bitcoin a hassle for those who are innocent.

Therefore I do not support this and will vigorously reject any movement towards this initiative and any like it.
+1

That's just not the right way to address the problem of thefts! Why not spend your time on making Bitcoin more secure and educate people how to prevent thefts instead?

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June 05, 2012, 08:29:55 AM
 #37

You introducing a system that imposes a form of taint does nothing to prevent theft but does make using Bitcoin a hassle for those who are innocent.

Therefore I do not support this and will vigorously reject any movement towards this initiative and any like it.

yet another +1

Because you don't yet understand this is a bad idea dscotese
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June 05, 2012, 08:49:16 PM
 #38

Could you change your title? Just opened this again and forgot it was about a blacklist.

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June 05, 2012, 08:58:11 PM
 #39

yeah more like "disempowering bitcoin users".

Want to see empowering honest users? 

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June 05, 2012, 09:05:35 PM
 #40



There's no good solution for taint as the burden will be placed on the innocent.
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June 05, 2012, 10:47:05 PM
 #41

Let's use this thread to suggest titles for this thread.

"Confiscating bitcoins from innocent people. But what if there was a large bounty?"

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June 05, 2012, 11:25:57 PM
 #42

"Playing judge, jury and executioner when receiving bitcoins merely accused of being stolen some number of txs ago"

My personality type: INTJ - please forgive my weaknesses (Not naturally in tune with others feelings; may be insensitive at times, tend to respond to conflict with logic and reason, tend to believe I'm always right)

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June 06, 2012, 12:35:46 AM
 #43

"How to piss off friends and customers."

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June 06, 2012, 01:17:18 AM
 #44

"How to undermine confidence in a currency by destroying fungibility"
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June 06, 2012, 05:45:51 AM
 #45

"A Warning Against Using Taint"

I recognized that the taint was already there, kind of like that article about anonymity.  Since I felt that bitcoin thefts decrease its value, I wanted to make thefts less profitable for the thieves, so I proposed using the taint to accomplish this.  It seems that most people who replied are afraid that bitcoin users will make too many decisions based on taint.  I don't think they would (see the replies), but too many others do, so I'll stop defending the proposal.

Is there anything else I should do?

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June 06, 2012, 05:56:39 AM
 #46

"A Warning Against Using Taint"

I recognized that the taint was already there, kind of like that article about anonymity.  Since I felt that bitcoin thefts decrease its value, I wanted to make thefts less profitable for the thieves, so I proposed using the taint to accomplish this.  It seems that most people who replied are afraid that bitcoin users will make too many decisions based on taint.  I don't think they would (see the replies), but too many others do, so I'll stop defending the proposal.

Is there anything else I should do?

A good choice.

It just isn't right to take from some random user because some other user stole from another user. Nearly anyone would get behind something the could take back from the thief, but that's not on the table as a possibility.

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June 06, 2012, 07:30:56 AM
 #47

"A Warning Against Using Taint"

I recognized that the taint was already there, kind of like that article about anonymity.

No, it was not already there.

"Taint" exists only in the minds of people who think fungible goods can be stamped with some moral seal of approval.

Thief steals $10. The money changes hands. Eventually some of it winds up in the church offering plate. And from now on, by the power of fungibility and through the magic fiction of "taint," every check that church writes is rendered unclean... sorry, "tainted."

I don't even know where to start with that.

At least you stopped defending the proposal.

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June 06, 2012, 07:44:13 AM
 #48

I think the negative responders to this sort of proposal are largely failing to recognize that such a system would be:
a) highly automated
b) smarter than they seem to give it credit (e.g various levels of 'taxation' at popular brick and mortar government-audited points)
c) viral

Alternatively - they do understand this and they're resisting it in perhaps the only way that *might* work: overwhelming popular rejection/distaste + playing down the practicality of it.

I asked this question on stack exchange a while back:

Is there any way the Bitcoin network could resist a viral tainted-coin tagging system implemented by regulators?
http://bitcoin.stackexchange.com/questions/2119/is-there-any-way-the-bitcoin-network-could-resist-a-viral-tainted-coin-tagging-s

The answer seems to be, technically no, politically/socially maybe.

I feel confident that some government somewhere will try it if Bitcoin ever goes mainstream.
If they are 'heavy handed' in applying taint - then the more tainted coins (and the higher taxed they are), the larger the split in fungibility.
If they produce a massive split in fungibility this way - all they succeed in doing is creating a subset of bitcoins which are largely used for blackmarket transactions.
If you end up with a chunk of tainted coin.. you then have an incentive to spend it on 'blackmarket' goods and services (rather than reporting the source or paying the audit-point taxes to spend it cleanly)  - increasing the size of the blackmarket economy the taint system is supposedly there to control!

Because of this - I think that although such taint systems are inevitable, they'll be largely self-limiting and only effective if applied judiciously to the worst of the worst.

Most of the complaints here seem to be of the sort: "I don't like it!!!"
Well duh.. but can we move beyond that and look at what might happen whether you like it or not!?

I'm not convinced that it's as big a problem as some think (due to self-defeating effects if too heavily applied).. and I'm also not convinced that just naysaying it will stop it from popping up. Better to model a light-touch vs heavy-touch taint system and try to get a feel for how it might play out.


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June 06, 2012, 07:59:57 AM
 #49

Most of the complaints here seem to be of the sort: "I don't like it!!!"

No, the complaints are saying it won't work.  And unless you come up with a new reason why it might, we just keep going around in circles.


I'm also not convinced that just naysaying it will stop it from popping up.

Ok,  how's this.  If anything in the open source Bitcoin.org project for taint were to be added I would help towards getting going a fork of that project where there would be no such concept or recognizance of this concept referred to as taint.  I would do what I can to help beat this idea into the ground to which it belongs.

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June 06, 2012, 08:21:10 AM
 #50

Most of the complaints here seem to be of the sort: "I don't like it!!!"

No, the complaints are saying it won't work.  And unless you come up with a new reason why it might, we just keep going around in circles.

It can work *in a more mainstream setting* - because it's viral in nature, and if your local supermarket subscribes to a particular taint-list, it's in your interests to have wallet software which *understands* the taints that this supermarket subscribes to and the (initially small) penalties(taxes) it is enforced to enact.




I'm also not convinced that just naysaying it will stop it from popping up.

Ok,  how's this.  If anything in the open source Bitcoin.org project for taint were to be added I would help towards getting going a fork of that project where there would be no such concept or recognizance of this concept referred to as taint.  I would do what I can to help beat this idea into the ground to which it belongs.

Hows that? Mostly irrelevant.  Tainting will work in a world where the core bitcoin.org software *never* implements any taint-aware code.
It'll be locally applied, and thus people will be locally incentivized to have taint-aware wallets - even if they hate the whole idea.









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June 06, 2012, 08:27:08 AM
 #51

Most of the complaints here seem to be of the sort: "I don't like it!!!"

No, the complaints are saying it won't work.  And unless you come up with a new reason why it might, we just keep going around in circles.

It can work *in a more mainstream setting* - because it's viral in nature, and if your local supermarket subscribes to a particular taint-list, it's in your interests to have wallet software which *understands* the taints that this supermarket subscribes to and the (initially small) penalties(taxes) it is enforced to enact.




I'm also not convinced that just naysaying it will stop it from popping up.

Ok,  how's this.  If anything in the open source Bitcoin.org project for taint were to be added I would help towards getting going a fork of that project where there would be no such concept or recognizance of this concept referred to as taint.  I would do what I can to help beat this idea into the ground to which it belongs.

Hows that? Mostly irrelevant.  Tainting will work in a world where the core bitcoin.org software *never* implements any taint-aware code.
It'll be locally applied, and thus people will be locally incentivized to have taint-aware wallets - even if they hate the whole idea.










I would be boycotting that business if that's the case. Like finding out my ISP is limiting p2p traffic I would find another one.

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June 06, 2012, 08:35:51 AM
 #52

It can work *in a more mainstream setting* - because it's viral in nature, and if your local supermarket subscribes to a particular taint-list, it's in your interests to have wallet software which *understands* the taints that this supermarket subscribes to and the (initially small) penalties(taxes) it is enforced to enact.

Enforced?  By whom?

It matters not.  Because it is so easy to mix coins, all you need are enough people willing to throw their 100% untainted coins into the mix and your approach fails miserably.

"There's a time when the operation of the machine becomes so odious—makes you so sick at heart—that you can't take part. You can't even passively take part. And you've got to put your bodies upon the gears and upon the wheels, upon the levers, upon all the apparatus, and you've got to make it stop. And you've got to indicate to the people who run it, to the people who own it, that unless you're free, the machine will be prevented from working at all."
 - Mario Savio


Hows that? Mostly irrelevant.  Tainting will work in a world where the core bitcoin.org software *never* implements any taint-aware code.

Ok, good.  So there will be no code in the client that will try to load your no-fly list.  That's fine then.

It'll be locally applied, and thus people will be locally incentivized to have taint-aware wallets - even if they hate the whole idea.

Have you been shopping on Silk Road?

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June 06, 2012, 08:40:58 AM
 #53

Does anyone remember the coin lolcaust created that had a massive premine and its aim was to create a money laundering fund ?


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June 06, 2012, 09:01:54 AM
 #54

Given the extent to which coins are "tainted" on the basis of little more than unsubstantiated claims, I can see legitimate businesses choosing to avoid taking Bitcoin altogether rather than having to go through the hassle of dealing with potentially tainted coins which may be difficult to offload.

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
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June 06, 2012, 09:09:27 AM
 #55

Let's use this thread to suggest titles for this thread.

A new currency: BinLadenCoin! Unlike ordinary Bitcoin where there is no ownership, just carefully controlled ability to spend, BinLadenCoin introduces a huge layer of loosely described psychological Voodoo, whose rules keep changing because of the endless loopholes.

SecurityTheatreCoin  Cheesy

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June 06, 2012, 10:49:59 AM
 #56

This thread actually reminded me of an obscure bit of trivia I once learnt. Namely: ordinary cash (to the best of my knowledge) is not actually 'owned' by the person/s holding it. The actual bits of paper are owned by the government (or the reserve bank that issued them. It probably varies from country to country -- not sure).

This is analogous to the Bitcoin situation whereby nobody actually 'owns' any of the coins on the block-chain. As proof, anyone can download ALL of them if they want. Their usage is merely governed by the rules according to which coins are transacted using the open-source Bitcoin protocol. Therefore, the casual, social concept of ownership is not even part of Bitcoin, and everyone who bought into the idea should understand that and accept it instead of trying to change it into a different system.

No, it's completely different. The blockchain is more like a title deed, giving property rights to certain individuals, who can sign over all or part of their ownership to anyone else in a publicly witnessed manner. While it is true that nobody "owns" the blockchain, the rights that the blockchain provides (namely, the right to spend one's own bitcoins) are genuine property rights, and to suggest otherwise makes about as sense as suggesting that the deed to your house is worthless because you don't really own the piece of paper it's printed on.

Will pretend to do unverifiable things (while actually eating an enchilada-style burrito) for bitcoins: 1K6d1EviQKX3SVKjPYmJGyWBb1avbmCFM4
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June 06, 2012, 11:26:44 AM
 #57

This thread actually reminded me of an obscure bit of trivia I once learnt. Namely: ordinary cash (to the best of my knowledge) is not actually 'owned' by the person/s holding it. The actual bits of paper are owned by the government (or the reserve bank that issued them. It probably varies from country to country -- not sure).

This is analogous to the Bitcoin situation whereby nobody actually 'owns' any of the coins on the block-chain. As proof, anyone can download ALL of them if they want. Their usage is merely governed by the rules according to which coins are transacted using the open-source Bitcoin protocol. Therefore, the casual, social concept of ownership is not even part of Bitcoin, and everyone who bought into the idea should understand that and accept it instead of trying to change it into a different system.

No, it's completely different. The blockchain is more like a title deed, giving property rights to certain individuals, who can sign over all or part of their ownership to anyone else in a publicly witnessed manner. While it is true that nobody "owns" the blockchain, the rights that the blockchain provides (namely, the right to spend one's own bitcoins) are genuine property rights, and to suggest otherwise makes about as sense as suggesting that the deed to your house is worthless because you don't really own the piece of paper it's printed on.

You dont actually own your own house. Have you ever tried not paying local council rates ?

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June 06, 2012, 11:53:23 AM
 #58

You dont actually own your own house. Have you ever tried not paying local council rates ?

Have you ever tried not paying federal taxes? By that logic, you don't actually "own" anything. But I (like most people) define "ownership" to mean "right of property", regardless of whether such rights can be revoked at the whim of the government.

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June 06, 2012, 12:08:13 PM
 #59

Given the extent to which coins are "tainted" on the basis of little more than unsubstantiated claims, I can see legitimate businesses choosing to avoid taking Bitcoin altogether rather than having to go through the hassle of dealing with potentially tainted coins which may be difficult to offload.

This thread actually reminded me of an obscure bit of trivia I once learnt. Namely: ordinary cash (to the best of my knowledge) is not actually 'owned' by the person/s holding it. The actual bits of paper are owned by the government (or the reserve bank that issued them. It probably varies from country to country -- not sure).

This is analogous to the Bitcoin situation whereby nobody actually 'owns' any of the coins on the block-chain. As proof, anyone can download ALL of them if they want. Their usage is merely governed by the rules according to which coins are transacted using the open-source Bitcoin protocol. Therefore, the casual, social concept of ownership is not even part of Bitcoin, and everyone who bought into the idea should understand that and accept it instead of trying to change it into a different system.
But you own the private keys for your bitcoins. Only you have that private keys.
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June 06, 2012, 12:16:10 PM
 #60

GREAT IDEA.

I find it highly ironic that the forum's "libertarians" are the ones that are most opposed to a personal blacklist. By public ridicule, and by threatening to attack the block chain, they seek to impose their academic hypothesis of fungibility on all bitcoin users. Why do you think you are allowed to use force to prevent me from implementing some scheme on my own client?

This begs the question as to the true motivation of the anti-taint thugs. Why are they attracted to the bitcoin cryptocurrency? Because it makes sense to them personally, or because they are confidence artists and believe the irrevocable nature of transactions will help them defraud more people?

We have a perfect record of every transaction that has ever occured in the economy. Why not use it?

I encourage the sympathetic readers of this post to stop thinking about bitcoin as "cash" and start thinking in terms of a distributed file system containing a perfect accounting ledger. The idea is much more sophisticated than "cash" and will lead one day to a system that will allow us to keep track of our debts to each other in terms of personal economic value.

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June 06, 2012, 12:25:30 PM
 #61

GREAT IDEA.

I find it highly ironic that the forum's "libertarians" are the ones that are most opposed to a personal blacklist. By public ridicule, and by threatening to attack the block chain, they seek to impose their academic hypothesis of fungibility on all bitcoin users. Why do you think you are allowed to use force to prevent me from implementing some scheme on my own client?

This begs the question as to the true motivation of the anti-taint thugs. Why are they attracted to the bitcoin cryptocurrency? Because it makes sense to them personally, or because they are confidence artists and believe the irrevocable nature of transactions will help them defraud more people?

We have a perfect record of every transaction that has ever occured in the economy. Why not use it?

I encourage the sympathetic readers of this post to stop thinking about bitcoin as "cash" and start thinking in terms of a distributed file system containing a perfect accounting ledger. The idea is much more sophisticated than "cash" and will lead one day to a system that will allow us to keep track of our debts to each other in terms of personal economic value.



If you need to ask what a persons morals are before you trade with them you've already lost. May as well use cash which doesnt care that drug dealers or other "criminals" have stolen it from a bank at some point in the past Smiley

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June 06, 2012, 12:34:46 PM
 #62

GREAT IDEA.

I find it highly ironic that the forum's "libertarians" are the ones that are most opposed to a personal blacklist. By public ridicule, and by threatening to attack the block chain, they seek to impose their academic hypothesis of fungibility on all bitcoin users. Why do you think you are allowed to use force to prevent me from implementing some scheme on my own client?

What force? Please, think before you speak.

You are perfectly free to implement what the OP suggested and fork the blockchain but on the other hand if you should manage to introduce these rules into the current client, we who disagree are perfectly free to fork the blockchain and then we can see who's going to be more popular and successful of which this thread gives you a nice little hint for. And there's no force involved in any of this.

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June 06, 2012, 01:21:42 PM
 #63

If I had such scheme in my client I'd use it to see if I received some coins from that famous pizzas (numismatic value).

And, since the possibility is already there, yes, out of curiosity, I'd keep track of the famous heists too.

I'd keep track of how old my coins really are, if they are freshly mined etc.

Don't need a fork to do this.

The true is that bitcoins are not fungible like metals (Jules Rimet Trophy melted down by thieves in Rio de Janeiro - 1983), and it's easier to track than cash.


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June 06, 2012, 01:29:35 PM
 #64

GREAT IDEA.

I find it highly ironic that the forum's "libertarians" are the ones that are most opposed to a personal blacklist. By public ridicule, and by threatening to attack the block chain, they seek to impose their academic hypothesis of fungibility on all bitcoin users. Why do you think you are allowed to use force to prevent me from implementing some scheme on my own client?

What force? Please, think before you speak.

You are perfectly free to implement what the OP suggested and fork the blockchain but on the other hand if you should manage to introduce these rules into the current client, we who disagree are perfectly free to fork the blockchain and then we can see who's going to be more popular and successful of which this thread gives you a nice little hint for. And there's no force involved in any of this.

I have no problem if its an external white/black list that simply plugs into the client voluntarily like adding an app to your phone or a greasemonkey script for your browser. Any attempt to actually include it in the client or the project is another matter entirely.

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June 06, 2012, 06:31:50 PM
 #65

Can someone explain how they'd fork the blockchain?

For all you know, half the people you've traded with in the last month already have a special client with a blacklist/whitelist in it.  How would you identify them so that your client doesn't let them back on the "taint-free" fork of the blockchain?  I think you might have a good answer to this, but it will be one which demonstrates a misunderstanding of the original proposal.

I've received at least one personal request to continue developing this idea from someone who suggested that the information in the blockchain will probably be an important part of the future of private justice.  That is, in fact, why I came up with the idea.

No one has yet pointed out explicitly that if a thief were on this discussion, that thief would make every effort to discourage people from even thinking about the proposal.

"Taint" exists only in the minds of people who think fungible goods can be stamped with some moral seal of approval.

This is an interesting perspective.  I only meant that anyone, regardless how they feel about fungibility, can compile a list of all the address that currently hold coin that was in an address that contained allegedly stolen bitcoins.  So perhaps "taint" is the wrong word for westky to use in describing this fact.

To confuse the issue even more, I have developed a theory (silly, if you want to call it that) that the reason no reward has been offered by the victims of heists is that they weren't really victims:
  • A large dealer creates a hidden (fake) member
  • The fake member "steals" bitcoin
  • The dealer "loses" all the records indicating who they owe.
  • The dealer announces that they will reimburse all customers who can prove their claim
  • Less than 100% of the customers prove their claims
  • The dealer reimburses claims using the stolen bitcoin (after mixing it up enough to avoid suspicion)
  • The dealer ends up with some stolen coin that didn't get reimbursed to customers who failed or didn't bother to prove a claim - customers who have abandon bitcoin because it's too insecure.

Anyone can do that if they have the marketing power and the lack of morals.  But they're in danger if we start analyzing the blockchain more closely.

Given the vehemence of the responses to the proposal, I've become ambivalent on the likelihood of this theory.  I asked Gavin for advice in setting up Python so I could enhance his BitcoinTools to do this backtracing, but he hasn't answered.  So, large dealers who are unethical thieves, you might want to pressure him into ignoring me, and perhaps removing the tools lest some other curious soul use them to demonstrate that my theory is true.  I sure hope to hell it isn't.

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June 06, 2012, 08:00:30 PM
 #66

Why do you think you are allowed to use force to prevent me from implementing some scheme on my own client?
Because you can't control who sends you coins. If somebody sends you tainted coins, what are you going to do about it? You can't send them back, since the address they came from may not be under the sender's control (eg, e-wallets), and you can't keep them but refuse to accept them as payment. Can you imagine if that happened with cash? "Sorry, we can't accept this $100 note as payment, you'll have to give us another one. No, you can't have this one back; no, it's not counterfeit, we just think it might have been involved in some form of criminal activity at some point in the past." You'd have some use of force directed at your face if you tried that in real life.

I encourage the sympathetic readers of this post to stop thinking about bitcoin as "cash" and start thinking in terms of a distributed file system containing a perfect accounting ledger. The idea is much more sophisticated than "cash" and will lead one day to a system that will allow us to keep track of our debts to each other in terms of personal economic value.
So, everyone's bitcoins will have a different value to everyone elses? How exactly are you supposed to set prices with such a scheme? "This product costs 10 BTC, but only 8 BTC if the coins come from a verified Mt Gox account, with a 50% surcharge if the coins ever touched SR, plus 10% if they came from a coin mixing service... etc" Is that pretty much how it's supposed to work? And if so, how does that make any sense? That would cause problems if you tried it in real life, too.

Will pretend to do unverifiable things (while actually eating an enchilada-style burrito) for bitcoins: 1K6d1EviQKX3SVKjPYmJGyWBb1avbmCFM4
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June 06, 2012, 09:21:04 PM
 #67

Can someone explain how they'd fork the blockchain?

Bitcoin is a protocol.  The Bitcoin.org client is code that implements the Bitcoin protocol.  This taint blacklist idea of yours could be implemented in a client without touching the Bitcoin protocol or requiring a hard-fork to the blockchain.    So my reference earlier to a fork was describing alterations to the Bitcoin.org client and not to a fork of the blockchain.   As you also mentioned, you could even implement a taint blacklist that does not require changes to the Bitcoin.org client (e.g., this could easily be done in Armory, for instance, or some other external service.)

So, it's technically very possible for you to do this.  Go do it.  What are you waiting for?  Go nuts!

The reason you haven't is because you know that unless others are using that taint blacklist as well, you doing so unilaterally has no effect.   If you'ld like to boycott tainted coins, you don't need anyone's permission.  You are free to do so.   Isn't Bitcoin and open source fantastic, where you have the liberty to take the software and to basically be allowed to do pretty much whatever you want to with it?

Now if instead you want to change the software that I use, that's when I start to have a problem with you.  Your freedom ends where my nose begins.

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June 06, 2012, 09:26:03 PM
 #68

Why starting making the same errors in bitcoins as in the actual currencies?

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June 06, 2012, 09:50:22 PM
 #69

Why starting making the same errors in bitcoins as in the actual currencies?

Some people are thick that way..  Roll Eyes

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June 06, 2012, 10:02:46 PM
 #70

Funny how it always comes back to the same false accusations. Apparently only Bitcoinica and those earnestly trying to track their coins aren't thieves (oh, and Mt. Gox too, for some reason.)

How about you TaintFreeCoin folks go start your own fork? Add whatever makes you feel good about your digital cash being safe from all thefts forever and ever, nevermind the harm to innocents to get it to work. Heck, invite governments in to help out, and they can even guarantee your funds and help you reclaim your lost wallets too!

But I'm never touching that fork. And if it's the main fork that's compromised, whether through protocol changes or social conditioning, I'll be among the first in line to direct funding and effort towards a new cryptocurrency that won't allow for this nonsense. And I know I won't be alone.

Of course, at that point, I'm sure the anti-bitcoin lobby (which is what they are, whether they want to believe it or not) will chase right after us and do what they can to undermine it again. Won't you? <-- *1 BTC says that last question won't ever get an honest answer from any of them.*


"Taint" exists only in the minds of people who think fungible goods can be stamped with some moral seal of approval.

This is an interesting perspective.  I only meant that anyone, regardless how they feel about fungibility, can compile a list of all the address that currently hold coin that was in an address that contained allegedly stolen bitcoins.  So perhaps "taint" is the wrong word for westky to use in describing this fact.

You made it quite clear what you meant. You're the one using the term "taint" to describe it, and as you chose to use it, it's a figment of your imagination just as it would be to declare a pile of gold bars as "tainted" because there are a few atoms (or moles, or micrograms, or ounces, or whatever) in there that came from a shady source. Such a declaration, even if proven true, says NOTHING about the imagined "moral state" of the gold bars, or of the person holding them. And it's nonsense to pretend that shaving off some of the gold and doing something with it changes things.

Again though... go ahead and start implementing your designs. Just don't be shocked when they're ignored by the bulk of the bitcoin community.

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June 07, 2012, 12:00:13 AM
 #71

Why do you think you are allowed to use force to prevent me from implementing some scheme on my own client?
Because you can't control who sends you coins. If somebody sends you tainted coins, what are you going to do about it? You can't send them back, since the address they came from may not be under the sender's control (eg, e-wallets), and you can't keep them but refuse to accept them as payment. Can you imagine if that happened with cash? "Sorry, we can't accept this $100 note as payment, you'll have to give us another one. No, you can't have this one back; no, it's not counterfeit, we just think it might have been involved in some form of criminal activity at some point in the past." You'd have some use of force directed at your face if you tried that in real life.

You don't have to accept coins that have been obtained dishonestly, either. That would be a personal choice. Because bad actors could respond, to honest traders who only making transactions with other honest people, with violence does not invalidate the idea.

I encourage the sympathetic readers of this post to stop thinking about bitcoin as "cash" and start thinking in terms of a distributed file system containing a perfect accounting ledger. The idea is much more sophisticated than "cash" and will lead one day to a system that will allow us to keep track of our debts to each other in terms of personal economic value.
So, everyone's bitcoins will have a different value to everyone elses? How exactly are you supposed to set prices with such a scheme? "This product costs 10 BTC, but only 8 BTC if the coins come from a verified Mt Gox account, with a 50% surcharge if the coins ever touched SR, plus 10% if they came from a coin mixing service... etc" Is that pretty much how it's supposed to work? And if so, how does that make any sense? That would cause problems if you tried it in real life, too.

What you're asking is like asking how Mt. Gox can give you 5 USD/BTC one day and 6 USD/BTC the next day. Why are exchange rates set on an open market with bids and asks any different than devaluing dishonest money? If someone you want to trade with wants to charge you more because you have dishonest money, you don't have to trade with them. I'd encourage you to find someone to trade with that will give you the full value you believe your BTC is worth.
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June 07, 2012, 12:17:14 AM
 #72

I do not know of a technical limitation that would require forking the blockchain to implement this idea.

This functionality is built into the bitcoin. Its a fundamental part of bitcoin. I cannot think of a way to remove the possibility of tainted coins from bitcoin without moving to a centralized server like open transactions. If you don't want a taintable currency, run an open transactions server without accounts.

There are people, like deathandtaxes, that have claimed they will respond to a voluntary, per-user, tainted coin system by spamming the blockchain with bogus transactions. I think this shows the level of maturity we are dealing with.
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June 07, 2012, 12:19:47 AM
 #73

There are people, like deathandtaxes, that have claimed they will respond to a voluntary, per-user, tainted coin system by spamming the blockchain with bogus transactions. I think this shows the level of maturity we are dealing with.

http://en.wikipedia.org/wiki/Nonviolent_resistance
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June 07, 2012, 12:39:49 AM
 #74

You don't have to accept coins that have been obtained dishonestly, either. That would be a personal choice. Because bad actors could respond, to honest traders who only making transactions with other honest people, with violence does not invalidate the idea.
Did you just skip over what he said above you? I don't know how many times I must repeat myself: it is NOT POSSIBLE to prevent anyone from sending you money, whether "tainted" or not. It just  is  not  possible. It is the way the system was designed from the ground up. Sure you can watch for "taint" yourself, but what are you going to do once it touches you? Return it? Keep it? Donate it?

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June 07, 2012, 12:50:42 AM
 #75

Since I felt that bitcoin thefts decrease its value, I wanted to make thefts less profitable for the thieves, so I proposed using the taint to accomplish this.

Tainting won't make it less profitable for theives. Just like copy protection, the tainting will only make things difficult for the honest users. Thieves will just work around any tainting you propose.

Buy & Hold
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June 07, 2012, 01:04:58 AM
 #76

This is such a non-issue, but I thought I'd chime in. If you are a vendor and someone wants to spend tainted bitcoin at your store and you refuse them, your competitor probably will not. Bitcoin theft is going to happen. There are numerous ways to prevent it, but some people will not take necessary precautions. This is a good niche for banks to fill. People that want someone else to take care of their security can pay a premium. This premium will cover an insurance policy for any amount that is stolen from you. Your premiums will increase the more you lose. Eventually you better learn to cover your assets or barter eggs.

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June 07, 2012, 01:07:18 AM
 #77

It can work *in a more mainstream setting* - because it's viral in nature, and if your local supermarket subscribes to a particular taint-list, it's in your interests to have wallet software which *understands* the taints that this supermarket subscribes to and the (initially small) penalties(taxes) it is enforced to enact.

Enforced?  By whom?
By the same local authorities which enforce all businesses to be registered and pay their taxes etc.
Bitcoin exchanges and popular high-transaction merchants can be required to implement taint-aware systems by whatever geographical jurisdiction they operate in.

It matters not.  Because it is so easy to mix coins, all you need are enough people willing to throw their 100% untainted coins into the mix and your approach fails miserably.
No - the mixing matters not. It's computationally intensive, but nevertheless practical with today's technology to follow the chain and apply taint in the appropriate percentages.


"There's a time when the operation of the machine becomes so odious—makes you so sick at heart—that you can't take part. You can't even passively take part. And you've got to put your bodies upon the gears and upon the wheels, upon the levers, upon all the apparatus, and you've got to make it stop. And you've got to indicate to the people who run it, to the people who own it, that unless you're free, the machine will be prevented from working at all."
 - Mario Savio

Nice.. but you seem to still be missing the point.
The various 'taint lists' are overlays that will be applied in multiple (usually geographic) jurisdictions. You will always be free to trade Bitcoins as if the taint lists don't exist with other like-minded taint-haters (or because particular taints are largely only enforced in a region you are unlikely to deal with). This isn't about changing the protocol, nor even the reference client.

The effect of various taint-lists being applied is that there will be a viral incentive for the average user to subscribe to them in order to maximize their wealth.
(In terms of being able to freely spend their coins at the various government-audited exchanges & merchants)
Now it's perfectly reasonable to argue that if someone advertises a price in 'BTC' - that this should imply *any* BTC ie a taint-agnostic transaction. I wholeheartedly support that sort of up-front honesty in the arrangement of any Bitcoin deal.


Hows that? Mostly irrelevant.  Tainting will work in a world where the core bitcoin.org software *never* implements any taint-aware code.

Ok, good.  So there will be no code in the client that will try to load your no-fly list.  That's fine then.

Of course. This much should be obvious by now.  
Subscribing to any (of the presumably multitudinous) taint-lists is completely optional - except that there is a clear viral pressure on the average consumer to opt into using taint-aware wallet software in order to avoid
a) penalty-taxes at control points
b) mandatory government reporting on your recent transactions if you happen to be 'early' in the chain of transactions since a particularly attention-worthy event.
(e.g kidnap proceeds, terrorism funding etc)



It'll be locally applied, and thus people will be locally incentivized to have taint-aware wallets - even if they hate the whole idea.

Have you been shopping on Silk Road?

No. Have you?  Are you being facetious here?
Perhaps you don't understand the point that taints can (I predict 'will') be applied if Bitcoin ever becomes seriously mainstream across the globe.

You'll always be free to laugh at the small nation on the other side of the world which implements this, and offer their citizens fewer 'clean' bitcoins from your stash in exchange for Bitcoins that those silly folk view as 'tainted'.   Profit for you! 
(At least until some sort of international cooperation amongst tainting authorities starts to make some of your coins spendable without penalty at fewer merchants)

The only way this sort of system won't work is
a) If some sort of 'blinding' mechanism gets built into the Bitcoin protocol
(see: https://bitcointalk.org/index.php?topic=82947.0   I don't know enough about this to know if it's feasible though)

b) The various taint-implementing authorities go overboard in applying taint - thus so expanding the pool of 'tainted' coins that the black-market economy is effectively stimulated.  (see my earlier comments about it being somewhat self-limiting in this regards)

c) political/social pressure makes tainting impractical for authorities to implement.  
I think this is a fools hope in that some authorities somewhere will implement it anyway. If you can manage to get the law in your country to declare it unconstitutional or unreasonable in some way to 'tax' people via this sort of system - good on you.. but when balanced against law-enforcement's mandate to curtail kidnapping, terrorism etc... good luck!


My preference would lean towards a) but with provisos.
I think your dismissal of the possibility of this sort of viral-tainting even occurring is damaging to the possible consensus required to avoid it in some technical manner.
A counter-argument to implementing a) would be that if law-enforcement truly can't curtail things such as assassination markets and other 'worst of the worst' events, then their only alternative is to crack down in the most draconian ways imaginable to declare Bitcoin utterly illegal and thus limit it forever to the black market.
I suspect that it would be preferable to live with the various self-limiting taint systems and allow Bitcoin to expand to more mainstream usage.

I've not seen anyone else comment on my notion that any authority which over-tainted would effectively be acting against their own interests by increasing the incentive to spend their coins on black-market goods and services.  If this is the case, and I think it is, then a world in which various taints are enforced is preferable to a world in which Bitcoin is equated with terrorism and treated in a zero-tolerance manner by authorities.

Taint systems or not - you'll always be free to transact Bitcoins with others who value them irrespective of taint.
With taint-systems - Bitcoin has a chance of serving more than the black market niche.



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June 07, 2012, 01:28:42 AM
 #78

You don't have to accept coins that have been obtained dishonestly, either. That would be a personal choice. Because bad actors could respond, to honest traders who only making transactions with other honest people, with violence does not invalidate the idea.
Did you just skip over what he said above you? I don't know how many times I must repeat myself: it is NOT POSSIBLE to prevent anyone from sending you money, whether "tainted" or not. It just  is  not  possible. It is the way the system was designed from the ground up. Sure you can watch for "taint" yourself, but what are you going to do once it touches you? Return it? Keep it? Donate it?

It's true you can't stop someone sending you coins that are on somebody's taint-list.
How this is handled would depend somewhat on the particular jurisdiction enforcing the taint.

This is the reason I think any price advertised as simply X BTC - should refer to a taint-unaware price.
If someone using a taint-aware wallet is willing to accept the amount of tainted coins you offer for their product/service - then it's up to them to either ask for the equivalent they will be taxed upon spending it at a control-point, or to wear that cost themselves, or to spend those coins on the black-market or with someone else who values those tainted coins at full value. (The taint-publishing authority is effectively incentivising you to ask for 'clean coins' in the first place)

Of course - nothing will stop you from occasionally receiving coins that weren't tainted when you got them, but are on a taint-list by the time you go to spend them.
I'm arguing that this won't stop some authority implementing this sort of thing.  If your 'tainted' coins aren't particularly 'interesting' because they're later in the transaction tree - they'll just apply some small tax at a control point. If you received those coins from someone closely connected to the event of interest - well you can expect some sort of investigation.

Ugly as it may be philosophically - the software could make it easy for the merchants and average consumer to deal with.
It's all a balancing act that the authorities would have to perform in such a way that they don't overstimulate the black-market, whilst enhancing their capability to gain information about events of particular interest.

When the average Joe is assured that the 'taint' is all about catching child molesters, kidnappers and terrorists - they'll accept such a system, and once a significant proportion of local merchants and consumers are on board with it, the vast majority of consumers will feel unaffected by it.

The ones who are affected, will be those who don't advertise their prices as 'clean BTC'  - hence the virality of the system.

Don't mistake me for a 'fan' of this.  I'm putting forth what I suspect is an inevitability, and examining what it might look like, and how much of a problem it really is.
I'm really on the fence about whether a technical solution in the form of some sort of 'blinding' would be ideal.. or if a minor level of cooperation with authorities in this regard, in order to allow bitcoin to escape to become 'mainstream' is the best outcome.











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June 07, 2012, 01:32:49 AM
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It was hard enough to take this thread seriously before the name change...
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June 07, 2012, 01:46:24 AM
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This is such a non-issue, but I thought I'd chime in. If you are a vendor and someone wants to spend tainted bitcoin at your store and you refuse them, your competitor probably will not.
Only if your competitor is outside of the physical jurisdiction enforcing the taint.
This may however be a good argument against implementing taint in any particular country - as it provides incentive for people to use foreign merchants, thus harming the local economy!

If however, the control-points  are things like supermarkets which have captive local consumers - it's unfortunately not going to be enough to stop it.

Anyway.. the likely implementation would be that the merchant accepts them, but applies the prescribed tax and asks for a further small payment before you walk out of the store.

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June 07, 2012, 01:52:03 AM
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The question is how do you verify that coins were actually stolen and not scammed by a site owner Huh?

Anyone can CLAIM that coins were stolen. Proving it is another kettle of fish.

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June 07, 2012, 02:05:56 AM
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Anyway.. the likely implementation would be that the merchant accepts them, but applies the prescribed tax and asks for a further small payment before you walk out of the store.

That would absolutely count as money-laundering.  You're literally charging someone extra to accept funds of questionable origin and you'd be wide open to serious criminal charges.

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
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June 07, 2012, 02:41:16 AM
 #83

The question is how do you verify that coins were actually stolen and not scammed by a site owner Huh?

Anyone can CLAIM that coins were stolen. Proving it is another kettle of fish.

Yet another point the anti-bitcoin lobby refuses to acknowledge.

Bitcoins are controlled by private keys. Numbers. Information. They are accessed through information.

Someone claiming they had their bitcoins stolen, whether truthful or not, has about as much credibility as someone claiming someone copied their password, and used it to do such-and-such. There's no way to prove there was no collusion, or worse, that there was no theft by an outside party.

Anyone who wants to field an ever-increasing number of fraudulent claims of stolen coins begging for their addresses to be blacklisted, can go right on ahead. I'll pass.


This functionality is built into the bitcoin. Its a fundamental part of bitcoin.

No, it's not. It still just some idea in the minds of some people on this forum, and the fact that you're claiming it's a "fundamental part of bitcoin" just shows how far you're willing to carry this belief in this fiction.

Bitcoin addresses are hashes. They're information. When bitcoins are sent to an address of mine, there's nothing I need to do. In fact, there's nothing I can do to prevent it, regardless of how "unclean" someone claims the coins are. This is the fundamental design of bitcoin.

For this scheme to reject/return/destroy/whatever "unclean" coins to work, you have to write code. That code has to maintain a blacklist (seriously, a blacklist!) of addresses. It has to check the entire blockchain for any and all links to these addresses in all of your wallet's addresses in each block. It has to DO SOMETHING with the transactions, even if that SOMETHING is to just alert you. (Extra credit: guess what frauds are guaranteed if the SOMETHING is to forward the coins to the "rightful owners'" addresses!)

Then you have to incorporate this code into clients and/or apps and/or websites.

And you have to convince people to use it, and to use it properly, and to maintain their blacklists on their own (you're not looking to centralize a list, are you?)

And then you start begging the government to force it on others when everyone ignores your ideas and refuses to use your code.


Quote
I cannot think of a way to remove the possibility of tainted coins from bitcoin without moving to a centralized server like open transactions. If you don't want a taintable currency, run an open transactions server without accounts.

There are no such thing as "unclean" coins. What there are are transactions that can be tied back to addresses that are alleged to belong to thieves. Which, unless we're talking one or two transactions back, doesn't mean much to anyone except to the anti-bitcoiners who are so convinced their good intentions will lead us to cryptocurrency heaven that they refuse to acknowledge the problems with the scheme.

If you want to believe in "unclean" coins, by all means, continue believing, and create code to implement that belief. Pardon us while we choose not to believe.


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There are people, like deathandtaxes, that have claimed they will respond to a voluntary, per-user, tainted coin system by spamming the blockchain with bogus transactions. I think this shows the level of maturity we are dealing with.

There are no such things as "bogus transactions" in bitcoin. There's just money moving around. And spam is prevented via transaction fees. If the fees are paid, there is no spam.

And to that point, what's the harm with him sending money to public addresses anyway? It's not as if your scheme falls to pieces if everyone finds they have "unclean" coins in their wallets, right? Oh, wait... maybe that's one of the issues you should be listening to us about in the first place.

And you're challenging his maturity level?

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June 07, 2012, 04:28:49 AM
 #84

Bitcoin is a protocol.  The Bitcoin.org client is code that implements the Bitcoin protocol.  This taint blacklist idea of yours could be implemented in a client without touching the Bitcoin protocol or requiring a hard-fork to the blockchain.    So my reference earlier to a fork was describing alterations to the Bitcoin.org client and not to a fork of the blockchain.   As you also mentioned, you could even implement a taint blacklist that does not require changes to the Bitcoin.org client (e.g., this could easily be done in Armory, for instance, or some other external service.)
Exactly.  I was pretty sure that the idea forking the blockchain for taint was founded on a deep misunderstanding.  Thanks for clearing it up.
 
So, it's technically very possible for you to do this.  Go do it.  What are you waiting for?  Go nuts!

The reason you haven't is because you know that unless others are using that taint blacklist as well, you doing so unilaterally has no effect.   If you'ld like to boycott tainted coins, you don't need anyone's permission.  You are free to do so.   Isn't Bitcoin and open source fantastic, where you have the liberty to take the software and to basically be allowed to do pretty much whatever you want to with it?
Well, I would like to set up a tool to identify addresses that received coin (in significant amounts) from other interesting addresses just because I'm curious.

Now if instead you want to change the software that I use, that's when I start to have a problem with you.  Your freedom ends where my nose begins.
Agree completely.  As a voluntaryist, I even have a philosophical problem with the use of taint by authorities (as described by Fulz) - but it's the same philosophical problem I have with (coercive) authority in general.  If you are aware of "taint" (not really the right word, because it really only means that "this bitcoin was once in a certain bitcoin address"), then you should be free to use or ignore that awareness in all the decisions you make.  And if you choose to avoid being aware of it, then no one should force you to look at it.

In fact, to vindicate Westky, perhaps s/he was talking about the fact that it's only "taint" if you view the address that once held it as a "bad" address.  When we say it's already there, or intrinsic to bitcoin, we only mean that it's possible to identify all the addresses that now hold bitcoin that was once in any given address.

It's true you can't stop someone sending you coins that are on somebody's taint-list.
How this is handled would depend somewhat on the particular jurisdiction enforcing the taint.
Mostly, in my opinion, it ought to depend on your better judgement.  Or, to put it another way, the particular jurisdiction that should handle this should be you, by yourself, with an awareness of as much pertinent info as possible.

But I respect the choice of many here to remain blind to the history of the BTC they receive.

I've been reading "The Myth of National Defense", a collection of writings edited by Hans-Herman Hoppe.  If you check it out, it might make more sense why I'm looking for a way to thwart thievery that doesn't involve the authorities.

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June 07, 2012, 04:49:37 AM
 #85

You introducing a system that imposes a form of taint does nothing to prevent theft but does make using Bitcoin a hassle for those who are innocent.

Therefore I do not support this and will vigorously reject any movement towards this initiative and any like it.

I concur 100%

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June 07, 2012, 04:52:36 AM
 #86

This is such a non-issue, but I thought I'd chime in. If you are a vendor and someone wants to spend tainted bitcoin at your store and you refuse them, your competitor probably will not.
Only if your competitor is outside of the physical jurisdiction enforcing the taint.
This may however be a good argument against implementing taint in any particular country - as it provides incentive for people to use foreign merchants, thus harming the local economy!

If however, the control-points  are things like supermarkets which have captive local consumers - it's unfortunately not going to be enough to stop it.

Anyway.. the likely implementation would be that the merchant accepts them, but applies the prescribed tax and asks for a further small payment before you walk out of the store.


That's no remotely likely. The coins will usually be going to a safe place not accessable by the on duty clerk. If the customers doesn't want to pay or can't pay the essentially random extra tax are you going to return the coins.. later? different ones?

You are not going to have a popular store that way.

The only way this would happen is if someone forced stores to do it. And even then they would probably bail on bitcoin unless someone was forcing them to keep using it.

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June 07, 2012, 07:20:54 AM
 #87

This is such a non-issue, but I thought I'd chime in. If you are a vendor and someone wants to spend tainted bitcoin at your store and you refuse them, your competitor probably will not.
Only if your competitor is outside of the physical jurisdiction enforcing the taint.
This may however be a good argument against implementing taint in any particular country - as it provides incentive for people to use foreign merchants, thus harming the local economy!

If however, the control-points  are things like supermarkets which have captive local consumers - it's unfortunately not going to be enough to stop it.

Anyway.. the likely implementation would be that the merchant accepts them, but applies the prescribed tax and asks for a further small payment before you walk out of the store.


That's no remotely likely. The coins will usually be going to a safe place not accessable by the on duty clerk. If the customers doesn't want to pay or can't pay the essentially random extra tax are you going to return the coins.. later? different ones?

You are not going to have a popular store that way.

The only way this would happen is if someone forced stores to do it. And even then they would probably bail on bitcoin unless someone was forcing them to keep using it.

Tainting will likely happen after/when Bitcoin is widespread, I would give it 12-15 years.

How do you prove that the coins are stolen?

If you can´t prove it, they wont be tainted.




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June 07, 2012, 08:11:01 AM
 #88

Why do you think you are allowed to use force to prevent me from implementing some scheme on my own client?
Because you can't control who sends you coins. If somebody sends you tainted coins, what are you going to do about it? You can't send them back, since the address they came from may not be under the sender's control (eg, e-wallets), and you can't keep them but refuse to accept them as payment. Can you imagine if that happened with cash? "Sorry, we can't accept this $100 note as payment, you'll have to give us another one. No, you can't have this one back; no, it's not counterfeit, we just think it might have been involved in some form of criminal activity at some point in the past." You'd have some use of force directed at your face if you tried that in real life.

You don't have to accept coins that have been obtained dishonestly, either. That would be a personal choice. Because bad actors could respond, to honest traders who only making transactions with other honest people, with violence does not invalidate the idea.
The problem is that the people who respond with violence are not bad actors, they are honest people who have had their money taken without compensation based on nothing more than the belief that the money might have been involved in an illegal transaction at some point in its history. Remember, YOU CANNOT CONTROL WHO SENDS YOU BITCOINS! If an honest person happens to receive "tainted" bitcoins from someone else, there is absolutely nothing that they or anyone else can do about it, and any attempt to do something about it will simply be punishing innocent users for other people's actions.

Here's another experiment you can try: Open a store and keep a drug kit behind the counter. Drug test every note a customer pays you with, and if the result is positive, refuse to accept the money but don't give it back. See how long you can last without either getting punched in the face or having the cops called on you. I guarantee you'll be out of business one way or another before the day is out.

I encourage the sympathetic readers of this post to stop thinking about bitcoin as "cash" and start thinking in terms of a distributed file system containing a perfect accounting ledger. The idea is much more sophisticated than "cash" and will lead one day to a system that will allow us to keep track of our debts to each other in terms of personal economic value.
So, everyone's bitcoins will have a different value to everyone elses? How exactly are you supposed to set prices with such a scheme? "This product costs 10 BTC, but only 8 BTC if the coins come from a verified Mt Gox account, with a 50% surcharge if the coins ever touched SR, plus 10% if they came from a coin mixing service... etc" Is that pretty much how it's supposed to work? And if so, how does that make any sense? That would cause problems if you tried it in real life, too.

What you're asking is like asking how Mt. Gox can give you 5 USD/BTC one day and 6 USD/BTC the next day. Why are exchange rates set on an open market with bids and asks any different than devaluing dishonest money? If someone you want to trade with wants to charge you more because you have dishonest money, you don't have to trade with them. I'd encourage you to find someone to trade with that will give you the full value you believe your BTC is worth.
No, it's not like that at all, and I'm not sure why you even think that. They are different because the exchange rate assumes that bitcoins (and dollars, for that matter) are fungible, meaning that one bitcoin (or dollar) is just as good as any nother. This is because when you make an offer to buy bitcoins on an exchange, you have absolutely no way of knowing who, out of thousands of other traders, will actually be providing your bitcoins, and so you have no way of knowing whether you'll end up with good bitcoins or "tainted" ones. As I have already pointed out, setting prices will be impossible if "tainted" bitcoins are valued differently from "clean" bitcoins.

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June 07, 2012, 08:18:51 AM
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Sub

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June 07, 2012, 11:09:40 AM
 #90

Mt Gox has recently blocked peoples access to coins then forced them through onerous ID requirements claiming they came from the bitcoinica hack. You can bet the major exchanges have "blacklists" only know one before they deposit whether they are on this.


If such a thing exists I would like to know beforehand rather than risk having to deal with a  goxing because i unknowingly received tainted coins. Cheesy

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June 07, 2012, 12:09:36 PM
 #91

Tainting will likely happen after/when Bitcoin is widespread, I would give it 12-15 years.
Sorry if this is a stupid question (couldn't find a non-ambiguous answer anywhere) but exactly what is a tainted bitcoin?


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June 07, 2012, 12:13:53 PM
 #92

Tainting will likely happen after/when Bitcoin is widespread, I would give it 12-15 years.
Sorry if this is a stupid question (couldn't find a non-ambiguous answer anywhere) but exactly what is a tainted bitcoin?



You can follow the trail of a coin. Just say a bitcoin was stolen from bitcoinica you can see in the blockchain which address it goes too and how many transactions have happened in between.

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June 07, 2012, 12:55:53 PM
 #93

If however, the control-points  are things like supermarkets which have captive local consumers - it's unfortunately not going to be enough to stop it.

No customers will just use cash or some other system which retains fungibility.  The customer will just ignore worthless Bitcoin and all the complications which produce no value and undermine the system.  That is the whole point.  Once Bitcoin loses fungibility is ceases to have any value as a medium of exchange.

"Here is this new medium of exchange which just happens to suck royally as a medium of exchange.  Please stop using your existing highly fungible payment systems and adopt this one instead"

Quote
Anyway.. the likely implementation would be that the merchant accepts them, but applies the prescribed tax and asks for a further small payment before you walk out of the store.

At which point:
a) Bitcoin loses a user likely forever
b) The store loses a customer possibly forever
c) A class action lawsuit lawyer gains a lucrative plaintiff.
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June 07, 2012, 01:29:52 PM
 #94

Tainting will likely happen after/when Bitcoin is widespread, I would give it 12-15 years.
Sorry if this is a stupid question (couldn't find a non-ambiguous answer anywhere) but exactly what is a tainted bitcoin?



A stolen bitcoin.

Like someone steal a bitcoin, well then this bitcoin is "tainted" and whoever receive it will like be "omg you have a tainted bitcoin you CRIMINAL" wich of course make no sense cause bitcoins keep moving from an address to another and if you sell something to someone and he pay you with a "tainted coin" you are not a criminal.
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June 07, 2012, 02:42:56 PM
 #95

You can follow the trail of a coin. Just say a bitcoin was stolen from bitcoinica you can see in the blockchain which address it goes too and how many transactions have happened in between.
A stolen bitcoin.

Like someone steal a bitcoin, well then this bitcoin is "tainted" and whoever receive it will like be "omg you have a tainted bitcoin you CRIMINAL" wich of course make no sense cause bitcoins keep moving from an address to another and if you sell something to someone and he pay you with a "tainted coin" you are not a criminal.
I see, thanks.

Doesn't seem like a working concept to me. If somebody steals bitcoins (by hacking someone's mtgox account or whatever, and transferring bitcoins stored online to an address of his own) he can simply mix them up with other bitcoins, send them through a few transactions combined with other addresses, or use one of the dozen bitcoin laundry schemes or services, and there's no telling which bitcoins are tainted anymore.

In theory, there's no difference between theory and practice. In practice, there is.
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June 07, 2012, 02:48:00 PM
 #96

Tainting will likely happen after/when Bitcoin is widespread, I would give it 12-15 years.
Sorry if this is a stupid question (couldn't find a non-ambiguous answer anywhere) but exactly what is a tainted bitcoin?



A stolen bitcoin.

Like someone steal a bitcoin, well then this bitcoin is "tainted" and whoever receive it will like be "omg you have a tainted bitcoin you CRIMINAL" wich of course make no sense cause bitcoins keep moving from an address to another and if you sell something to someone and he pay you with a "tainted coin" you are not a criminal.

Not true. Tainted is not a stolen bitcoin, it's a bitcoin merely accused of being stolen, big fking difference.

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June 07, 2012, 03:07:14 PM
 #97

You can follow the trail of a coin. Just say a bitcoin was stolen from bitcoinica you can see in the blockchain which address it goes too and how many transactions have happened in between.
A stolen bitcoin.

Like someone steal a bitcoin, well then this bitcoin is "tainted" and whoever receive it will like be "omg you have a tainted bitcoin you CRIMINAL" wich of course make no sense cause bitcoins keep moving from an address to another and if you sell something to someone and he pay you with a "tainted coin" you are not a criminal.
I see, thanks.

Doesn't seem like a working concept to me. If somebody steals bitcoins (by hacking someone's mtgox account or whatever, and transferring bitcoins stored online to an address of his own) he can simply mix them up with other bitcoins, send them through a few transactions combined with other addresses, or use one of the dozen bitcoin laundry schemes or services, and there's no telling which bitcoins are tainted anymore.

Well, that's the problem, but apparently the solution is, to use the blockchain to declare unclean ALL other coins that may have ever directly or indirectly touched the "tainted" ones, no matter how much tracing back has to be done.

You would think the unworkability of this would be obvious, yet here we are, having to point this out to people who want to reject your money because it's evil. (And by "reject," they either mean keep or naively hand over to someone else, since they seem to know full well that a payment can't really be rejected, even though they keep using the word.)

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June 07, 2012, 04:17:05 PM
 #98

Well, that's the problem, but apparently the solution is, to use the blockchain to declare unclean ALL other coins that may have ever directly or indirectly touched the "tainted" ones, no matter how much tracing back has to be done.
Afaik, a typical bitcoin laundry service works like this:



You transfer N bitcoins from address A to P.
They Someone transfers X bitcoins from address Q to B, and Y bitcoins from R to C (where X+Y ≈ N minus a random fee of ±2%).
No money is transferred between A and B, A and C, P and Q, P and R, or Q and R.

Can the coins at Q or R now be considered dirty?

(the ones at P are eventually cashed out at MtGox)

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June 07, 2012, 05:16:03 PM
 #99

I'm 6 pages in before my reply, but here's my thinking:
 
I don't support this at all, because I view bitcoins as cash.  Let's say you sell something for $100 on craigslist, and you get a nice $100 bill, you try the ink mark and determine it's a legit $100.  You go into the bank to deposit it and they say, "this $100 was stolen last month, we have its serial number written down.  You cannot use this $100 anymore"
 
I call bullshit.  It's my money, I got it through legal means.  It sucks to the person who had it stolen, but I'll be damned if I'm going to give up my money (government stealing notwithstanding).
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June 07, 2012, 07:42:22 PM
 #100

Well, that's the problem, but apparently the solution is, to use the blockchain to declare unclean ALL other coins that may have ever directly or indirectly touched the "tainted" ones, no matter how much tracing back has to be done.
Afaik, a typical bitcoin laundry service works like this:



You transfer N bitcoins from address A to P.
They Someone transfers X bitcoins from address Q to B, and Y bitcoins from R to C (where X+Y ≈ N minus a random fee of ±2%).
No money is transferred between A and B, A and C, P and Q, P and R, or Q and R.

Can the coins at Q or R now be considered dirty?

(the ones at P are eventually cashed out at MtGox)

Yes, that's how to try to get around it, but once Mt. Gox starts "rejecting" (read: keeping for themselves) the coins at P because someone some time ago back said a transaction was a theft, how long can such a service remain viable? Why would they give you coins from Q and R when they know they can't use the coins at P?

True, the coins at P could be split to several addresses which are passed around on paper via private keys (similar to Casascius coins.) But if those coins can't be spent on the blockchain, and instead they require that one private key to be constantly passed around yet kept secret, that doesn't seem like a workable plan either.

Once someone chooses to believe in "tainted" coins (just like believing in "dirty money",) they'll be set on trying to "reject" any transactions even tangentially related. The best approach to dealing with this and avoiding having innocent people be defrauded and stolen from is to just ignore their belief and refuse to use code or services that implement their schemes.

Bitcoin is the ultimate freedom test. It tells you who is giving lip service and who genuinely believes in it.
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June 07, 2012, 11:02:07 PM
 #101

And you have to convince people to use it, and to use it properly, and to maintain their blacklists on their own (you're not looking to centralize a list, are you?)
Absolutely not!  I don't even think any of the other things are necessary.  It's like puling the curtain back so people can see the old man.  They are free to ignore him and continue kneeling before the "wizard".  I think if the ONLY effort is pulling back the curtain, the net effect will be positive.  But I respect the consensus that it won't be positive, so I'm agreeing to disagree, and participating in this discussion now only to point things out that I think are important.

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June 07, 2012, 11:24:01 PM
 #102

The problem is that the people who respond with violence are not bad actors, they are honest people who have had their money taken without compensation based on nothing more than the belief that the money might have been involved in an illegal transaction at some point in its history. Remember, YOU CANNOT CONTROL WHO SENDS YOU BITCOINS!
Do you mean that the money in my wallet that is tainted is somehow "taken" from me because I can't use it to buy something from... someone... somewhere who sees the taint?  There are plenty of other people to transact with, no?  Remember, it's a personal blacklist.  Most of the people on this thread here have insinuated that they would ignore any taint.

This reminds me of an assumption I made while I was growing up without realizing it, which is a really stupid assumption:  That prices should be the same for everyone.  That's just BS.  If I like you, you'll get a better price.  If I don't like anybody, then my price to all of them will be higher, and I won't get to trade much.  The same thing goes for this taint idea.

The biggest problem I see is lack of original judgment.  Too many people just do what they're told - they're sheeple.  Because of that, the mere suggestion that address XYZ belongs to a thief can ruin the owner of that address.  But I don't think that would happen much, because the average BTC user is a bit brighter than that, and the "mere suggestion" will get the suggester a large load of chastisement for jumping to conclusions.  Or maybe I'm wrong.  Again, it's a faith in the community that perhaps I have too much of, at least as pertains to the exposure of transactions from alleged thieves.

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June 07, 2012, 11:50:09 PM
 #103

Mt Gox has recently blocked peoples access to coins then forced them through onerous ID requirements claiming they came from the bitcoinica hack. You can bet the major exchanges have "blacklists" only know one before they deposit whether they are on this.


If such a thing exists I would like to know beforehand rather than risk having to deal with a  goxing because i unknowingly received tainted coins. Cheesy

I guess that means MtGox is already using taint.  Are they really?  How did you find out?

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June 08, 2012, 12:27:44 AM
 #104

Mt Gox has recently blocked peoples access to coins then forced them through onerous ID requirements claiming they came from the bitcoinica hack. You can bet the major exchanges have "blacklists" only know one before they deposit whether they are on this.


If such a thing exists I would like to know beforehand rather than risk having to deal with a  goxing because i unknowingly received tainted coins. Cheesy

I guess that means MtGox is already using taint.  Are they really?  How did you find out?

I read the forums Smiley

imho people should boycott mt gox for such things.

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June 08, 2012, 12:36:22 AM
 #105

So what if Apple makes a Bitcoin app and only allows "Apple Coins" approved by Apple to buy Apple approved products and services from Apple vendors in Apple Land? They would call any non-Apple coins "tainted" and will void your Apple Health Insurance and send you to Apple Prison.

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June 08, 2012, 02:53:28 AM
 #106

Do you mean that the money in my wallet that is tainted is somehow "taken" from me because I can't use it to buy something from... someone... somewhere who sees the taint?  There are plenty of other people to transact with, no?  Remember, it's a personal blacklist.  Most of the people on this thread here have insinuated that they would ignore any taint.
The fundamental purpose of money is to give you a means of trading with other people without having to worry about whether you happen to have what they want, because everyone wants money equally. If some people don't want money under certain circumstances, the whole system breaks down. Though, as a general rule, refusing to accept money which is accepted by your competitors is pretty damn stupid, regardless of whether it's technically viable.

This reminds me of an assumption I made while I was growing up without realizing it, which is a really stupid assumption:  That prices should be the same for everyone.  That's just BS.  If I like you, you'll get a better price.  If I don't like anybody, then my price to all of them will be higher, and I won't get to trade much.  The same thing goes for this taint idea.
That prices should be the same for everyone is not an assumption, it's a basic economic fact stemming from the fungibility of money: If everyone's dollars are equal, then everyone's prices should be equal. To suggest that prices should not be equal for everyone is to suggest that everyone's dollars are not equal, which is not only absurd, it's downright stupid if you are in a competitive business. (Note that things like loyalty discounts are no exception to this rule, since the customer to whom the discount applies is providing a service (namely, their continued patronage) to the store which is of equal value (in the store management's opinion) to the discount received.)

The biggest problem I see is lack of original judgment.  Too many people just do what they're told - they're sheeple.  Because of that, the mere suggestion that address XYZ belongs to a thief can ruin the owner of that address.  But I don't think that would happen much, because the average BTC user is a bit brighter than that, and the "mere suggestion" will get the suggester a large load of chastisement for jumping to conclusions.  Or maybe I'm wrong.  Again, it's a faith in the community that perhaps I have too much of, at least as pertains to the exposure of transactions from alleged thieves.
I admire your optimism, but unfortunately assuming that people aren't idiots always ends badly.

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June 08, 2012, 03:10:01 AM
 #107

Mt Gox has recently blocked peoples access to coins then forced them through onerous ID requirements claiming they came from the bitcoinica hack. You can bet the major exchanges have "blacklists" only know one before they deposit whether they are on this.


If such a thing exists I would like to know beforehand rather than risk having to deal with a  goxing because i unknowingly received tainted coins. Cheesy

I guess that means MtGox is already using taint.  Are they really?  How did you find out?

I read the forums Smiley

imho people should boycott mt gox for such things.
Here's a link to a story on it.
Quote
and the police, working with MtGox and other Bitcoin services, could theoretically trace their way back through each link... It’s hard to tell how practical such a strategy actually is...
I guess they mean the strategy of identifying each person along the way in order to get the identity of the next person back.  I hope that is impractical.  I'd much rather trust the community than the authorities.  Let each account holder decide on their own what past addresses matter to them.  The proposal allows anyone to filter for whatever addresses are important to them (personal black/white lists) and then do whatever they want with that information.  Beating the authorities to a resolution (maybe it did - see below) would be an excellent feather in the cap for anarchy.

It looks like MtGox has already stopped ("Bitcoinica no longer wishes to pursue this case"  MtGox, at least according to the reddit user - whose account has been deleted).

I wonder if Bitcoinica's wish to pursue the case was costing them anything.  Why else would they not wish to pursue it?  Perhaps the taint-tracking was effective enough for the thief to quietly beg for mercy and return enough of the proceeds to get the authorities off his trail.  That is the end I'd like to see for all BTC heists.  It would make a good cover story in case something more nefarious was going on.

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June 08, 2012, 05:53:23 AM
 #108

And you have to convince people to use it, and to use it properly, and to maintain their blacklists on their own (you're not looking to centralize a list, are you?)
Absolutely not!  I don't even think any of the other things are necessary.  It's like puling the curtain back so people can see the old man.  They are free to ignore him and continue kneeling before the "wizard".  I think if the ONLY effort is pulling back the curtain, the net effect will be positive.  But I respect the consensus that it won't be positive, so I'm agreeing to disagree, and participating in this discussion now only to point things out that I think are important.

...

Let's say I don't visit the forums. I have an older version of Bitcoin that I consider more stable and trustworthy, and the "bitcoin community" I get my info from is a small circle of friends and Bitcoin Magazine. We've not heard about "tainted coins."

Let's also say you have a website selling widgets. 50 BTC each, including shipping. But you have a small disclaimer at the bottom of the page saying you don't accept tainted coins, with a link to your blacklisted addresses. I don't see this disclaimer (or perhaps I just don't get it, since I'm not a thief, and no one I associate with is,) and send you 50 BTC for a widget.

6.2091 BTC of that transaction comes from an input that can be traced all the way back to the MyBitcoin.com nastiness. Your software (whether an extra program or coded directly into the latest Satoshi client) catches this.

Do you:

1) Send me the widget I paid for?

or

2) Ask for an address to refund my 50 BTC?

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June 08, 2012, 04:01:46 PM
 #109

Tainting will likely happen after/when Bitcoin is widespread, I would give it 12-15 years.
Sorry if this is a stupid question (couldn't find a non-ambiguous answer anywhere) but exactly what is a tainted bitcoin?



A stolen bitcoin.

Like someone steal a bitcoin, well then this bitcoin is "tainted" and whoever receive it will like be "omg you have a tainted bitcoin you CRIMINAL" wich of course make no sense cause bitcoins keep moving from an address to another and if you sell something to someone and he pay you with a "tainted coin" you are not a criminal.

Not true. Tainted is not a stolen bitcoin, it's a bitcoin merely accused of being stolen, big fking difference.
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June 08, 2012, 07:55:05 PM
 #110

Let's say I don't visit the forums. I have an older version of Bitcoin that I consider more stable and trustworthy, and the "bitcoin community" I get my info from is a small circle of friends and Bitcoin Magazine. We've not heard about "tainted coins."

Let's also say you have a website selling widgets. 50 BTC each, including shipping. But you have a small disclaimer at the bottom of the page saying you don't accept tainted coins, with a link to your blacklisted addresses. I don't see this disclaimer (or perhaps I just don't get it, since I'm not a thief, and no one I associate with is,) and send you 50 BTC for a widget.

6.2091 BTC of that transaction comes from an input that can be traced all the way back to the MyBitcoin.com nastiness. Your software (whether an extra program or coded directly into the latest Satoshi client) catches this.

Do you:

1) Send me the widget I paid for?

or

2) Ask for an address to refund my 50 BTC?

You've given me information here that I wouldn't have there.  I will pretend to not know it...

You've set up a website for me that I wouldn't set up.  However, the changes would only make it more difficult for this to be messy, so I'll stick with your description.

Not sure what you mean by "traced all the way back" - am I getting BTC straight from an address that MyBitCoin's alleged theft put BTC into?  Or has this 6.2091 BTC remained undivided traveling from address to address?  Is MyBitCoin offering any reward for information or help?  Those questions would factor into my thinking, but...

I'd send an email with what I discovered, in an effort to uncover all the information you've provided in this post that I wouldn't have yet.  I like to explain my chess moves to my opponent.  You'd be able to sway me toward one side or the other.  If you asked for a refund, I'd give it immediately.  If not, I'd be more likely to send the widget.

Is my assumption correct that you wouldn't do anything any differently no matter how closely related to the MyBitCoin theft your counterparty appeared to be?  Suppose it was a friend of yours instead of MyBitCoin?

These are fun mental games to play around with, but your answers to the same questions wouldn't affect me much and I don't think my answers should affect you much.  It's the aggregate behavior that I trust, assuming everyone has all the information that's important to them.  The "chaotic" nature of how BTC users would apply or ignore taint (or any information that suddenly appears to be a lot more accessible than they first thought) will help keep everyone more honest.

It seems a bit like the second amendment argument that if gun ownership were very common, violence would be very uncommon.  I buy that argument.  Do you?

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September 13, 2012, 03:44:15 AM
 #111

A currency is fungible.  Period.  If it lacks fungibility it is no longer a currency and the entire rational for Bitcoin ceases to exist.


This was just learned again today after this:



Those were bills stolen in a robbery from a Bank of America.

Quote
LAPD spokesman Sgt. Rudy Lopez said there was plenty of video footage of the chase that will help them identify those people who grabbed money from the street and the suspects' vehicle.

"If they're identified, they will be prosecuted for receiving stolen property," Lopez said, adding that conviction on such a charge, a felony, is punishable by more than a year in prison.

 - http://latimesblogs.latimes.com/lanow/2012/09/police-still-investigating-cars-suspects-after-bizarre-bank-robbery.html

If the serial numbers for those bills were known, then the solution is simple right?    List a database of the stolen bills, and any of these tainted bills that end up at a bank get turned over to the secret service.  The person that deposited them loses those funds, as they were stolen property and thus they had no right to them in the first place (should have checked to see if they were tainted first!)

Now of course, this is absolute lunacy.  Cash is cash.  It is fungible money.

Bitcoins are the same.

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September 13, 2012, 08:10:46 AM
 #112

Quote
Now of course, this is absolute lunacy.  Cash is cash.  It is fungible money.

Bitcoins are the same.

No, they clearly are not. We wish bitcoins were fungible, but they are not, each bitcoin has a unique, identifiable number (and a string of previous transactions) associated with them, stored in a public database.

Cash is still king, until crypto-currencies nail the strong-anonymity problem natively (that bitcoin is deficient in).

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September 13, 2012, 08:32:45 AM
 #113

Quote
Now of course, this is absolute lunacy.  Cash is cash.  It is fungible money.

Bitcoins are the same.

No, they clearly are not. We wish bitcoins were fungible, but they are not, each bitcoin has a unique, identifiable number (and a string of previous transactions) associated with them, stored in a public database.

Cash is still king, until crypto-currencies nail the strong-anonymity problem natively (that bitcoin is deficient in).

Paper currency has serial numbers.  That data isn't collected so it is of little use currently, but cash has the capacity to carry taint and thus be less than fungible.  The drawbacks to doing that outweigh any benefit so that's why even the technology to start tracking that data will not be implemented.

Bitcoins can be transferred from one address in a wallet to another in the same wallet, and at that point it becomes less than 100% certain that they are still held by the original party.   Any recognition of taint then potentially penalizes innocents and thus cannot be allowed, regardless of the opportunity to do whatever good is intended.  Fungibility trumps all.

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September 13, 2012, 09:22:45 AM
 #114

Paper currency has serial numbers.  That data isn't collected so it is of little use currently

The other day, I had the thought that if I was the Federal Reserve, I would have high speed scanners and a computer system that tracked the movement of the money coming in and going out. We know that bills are checked for wear and damage before they're placed back into circulation. Completely feasible, and I wouldn't doubt if they were already doing it.
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September 13, 2012, 01:27:06 PM
 #115

There would be so much less demand for cash if you couldn't break the law with it. Value would absolutely crater.

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September 13, 2012, 02:15:45 PM
 #116

There would be so much less demand for cash if you couldn't break the law with it. Value would absolutely crater.

The government still needs a way to pay for their off the books "contractors" too. If they weren't actually corrupt, they would have probably banned possession of over a certain amount of cash by now. After all, why do you need cash if you're a law abiding citizen?
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September 13, 2012, 02:17:47 PM
 #117

Why is the title of the thread "A Warning Against Using Taint" and then you proceed to recommend a system to give a measure of taint?

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September 22, 2012, 10:27:37 PM
 #118

Why is the title of the thread "A Warning Against Using Taint" and then you proceed to recommend a system to give a measure of taint?
The answer is in the thread.

Thanks to Stephen for bringing this thread up again.  It's still fun for me to read.

If you look up a BTC address at https://blockchain.info/, you get a "Taint Analysis" button which will then show the % of funds received by an address that can be traced back to other addresses, or if you reverse it (drop down top right), the % of funds sent from an address which passed through other addresses.  It's fun to play with.  It was added around 6/24 this year.

Any recognition of taint then potentially penalizes innocents and thus cannot be allowed, regardless of the opportunity to do whatever good is intended.  Fungibility trumps all.

So are you mounting any effort to get blockchain.info to remove that feature?  The address to which the Bitcoinica heist went is public knowledge, so the potential is there, I guess.  On the other hand, every capability and piece of information that can be used to penalize others has the same potential.  I don't think the answer is censorship, but rather education and decentralization.

I'm glad they added that tool.  It should make my investments in mixing services do well, and also discourage thieves.  Exactly what I wanted!  Has anyone suffered from it?  Gotten an email from someone they paid with BTC, asking nosy questions?  Perhaps so, but are they willing to bring it up?  I guess it's kind of like admitting you've been mugged or raped.  Personal decision, I suppose.

To suggest that prices should not be equal for everyone is to suggest that everyone's dollars are not equal, which is not only absurd, it's downright stupid if you are in a competitive business.

Ok, but I run a competitive business (selling my programming skills) and I charge assholes more than I charge nice people all the time.  Same thing goes when I sell stuff at garage sales.  I suppose it might leave me with less cash at the end of the day, but I feel better about myself and the world in general.  So for me, everyone's dollars are certainly not equal.  The indiscriminate nature of your view on selling seems a bit creepy to me.  But I think you extrapolated a bit too far:

The dollars themselves are equal, but they are a medium of exchange, which requires two parties making an exchange to be useful.  I imagine that the view each party takes of the other reasonably has some influence over what they demand in return for what they offer.  I think your description extrapolates the equivalency of the medium of exchange to the equivalency of the parties.  That seems a lot like the propaganda subtly  imposed on us in public school, that we are all the same, just interchangeable consumers, non-individual and unimportant pawns.  That is the propaganda I recognized and rejected when I realized that different prices for different people makes sense.

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September 23, 2012, 12:38:12 AM
 #119

Ok, but I run a competitive business (selling my programming skills) and I charge assholes more than I charge nice people all the time.

But with taint all the nice people will be treated like assholes and the assholes will find ways to avoid the taint. Taint is like copy protection. It never hurts the pirates.

Buy & Hold
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September 23, 2012, 07:05:43 PM
 #120

Ok, but I run a competitive business (selling my programming skills) and I charge assholes more than I charge nice people all the time.

But with taint all the nice people will be treated like assholes and the assholes will find ways to avoid the taint. Taint is like copy protection. It never hurts the pirates.

So are you going to contact blockchain.info and ask them to remove the analysis?

I think any time there are assholes, and they get treated like assholes, some of them will point out that nice people are being treated like assholes, and also claim to be one of those nice people.  The first part of their claim is probably right, just because there are always people who err on the side of treating too many people like assholes instead of too few.  But if it is an asshole making the claim, the second part is dead wrong.

I bet there are some would-be pirates who gave up because the copy-protection frustrated them.  But I also bet that the net effect has been to worsen the problem of piracy, and it certainly frustrates people who try to back up the stuff they buy.  Copy protection, however, is generally an alteration to otherwise normal media that makes a common activity more difficult.  Taint requires an actual human mind to translate it into making a common activity more difficult.  As I've already pointed out, every capability and piece of information that can be used to penalize others has the same potential.  I will always argue against keeping people as incapable and stupid as possible in order to prevent them from penalizing innocents.  Wouldn't you?

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September 24, 2012, 05:42:51 PM
 #121

(Didn't read the entire thread)

But I could never sleep well if I had to worry about where each one of my pennies came from. There's more enjoyable things in life than that.

Using anonymizers is fun too, and I don't care about the 1.5% fee that comes along with it.


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September 24, 2012, 08:00:31 PM
 #122

I'd like to reiterate that -


All bad ideas/laws (that make a mess out of everything in the long term) stem from some very reasonable-looking special exceptions (such as trying to outlaw coins tainted from this or that theft).



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September 24, 2012, 08:32:57 PM
 #123

I'd like to reiterate that -


All bad ideas/laws (that make a mess out of everything in the long term) stem from some very reasonable-looking special exceptions (such as trying to outlaw coins tainted from this or that theft).


I second that. Why is this fact being so persistently overlooked still?

This has been happening in almost every aspect of life. Just look at tax return forms.

Remember the good old days "A tithe of your harvest, or your head off!"? Then somebody complains and a slight exception is added that is meant to make it a little fairer for somebody. Then somebody else complains and another exception is added, and so forth. Until a perfectly functional system is over regulated to a complete waste of time. And you end up with a million fucks in the country sitting in office buildings doing tax evaluation instead of selling candy or rubbing my back.

Regulation is almost like cancer. You let it get its foot in the door and it'll grow until you go bald.

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September 24, 2012, 09:19:15 PM
 #124

I'd like to reiterate that -


All bad ideas/laws (that make a mess out of everything in the long term) stem from some very reasonable-looking special exceptions (such as trying to outlaw coins tainted from this or that theft).




The failure to distinguish between following a good idea yourself through self-discipline and coercing everyone to follow it through legislation is a major problem.  Everyone should have a code of conduct, but no one should be forced to follow anyone else's code.

The root of the long term mess doesn't lie in reasonable-looking ideas, but in the failure of individuals to implement them personally (that is, following good ideas on their own through self-discipline, not forcing others to follow them), and the popular supposition (often supported by government propaganda) that things would be better if only everyone followed them.

It may be true that things would be better if everyone followed a particular good idea, but forcing them to do so will more than negate the benefit.  That coercion is the root of the mess.

I suspect remarkably intelligent statist apologists would be the ones to strenuously object to a good idea on the grounds that it may lead to a long term mess without addressing the coercion that creates the problem.  The strategy is two-stepped - first, prevent voluntary solutions through such objections, and when the problems they'd solve are bad enough, introduce the coercion that statists love.  But others get suckered into the same pattern.

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September 24, 2012, 09:42:07 PM
 #125

Well, Sir,

you are free to reject tainted coins as much as I'm free to use an anonymizing service to pay you.

Let's do business.



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September 24, 2012, 11:20:31 PM
 #126

Compulsion is a sure sign you are being fed a crap sandwich .... if it was so great you wouldn't have to be forced to eat it.

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April 30, 2013, 05:02:12 PM
 #127

Dan Kaminsky of Business Insider mentions the failures of bitcoin and then explains what I explained at the beginning of this thread.  I was not unprincipled enough to mention the fact that "possession of stolen property is a crime" since the foundation of that concept is mostly perverted from psersonal self-discipline (which would call it immoral rather than a crime) is the centralized coercive system of "justice" provided by coercive governments.  Kaminsky, on the other hand, has no problem with that centralization, perhaps because he views anything called a crime as equivalent to immoral.

I pointed our earlier in the thread that (essentially) having and following your own code of conduct is a good thing, but imposing it on others (through coercion) is a bad thing.  When you internalize this lesson, you'll understand why I love this thread so much, and why I have brought it back from the past.

If you have stolen coins, consider making some small attempt (however small it might be) to undo the damage you helped cause.  I urge others toward what I believe is the right thing to do, but I will never attempt to coerce them into doing it.

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April 30, 2013, 05:09:38 PM
 #128

BTC are no different than greenbacks.  Who knows what path a bill has followed into your wallet?  Does anyone really care?

Bills are all contaminated ("tainted") with trace amounts of cocaine supposedly.  Maybe they were involved in a drug deal.  Does/should anyone care?

You are in a maze of twisty little passages, all alike.
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April 30, 2013, 05:20:10 PM
 #129

BTC are no different than greenbacks.  Who knows what path a bill has followed into your wallet?  Does anyone really care?

Bills are all contaminated ("tainted") with trace amounts of cocaine supposedly.  Maybe they were involved in a drug deal.  Does/should anyone care?
Using cocaine is not immoral.  Making deals for mind altering substances is not immoral.  The difference between immoral and illegal is very very important.  It is, fundamentally, a large part of the reason that bitcoin is such a great invention.

If you buy a shovel at a used equipment shop and you find blood stains on the bowl, do/should you care?  What if it's a garage sale?

BTC are different from greenbacks for many reasons, the most important of which, in this thread, is that their entire transaction history is permanently recorded in full view of the public.

The victims of bitcoin heists have NEVER appealed to the community (that I know of) to help them recover their stolen property (until the thieves send the bitcoin back).  As I mentioned (way) earlier in the thread, without such an appeal, I don't think there's any point to paying attention to taint.  However, when a victim offers me something for helping to thwart the plans of the thief who stole their bitcoin, I will be happy to check my own holdings for taint.

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April 30, 2013, 05:30:27 PM
 #130

Using cocaine is not immoral.  Making deals for mind altering substances is not immoral.  The difference between immoral and illegal is very very important.  It is, fundamentally, a large part of the reason that bitcoin is such a great invention.

I always thought breaking the law was immoral by definition.  I can think of situations where using cocaine is immoral, certainly selling harmful substances is immoral.

Sure, breaking the old Jim Crow laws was illegal, not immoral.  But we're talking harmful drugs here.

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April 30, 2013, 05:38:59 PM
 #131

I always thought breaking the law was immoral by definition.

Sure, breaking the old Jim Crow laws was illegal, not immoral.

Huh

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April 30, 2013, 05:53:12 PM
 #132

I always thought breaking the law was immoral by definition.

Sure, breaking the old Jim Crow laws was illegal, not immoral.

Huh

It seems contradictory but I'm talking about the *mentality* of law-breaking in general.  Stealing, killing, speeding, like that.

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April 30, 2013, 05:57:02 PM
 #133

Using cocaine is not immoral.  Making deals for mind altering substances is not immoral.  The difference between immoral and illegal is very very important.  It is, fundamentally, a large part of the reason that bitcoin is such a great invention.

I always thought breaking the law was immoral by definition.  I can think of situations where using cocaine is immoral, certainly selling harmful substances is immoral.

Sure, breaking the old Jim Crow laws was illegal, not immoral.  But we're talking harmful drugs here.
kjj, Steve doesn't need people being exasperated.  He just needs some explanation...

Steve, Consider the possibility that "breaking the law [is] immoral by definition" is similar to the feeling of stupidity that a (very intelligent) child gets when those taking care of him constantly tell him he's stupid.  It's a lie that becomes true because we aren't psychologically advanced enough yet to resist the "availability heuristic".  You can google that.

Jim Crow laws are an excellent example.  Laws against marijuana are also excellent examples.  Cocaine is dangerous - but it's a little less dangerous than sky diving, as far as I know.  If you feel obligated to do something about whatever dangerous behaviors others choose to undertake, then by all means, do so, but please don't vilify others for leaving them alone or otherwise respecting their decisions to behave dangerously.  Danger is fun!  Caveat!  It's also dangerous.  But that doesn't make it immoral.  It does make it illegal, at least when there is a nanny state involved (as there usually is).

If challenging that idea ("breaking the law [is] immoral by definition") interests you, visit voluntaryist.com or (if you want resources that are out of my control - I'm the webmaster for voluntaryist.com), just google immoral illegal different.

And I just read your post about the mentality - you're absolutely right, and that is a big problem.  Once people see that illegal is often NOT immoral, they kind of lose their conscience until they "eat of the tree of knowledge" (which means to re-grow their own conscience).  That is the result of having a nanny state.   As Nietzsche says, religion (statism is also a religion) tends to replace the self (that's you - your own conscience) with a Godhead (or a legal system).  It's our job to undo that damage.

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April 30, 2013, 06:20:28 PM
 #134

kjj, Steve doesn't need people being exasperated.  He just needs some explanation...

Heh, I had just hoped to point out the contradiction so that he could examine it for himself.  My confusion was rhetorical, rather than actual.

Once you see it for yourself, it becomes obvious that following law is only moral when the law is moral.  From there, you can divide out the middle step and see that on one side you have (moral = moral) and on the other side you have (law = law), with no fundamental connection between the two.  Having laws that are moral is an ideal that we must strive for.

Ghandi and MLK both wrote fairly well on the struggle to make law moral.  Letter from a Birmingham Jail is an excellent read on the topic.

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April 30, 2013, 09:31:41 PM
 #135

Not even one joke about the taint. How this forum has changed. It is indeed the difference between immoral and illegal, depending on where you live.   XD

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May 01, 2013, 01:38:13 AM
 #136

There's nothing special about laws; they are just opinions. The only difference between your opinions and The Law, is the people uttering those opinions will (have other people) shoot you for disagreeing with them.
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May 01, 2013, 01:59:07 AM
 #137

There's nothing special about laws; they are just opinions. The only difference between your opinions and The Law, is the people uttering those opinions will (have other people) shoot you for disagreeing with them.

Some people would consider that a rather large difference.
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May 01, 2013, 02:33:10 AM
 #138

Some people would consider that a rather large difference.
Opinions are just opinions. They all have exactly the same validity.

The difference you are talking about is not inherent to the opinions; it is a difference in the people who state them. Some people are willing to use force to coerce everyone else into obeying their opinions, and other people are not. That is the difference.
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May 01, 2013, 02:58:45 AM
 #139

Some people would consider that a rather large difference.
Opinions are just opinions. They all have exactly the same validity.

The difference you are talking about is not inherent to the opinions; it is a difference in the people who state them. Some people are willing to use force to coerce everyone else into obeying their opinions, and other people are not. That is the difference.

Okay.  I have an opinion that killing me is a bad idea and is against the law.  I'm willing to use force to "coerce" anyone who doesn't believe that.  Wow, I'm a monster!
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May 01, 2013, 03:29:21 AM
 #140

Not even one joke about the taint. How this forum has changed. It is indeed the difference between immoral and illegal, depending on where you live.   XD

Considering the mix of this forum it would be better to call it the gooch. I'm not really concerned about using coins with taint. After all who could possibly be against coins with a chin rest?  Wink

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May 01, 2013, 04:30:41 AM
 #141

Admittedly I entered this thread thinking it was about something different.

Carry on.
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May 01, 2013, 04:38:11 AM
 #142


well, i say use the taint if you want! it is not for us to impose our sexual preferences on others.

besides you naysayers shouldnt be so narrowminded. have u ever tried letting a girl lick the taint? it feels really good!
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May 01, 2013, 08:30:14 AM
 #143

8 pages of this and most of it is lost in the small details instead of the big picture, which is why this thread might have been created.

Why are we focusing on the effect, instead of the cause? What is the intention of this thread? To prevent stolen coins from being effectively used, right?

Why aren't we focusing on how to prevent thefts, period? Isn't that really the goal?

Instead of talking about a system that isn't workable based on fungibility, shouldn't we be talking about a way to implement a system that uses escrow and trust? Or some sort of way to prevent theft?

Let's stop focusing on the effect, and more so on the causes.

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May 01, 2013, 08:34:10 AM
 #144

strongly disagree with OP
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May 01, 2013, 09:11:02 AM
 #145

You introducing a system that imposes a form of taint does nothing to prevent theft but does make using Bitcoin a hassle for those who are innocent.

Therefore I do not support this and will vigorously reject any movement towards this initiative and any like it.
+1
A tainting system could be used to deanonymize all bitcoin owner. Anybody could claim that bitcoins from an address were stolen from him and now all tainted bitcoin owner would need to authorize themselves and reveal all their transactions to the police otherwise their bitcoins would be blocked. That would lead to subsequent malicious accusations and the authorities would feel legitimized to seize the half of the bitcoin supply worldwide. Finally bitcoin would crash.

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May 01, 2013, 10:22:04 PM
 #146

You introducing a system that imposes a form of taint does nothing to prevent theft but does make using Bitcoin a hassle for those who are innocent.

Therefore I do not support this and will vigorously reject any movement towards this initiative and any like it.
+1
A tainting system could be used to deanonymize all bitcoin owner. Anybody could claim that bitcoins from an address were stolen from him and now all tainted bitcoin owner would need to authorize themselves and reveal all their transactions to the police otherwise their bitcoins would be blocked. That would lead to subsequent malicious accusations and the authorities would feel legitimized to seize the half of the bitcoin supply worldwide. Finally bitcoin would crash.

Precisely, it is a systemic vulnerability ... call it the "taint attack".

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