Decentralized Security in the Blockchain

[Delek]

I was thinking yesterday, this address:
https://blockchain.info/address/1L2JsXHPMYuAa9ugvHGLwkdstCPUDemNCf

We all know that it belongs to the Bitstamp hacker, a thief; why then, the whole network, knowing that Bitcoins are coming from a hack, can't do anything about it? Why if we all agree, the network, can't do anything against this injustice?

Crazy idea, but what if we all start to migrate to new anti-thief-nodes where, while analyzing the blockchain during a transaction and find that this address was involved, automatically reject the transfers?
Does not this would eliminate the profit of the hacker?, this will not eliminate the urge to steal bitcoins, and still maintain a decentralized, anti theft system?

I know that this will only works for BIG hacks, that the entire network knows about, but this could be done somehow or I'm missing something?

Thanks in advance.

[1714029377]

1714029377

[1714029377]

1714029377

[1714029377]

1714029377

[1714029377]

1714029377

[1714029377]

1714029377

[gmaxwell]

For all I "know"- in a strong sense-- Bitstamp sold those coins to an innocent third party.  (Or, if implicating Bitstamp is indeed too crazy for you: The hacker could have directly sold them to an unaware third party; and half the coins flowing there could actually be unrelated to Bitstamp.)

Be mindful of what you know, vs what you think you know.  Part of the value of the system is that it minimizes importing human judgement into its operation.  If it does that then there is no clean boundary, and risk analysis is much more costly.

[DannyHamilton]

I would like to announce that I was hacked and that exactly 1.89283702 bitcoins were stolen from me.  I've traced these bitcoins from the addresses where they were stolen to: 172YkAaaWjKucB9nHnXdYyYwJ7V7fQUPPa and they are still there right now.

"We all know that it belongs to a hacker, a thief; why then, the whole network, knowing that Bitcoins are coming from a hack, can't do anything about it? Why if we all agree, the network, can't do anything against this injustice?"

Crazy idea, but what if we all start to migrate to new anti-thief-nodes where, while analyzing the blockchain during a transaction and find that this address was involved, automatically reject the transfers?

Thanks in advance.


Edit: For those who don't see what I'm doing here, I have not actually been hacked, and those bitcoins haven't actually been stolen.  The point is that anyone can make such a claim, and it is extremely difficulty to prove that such a claim is false.  The question I'm posing is: "How does Delek feel about actually giving this power to the users of Bitcoin?"

[Melbustus]

^ What Greg said.

Further, doing some sort of coin-blocking collective action like that starts bitcoin down a nasty road of eliminating its "fungibility"; ie, a core property of any good money which means that one unit is just as good as another. Start going down that road, and you introduce all kinds of friction into the system which makes it less workable for everyone longrun.

[calci]

I was thinking yesterday, this address:
https://blockchain.info/address/1L2JsXHPMYuAa9ugvHGLwkdstCPUDemNCf

We all know that it belongs to the Bitstamp hacker, a thief; why then, the whole network, knowing that Bitcoins are coming from a hack, can't do anything about it? Why if we all agree, the network, can't do anything against this injustice?

Crazy idea, but what if we all start to migrate to new anti-thief-nodes where, while analyzing the blockchain during a transaction and find that this address was involved, automatically reject the transfers?
Does not this would eliminate the profit of the hacker?, this will not eliminate the urge to steal bitcoins, and still maintain a decentralized, anti theft system?

I know that this will only works for BIG hacks, that the entire network knows about, but this could be done somehow or I'm missing something?

Thanks in advance.

Maybe if satoshi was here, we could ask him to create a hack to be able to remove coins from any address. That way we could have punished these hackers

[goosoodude]

We all know that it belongs to the Bitstamp hacker, a thief; why then, the whole network, knowing that Bitcoins are coming from a hack, can't do anything about it? Why if we all agree, the network, can't do anything against this injustice?

Who are 'all'? How do we 'know' beyond any shadow of doubt?

Its easy to think that cases like this should be handled like as you suggested, but where do you stop? Its supposed to be trustless, you are putting in actors you have to trust.

[erre]

We all know that it belongs to the Bitstamp hacker, a thief; why then, the whole network, knowing that Bitcoins are coming from a hack, can't do anything about it? Why if we all agree, the network, can't do anything against this injustice?

Who are 'all'? How do we 'know' beyond any shadow of doubt?

Its easy to think that cases like this should be handled like as you suggested, but where do you stop? Its supposed to be trustless, you are putting in actors you have to trust.

There is general net consensus about that address storing stolen coins, can't a transaction be reversed via a fork or something?

I know the coins are not still Int his address, but just as an example...

[cr1776]

I was thinking yesterday, this address:
https://blockchain.info/address/1L2JsXHPMYuAa9ugvHGLwkdstCPUDemNCf

We all know that it belongs to the Bitstamp hacker, a thief; why then, the whole network, knowing that Bitcoins are coming from a hack, can't do anything about it? Why if we all agree, the network, can't do anything against this injustice?

Crazy idea, but what if we all start to migrate to new anti-thief-nodes where, while analyzing the blockchain during a transaction and find that this address was involved, automatically reject the transfers?
Does not this would eliminate the profit of the hacker?, this will not eliminate the urge to steal bitcoins, and still maintain a decentralized, anti theft system?

I know that this will only works for BIG hacks, that the entire network knows about, but this could be done somehow or I'm missing something?

Thanks in advance.

Maybe if satoshi was here, we could ask him to create a hack to be able to remove coins from any address. That way we could have punished these hackers

Why would we want to have him do that?  Not that he could unless he forked bitcoin into bitcoin-taint.

I have to disagree with Danny though, the coins at address 172YkAaaWjKucB9nHnXdYyYwJ7V7fQUPPa  were hacked from me so we should block them and return them to my address.  EVERYBODY knows that 172YkAaaWjKucB9nHnXdYyYwJ7V7fQUPPa has stolen coins now.

 

[goosoodude]

There is general net consensus about that address storing stolen coins, can't a transaction be reversed via a fork or something?

How are you going to find the 'general net consensus'? Think about it, its not possible.

Technically its a simple matter of hard forking and making it unspendable.

[DannyHamilton]

There is general net consensus about that address storing stolen coins,

No. There isn't.

can't a transaction be reversed via a fork or something?

Not without the likely destruction of Bitcoin.

I know the coins are not still Int his address, but just as an example...

It's a very bad idea.  There are several reasons why it is a very bad idea.

[MrTeal]

There is general net consensus about that address storing stolen coins, can't a transaction be reversed via a fork or something?

How are you going to find the 'general net consensus'? Think about it, its not possible.

Technically its a simple matter of hard forking and making it unspendable.

It's easy, just 50%+1.
It would be really useful too. If we could do this, we could use it to remove coins that get used to fund terrorists. Or bad people that buy drugs. Or people that have their gains from bad things like crime. There's lots of things that more than 50% of people are against that we could blacklist. Support gay marriage? Gone. Abortion? Gone. Once we confiscate the coins of everyone we don't like, we can use bitcoin like the proper upstanding currency it was meant to be.

[cr1776]

We all know that it belongs to the Bitstamp hacker, a thief; why then, the whole network, knowing that Bitcoins are coming from a hack, can't do anything about it? Why if we all agree, the network, can't do anything against this injustice?

Who are 'all'? How do we 'know' beyond any shadow of doubt?

Its easy to think that cases like this should be handled like as you suggested, but where do you stop? Its supposed to be trustless, you are putting in actors you have to trust.

There is general net consensus about that address storing stolen coins, can't a transaction be reversed via a fork or something?

I know the coins are not still Int his address, but just as an example...

If we do this: Who decides what consensus is?  How do you know that this is the consensus?  Is it 51%?  60%? 75%? 90%? 99.99%?  Is it by person?  How do you track people?  By address? (I can create 10 billion addresses to vote?)  By number of "coins"?  Can the hacker vote?  

What if a government decided that we should block X coins after that?  Which government should be allowed to block them?  UK, China, Russia, US, Mexico, North K, Cuba, which?

As was said, be careful what you think is the "net consensus" because like the "consensus" about who the Boston bombers were, it is often wrong.

Do a search for fungibility and the problems with it and why it is a bad idea.

:-)

[erre]

There is general net consensus about that address storing stolen coins,

No. There isn't.

can't a transaction be reversed via a fork or something?

Not without the likely destruction of Bitcoin.

I know the coins are not still Int his address, but just as an example...

It's a very bad idea.  There are several reasons why it is a very bad idea.

Sorry, I was talking about the " old" empty address, I didn't checked it
I know that the whole bitcoin concept would be a non-sense if the blockchain is altered....but if the majority of miners agrees about changing it isn't it possible? Beside this being a bad idea, wich I do not doubt it is...

[DannyHamilton]

How are you going to find the 'general net consensus'? Think about it, its not possible.
- snip -

It's easy, just 50%+1.

That is NOT a consensus.  That is a simple majority.

Bitcoin is a consensus system.  50% + 1 would simple result in a forked blockchain, and would likely destroy both forks.

It would be really useful too.

Useful for any oppressive organization that wants to gain control of the funds of others.

If we could do this, we could use it to remove coins that get used to fund terrorists. Or bad people that buy drugs. Or people that have their gains from bad things like crime. There's lots of things that more than 50% of people are against that we could blacklist. Support gay marriage? Gone. Abortion? Gone. Once we confiscate the coins of everyone we don't like, we can use bitcoin like the proper upstanding currency it was meant to be.

Ah, sorry, I see the sarcasm/satire now.  Didn't catch that at first.

[goosoodude]

I know that the whole bitcoin concept would be a non-sense if the blockchain is altered....but if the majority of miners agrees about changing it isn't is possible? Beside this being a bad idea, wich I do not doubt it is...

The transaction cant be reversed since so many blcoks have passed. It was possible if the majority acted fast and rolled back to the block prior to that transaction and all the miners refused the transaction.

Now a hard fork can be submitted which can do anything including making that address unspendable. Thats the easy part. The impossible part is to get the miners as well as the merchants and exchanges to switch.

[goosoodude]

How are you going to find the 'general net consensus'? Think about it, its not possible.
- snip -

It's easy, just 50%+1.

That is NOT a consensus.  That is a simple majority.

Bitcoin is a consensus system.  50% + 1 would simple result in a forked blockchain, and would likely destroy both forks.

Everyone will eventually move to the bigger chain, it will not destroy it.

It will make it dangerous and kill any trust in the blockchain. With the mining centralisation it means a few miners can decide anytime to snatch the wealth of anybody they dislike. Now, that will kill it.

[DannyHamilton]

- snip -
I know that the whole bitcoin concept would be a non-sense if the blockchain is altered....but if the majority of miners agrees about changing it isn't it possible? Beside this being a bad idea, wich I do not doubt it is...

No.

Bitcoin is not a "majority rules" system.  It's a consensus system.  If 49% of the miners agree to accept blocks that contain transactions that include that address, and 51% or the miners reject those blocks, the blockchain will fork.  The miners that choose to accept the blocks will modify their code to ignore the longer chain that is rejecting the blocks so that they don't loose their block rewards.  There will be two separate alt-coins: "fungible bitcoin" and "blacklist bitcoin".  Users will need to distinguish which "coin" they are agreeing to send or receive.  The whole system will likely break down.

Everyone will eventually move to the bigger chain, it will not destroy it.

No. Not everybody.  Mr. Teal said 50% + 1.

If EVERYBODY (all miners, all users, all merchants) agree to accept the "blacklist bitcoin", then that is "consensus" and would work.  However, you will likely find it completely impossible to convince EVERYBODY to use the "blacklist bitcoin".

If some people insist on using the "fungible bitcoin", then those people will make sure that they are running software that rejects the "bigger chain" from the "blacklist bitcoin".  This will fork the blockchain into two alt-coins.

It will make it dangerous and kill any trust in the blockchain.

Correct.

[erre]

- snip -
I know that the whole bitcoin concept would be a non-sense if the blockchain is altered....but if the majority of miners agrees about changing it isn't it possible? Beside this being a bad idea, wich I do not doubt it is...

No.

Bitcoin is not a "majority rules" system.  It's a consensus system.  If 49% of the miners agree to accept blocks that contain transactions that include that address, and 51% or the miners reject those blocks, the blockchain will fork.  The miners that choose to accept the blocks will modify their code to ignore the longer chain that is rejecting the blocks so that they don't loose their block rewards.  There will be two separate alt-coins: "fungible bitcoin" and "blacklist bitcoin".  Users will need to distinguish which "coin" they are agreeing to send or receive.  The whole system will likely break down.

I don't think that forking bitcoin in " clean coins" and " free coins"  would be a good idea for many reasons, but I don't think this would destroy bitcoin at all....just some miners switching to an alt-coin

[DannyHamilton]

I don't think that forking bitcoin in " clean coins" and " free coins"  would be a good idea for many reasons, but I don't think this would destroy bitcoin at all....just some miners switching to an alt-coin

I suppose that depends on how big of a percentage the smaller community was, and how hard each community pushed to be considered the "official bitcoin".

[erre]

I don't think that forking bitcoin in " clean coins" and " free coins"  would be a good idea for many reasons, but I don't think this would destroy bitcoin at all....just some miners switching to an alt-coin

I suppose that depends on how big of a percentage the smaller community was, and how hard each community pushed to be considered the "official bitcoin".

I would call " bitcoin"  the coin with the majority  (50%+1) of the hashpower. That's one of the reasons why I hate so much centralization, I know that hashes are not people, but name does not matter... I will prefer to use the original blockchain independently of the coin name