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Ask HN: Where are the 750k Bitcoins lost by Mt. Gox?

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Re: Ask HN: Where are the 750k Bitcoins lost by Mt. Gox?

#71

Post by the_watcher »

pjc50 wrote: post #34
hartator wrote: post #8

Earlier quoted context omitted.

I wouldn't be that pessismistic. If people manage to identify people behind the blockchains, I strongly suppose that law enforcements, depending on countries where the theift physically is, can force the thieft to give it back without any modifications to existing laws. I think we can catch him when he is going to want to laundry his bitcoins.

The community really needs to choose one of two messages: a) Bitcoin is pseudonymous enough that you can safely buy drugs with it b) Large thefts of bitcoin can be traced; it's not pseudonymous enough for massive frauds

Those two messages are not incompatible. It could be pseudonymous enough to buy drugs with it safely because the resources required to actually unravel identities is so much greater than the value of catching the drug purchaser (this assumes there is any value of catching the purchaser over the seller for purposes of argument).

At the same time, the value of solving large thefts like this makes expending substantial resources to solve it much more reasonable.

It's like stealing someone's iPhone with a ski mask on while a camera catches you vs. robbing a bank with a ski mask on with a camera catching you. Both thefts begin with the same amount of evidence, but the latter is infinitely more likely to have resources devoted to it.

Re: Ask HN: Where are the 750k Bitcoins lost by Mt. Gox?

#72

Post by pera »

zbowling wrote: post #32
bachback wrote: post #11

Earlier quoted context omitted.

5) they were stolen

that is #2

not exactly the same, one bad actor owning that amount of bitcoins would be scary: for example, this person could first trade otc one fraction after mixing, second talk with some entity that hates bitcoin (say jpmorgan) and tell them that you can sell the rest in the open market (on every big exchange) sending the price to 0 (literally), get profits and powerful new friends from doing this.

The situation doesn't looks good.

Re: Ask HN: Where are the 750k Bitcoins lost by Mt. Gox?

#73

Post by mars »

deweller wrote: post #28

In November of 2011 Mt. Gox demonstrated control of 500k BTC. I followed the 500,000 BTC for a bit beginning at https://blockchain.info/tx/b269bf1b82dae8a61f7f91dbf7a9d807e... . The coins move around and small amounts are sent away, but the majority ends up back in Mt. Gox's main (hot) wallet. This repeats a few times until the majority is paid back to the main Mt.Gox address. Here is the transaction where it starts…

that's common practice to anonymize bitcoins. google 'bitcoin tumbling service'.

Re: Ask HN: Where are the 750k Bitcoins lost by Mt. Gox?

#74

Post by the_watcher »

Since the story seems to be that this has been going on for years without anyone investigating, I'd guess that most of them are long since laundered and distributed between various innocent bystanders. Even if we could trace every single uBTC to it's current location, the percentage actually held by those responsible has got to be very small.

Re: Ask HN: Where are the 750k Bitcoins lost by Mt. Gox?

#75

Post by deletes »

pjc50 wrote: post #34
hartator wrote: post #8

Earlier quoted context omitted.

I wouldn't be that pessismistic. If people manage to identify people behind the blockchains, I strongly suppose that law enforcements, depending on countries where the theift physically is, can force the thieft to give it back without any modifications to existing laws. I think we can catch him when he is going to want to laundry his bitcoins.

The community really needs to choose one of two messages: a) Bitcoin is pseudonymous enough that you can safely buy drugs with it b) Large thefts of bitcoin can be traced; it's not pseudonymous enough for massive frauds

Those two options are not mutually exclusive.

If you use it correctly, then bitcoin itself is anonymous.

Re: Ask HN: Where are the 750k Bitcoins lost by Mt. Gox?

#76

Post by [deleted] »

webkike wrote: post #64
chevreuil wrote: post #48

Earlier quoted context omitted.

I'm a bit new to bitcoins, but is it technically possible for the bitcoins community as a whole to make a blacklist of bitcoins addresses and "ban" the stolen bitcoins ? Such blacklist would daunt robbers and enforce public trust in bitcoins.

Absolutely impossible. One of the major positives of bitcoin is that accounts cannot be frozen by any authority.

[deleted]

Re: Ask HN: Where are the 750k Bitcoins lost by Mt. Gox?

#77

Post by loceng »

d0ugie wrote: post #49
loceng wrote: post #21

Earlier quoted context omitted.

This is the issue. It can become a never-ending wild-goose chase. The thieves can continue to move the funds around until they're no longer tracked, or far enough ahead that from the trackers (assuming there's any enforcement or penalties or laws relating to accepting stolen Bitcoin - which there aren't currently) or just spend them if they're not being tracked or if there's no enforcement in place. The thieves will…

Wouldn't, in this high profile clustereff, somehow tracking down those bitcoins cause bitcoin in general more harm than good? Would it not highlight that one way or another, either by fault of bitcoin or human error, that like Tor it is not bulletproof in terms of anonymity and susceptibility to being taken back from someone, whether that someone is a good or bad guy?

Taken back? Finding a person is one thing - you need a lot of resources to track a person down - then trying to find where they may have hidden the keys needed to use the Bitcoin is another. People who have stolen millions of real dollars are still able to just hide the cash or money in off-shore accounts. Similar problems exist, though it doesn't start off anonymously. It's not really good or bad, it just is. We need to manage for best case scenario, and structure systems to provide best case scenarios. Controlled or rather fully-manageable ecosystems are the best, though they have the ability to be badly managed and through political lobbying, etc. cause a whole series of problems in a society.

Re: Ask HN: Where are the 750k Bitcoins lost by Mt. Gox?

#78

Post by rsiqueira »

jackgavigan wrote: post #58
deweller wrote: post #28

In November of 2011 Mt. Gox demonstrated control of 500k BTC. I followed the 500,000 BTC for a bit beginning at https://blockchain.info/tx/b269bf1b82dae8a61f7f91dbf7a9d807e... . The coins move around and small amounts are sent away, but the majority ends up back in Mt. Gox's main (hot) wallet. This repeats a few times until the majority is paid back to the main Mt.Gox address. Here is the transaction where it starts…

> Why take 429k and split it into many addresses each containing less than 1,000 BTC each? Ever heard the adage "Don't put all your eggs in one basket"? It's possible that MtGox used to operate everything from a single, large wallet but decided to split it up into lots of smaller wallets, to avoid the risk of suffering a single, catastrophic compromise.

When following the splits-in-2 of this transaction, many accounts still have about 1000 BTC in their final balance according to blockchain. E.g: 1BoGw97oS9L2mU8HTQqpm7yxC72H4LCm6i (Final Balance: 1,000.35 BTC). The question is: who may be the owner of those large amounts of of about 1000 btc? If MtGox did all those splits in 2 smaller accounts, then MtGox could still be the owner?

Re: Ask HN: Where are the 750k Bitcoins lost by Mt. Gox?

#79

Post by marcusramberg »

jackgavigan wrote: post #58
deweller wrote: post #28

In November of 2011 Mt. Gox demonstrated control of 500k BTC. I followed the 500,000 BTC for a bit beginning at https://blockchain.info/tx/b269bf1b82dae8a61f7f91dbf7a9d807e... . The coins move around and small amounts are sent away, but the majority ends up back in Mt. Gox's main (hot) wallet. This repeats a few times until the majority is paid back to the main Mt.Gox address. Here is the transaction where it starts…

> Why take 429k and split it into many addresses each containing less than 1,000 BTC each? Ever heard the adage "Don't put all your eggs in one basket"? It's possible that MtGox used to operate everything from a single, large wallet but decided to split it up into lots of smaller wallets, to avoid the risk of suffering a single, catastrophic compromise.

Yeah, that worked out well.

Re: Ask HN: Where are the 750k Bitcoins lost by Mt. Gox?

#80

Post by kordless »

loceng wrote: post #21
bushido wrote: post #6

With the possibility of getting down voted into oblivion. The BTC lost/stolen are all available within blockchain/public ledger. Depending on who stole them, it would probably be distributed within multiple very smaller transaction. It my be traceable, but likely unrecoverable, because this is a feature of Bitcoin. In other words authorities and forensic enthusiasts can find the BTC but they are most likely lost at t…

This is the issue. It can become a never-ending wild-goose chase. The thieves can continue to move the funds around until they're no longer tracked, or far enough ahead that from the trackers (assuming there's any enforcement or penalties or laws relating to accepting stolen Bitcoin - which there aren't currently) or just spend them if they're not being tracked or if there's no enforcement in place. The thieves will…

Eventually all addresses will contain coin from all other addresses, if they are spent. It's the Kevin Bacon rating for currency.

In the short term, referencing Blockchain transaction over a given period of time, a destination address could be assigned a lower karma value for having a relationship with a bad actor address. The karma could be measured in amounts taken from other bad karma addresses.

While your wallet may contain trace amounts of bad karma money, it eventually gets diluted over time. Maybe we could utilize a days destroyed karma as well.

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