_ Here's how it works: Anybody can ask a question Anybody can answer The best answers are voted up and rise to the top up vote 2 down vote favorite I have to admit I don't fully understand the Bitcoin protocol.But from what I do understand, transactions are traceable -- it is the main reason decentralization works: the world can watch and confirm that a transaction is legit.Why then can't we observe when a thief tries to cash out or otherwise exchange a Bitcoin that we know to have been stolen?As Robert Wagner writes: 1 out of every 14 Bitcoins is now stolen property, and there are plenty of laws governing stolen property.What am I missing here?With so many Bitcoins identified as "stolen," why can't they be traced, recovered and returned to their rightful owner?wallet legal traceability up vote 2 down vote The answer to the first question about why stolen bitcoins can not be easily traced like regular bitcoin transactions.

This is because the exchanges like btc-e magically move the coins so that tracing becomes impossible.For example yesterday I moved 15 dollars worth of bitcoins in to btc-e and traded it to litecoins, but the address where I sent those coins still today show the coins are unspent.The answer to the second question about why stolen bitcoins can not be easily recovered is about the bitcoin protocol itself.We can not magically revert transactions without the coin holders.Recovering stolen coins would require finding the people who are holding the coins, but this is almost impossible because of the anonymity of wallet owners.These two features allow easy protection against being caught which makes cryptocoins good target for Internet theft.up vote 1 down vote Transactions can occur very quickly and the stolen coins can exchange hands, split up and be mixed with other coins multiple times before the theft is discovered.Many innocent parties (whether it is merchants, exchanges or other individuals) could be affected.

Who is going to be holding the bag?up vote 1 down vote you can't trace stolen bitcoins.when you move the stolen bitcoins into exchange and say exchange into dogecoin or litecoin then exchange back to bitcoins then everything would screwed all up, it's untraceable.also exchange like btc-e or bter which are not base in the u.s so the u.s can't do anything or even try to close them.up vote 1 down vote Several great reasons: (1) off chain transactions do not have a public ledger (2) tumbling - repeatedly moving through different addresses quickly makes tracking difficult (3) fragmenting - your BTC gets broken up into tiny tiny pieces and spread around (4) TOR or similar IP hiding can cloak the owner of an address (5) questions of jurisdiction (6) questions of whether any crime was even committed Your Answer Sign up or log in Sign up using Google Sign up using Email and Password Post as a guest Name Email discard By posting your answer, you agree to the privacy policy and terms of service.tips bisnis bitcoin

Browse other questions tagged wallet legal traceability or ask your own question.Can a thief extract my bitcoins from a stolen Ledger Wallet?In case of physical theft of your Ledger Wallet, the cost and time to extract the keys by a lab analysis is staggering.It would take weeks to break in the smartcard, giving you ample time to move your bitcoins to a new safe place.If you need to import your backup in another wallet, please follow this guidebitcoin alma siteleriRecall that we introduced the Bitcoin Vault abstraction last week.bitcoin exchange moneypakThis new abstraction allows you to move the coins that you do not need immediately into a special kind of account called a vault.bitcoin will soarIf they are stolen from the vault, you get to use a recovery key to get them back from the hacker.ethereum miner eu

If the recovery key is also stolen, then you can convert the funds into mining fees, ensuring that the hacker does not benefit from the theft.Vaults do not affect fungibility or irreversibility of regular Bitcoin transactions; they solely improve your personal protection.(The paper has the details).We recently answered some questions from the press regarding vaults.The questions were quite interesting and insightful -- so much so that they can be used as an FAQ list.bitcoin litecoin namecoin dogecoinOur response did not go out in time to make it into the article, so here it is, a vault FAQ.Vaults do not affect fungibility at all, nor do they affect the irreversibility of regular transactions.Vaults are a personal defense mechanism: you take the coins that you want to protect, the coins that you want to keep in a cold wallet, and put them in a vault address that you create (call it V).In doing so, you give up the ability to spend them quickly in return for theft prevention.

When you want to spend the coins, you unvault them from V into your hot wallet (W).This operation takes time to complete -- it takes exactly as long as the unvaulting period you specified when you created your vault.Once the coins have arrived at W, you pay a merchant M from W. Only coins in your possession can be vaulted; coins cannot be vaulted retroactively; and they can only be unvaulted back to your possession.You can't trick someone into accepting a vault payment and then take your coins back!Merchants will readily detect that they are being paid with a vault payment, and will not accept such payments.So a vault user can only take the coins out of the vault into her own hot wallet, and then, after that unvaulting is complete, issue payments from the hot wallet to merchants.Consequently, the irreversibility of regular transactions remains untouched.Overall, the entire design revolves around adding a new feature for improving one's own security, without disturbing any of the rest of Bitcoin's properties.

Yes, we have the full vault functionality implemented.We plan to submit a pull request and a corresponding BIP.The changes required are incredibly modest: just a single new opcode that is easy to implement.Vaults are complementary to hardware security mechanisms such as Trezor hardware wallets.Note that it is not good practice to store a key solely in a Trezor, as it may be physically lost or damaged.Vaults are orthogonal to protections against key loss and should always be accompanied by backups/multisig strategies that protect against that.The keys should be replicated, and the replicas need to be protected -- the more replicas there are, the greater the attack surface.If the funds do not need to be spent immediately, such protection is best achieved with a vault.We think very highly of the Bitcoin core developers and the Bitcoin development process, which follows open source principles.At the moment, the maximum block size debate seems to have tied up many cycles over a very important, but ultimately short term, battle.

We hope the maximum block size debate can get settled quickly so we can all focus on more interesting developments that will go beyond the scalability question, such as how to expand Bitcoin's functionality and fulfill its promise of delivering a new kind of digital money with new capabilities.For years now, we have been watching people lose their coins to hackers.And it's just not their fault: our operating systems are nowhere near secure enough for highly valuable assets.Regular people cannot be expected to know and follow the incredibly complicated opsec procedures to maintain a bulletproof device.Worse, there is no help on the horizon.The Microsofts, Apples and Googles of the world are not going to be able to improve the state of client-side operating system security -- they have been trying for years, and what we have today is the best they've got: the computer security problem is just too hard.Vaults allow Bitcoin users to step around this problem.It's Bitcoin users' way of saying "ok, I realize that a determined hacker can get into my machines, that I might lose my key or I might have a temporary lapse, but I will be able to keep my coins despite occasional failures of this kind."