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Comment by cflewis | Hacker News Reader

As someone who knows very little about the blockchain, I was wondering if the Bitcoins are "known"? Like, they have a hash or something? Can't they be then blacklisted from use somehow?

I thought the whole point of the blockchain was that all the transactions were all known?

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How would you get everyone to agree on the blacklisting? How would be enforced? What if some clients accept nodes containing 'blacklisted' addresses, and some don't? When if then a client that 'blacklists' addresses sees a block that contains a transaction whose inputs are 99% 'legit' coins and 1% 'blacklisted' coins? Should it honor it?

What you're really proposing is a hard fork, which is a morass of problems. And why should everyone suffer all this grief just because the security team on one exchange in Japan is staffed with people who don't know what they are doing?

Yes, bitcoin transactions are 'known' and are represented by a unique hash; however, It's impossible to 'reject' an incoming bitcoin transaction. Miners can implement custom software that can exclude blacklisted transactions from their list of mineable transactions, but requiring all miners to blacklist an address or transaction would require a hard fork.

The accounts on the NEM network (XEM was stolen, not Bitcoin) can be marked with a non-transferable asset. That was just automated and all known hacker addresses are now tainted.

Interesting - I'm unfamiliar with XEM, I presume the non-transferable mosaic (that were used to mark the accounts to which the stolen funds were transferred) is signed in some manner such that a copy couldn't be spoofed onto an arbitrary account?

Mosaics are a core feature of the platform. Think of it like an ERC20 token, but the creator of the token can impose fees (among other features). The fees are set to another token that the hacker doesn't/can't own - as such the account is stuck owning the asset.

So in a sense you never truly own your XEM tokens? The creator can change the rules ex post facto.

That's configurable. There's tokens where you want it to be centralized and able to change post creation (mutable) and then immutable ones.

Companies using NEM really like the mutable ones.

Is there a roadmap for weaning XEM off this centralized governance structure?

It is very difficult to blacklist coins with the current culture of Bitcoin.

If 1 person refuses to accept the coins, there are thousands and thousands of others who knowingly WILL. And an even larger group of people who aren't even going to be aware of your blacklist and will do so unknowingly.

In order to blacklist coins, it is not enough to just blacklist the 1 address. You have to black everyone who accepts those coins, and everyone who accepts coins from the people who accepted them and so on.

And at that point you have blacklisted the entire network.

You'd need consensus of the miners to do so.

Nothing to do with miners. It is all about exchanges.

Miners would be the correct level for such a thing.

By blocking a specific address, it would effectively freeze all the funds held by it, preventing them from being transferred to anyone, including exchanges.

This happened with Ethereum early on. It's the cause of the Ethereum Classic fork since many oppose violating immutability.

In addition, my understanding is that many cash exchanges will not accept funds that have previously been identified in major hacks because they could be forced to return the funds to their rightful owners in addition to the cost of compliance with law enforcement.

There are "privacy"-focused cryptocurrencies that do not have this characteristic, the most well known of which is Monero.

[I am not an expert, just a casual news consumer of the space]

Yes... all of the addresses involved should be known and can be blacklisted by major exchanges.

Still - the question is why was it even possible for a "hack" to score so much cryptocurrency? This is a legendary score on par with Mt Gox... they should be holding all currency not required for immediate trading liquidity in cold storage and rebalancing as needed.

Uh. Wasn't the whole goddamn point of blockchains "censorship resistance"? Now people are saying that we can just ban transactions from certain addresses?

You can't ban them, but you could put together a "blacklist" on tokens from a particular origin that exchanges could agree to honour. It wouldn't stop anyone from trying to sell their coins in other ways.

That's basically forming a government. Who decides what goes in the list? Who ensures they'll keep honest? Who watches the watchers? What recourse does a user have against arbitrary measures?

A government? It's a list. Until it collects taxes, has a monopoly on violence and provides basic services, a list is just... a list.

I just had a LISPy epiphany here! All that you mention are ultimately lists.

An elisphany! What is the human body if not a list of proteins? ;-)

What is the universe but a list of 'string's?

Knowing their history is good against faking the coins aka counterfeiting. If someone steals $50,000 from your bank account you may or may not ever see it again. Bitcoin will help you track it down to wherever it ends up, unlike your bank.

You can't fake (counterfeit) bitcoin...

That is what I just said.

They are known, but the point of a decentralized blockchain is that there is no central authority to 'blacklist' them.

Furthermore, there are methods by which bitcoins can be anonymized once obtained: look up 'bitcoin tumbler'.

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