Hacker News Reader

How many people have committed such egregious crimes using blockchains that it is literally worse to spend your entire life in jail than it is to give up your Bitcoins? That scenario you've presented makes absolutely no sense to me.

But anyway, it's still entirely wrong because they can still just catch you using traditional means. Like catching you on tape admitting you stole the Bitcoins, or getting a video of you doing it, or getting credible witnesses to say that you did it. Or similarly, to retrieve the stolen coins just get a video of your keyboard while you type the pass phrase to the wallet, or just liquidate the rest of your assets into dollars and pay back the victim that way... Like the whole thing just makes no sense. Even if it did actually work it would still be terrible because the system you describe means that if you get your bitcoins stolen and you catch the thief and he admits he did it and then intentionally goes to jail to avoid having to give the tokens back so they just sit there unused in the wallet just to spite you... you can literally never get them back. Why would anyone actually want that??? I am honestly trying not to make this so outlandish but this is entirely what you just described. It's completely ridiculous.

The only thing this accomplishes is if you are trying to destroy money and make someone suffer by taking destructive actions... but like, if you are really an evil and petty criminal person you can also just do that with anything else? Like, rob them at gunpoint and set their cash on fire? Or slash their car tires? No one needs Bitcoins just to be an asshole, you can see that every day on this planet...

I don't think this works because even if a transaction is irreversible, the court could still impose monetary damages, if it has jurisdiction. Or some other penalty.

And it seems hard to keep US machines (or any other country) out of a permissionless distributed algorithm? Effectively, any country could claim jurisdiction pretty easily, if it wanted, by adding a machine to the network.

I agree on the first point. I think this is fully compatible with what I said too.

> but they can't force you to decrypt it if the key is lost or you don't give in.

A very US-centric view is it not? Many places can force you to decrypt something by law. In fact the US does on entry to the country and can refuse entry if you do not comply.

> there ain't shit they can do to actually enforce that demand.

Watch forks become more commonplace and "official" forks being recognised and non-official forks being barred from use in any legitimate transactions. The courts will have the power to force blockchains to reverse transactions or other fraud this way - at a technical level still quite difficult but if it becomes law then solutions to make it easier will be created. Perhaps to cherry pick transactions just like you can cherry pick git commits.

> Courts forcing forks

I wouldn’t be so sure about that, unless you are equally convicted in that court’s jurisdiction’s conviction to outright ban the whole chain from use - because as soon as two courts mandate two different forks, one of them will be banning a chain that the rest of the globe has consensus on. It’s a lot like banning a whole region from sending mail because one person in that region got caught mailing drugs.

Right - but nothing is stopping them from making that law. Countries aren't simply going to adhere to a digital currencies protocol or allow it to avoid regulation because otherwise it goes against the "community spirit".

Here we are talking about the hypothetical situation of the U.S claiming complete jurisdiction of Ethereum. The U.S could make whatever laws it likes around the usage of Ethereum, legislate that all nodes have to adhere to these laws and job is done. The rest of the world can say "lolbye" and continue using it like nothing has happened, but in the U.S they would likely have to fork and create a new chain, and those who want to use it legally in the U.S would also have to use this new U.S-regulated chain. From there they can then implement processes to reverse transactions, introduce identification requirements etc.

Yeah, if larger jurisdictions behaved as such the issues I described are easier to avoid. I don’t think the regulatory bodies have an attitude towards crypto that would enable that large scale attempt at control, but we can see how it’s possible.

When your protocol’s primary use case relies on denominating centralized currency, it makes these types of network attacks far, far more effective when the attacker controls that currency. People have completely forgotten about any use case of a non-excludable censorship resistant network that isn’t tokens, but I digress.

> A very US-centric view is it not? Many places can force you to decrypt something by law. In fact the US does on entry to the country and can refuse entry if you do not comply.

I must not be explaining well, because you're saying the same thing I am. There can be consequences for refusing to comply, ranging from being turned away at the border to being thrown in jail, all the way to, in some countries, torture and execution. That's how the government gets you to comply.

But--here's the critical point--your compliance is required to actually decrypt the email/drive/whatever. This is unlike, say, a cloud hosting provider where the government can just show up with a warrant or probable cause and get the data without your involvement. With strong encryption your data is protected by math, and the math insures that the government or whoever has to go through you to get it. No exceptions. They might throw you in prison for the rest of your life, or threaten to kill your family to get you to give up the encryption keys. But they do need to get you to comply to get access to the decrypted data.

Likewise with blockchain technology. A court or law enforcement agency can't just appropriate stolen bitcoin. They have to either (1) recover the keys, or (2) have the thief pay an equivalent amount in reparations. What I'm saying is that they can't just show up at the Bank of Bitcoin with a warrant and request a stop payment, recovering the funds that way as they're used to with the legacy financial system. The blockchain is irreversible even in the face of the law, for reasons rooted either in physics (proof-of-work) or math (staking).

> The courts will have the power to force blockchains to reverse transactions or other fraud this way - at a technical level still quite difficult but if it becomes law then solutions to make it easier will be created.

No, at a technical level it is impossible. You could no more do this than legislate that pi=3 or raise the speed of light.

Completely see where you are coming from now - absolutely agree.

On your second point - where I am coming from is that there is nothing stopping countries from creating laws which introduce these powers and outlaw methods to avoid the new legislation. No it doesn't work with the current architecture. But we absolutely can end up in a situation where there is a U.S Ethereum chain where all nodes are legally required to follow updates/forks to the chain as they occur, caused by various court orders to reverse transactions etc. At this point the consensus can go whichever the government likes because those operating the nodes would want to be participating in the current legal chain.

> At this point the consensus can go whichever the government likes because those operating the nodes would want to be participating in the current legal chain.

I think this is an unwarranted assumption on your part. Capital would flee the US-controlled fork, causing the price of US-ETH tokens to plummet and staking to centralize. At that point there'd be absolutely no reason for US-ETH to exist: you could operate the same system more efficiently without a blockchain, and by isolating the system you would have lost the main, if not only advantage that blockchain systems have today: low-friction international transactions. Corporate entities which stick with the US-ETH split would find their revenues dry up very fast. I guarantee you that those which survive would be looking for ways to go multinational in their corporate structure so they can continue supporting ETH for non-US participants, and focus all of their efforts there. All this would do is isolate and exclude the US from participating in blockchain innovation.