Re: Find missing bitcoins
@Onno
The first problem to overcome is what happens if these bitcoins have now been used to may legitimate payments? If I managed to covertly transfer a bitcoin from you to me (i.e. 'steal' it) and then donate that coin to a charity, from whom do you get the coin back?
Or, if I 'steal' 10 bitcoins, add them together with 90 other bitcoins I have and then spend those hundred bitcoins in 100 x 1 BTC transactions, which 10 bitcoins do you recover?
But, let's assume that you aren't talking about actually getting those coins back but the thief having to pay back the value stolen - presumably in the equivalent USD.
The question then becomes identifying the thief. This is the problem and it's built into Bitcoin by design - the ability to achieve near-perfect anonymity.
Bitcoin is a difficult concept to explain to people who don't already understand public key cryptography. Apologies if this either is unintelligible or I am teaching some proverbial egg-sucking.
Imagine the Bitcoin world like a giant room filled with locked boxes. Each box has two components of note - the box number (e.g. A1, C6, etc...) and the key to unlock it. Boxes and keys are 1:1 - each boxes has one and only one key that will open it and each key is only good for unlocking one specific box.
Bitcoins are stored in these boxes and any given person might have any number of them.
These boxes have a small slot in them (like a letterbox or vending machine coin slot) to allow bitcoins to be put into them without requiring the key. If you want to give someone money, you only need the box number. If you want to retrieve that money, you need the key to open it.
These boxes can be created at will by people and there is no record of who created what box. There is no security guard watching over them nor a ledger listing who owns the key to each box. They are secure because only the person with the key can open the box - they are (effectively) unpickable.
If I want to transfer a bitcoin to you, the process goes like this:
1. - You tell me the number of your box (E12)
2. - I use my key to open my box (A3) and put the money in E12.
3. - The transaction is recorded as 1BTC going from A3 to E12.
There is an important addition, however - boxes can be arbitrarily created and destroyed. Both sender and reciever can just use the same box for all their transactions but this is far from necessary. What would 'normally' happen is:
- You would create a new box each time you wished to receive a transaction and give me that number.
- After I had opened my box and transferred the bitcoin to you, I would destroy my box (it's empty now after all)
As creation of these boxes is anonymous and not controlled, maintained, authorised or recorded by any central authority, there is no intrinsic method to link a box to it's 'owner'. You might know from previous transactions that I owned box X71 but that says nothing about what other boxes I might own.
The only way to prove who owns a box in practice is to match it to a transaction that requires or records personal details.
For example, if I buy from an online store for delivery, I would have to provide a shipping address. The store would record the transaction and that box number (X71) would be tied to my name.
If the theft went R106(Mt. Gox) > X71(?) > V122(retailer) then you can get information from the retailer to find out who, logically, must own box X71.
Unfortunately, anyone capable of pulling off the theft in the first place can be presumed to be smarter than that.
Of note, as you can arbitrarily create boxes, there is nothing to stop you taking 10 bitcoins from one box and then transferring one each to 10 new boxes, then destroying the original one. If I have 1 BTC in box X71, I can create a new box, Y93 and transfer the 1 BTC into that. I can do that as many times as I want and the transaction will show as:
R106(Mt. Gox) > X71(?) > Y93(?) > Y8373(?) > . . . > Z522(?) > V122(retailer)
Now, you can match Z522 to a name and address via the retailer but that doesn't mean you can match all the previous points in the transaction. It may well be the same person but how can you tell?
Also, to be clear, the thing was stolen is the keys to those boxes. Once the thief has those keys, they can be used to transfer the bitcoins to any specified box.