Quote from: musician on July 12, 2014, 08:58:38 PM

Quote from: InwardContour on July 12, 2014, 08:31:59 PM

Quote from: BittBurger on July 12, 2014, 08:19:09 PM

Why would this affect fungibility?

The OP is not talking about a central authority doing anything that would stop the Bitcoin economy from functioning as normal.

From what I am reading - he's just talking about a notification and monitoring system.

And you dont need blacklisted or marked coins to do it either. Just the blockchain.

The thief tries to cash out and the bank is notified that its stolen funds, simply by following the trail of public transactions on the blockchain.

Nothing more than passive monitoring and alerts.

The bank doesn't "freeze" the coins in some strange, abnormal way. They simply don't let the thief have them. The coins are still completely viable and would simply be held in an account and returned to the victim.

Im not seeing what is wrong with this idea, except for the risk of "mixers" and the like.

But a company providing this service will no doubt recover people's money quite often. There will be "smarter" thieves who can figure ways around it, but just like with everything else, a large portion of thefts are done by idiots.

The OP says that once the stolen coins are sent to a merchant/exchange they would be frozen. This would imply that this company would act as a central authority (or simply act as an authority) that would freeze "stolen" coins

Obviously what I meant is that once is clear the victim is really the victim (if that makes any sense) the bitcoins would be returned to the victim.

But even if the victim really had their coins stolen it would not necessarily mean that the person who sent the coins to the exchange is the thief