Bitcoin Fraud/Recovery Protocol Proposals

Bitcoin Fraud/Recovery Protocol Proposals

Does Bitcoin plan to implement any Fraud/Loss Prevention in their protocol?

“Bitcoin” doesn’t plan anything. It’s a network of software nodes run by individual operators, who each decide whether or not they accept transactions as valid based on the transaction’s inclusion in the valid chain with the longest proof of work.

There is no “their.” Bitcoin doesn’t belong to anybody. If someone has a proposal to improve bitcoin they must publish the idea and attempt to have the overwhelming majority of bitcoin validators run software which incorporates the changes.

Maybe allowing nodes to create new/recover Bitcoins that were stolen? And expiring tokens from the thief?

In regards to having some kind of backdoor, as you suggest, to revert bitcoin transactions, I think that almost all bitcoin node operators will decisively say NO! The fact that bitcoin transactions are irreversible is a feature, not a bug.

Bitcoin eliminates buyer fraud. Once a transaction has been confirmed past a few blocks, it is then absolutely irreversible. Whether a recipient of some funds would like to give a refund is a separate matter and is for dispute between the respective parties only – it is of no concern to other bitcoin users. As a consumer, you might find the ability to reverse credit card transactions “desirable,” but businesses accepting credit card payments certainly don’t. Many businesses suffer significant losses because of credit card fraud, and will be delighted to accept irreversible transactions.

The matter of seller fraud must be addressed by other means such as third-party escrows.

As for exchanges not being able to internally manage their data security – this is their problem only and is not of concern for the rest of the bitcoin network.

Restricting consumption of any bitcoins with a certain publickeys/IP address?

The fact that you can’t censor certain transactions outputs from being spent is also a feature and not a bug. Bitcoin is intended to be for everyone. Any tool intended for censoring “fraudulent” transactions will inevitably be used for other nefarious purposes.

I can see SEC or FDIC having something similar come to Crypto, and hopefully bitcoin community can address issues in their next protocol. Otherwise, government regulators may interfere.

Bitcoin is governed by mathematics and individuals deciding whether or not they accept a global source of truth. Anybody can attempt to contribute to this truth by mining bitcoin blocks, and they do not require any permission. There is not going to be any regulation that targets bitcoin itself – such thing is unenforcible and entirely a folly. Regulators can only hope to take on businesses which deal in exchanging legacy fiat for bitcoin, which is unrelated to the bitcoin protocol.

And there is also no “their next protocol”. Bitcoin is already here, it works, and its rules are being enforced by tens of thousands of unrelated people who each assume that every other party in this network is potentially malicious.The protocol can and is being improved, but it will certainly not be getting these kinds of backdoors. It is unlikely that any kind of “hard-fork” will ever be accepted by the majority of bitcoin users.

Welcome to the new age of personal responsibility.

Published at Tue, 04 May 2021 17:20:04 +0000

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