Mike has been advocating for removing the blocksize limit, which even he thinks can lead to there being only a few hundred, and as little as a dozen, validating nodes handling Bitcoin. Implement blacklists on that tiny number of validating nodes and you now have Bitcoin under central control, and opposing that control will be extremely expensive to downright impossible.

Not to mention how with small blocksizes the lack of privacy inherent in Bitcoin - every transaction goes on the public blockchain after all - puts you on an equal footing with big businesses and governments in monitoring and auditing the actions of other Bitcoin users. On the other hand, with large blocks you can't afford the computer equipment required to run a validating node, and thus while you have no ability to to monitor the network and follow the movement of funds but they do.

EDIT: s/will lead/can lead/


Well removing the blocksize limit is a fork, and more to that, it's not a technical "bug-fix" fork like is happening on May 15th - it will radically change what Bitcoin is.

re: Jeff Garzik, I can't speak for him, but personally I would be happy making a similar statement myself. But there is a big difference between working with authorities and educating them about how Bitcoin works and what the vulnerabilities are and introducing brand new vulnerabilities into the system itself.

retep, please don't put words in my mouth. I have never said I think there will be a few hundred or a dozen validating nodes, where did you get that from? Nobody knows how many there will end up being, but on a global scale I'd expect hundreds of thousands if not more.

Regardless, the entire point of this proposal is it is not state control. It's a system based on majority consensus, just like Bitcoin. malevolent clearly hasn't read what I wrote because there's no fork of Bitcoin needed. Checking blacklists is an optional extra layer on top.

No Mike, it's nesting an undefined number of majority consensus systems within Bitcoin, and these will be based on the moral judgements of potentially pernicious actors. The whole point of Bitcoin is to de-politicise money, and you're attempting to argue for an overlay that explicitly politicises transaction acceptance. Continue with this, and you will end up arguing in favour of a different protocol to the one that users want. Majority consensus does not make for a good solution to every problem, hence voting rights being rescinded from the mentally deranged.   

This is a trend toward mediocrity, diluting what's good about the system. It's as bad as gold derivatives.

So long as none of this enters the protocol itself, it may be very difficult to gain widespread usage of such blacklists - or hard to act upon. May it remain disused and ignored for as long as possible.

This concept has been discussed at length before and vigorously rejected:

https://bt.irlbtc.com/view/85433.0

Following these principles merely serves to destroy the important property of Fungibility which all currencies should have. Any attempts to move in this direction should continue to be rejected for this reason alone.

Mike, this is vigilantism at it's utter worst. It would drive people away from Bitcoin faster than you can say, "we're taking 10% for all accounts over 100k Euros and 6% for all accounts under 100k Euros", noone can ever be certain the coins they currently hold will be accepted under a system like this. It also completely ruins the fungibility of Bitcoins that makes it such a good form of money.

We have courts and agencies in each country to deal with crimes committed on sovereign soil, this is their problem, not the Bitcoin network's. No person should EVER have to prove their innocence in order to spend their money. To think that it is the network's moral responsibility to ostracise payments based on an arbitrary and nebulous consensus is manifestly absurd. This kind of dangerous interference subverts due process in the country where the crime is being committed and would completely undermine the trust people have in the value of Bitcoin as a store of value.

Since when did we get the right to assign ourselves the position of multinational and morally righteous financial police?

This not the first time Mike is taking up the same rhyme:

Freezing BitCoin addresses by regulating miners
April 17, 2011
by Mike Hearn
https://bt.irlbtc.com/view/5979.0

There is some hidden agenda, isn't it?

More on the same topic:

What if bitcoins that can be tracked back to Silk Road are declared 'illegal'?
June 22, 2011
https://bt.irlbtc.com/view/20979.0

Governments/regulators may eventually actually *like* Bitcoin. - coin blacklists
December 02, 2011
https://bt.irlbtc.com/view/53539.0;all


EDIT:
My opinion: Bitcoin (as public ledger) is information. 'Tainted'/blacklisted/whitelisted coins are censorship in the purest form. When has censorship served for the good of humankind?

+1

I can only reiterate my concerns, but this is a very important topic and seeing Mike Hearn continue to vote in favor of it is even more unsettling. While your approach is intriguing from a technological point of view, the scenarios you describe don't seem very plausible to me and once such a system would be in widespread use it will just provoke countermeasures resulting in an arms race that will only lead to Bitcoin being a miserable experience for everybody in the end.

As the recipient of a transaction you will always bear the risk of receiving coins that will end up being blacklisted, because the crime of the sender was not yet reported or the verdict was not yet final (assuming the verification process is at least somewhat thorough). This will lead to everyone applying the most restrictive blacklists with the fastest and least false negative prone approval process possible before accepting any payment.


A decentralized blacklist approach sounds nice, until you factor in that most people are neither interested in nor able to personally assess the guilt of some suspect. Just have a look at how much debate there is over the scammer label in this forum and how time consuming these debates are. Do you really think each and every merchant will take the time to listen to your life story before accepting your payment? Who is going to pay for that time and effort? Also this merchant will have to convince their supplier as well to take the money, etc. Adding coin mixing to that equation will make it even more complicated.

Don't get me wrong: the fact that some crimes (especially corruption) will be much harder to trace with Bitcoin is one of my biggest concerns about Bitcoin in general, but I just don't see tainting coins as an acceptable way to go.

Think about it this way: would you argue that it is justified to require all Internet communication to be personalized and enforcing crime blacklists at the TCP level? Surely this would be an even more effective measure against crime but where do you draw the line?

Bitcoin is a tool for payments and not a tool to prevent or punish crime or to enforce arbitrary social concepts of justice!

No, it would not converge. Should something like this ever reach a critical mass it will grow like cancer. The cleaner the coins the better so everybody tries to subscribe to as many lists as possible and goes down as many levels as possible.

This is a very bad idea.

Should it ever take foot there will soon be a new system to replace Bitcoin that is more anonymous and immune to this kind of control.

This is bad