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Is it possible to detect stolen bitcoins?

With so many coins being stolen these days, for the more "ethically conscious" bitcoin users, is it somehow possible to check if the coins (you're about to receive) are from stolen coins?

If it is possible, what's the quickest and easiest way to do this?

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Generally, this is not possible.

Since all transactions are public, one could imagine a registry of sorts where a person could report a particular transaction as unauthorized. You could then consider any coins traceable back to that transaction to be "tainted". However, there are several problems:

  1. There would be no way to verify the truth of a claim that a transaction was unauthorized. Even if you required a signature to confirm that the claimant held the private key for the address from which the coins were "stolen", the claimant could have made the transaction intentionally and then reported it unauthorized to defraud the payee.

  2. A Bitcoin thief would likely immediately send the stolen coins to a mixing service to disguise their origin. Then every other innocent party who used the mixing service around the same time would also have their coins tainted.

  3. There's no way of checking coins that you are "about to receive". You have no information about the source of coins until the transaction is made. At this point the coins belong to you. What are you going to do? Give them back?

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