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Let's say that somehow I generate a new address which happens to already be "taken". I realize the chances of address collision are extraordinarily low as per Is it possible to brute force bitcoin address creation in order to steal money?, but let's just say that it happens.

For argument's sake, let's say I land on 1FeexV6bAHb8ybZjqQMjJrcCrHGW9sb6uF (currently carrying a balance of about 80,000 BTC).

If I were to then sign a transfer to another address, would I be doing anything wrong or illegal? I think it'd be immoral, but does it constitute any legal wrongdoing?

I don't think this is quite like finding an ATM card and guessing the PIN, but more like walking into a Swiss bank, guessing a random account number and PIN, and walking out with whatever is in the safety deposit box, right? Is that "stealing" ?

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    Luckily, the chance of this so low that you're more likely to win the lottery several times in a row before you stumble upon somebody else's Bitcoin address. – Nayuki Dec 5 '15 at 16:24
  • @NayukiMinase True, but what about the recent incident where Blockchain.info was using the random.org error message to generate entropy? (ie the same entropy each time = the same address) – Wizard Of Ozzie Dec 6 '15 at 4:11
  • Ah, I did some research and it seems the Blockchain.info mobile app was misusing Random.org as an entropy source, not checking HTTP status codes, and other logic omissions: arstechnica.com/security/2015/05/… – Nayuki Dec 6 '15 at 4:49
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IANAL.

What you describe is the act of taking something that isn't yours in full knowledge that somebody else invested effort and money to accumulate it.

Just as with your Swiss bank example: The rightful owner would be losing the funds that you misappropriated. Taking someone's property without their consent is theft.

I feel that this is independent of the way by which you gained access to the property, but rather derived from the intent of your action.

Perhaps more ambiguous would be scenarios where somebody receives a transaction to a key that you also control, or when you stumble on a key that has a Bitcoin balance that hasn't been moved for decades and could reasonably assumed to have been lost by the rightful owner.

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Adding my owner answer here thanks to some input from @Wats0ns and @Murch.

IANAL.

Let's say the following happened:

  1. I generate a key pair that collided with an already existing address.
  2. That address happened to have a balance.
  3. I signed a transfer to a new address under my (and only my) control.
  4. In that transfer I put my contact information (and proved after the fact that I had the private key and had done exactly as everyone suspects, crazy I know).

I'd expect:

  1. The other owner to claim they owned the address via a digital signature (the only way you can claim to own an address).
  2. The other owner to show either that they owned the previous incoming addresses or that they traded with others to result in the funding of the address in question.
  3. The other owner to sue me for those coins back, and press criminal charges for theft.
  4. I would use a "Claim of Right or Ownership of Property" defense for the theft charge.
  5. I might lose the civil case and have to return the BTC.

For the theft charge, my argument would effectively be, "I thought I had just as much right to the coins as they did. We both generated a key pair, and the key pair is how you 'own' an address or any BTC the ledger says belongs to that address. I didn't act maliciously in generating the address, I didn't hack a computer and steal the private key, I just happened upon it."

I think that might be a reasonable amount of evidence to show "I thought it was mine" and hopefully that'd keep me out of jail.

I have no idea what a court would decide in the lawsuit as I don't know of any case law that comes close to this. Maybe it's like a bank accidentally adding you as a co-signer to someone's bank account (not heard of any cases involving this)? Or making an invalid deposit to your account (which does have case law, and you have to give the money back IIRC)?

Either way, I'd be willing to bet that the BTC would have to be returned, but it could be a coin flip...

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Could you get away with it? Probably. Laws have not caught up to Bitcoin. It would be better to do the right thing, and just click one button and generate a new private / public key pair, and move along.

It's like finding money in the street, except you know that the person who lost it is walking back to find it. Can you grab it and run? Yup. Should you grab it and run? Nope.

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Owning a private key is the way to control the spending of coins. It should not be defined as legal ownership. People tend to give too much credit to the anonymity of bitcoin. But assuming you can find and take a person to court who hit the lottery by generating an already used wallet address, you can plead your case to the judge. If you mine coins or purchase them you have documentation proving that they are yours by showing a chain of accumulation evidence. That,imo, would be better proof than simply possessing the private keys and suddenly having thousands of coins.

Take aways: 1) better to steal smaller numbers of coins than huge wallets to get away with the theft. 2) better still, if it isn't yours, (ie. you mined, it was gifted, or purchased with your own funds...) then you know it's stealing to take it. 3) Lost coins/private addresses. How would you know for certain?
If you found a paper with a private key written on it you may have a better defense for taking ownership. But does that ever happen?

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I don't think so:

Theft : the act of stealing; specifically : the felonious taking and >removing of personal property with intent to deprive the rightful owner of it (from http://www.merriam-webster.com/dictionary/theft)

Stealing implies taking something that doesn't belong to you, but how do you define ownership of Bitcoins ? You own Bitcoins by owning the private keys, and only so.

So if you ever find the private key of this address (good luck, BTW), you'll become an "owner" of this address, and of the Bitcoins "attached" to it, so transfer wouldn't constitute a theft.

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    By similar logic, ownership of cash is defined by physical possession, therefore pickpocketing is not theft; it is merely a nonconsenual transfer of property. – Nick ODell Dec 6 '15 at 1:42
  • Well I think I explained badly. You can easily define to whom belong money on a bank account or cash, but because Bitcoin is pseudo-anonymous, it's hard to define ownership. If OP find the private key of an address (without looking for it, otherwise yeah, that would be a theft), in my opinion this wouldn't constitue a theft. – Wats0ns Dec 6 '15 at 18:46
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The "owner" of address with balance is person who holds "Passphrase" and Private key!!! If you have private key and you don't have "Passphrase" for address private key in that case you're a Theft!

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  • maybe i misunderstand. but: if you have the private key of your address you have access to your funds. also without any passphrase. – anion Jan 18 '18 at 7:52

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