Man, if only there existed some central societal body with the authority to essentially freeze accounts and unwind a transaction like this. What a security feature that would be.
Something tells me that politicians that visit said locations on the 4th of July and their buddies business "leaders" looking to destablize the system are just not on the up and up. May even be corrupt.
First, both cryptocurrencies and traditional finance systems have chosen to and have chosen not to reverse or freeze criminal transactions in the past. Decentralized blockchains have chosen to do so at least once [0]. The traditional finance system has chosen not to many times and even large sums [1] [2]. It really comes down to how much is stolen and how much influence the victim(s) have.
No, instead I think the main difference is the speed of transactions. Some blockchains operate within milliseconds while bank transactions take days. Even instant transfers are actually settled on a way longer cadence in reality.
That means attackers can do a fast sweep on blockchains, which is not possible with bank transactions because everything happens in slow motion and humans have way more time to react and step in.
[0]: https://en.wikipedia.org/wiki/The_DAO [1]: https://www.turkiyetoday.com/turkiye/german-bank-e100m-disap... [2]: https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery
Whether undoing transactions or not is an option strongly depends on how fast value is allowed to move. Sometimes being slow is a feature as much as it is a bug.
Exactly, that is my point. It is less about reversibility and more so about speed. Being slow can be an advantage (for security).
For example, take Bitcoin, except that each transaction must be posted twice to be considered to have modified the ledger between 7 and 14 days apart as measured by the number of intermediate blocks as a function of the difficulty requirement. If a "blocking" transaction makes it to the blockchain in between, then the transaction is deemed to have been cancelled. A "blocking" transaction must merely demonstrate ownership of one of the transaction inputs.
If you hold large funds, you could keep a remote monitoring system somewhere that is empowered to block your own transactions.
The blockchain design could be enhanced so that a blocking transaction proves ownership of the original inputs but cannot sign a transaction itself.
Failure mode: someone trying to legitimately block a transaction could find themselves unable to get their blocking transaction mined. But in practice they'd just up the transaction fee, and game theory should take care of it.
This was just a thought experiment. A point that comes to mind is that given this is possible, what you describe isn't an inherent property of cryptocurrency, so if there's a benefit to having this property then it could be done.
Blockchain today cannot fix the problem that there will be examples where some guardian needs to reverse transaction because of fraud detection at some later stage.
How exactly can you sign the next entry in a block chain for a temporary period of time ? You cant. You either update it or you dont.
If a transaction is above that amount, you get alerts by email, SMS, push notification...
If it's expected you let it go though. If not, you take out the key, then reverse it.
Of course legit recipients would wait until the delay period is over before considering the transaction to be complete.
No worries if an attacker steals the key. Why would they reverse their own transaction?
https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery
Most of it was stopped and some was even recovered but $66Million is still lost 10years later .
In both incidents protection are reliant on the authorities to minimize the damage ; tether and circle able to freeze tokens is not that different from the traditional finance doing it.
Crypto is only reinventing structures that evolved in every financial system over time.
Overtime they are going away from their founding theme of decentralization . Exchanges and stable coin issuers who can freeze wallets and coins are by definition centralization ; it is worse though as these organizations are less transparent than banks with less accountability
Most of the billion was frozen though if it was not frozen in time it would have probably evaporated just like these bitcoins getting into mixers.
If it's a significantly large sum, it may look like this:
Step 1: The CEO of the debtor bank calls the CEO of the creditor bank and asks to return the money.
Step 2 (only needed if there is disagreement): Lawyers of the debtor bank send a ton of legal papers to the creditor bank and figure it out.
But it's just one of nearly infinite number of scenarios.
Sometimes they get lucky though and the government passes a law allowing them to seize equivalent assets a few decades down the road.
When you transfer a dollar from your account to Putin's account in a Russian bank, in reality your bank transfers a dollar from their account within the FRS (Federal Reserve System) to Putin's bank's account within the FRS.
It can be more complicated with more intermediaries, but it can be traced and reverted.
> A full recounting of it is outside the scope of this anecdote, but it rhymes with “If you and the United States federal government disagree whether a transaction is final, you are wrong.”
[0]: https://www.bitsaboutmoney.com/archive/no-payments-are-final...