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It is possible for the exchanges and miners to get together and change the protocol, to mark the stolen bitcoins as invalid? The thief is probably going to dump the stolen bitcoins on the market - not exactly a good thing for the bitcoin price or the long term viability of bitcoin itself.

Especially since it will take quite some time to dump all thsoe bitcoins - the market isn't all that liquid.

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Nobody can say for sure the bitcoins in that address are stolen.

But it would be very possible to reject bitcoins from certain addresses, and the protocol don't need to be changed. All it would take is make a client to reject to include transactions to/from blacklisted addresses into blockchain. And for everyone to update clients. That still would be vulnerable to 51% attack, but it is very real possibility.

It's a flawed idea though unfortunately - a malicious party could have a legitimate address blacklisted by sending stolen bitcoin to them.

It's a wonderfully interesting social issue. We have this high stakes protocol where everything is transparent and the whole system needs to be in a consensus. It's fantastic watching the internal struggle.

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