What to do with stolen coins?

On a recent Telegram chat, someone criticized the “new” Kittehcoin because the  largest current wallets are not (and won’t be) frozen. He/she said: “I won’t invest in this coin if the largest addresses aren’t burned, because it suggests these coins are illegitimate.”*

Below is our response to that criticism. 

We understand your concern and spent a lot of time weighing the pros for A) disrupting the blockchain and purging accounts that appear to have stolen coins in them, or B) leaving the blockchain history — and those accounts — alone.

In the end, we decided to go with Option B for two reasons. Why?

First, we assume that one (or two?) of the larger accounts is an exchange, and we don’t want to mess with that. If we block one incorrect address, it could permanently cripple users’ trust in this coin. Beyond that, we don’t know who owns the other large accounts and if the coins were stolen or not! (If someone stole such an obvious amount of coins, would they really place them in a single address? Or would they spread them out?) 

The coins appear to be stolen from the coinbase (not the exchange but the function within Kittehcoin that issues coins with each new block) so it doesn’t appear someone lost coins. Instead, it seems that more coins were created than planned. So the main concern is a massive coin dump on an exchange that would temporarily devalue the coin. However, we think the work done by the thief to steal the coins (their cost), was close to the cost of legit buyers at the time of the theft. They just paid for it in a different way.  As a result, it isn’t worth the effort to chase this down. 

Second, there is a precedent for not destroying Kittehcoin’s blockchain. See: Ethereum vs Ethereum Classic. In this case, we’re aligned with Ethereum Classic. We align with their philosophy because of their “hands-off” approach. We have little interest in determining the quality of individual transactions on the blockchain.

* Note: The exact comment on Telegram was: “… but I’ll not invest in this coin if top 10 addresses of rich list will not be burned (it is more than evident that these coins are not legit).”

 

Leave a Reply

Your email address will not be published. Required fields are marked *