Radia Perlman is a cryptographer, an ACM Fellow, and was a Distinguished Engineer with me at Sun Microsystems. Last June I pointed to Blockchain: Hype or Hope?, her skeptical take on blockchain technologies. At the recent RSA conference, a bevy of even more prominent cryptographers were equally skeptical:
[Ron] Rivest's peers on the panel added to the critique. He was joined on stage by Adi Shamir, Borman professor of computer science at The Weizmann Institute in Israel; public-key cryptography pioneer Whitfield Diffie currently the cryptographer and security expert at Cryptomathic; Paul Kocher, a security researcher and consultant; and Moxie Marlinspike, the founder of Signal.Here's an example from Ron Rivest:
Blockchain is often viewed as security pixie dust," said Ron Rivest, ... The message is "any application you have can be made better and more secure with blockchain." Rivest said the technology has interesting properties - decentralized, public access and immutable - but it fails on scale, throughput and latency.Rivest is certainly right about throughput. One example that should debunk claims that blockchains can scale comes from last December. The Ethereum blockchain struggled under the load of a simple game:
Ethereum has historically made bold claims that it is able to handle unlimited decentralized applications — to the extent to potentially rival the internet. However, this network disruption has brought caution to accepting that claim. ... The Crypto-Kittie app has shown itself to have the power to place all network processing into congestion.How many users did it take to cripple the network? It was far fewer than non-blockchain apps can handle with ease:
Citing data from DappRadar, Greylock community lead Chris McCann reports that CryptoKitties has fewer than 1,000 daily active users. Granted, interest has sharply declined over the past few months, but he estimates that even at its peak the DApp likely only had about 14,000 daily users. Neopets, a game to which CryptoKitties is often compared, once had as many as 35 million users.The MIT Media Lab's Defending Internet Freedom through Decentralization study demonstrated how small the user populations of distributed applications were when compared to popular centralized ones:
Facebook has 1.37*109 daily users, so it is about 22,800 times bigger than Diaspora.
|Cryptowall ransom payments
analyzed the economic impact (ransoms extorted in Bitcoin) of all the recent ransomware: (i) that used Bitcoin as at least one mode of ransom payment, and (ii) for which at least one Bitcoin address is publicly known.The income from ransomware turns out to be significant, but much less than the hype would lead one to believe:
By far the most profitable form of ransomware turns out to be CryptoWall, which began infecting Windows computers in November 2013. It encrypted the files using the RSA-2048 encryption algorithm and then demanded a payment of up to $1,400 to release them.
Between its release and December 2015, Bitcoin addresses associated with this malware received $2.2 million in Bitcoin payments and a further $2.3 million in higher-value transactions, which Conti and co suspect may also be ransom payments.
Yesterday, the website and Telegram channel of a hitherto unknown crypto token called Savedroid suddenly went down.Apparently, unlike many ICOs, Savedroid wasn't an exit scam:
Nobody was quite sure whether this was an elaborate marketing ploy, the site had been hacked, or investors had fallen prey to the kind of exit scam that has tarnished the reputation of an otherwise totally credible and legit industry: that of the initial coin offering (ICO), in which money is raised in return for
absolutely nothingdigital tokens and kitties.
All that was left on Savedroid's website yesterday was this South Park meme (screenshot by Bloomberg):
It turns out that it WAS just a joke, though. A video message from Hankir was posted on the site today to explain, along with the following message:
AND IT'S NOT GONE. Savedroid was here, is here, and will be here.Loooooool. I'm literally ROFLing.
But wait! This was not meant to be funny, it seems. This was actually a very serious message about how higher standards are needed in the ICO industry.
|SaveDroid expected return
For further proof of Savedroid's credentials, just look at this chart from their web site showing the expected return from the SVD token (which reminds us of another fun chart from the non-crypto world):Savedroid is based in Germany; maybe the German regulators are a little behind the US ones in addressing ICO scams.