tag:blogger.com,1999:blog-4503292949532760618.post4299446484548651103..comments2024-03-28T13:39:27.601-07:00Comments on DSHR's Blog: Blockchain: What's Not To Like?David.http://www.blogger.com/profile/14498131502038331594noreply@blogger.comBlogger65125tag:blogger.com,1999:blog-4503292949532760618.post-91657039541982280692019-05-02T16:01:10.656-07:002019-05-02T16:01:10.656-07:00Tether's missing $850M apparently vanished int...Tether's missing $850M apparently vanished into Crypto Capital. <a href="https://davidgerard.co.uk/blockchain/2019/05/02/crypto-capital-and-bitfinexs-missing-millions-and-reggie-fowler/" rel="nofollow">David Gerard reports that</a>:<br /><br />"Crypto Capital were the money transmitters for troubled crypto exchange Bitfinex and dubious dollar-substitute coin Tether. They operated in the US through a company called Global Trading Solutions. The founder of GTS, Reggie Fowler, was <a href="https://www.justice.gov/usao-sdny/pr/arizona-man-and-israeli-woman-charged-connection-providing-shadow-banking-services" rel="nofollow">indicted</a> on Tuesday. The US Government has <a href="https://www.courtlistener.com/recap/gov.uscourts.azd.1172710/gov.uscourts.azd.1172710.6.0.pdf" rel="nofollow">filed a motion</a> to detain Fowler as a flight risk. And it’s amazing.<br /><br /><a href="https://en.wikipedia.org/wiki/Reggie_Fowler" rel="nofollow">Reggie Fowler</a> is an American football player turned businessman. His most recent brush with fame was when the <a href="https://en.wikipedia.org/wiki/Alliance_of_American_Football" rel="nofollow">Alliance of American Football</a>, an attempt to form a new football league, <a href="https://www.si.com/nfl/2019/04/30/alliance-american-football-aaf-collapse-charlie-ebersol-tom-dundon" rel="nofollow">collapsed</a> after Fowler withdrew funding.<br /><br />Fowler had to withdraw funding for the AAF because the Department of Justice had seized his bank accounts in October 2018 — just after Bitfinex had <a href="https://twitter.com/lawmaster/status/1048515520482484224?lang=en" rel="nofollow">started sending money</a> through Global Trading Solutions."<br /><br />Fowler was caught with $14,000 in counterfeit $100 bills, among other details casting doubt on his financial operations.<br /><br />Note that future comments on this topic will appear on this <a href="https://blog.dshr.org/2019/04/short-talk-at-asilomar-microcomputer.html" rel="nofollow">more recent version of the talk</a>.David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-86539920388985803402019-04-30T16:39:13.192-07:002019-04-30T16:39:13.192-07:00Tether's general counsel admits that Tether is...Tether's general counsel admits that <a href="https://www.scribd.com/document/408190972/Stuart-Hoegner-Affidavit-4-30" rel="nofollow">Tether isn't 100% backed by cash after all</a>:<br /><br />"Tether has cash and cash equivalents (short term securities) on hand totaling approximately $2.1 billion, representing approximately 74 percent of the current outstanding tethers."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-47874822061348757702019-04-26T14:38:58.674-07:002019-04-26T14:38:58.674-07:00Izabella Kaminska's We all become MF Global ev...Izabella Kaminska's <a href="https://ftalphaville.ft.com/2019/04/26/1556291388000/We-all-become-MF-Global-eventually--Tether-edition/" rel="nofollow"><i>We all become MF Global eventually, Tether edition</i></a> has a detailed run-down on the history behind the New York AG's suit against Bitfinex.David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-30271796263091147522019-04-25T15:55:23.120-07:002019-04-25T15:55:23.120-07:00The New York Attorney General has sued Bitfinex an...The <a href="https://davidgerard.co.uk/blockchain/2019/04/25/quick-update-new-york-attorney-general-sues-bitfinex-850m-hole-in-tether-reserves/" rel="nofollow">New York Attorney General has sued Bitfinex</a> and has apparently discovered an $850M hole in Tether's reserves.David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-65092047563746451022019-04-24T06:40:56.865-07:002019-04-24T06:40:56.865-07:00In A 'Blockchain Bandit' Is Guessing Priva...In <a href="https://www.wired.com/story/blockchain-bandit-ethereum-weak-private-keys/" rel="nofollow"><i>A 'Blockchain Bandit' Is Guessing Private Keys and Scoring Millions</i></a> reports what happened after a researcher tried "1" as the private key for an Ethereum address:<br /><br />"the researchers not only found that cryptocurrency users have in the last few years stored their crypto treasure with hundreds of easily guessable private keys, but also uncovered what they call a "blockchain bandit." A single Ethereum account seems to have siphoned off a fortune of 45,000 ether—worth at one point more than $50 million—using those same key-guessing tricks."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-57193565093580373392019-04-09T07:01:37.686-07:002019-04-09T07:01:37.686-07:00Jemima Kelly dives into the depths of "Soluti...Jemima Kelly dives into the depths of "Solution to Everything™" self-parody with <a href="https://ftalphaville.ft.com/2019/04/09/1554809463000/Blockchain-for-Brexit--a-wonderfully-terrible-idea-/" rel="nofollow"><i>Blockchain for Brexit: a wonderfully terrible idea</i></a>:<br /><br />"The thing is though, the more this idea gets bandied about, the more the blockchainers expose the ridiculousness of their other ideas. Where an open-minded and uninformed reader might have (wrongly) bought into the idea that a blockchain can help combat the <a href="http://theconversation.com/how-blockchain-is-strengthening-tuna-traceability-to-combat-illegal-fishing-89965" rel="nofollow">illegal fishing of tuna</a> or <a href="https://www.europeanpharmaceuticalreview.com/news/84088/blockchain-trial-integrity/" rel="nofollow">ensure clinical trial integrity</a>, they are likely to draw a line at the idea that blockchain can in any way solve a problem as intractable as Brexit. Or for that matter, solve the utter lack of any form of consensus in Parliament."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-63876703241933332282019-03-31T19:07:04.970-07:002019-03-31T19:07:04.970-07:00My talk referred to Tether, an allegedly asset-bac...My talk referred to Tether, an allegedly asset-backed "stablecoin". But it didn't cover the alternative form of "stablecoin", the algorithmic variety. Fortunately, Ben Dyson at the Bank of England <a href="https://bankunderground.co.uk/2019/03/28/can-stablecoins-be-stable/" rel="nofollow">repairs the omission</a>. Using the example of "Basis", a proposed stablecoin that never actually materialized, he concludes:<br /> <br />"Whilst algorithmic stablecoins like Basis manage to eliminate the need for trust in a third party, they instead end up being heavily dependent on investor belief and confidence. As long as all users believe that the coin will be stable, their behaviour ensures that it will be stable, but if some users start to lose confidence and sell, the coin risks falling into a downward spiral. <br /><br />What does this mean for issuers and users of algorithmic stablecoins? If these stablecoins are destined to lose their stability, then over a long-enough time frame, buyers of algorithmic stablecoins will make significant losses. But the initial sellers of these coins – the founders and share-holders – will make significant gains, since they sold something created at no cost (the coins) in exchange for fiat currencies. If the peg fails, then the end result will have been a significant transfer of wealth from the buyers to the issuers."<br /><br />The talk pointed out that regular cryptocurrencies such as Bitcoin depend on a belief that the "price" will rise, and thus transfer wealth from later to earlier adopters. So too "stablecoins" depend on a belief that the "price" will be stable. Since, as Dyson shows, this is very unlikely to true, they will transfer wealth from later to earlier adopters.David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-65816387037600294882019-03-31T17:29:15.707-07:002019-03-31T17:29:15.707-07:00In Inside the rise and fall (and rise?) of crypto ...In <a href="https://www.scmp.com/tech/start-ups/article/3003517/inside-rise-and-fall-and-rise-crypto-mining-giant-bitmain" rel="nofollow"><i>Inside the rise and fall (and rise?) of crypto mining giant Bitmain</i></a>, the <i>South China Morning Post</i>'s Zheping Huang writes a fascinating account of the rise of Bitmain to dominate the Bitcoin mining chip business, and its subsequent troubles, leading to a failed IPO and irresolvable differences between the co-CEOs:<br /><br />"Beijing-based Bitmain Technologies on Tuesday called off its plan to go public in Hong Kong after its application lapsed after six months. The failure of what was billed as potentially the world’s largest crypto-related IPO adds to news of retrenchments. A new CEO has been appointed to replace the two main founders, who had previously shared the role."<br /><br />Tip of the hat to <a href="https://davidgerard.co.uk/blockchain/2019/03/31/news-bithumb-and-dragonex-hacked-quadriga-latest-metamask-security-craig-wright-legal-threats/" rel="nofollow">David Gerard</a>.David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-12456835075977074062019-03-30T09:27:43.073-07:002019-03-30T09:27:43.073-07:00Flaws in Bitcoin make a lasting revival unlikely f...<a href="https://www.economist.com/finance-and-economics/2019/03/28/flaws-in-bitcoin-make-a-lasting-revival-unlikely" rel="nofollow"><i>Flaws in Bitcoin make a lasting revival unlikely</i></a> from <i>The Economist</i> is a good summary:<br /><br />"the cryptocurrency fiasco has exposed three deep and related problems: the extent of genuine activity is hugely exaggerated; the technology does not scale well; and fraud may be endemic."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-66160369519797864942019-03-29T10:14:31.097-07:002019-03-29T10:14:31.097-07:00In The Bank of Hodlers [sic] (sigh), Jemima Kelly ...In <a href="https://ftalphaville.ft.com/2019/03/29/1553875342000/The-Bank-of-Hodlers--sic---sigh-/" rel="nofollow"><i>The Bank of Hodlers [sic] (sigh)</i></a>, Jemima Kelly uses the example of the Enron fiasco to explain that decentralizing utility functions like electricity and banking isn't a good idea:<br /><br />"The problem is, just like with the California example, every time deregulation, decentralisation and automation has taken foot in the financial world, bad things have tended to follow. Most of the time what is revealed is that middlemen or rent-seekers weren't actually eliminated or disempowered, but rather regenerated into new forms. Meanwhile, where algos took on the responsibility for human judgments, they were easily gamed, and introduced all sorts of new risks into the system. Those bad things then justified the return of regulation and the effective reformulation of human-overseen processes that “recentralise” the industry."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-60671199678813428402019-03-27T08:58:26.302-07:002019-03-27T08:58:26.302-07:00Hugh Son reports Bank of America tech chief is ske...Hugh Son reports <a href="https://www.cnbc.com/2019/03/25/bank-of-america-skeptical-on-blockchain-despite-having-most-patents.html" rel="nofollow"><i>Bank of America tech chief is skeptical on blockchain even though BofA has the most patents for it</i></a>.David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-75549972011227664412019-03-22T10:45:52.730-07:002019-03-22T10:45:52.730-07:00Bitwise Asset Management's detailed comments t...Bitwise Asset Management's <a href="https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca201901-5164833-183434.pdf" rel="nofollow">detailed comments to the SEC</a> about BTC/USDT trading on unregulated exchanges:<br /><br />"demonstrate in multiple different ways that approximately 95% of this volume is fake and/or non-economic in nature, and that the real market for bitcoin is significantly smaller, more orderly, and more regulated than commonly understood."<br /><br />Hat tip to <a href="https://news.slashdot.org/story/19/03/22/1359237/most-bitcoin-trading-faked-by-unregulated-exchanges-study-finds" rel="nofollow">msmash at /.</a>.David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-32459780657014980882019-03-15T12:23:59.125-07:002019-03-15T12:23:59.125-07:00David Gerard comments on the big news in cryptocur...David Gerard comments on the <a href="https://davidgerard.co.uk/blockchain/2019/03/14/decrypt-the-fictional-trading-reserve-by-me-after-tether-announced-that-the-skeptics-had-been-right-all-along/" rel="nofollow">big news in cryptocurrrencies</a>, that Tether has finally admitted that USDT is <i>not</i> actually backed one-for-one by actual USD in a bank account. <a href="https://twitter.com/Bitfinexed/status/1106214051074502656" rel="nofollow">Bitfinex'ed takes a bow</a>!David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-68525991871048279412019-03-15T07:55:57.315-07:002019-03-15T07:55:57.315-07:00Tim Copeland's The complete story of the Quadr...Tim Copeland's <a href="https://decryptmedia.com/5853/complete-story-quadrigacx-190-million" rel="nofollow"><i>The complete story of the QuadrigaCX $190 million scandal</i></a> is unlikely to be the "complete story" but it is very informative.David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-27041360230352004842019-03-12T16:35:35.959-07:002019-03-12T16:35:35.959-07:00Anyone who thinks that using cryptocurrencies is a...Anyone who thinks that using cryptocurrencies is a way of avoiding the attention of law enforcement should read <a href="https://davidgerard.co.uk/blockchain/2019/03/12/news-bitcointopia-busted-onecoin-busted-1pool-busted-canada-audits-crypto-traders/" rel="nofollow">today's news post from David Gerard</a>. He notes, in order:<br /><br />1) Morgan Rockoons pled guilty to wire fraud for the "Bitcointopia" scam.<br /><br />2) The US has charged the founders of OneCoin with wire fraud - there wasn't even one coin.<br /><br />3) 1pool/1broker has to pay a $421,000 fine and refund their customers bitcoin <i>even though they were based outside the US</i>.<br /><br />4) Two Australian exchanges got suspended for links to organized crime and drugs.<br /><br />5) The Canada Revenue Agency is auditing Bitcoin users. Here's the <a href="https://www.scribd.com/document/401254249/CRA-cryptocurrency-audit-Questions" rel="nofollow">13-page questionnaire</a> to give some idea of the answers users need to be prepared with.<br /><br />6) Remember that <a rel="nofollow">wash trading is illegal</a>: "Crypto Integrity found that up to 88% of reported volumes in February were artificial at some of the highest reported volume exchanges. On some less liquid trading pairs, the group estimates up to 100% of the volume is fake."<br /><br />Gerard also links to Kyle Gibson's informative <a href="https://medium.com/@kylegibson/100-crypto-thefts-a-timeline-of-hacks-glitches-exit-scams-and-other-lost-cryptocurrency-873c87fd5522" rel="nofollow"><i>100 Crypto Thefts: A Timeline of Hacks, Glitches, Exit Scams, and other Lost Cryptocurrency Incidents</i></a>.David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-31472714105818737322019-03-04T17:14:55.584-08:002019-03-04T17:14:55.584-08:00David Gerard notes that:
"Coinbase buys Neut...<a href="https://davidgerard.co.uk/blockchain/2019/03/04/news-quadriga-the-merchant-case-for-cryptos-ripple-malta-coinbase-buys-neutrino-coinhive-shuts-down-eos-hack-tether-on-tron/" rel="nofollow">David Gerard notes that</a>:<br /><br />"Coinbase buys Neutrino, a startup founded by <a href="https://motherboard.vice.com/en_us/article/3dad3n/the-vigilante-who-hacked-hacking-team-explains-how-he-did-it" rel="nofollow">Hacking Team</a>, a hacker group with an extensive track record of <a href="https://breakermag.com/coinbases-newest-team-members-helped-authoritarians-worldwide-monitor-journalists-and-dissidents/" rel="nofollow">selling surveillance technology to oppressive governments</a>, whose CEO regularly signed his emails with <a href="https://twitter.com/davidzmorris/status/1100484002484572165" rel="nofollow">old Fascist slogans</a>. Why did Coinbase buy Neutrino? Because their previous data analysis provider was <a href="https://cheddar.com/media/coinbase-adds-support-for-ripple-s-xrp-despite-regulatory-uncertainty" rel="nofollow">selling Coinbase customer data to third parties!</a>"David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-40050547707139693212019-03-02T17:48:01.380-08:002019-03-02T17:48:01.380-08:00It turns out that cryptocurrency exchanges are the...It turns out that cryptocurrency exchanges are the <a href="https://boingboing.net/2019/03/02/deletecoinboase.html" rel="nofollow">roach motel of personal finance</a>. Cory Doctorow writes:<br /><br />"The latest group of Hacking Team war criminals to find themselves reaccepted into polite society is the staff of Neutrino, a startup acquired by the cryptocurrency company Coinbase, to do forensic tracking of blockchain transactions.<br /><br />Many Coinbase users have concluded that they do not want to entrust their finances to a company that includes these unsavory characters, and so was born the #DeleteCoinbase movement to coordinate divestiture from the company.<br /><br />However, Coinbase will only allow you to delete your account if it has a zero balance, free of "dust" (infinitesimal residues left behind from fractional cryptocurrency transactions) and users are finding it impossible to rid themselves of their dust, which Coinbase insists is merely an accident and nothing to do with not wanting disgruntled users to leave."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-16753752852946928802019-02-27T17:23:44.349-08:002019-02-27T17:23:44.349-08:00ROFLMAO at Catalin Cimpanu's Cryptocurrency wa...ROFLMAO at Catalin Cimpanu's <a href="https://www.zdnet.com/article/cryptocurrency-wallet-caught-sending-user-passwords-to-googles-spellchecker/" rel="nofollow"><i>Cryptocurrency wallet caught sending user passwords to Google's spellchecker</i></a>. The sub-head says it all:<br /><br />"Coinomi wallet bug sends users' secret passphrases to Google's Spellcheck API via HTTP, in plaintext."<br /><br />Sadly, this appears typical of the competence level of programmers in the crypto wallet space.David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-63336553289768877332019-02-26T12:42:04.526-08:002019-02-26T12:42:04.526-08:00Eric Hellman's "Blockchain for Libraries&...Eric Hellman's <a href="https://osf.io/nuapv/?pid=2pmz6" rel="nofollow"><i>"Blockchain for Libraries" is Snake Oil</i></a> is not just right about blockchain, but about snake oil too! The video of Eric's talk is <a href="https://youtu.be/neeM_o63h7k?t=3799" rel="nofollow">here</a>.<br /><br />Although I have a couple of quibbles:<br /><br />- Slide 7 says "Participants can be anonymous" but means pseudonymous. And "Consensus mechanism prevents double-spending.–Secure- except for bugs" but ignores 51% attacks. It should say "Consensus mechanism makes double-spending costly" but in many cases now it isn't costly enough.<br /><br />- Slide 14 says LOCKSS uses Byzantine Fault Tolerance, which is wrong. It uses an original consensus mechanism that is related to BFT but is statistical in nature.David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-48197837033693680222019-02-21T06:47:47.215-08:002019-02-21T06:47:47.215-08:00Mike Orcutt's Once hailed as unhackable, block...Mike Orcutt's <a href="https://www.technologyreview.com/s/612974/once-hailed-as-unhackable-blockchains-are-now-getting-hacked/" rel="nofollow"><i>Once hailed as unhackable, blockchains are now getting hacked</i></a> is an overview of vulnerabilities including 51% attacks, <br /><br />"Toward the middle of 2018, attackers <a href="https://www.technologyreview.com/the-download/611238/self-serving-cryptocurrency-miners-are-attacking-small-blockchain-networks/" rel="nofollow">began springing</a> 51% attacks on a series of relatively small, lightly traded coins including Verge, Monacoin, and Bitcoin Gold, stealing an estimated $20 million in total. In the fall, hackers stole around $100,000 using a <a href="https://breakermag.com/51-attack-vertcoins-strength-fatal-flaw/" rel="nofollow">series of attacks</a> on a currency called Vertcoin. The hit against Ethereum Classic, which netted more than $1 million, was the first against a top-20 currency."<br /><br />And bugs in "smart contracts":<br /><br />"Last month, Tsankov’s team at ChainSecurity saved Ethereum from a possible repeat of the DAO catastrophe. Just a day before a major planned software upgrade, the company told Ethereum’s lead developers that it would have the unintended consequence of leaving some contracts on the blockchain newly vulnerable to the same kind of bug that led to the DAO hack. The developers promptly postponed the upgrade and will give it another go later this month."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-6065360464919953872019-02-21T06:27:06.424-08:002019-02-21T06:27:06.424-08:00The FT's Alphaville has two fun reads. Camilla...The FT's <i>Alphaville</i> has two fun reads. Camilla Hodgson's <a href="https://ftalphaville.ft.com/2019/02/21/1550725202000/Anatomy-of-a-cryptocurrency-scam/" rel="nofollow"><i>Anatomy of a Cryptocurrency Scam</i></a> starts:<br /><br />"In November this guesting Alphavillian wrote <a href="https://www.ft.com/content/5a95d240-f162-11e8-ae55-df4bf40f9d0d" rel="nofollow">an article</a> for the Financial Times about the falling price of bitcoin (what's new?). Half an hour later we received a direct Twitter message from an account saying it was a good time to invest in the cryptocurrency, which could become a “second source of income.”<br /><br />They said with an investment of $300 in crypto, on trading platform Crypto365, we could earn $3,000 in five days."<br /><br />And Elon Musk continues to <a href="https://ftalphaville.ft.com/2019/02/21/1550757066000/Stuff-Elon-says---inevitable--bitcoin-edition/" rel="nofollow">provide Izabella Kaminska with material</a> for the <a href="https://ftalphaville.ft.com/series/Billions%20of%20Blistering%20Barnacles" rel="nofollow"><i>Billions of Blistering Barnacles</i></a> series such as:<br /><br />"Paper money is going away, and crypto is a far better way to transfer value than pieces of paper, that’s for sure."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-69729586959165599612019-02-10T11:56:03.056-08:002019-02-10T11:56:03.056-08:00David Gerard provides another example of the reaso...David Gerard provides another example of the <a href="https://davidgerard.co.uk/blockchain/2019/02/10/news-quadrigacx-swift-and-ripple-mt-gox-illegal-abuse-images-on-bitcoin-sv-blockchain/" rel="nofollow">reason crypto "price" is in quote</a>s:<br /><br />"An upset Mt. Gox creditor <a href="https://www.goxdox.com/2019/02/the-dumpening-trustee-bank-book-reveals.html" rel="nofollow">analyses the data</a> from the bankruptcy trustee’s sale of bitcoins. He thinks he’s demonstrated incompetent dumping by the trustee — but actually shows that a “market cap” made of 18 million BTC can be crashed by selling 60,000 BTC, over months, at market prices, which suggests there is no market."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-86144644315337221612019-02-08T15:46:36.442-08:002019-02-08T15:46:36.442-08:00Paul Krugman's thread on Niall Ferguson joinin...<a href="https://twitter.com/paulkrugman/status/1093995245296066560" rel="nofollow">Paul Krugman's thread</a> on Niall Ferguson joining the <a href="https://ftalphaville.ft.com/2019/02/08/1549641256000/Niall-Ferguson-joins-blockchain-project-Ampleforth-/" rel="nofollow">recapitulation of the failed Basis stablecoin</a> features <a href="https://twitter.com/paulkrugman/status/1093996522679820288" rel="nofollow">his opinion</a>:<br /><br />"I'm on record as saying that crypto is a mishmash of technobabble and libertarian derp. But I guess that I should add that it's also a giant draw for sufferers from Dunning-Kruger syndrome"David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-1972137129559862542019-02-08T10:27:23.160-08:002019-02-08T10:27:23.160-08:00I've observed before that mining a public bloc...I've observed before that mining a public blockchain these days necessarily involves <a href="https://blog.dshr.org/2018/03/bad-blockchain-content.html" rel="nofollow">hosting content that allows the authorities to jail you</a> at a moment's notice in almost all jurisdictions, such as child porn.<br /><br />Now Bitcoin SV, one of the increasingly many forks of Staoshi's original, has raised its transaction size limit to 100KB, allowing much bigger and better content to be stored immutably in its blockchain. And, naturally, as David Canellis reports in <a href="https://thenextweb.com/hardfork/2019/02/04/bitcoinsv-blockchain-child-abuse-imagery/" rel="nofollow"><i>BitcoinSV ‘feature’ exploited to store child abuse imagery on the blockchain</i></a>, among the first content to take advantage of this feature is child porn:<br /><br />"A change to the Bitcoin Satoshi’s Vision (BSV) protocol has inadvertently led to child exploitation material being posted to its blockchain, forcing apps and block explorers into actively monitoring the network for illegal content."<br /><br />Filtering blockchains for illegal content is problematic because, as Nicholas Weaver points out in his <a href="http://www1.icsi.berkeley.edu/~nweaver/enigma_crypto_weaver.pdf" rel="nofollow">talk for Enigma</a>, it opens the blockchain up to a very simple and effective attack:<br /><br />"In late 2017 the Bitcoin network hit a capacity limit which caused fees to enter a death spiral, so if you wanted your transaction to go through you had to outbid everyone else, This is exploitable. Someone could spam the network whenever its below the death spiral point, shutting it down at will. And when it is above, do nothing but laugh.<br /><br />Keep this up until the network installs spam filters, and then the attacker starts a more interesting game: tuning spam not to get through the filters but to have the filters trigger false positives. How well would a currency work if 1-2% of transactions are randomly blocked by spam filters?<br /><br />Ethereum seems a particularly ripe target, with a full blockchain of over 2TB and working sets measured in the 100s of GB. What happens if an attacker adds a 0 or two to those numbers?"David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-17326454312446652002019-02-07T06:56:38.911-08:002019-02-07T06:56:38.911-08:00Bruce Schneier joins the chorus pointing out that ...Bruce Schneier joins the chorus pointing out that <a href="https://www.wired.com/story/theres-no-good-reason-to-trust-blockchain-technology/" rel="nofollow">there's no there there in blockchain technology</a>:<br /><br />"Do you need a public blockchain? The answer is almost certainly <a href="https://medium.com/@kaistinchcombe/decentralized-and-trustless-crypto-paradise-is-actually-a-medieval-hellhole-c1ca122efdec" rel="nofollow">no</a>. A blockchain probably doesn’t solve the security problems you think it solves. The security problems it solves are probably not the ones you have. (Manipulating audit data is probably not your major security risk.) A false trust in blockchain can itself be a security risk. The inefficiencies, especially in scaling, are probably not worth it. I have looked at many blockchain <a href="https://www.oreilly.com/ideas/blockchain-applications" rel="nofollow">applications</a>, and all of them could achieve the same security properties without using a blockchain—of course, then they wouldn’t have the cool name."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.com