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Category: privacy – Page 23

Tune in tomorrow (Thursday, Nov 10, 2016) at 4:30PM Eastern. Find out what Edward Snowden has to say on the future of the US. [Source: StartPage via Engadget]

edward-snowden

American technology policies could change significantly under Donald Trump, and that includes its stance on privacy. How will the new leader alter government surveillance, for example? Edward Snowden might have an answer. The whistleblower and Dutch search engine StartPage are hosting a live event on November 10th at 4:30PM Eastern to address what happens to privacy in the Trump era, among other questions. Snowden speaking engagements are nothing new, but this is special — he’s more than a little familiar with government spying activities, and this is his first chance to opine on how things might be different under a new administration.

Snowden hasn’t said much of anything about the subject as of this writing. However, Trump doesn’t exactly have a stellar record on internet privacy so far. He has proposed reauthorizing the Patriot Act and the previous, less restrained NSA mass surveillance that took place while the Act was in force. He tends to “err on the side of security” over privacy, even if he’s not especially fond of it. As such, Snowden probably won’t have many kind things to say. He’s in favor of more privacy wherever possible, and that could easily put him at greater odds with the US government than he is now.

By now, most Bitcoin and Blockchain enthusiasts are aware of four looming issues that threaten the conversion of Bitcoin from an instrument of academics, criminal activity, and closed circle communities into a broader instrument that is fungible, private, stable, ubiquitous and recognized as a currency—and not just an investment unit or a transaction instrument.

These are the elephants in the room:

  • Unleashing high-volume and speedy transactions
  • Governance and the concentration of mining influence among pools, geography or special interests
  • Privacy & Anonymity
  • Dwindling mining incentives (and the eventual end of mining). Bitcoin’s design eventually drops financial incentives for transaction validation. What then?

As an Op-Ed pundit, I value original content. But the article, below, on Bitcoin fungibility, and this one on the post-incentive era, are a well-deserved nod to inspired thinking by other writers on issues that loom over the cryptocurrency community.

This article at Coinidol comes from an unlikely source: Jacob Okonya is a graduate student in Uganda. He is highly articulate, has a keen sense of market economics and the evolution of technology adoption. He is also a quick study and a budding columnist.

What Happens When Bitcoin Mining Rewards Diminish To Zero?

Jacob addresses this last issue with clarity and focus. I urge Wild Ducks to read it. My response, below touches on both issues 3 and 4 in the impromptu list, above.

Sunset mining incentives—and also the absence of supporting fully anonymous transactions—are two serious deficiencies in Bitcoin today.
I am confident that both shortcomings will be successfully addressed and resolved.

Thoughts about Issues #3 and #4: [Disclosure] I sit on the board at CRYPSA and draft whitepapers and position statements.*

Blockchain Building: Dwindling Incentives

mining-incentive-02Financial incentives for miners can be replaced by non-financial awards, such as recognition, governance, gaming, stakeholder lotteries, and exchange reputation points. I am barely scratching the surface. Others will come up with more creative ideas.

Last year, at the 2015 MIT Bitcoin Expo, Keynote speaker Andreas Antonopoulos expressed confidence that Bitcoin will survive the sunset of miner incentives. He proposed some novel methods of ongoing validation incentives—most notably, a game theory replacement. Of course, another possibility is the use of very small transaction fees to continue financial incentives.

Personally, I doubt that direct financial incentives—in the form of microcash payments— will be needed. Ultimately, I envision an ecosystem in which everyone who uses Bitcoin to buy, sell, gift, trade, or invest will avoid fees while creating fluidity—by sharing the CPU burden. All users will validate at least one Blockchain transaction for every 5 transactions of their own.

Today, that burden is complex by design, because it reflects increasing competition to find a diminishing cache of unmined coins. But without that competition, the CPU overhead will be trivial. In fact, it seems likely that a validation mechanism could be built into every personal wallet and every mobile device app. The potential for massive crowd-sourced scrutiny has the added benefit of making the blockchain more robust: Trusted, speedy, and resistant to attack.

Transaction Privacy & Anonymity

Bitcoin’s lack of rock-solid, forensic-thwarting anonymity is a weak point that must ultimately be addressed. It’s not about helping criminals, it’s about liberty and freedoms. Detectives & forensic labs have classic methods of pursuing criminals. It is not our job to offer interlopers an identity, serial number and traceable event for every transaction.

Anonymity can come in one of three ways. Method #3 is least desirable:

  1. Add complex, multi-stage, multi-party mixing to every transaction—including random time delays, and parsing out fragments for real purchases and payments. To be successful, mixing must be ubiquitous. That is, it must be active with every wallet and every transaction by default. Ideally, it should even be applied to idle funds. This thwarts both forensic analysis mining-incentive-03and earnest but misguided attempts to create a registry of ‘tainted’ coins.
  2. Fork by consensus: Add anonymizing technology by copying a vetted, open source alt-coin
  3. Migrate to a new coin with robust, anonymizing tech at its core. To be effective, it must respect all BTC stakeholders with no other ownership, pre-mined or withheld distribution. Of course, it must be open, transparent and permissionless—with an opportunity and incentive for all users to be miners, or more specifically, to be bookkeepers.

That’s my opinion on the sunset of mining incentives and on transaction anonymity.
—What’s yours?

* Philip Raymond is co-chair of the Cryptocurrency Standards
Association. He was host and MC for the Bitcoin Event in New York.

I was pointed to this article by Jon Matonis, Founding Director, Bitcoin Foundation. I was sufficiently moved to highlight it here at Lifeboat Foundation, where I am a contributing writer.

On Fungibility, Bitcoin, Monero and ZCash … [backup]

This is among the best general introductions I have come across on traceability and the false illusion of privacy. The explanation of coin mixing provides and coin_mixing-03excellent, quick & brief overview.

Regarding transaction privacy, a few alt-coins provide enhanced immunity or deniability from forensic analysis. But if your bet is on Bitcoin (as it must be), the future is headed toward super-mixing and wallet trading by desgin and by default. Just as the big email providers haved added secure transit,
Bitcoin will eventually be fully randomized and anonymized per trade and even when assets are idle. It’s not about criminals; it’s about protecting business, government and individuals. It’s about liberty and our freedoms. [Continue below image]

coin_mixing-04
How to thwart forensic investigation: Fogify explains an advanced mixing process

The next section of the article explains the danger of losing fungibility due to transaction tracing and blacklisting. I can see only ONE case for this, and it requires a consensus and a hard fork (preferably a consensus of ALL stakeholders and not just miners). For example, when a great number of Etherium was stolen during the DAO meltdown.

My partner, Manny Perez, and I take opposing views of blacklisting coins based on their ‘tainted’ history (according to “The Man”, of course!). I believe that blacklists must ultimately be rendered moot by ubiquitous mixing, random transaction-circuit delays, dilbert-060219and multiple-transaction ‘washing’ (intentionally invoking a term that legislators and forensic investigators hate)—Manny feels that there should be a “Law and Order” list of tainted coins. Last year, our Pro-&-Con views were published side-by-side in this whitepaper.

Finally, for Dogbert’s take on fungible, click here. I bought the domain fungible.net many years ago, and I still haven’t figured out what to do with it. Hence this Dilbert cartoon. smile
____________
Philip Raymond is co-chair of The Cryptocurrency Standards Association.
He also presents on privacy, anonymity, blind signaling & antiforensics.

As useful as they are, wearable fitness trackers aren’t usually the height of fashion themselves, with many devices blending away out of sight on your wrist or ankle. Now Intel and Luxottica have teamed up to put a fitness tracker front and center on your face, stashing various biometric sensors and a voice-activated AI coach into a stylish, custom-designed pair of Oakley shades.

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Ouch!!!

National Security Agency says tools left exposed by mistake — and dumping by presumably Russia-backed hackers Shadow Brokers.

An FBI investigation into the public dumping of hacking tools used by the National Security Agency (NSA) to uncover security flaws in some networking vendor products is looking at how the tools were exposed on a remote computer, a Reuters report says, quoting people close to the investigation.

Sources say NSA believes it was an inadvertent act by an employee or contractor, but the NSA did not inform manufacturers of the leak because sensors employed to detect misuse of the tools came up empty-handed. NSA may have wanted to take advantage of the theft to gather intelligence and improve its defense, adds the exclusive.

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Interesting read on IPC Systems Inc. is partnering with U.K. startup Post-Quantum to (in their own words) “offer its clients encryption, biometric authentication and a distributed-ledger record-keeping system that the software company says is designed to resist hacking — even by a quantum computer.” — I will be researching this more.

(Bloomberg) — When it comes to cybersecurity, no one can accuse IPC Systems Inc., the New Jersey-based company that builds communications networks for trading firms and financial markets, of preparing to fight the last war.

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Hope they’re working with QC researchers in Los Alamos and DARPA; it is the US Government which is known for its silos and multi-layer bureaucracies.

Quantum computing is a novel way to build computers — one that takes advantage of the quantum properties of particles to perform operations on data in a very different way than traditional computers. In some cases, the algorithm speedups are extraordinary.

Specifically, a quantum computer using something called Shor’s algorithm can efficiently factor numbers, breaking RSA. A variant can break Diffie-Hellman and other discrete log-based cryptosystems, including those that use elliptic curves. This could potentially render all modern public-key algorithms insecure. Before you panic, note that the largest number to date that has been factored by a quantum computer is 143. So while a practical quantum computer is still science fiction, it’s not stupid science fiction.

(Note that this is completely different from quantum cryptography, which is a way of passing bits between two parties that relies on physical quantum properties for security. The only thing quantum computation and quantum cryptography have to do with each other is their first words. It is also completely different from the NSA’s QUANTUM program, which is its code name for a packet-injection system that works directly in the Internet backbone.)

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