[Bitcoin-development] Trusted identities
It recently occured to me that we can use the public nature of the block chain to create trusted identities, for a specific form of trust. Lets suppose Alice has some bitcoins held at bitcoin address A. She wants to establish trust in the identity associated with the ECC keypair associated with A, for instance for the purpose of having other users trust her not to attempt to double spend. Since the trust she seeks is financial in nature, she can do this by valuing the identity associated with A, by delibrately throwing away resources. A simple way to do this would of course be to transfer coins to a null address, provably incurring a cost to her. A more socially responsible way would be for her to create a series of transactions that happen to have large, and equal, transaction fees. Bitcoin makes the assumption that no one entity controls more than 50% of the network, so if she makes n of these transactions consecutively, each spending m BTC to transaction fees, there is a high probability that she has given up at least n/2 * m BTC of value. This of course is all public knowledge, recorded in the block chain. It also increases the transaction fees for miners, which will be very important for the network in the future. Now Bob can easily examine the block chain, and upon verifying Alice's trust purchase, can decide to accept a zero-confirmation transaction at face value. If Alice breaks that promise, he simply publishes her signed transaction proving that Alice is a fraudster, and future Bob's will distrust Alice's trusted identity, thus destroying the value needed to create it. In effect, we now have a distributed green address system. Now Alice could try to mount a double-spend attack on a whole bunch of people at once, hoping to have them all accept the transaction. However as it is the just trust them model works pretty well already. A good usecase for this idea, beyond the obvious fast payments application, is a distributed anonymizer. Alice can now publish her request to anonymize coins, and other trusted identities can make their bids. If Alice accepts a bid from Bob, she will want Bob to send her the anonymized coins *prior* to her transaction going through, thus breaking the temporal connection between the transactions. Now Alice can give Bob the signed payment transaction, and Bob can submit his payment transaction to the network first, knowing that Alice isn't going to try to rip him off. Bob can also have a trusted identity which signed the contract for the anonymizer transaction, and similarly if he rips Alice off, she can publish it for the world to see. A more subtle effect, is this makes sybil attacks more difficult. To pretend to be a thousand identities is going to now require 1,000 * n coins, and attempting to pull this attack off inherently strengthens the bitcoin network. Obviously we can apply this principle to other things like tor nodes as well. -- http://petertodd.org 'peter'[:-1]@petertodd.org signature.asc Description: Digital signature -- Live Security Virtual Conference Exclusive live event will cover all the ways today's security and threat landscape has changed and how IT managers can respond. Discussions will include endpoint security, mobile security and the latest in malware threats. http://www.accelacomm.com/jaw/sfrnl04242012/114/50122263/___ Bitcoin-development mailing list Bitcoin-development@lists.sourceforge.net https://lists.sourceforge.net/lists/listinfo/bitcoin-development
Re: [Bitcoin-development] Trusted identities
These are interesting thoughts, karma for bitcoins essentially. I would like CoinLab to publish a 'cost of subverting 1-n transactions with 90% probability' metric soon, and I think it would help everyone to understand what that number is. When we started out, you probably needed to wait 5 blocks for $10 or $20 of bitcoin value transfer. Now, I'd happily accept a $1k transaction with 1 confirmation. More difficulty shortens the safe time we can transact large volumes in, which is good for the network. I'm not sure of the current implementation of replacement transactions, can anyone on the core team speak to this? Can I replace transactions, or is that part of the spec unimplemented or deprecated right now? Peter On Thu, Apr 26, 2012 at 8:49 AM, Peter Todd p...@petertodd.org wrote: It recently occured to me that we can use the public nature of the block chain to create trusted identities, for a specific form of trust. Lets suppose Alice has some bitcoins held at bitcoin address A. She wants to establish trust in the identity associated with the ECC keypair associated with A, for instance for the purpose of having other users trust her not to attempt to double spend. Since the trust she seeks is financial in nature, she can do this by valuing the identity associated with A, by delibrately throwing away resources. A simple way to do this would of course be to transfer coins to a null address, provably incurring a cost to her. A more socially responsible way would be for her to create a series of transactions that happen to have large, and equal, transaction fees. Bitcoin makes the assumption that no one entity controls more than 50% of the network, so if she makes n of these transactions consecutively, each spending m BTC to transaction fees, there is a high probability that she has given up at least n/2 * m BTC of value. This of course is all public knowledge, recorded in the block chain. It also increases the transaction fees for miners, which will be very important for the network in the future. Now Bob can easily examine the block chain, and upon verifying Alice's trust purchase, can decide to accept a zero-confirmation transaction at face value. If Alice breaks that promise, he simply publishes her signed transaction proving that Alice is a fraudster, and future Bob's will distrust Alice's trusted identity, thus destroying the value needed to create it. In effect, we now have a distributed green address system. Now Alice could try to mount a double-spend attack on a whole bunch of people at once, hoping to have them all accept the transaction. However as it is the just trust them model works pretty well already. A good usecase for this idea, beyond the obvious fast payments application, is a distributed anonymizer. Alice can now publish her request to anonymize coins, and other trusted identities can make their bids. If Alice accepts a bid from Bob, she will want Bob to send her the anonymized coins *prior* to her transaction going through, thus breaking the temporal connection between the transactions. Now Alice can give Bob the signed payment transaction, and Bob can submit his payment transaction to the network first, knowing that Alice isn't going to try to rip him off. Bob can also have a trusted identity which signed the contract for the anonymizer transaction, and similarly if he rips Alice off, she can publish it for the world to see. A more subtle effect, is this makes sybil attacks more difficult. To pretend to be a thousand identities is going to now require 1,000 * n coins, and attempting to pull this attack off inherently strengthens the bitcoin network. Obviously we can apply this principle to other things like tor nodes as well. -- http://petertodd.org 'peter'[:-1]@petertodd.org -BEGIN PGP SIGNATURE- Version: GnuPG v1.4.10 (GNU/Linux) iQEcBAEBAgAGBQJPmW6EAAoJEH+rEUJn5PoEZfEH/ixptlMX9MzP71bCHMkj7YN1 y6GEkc1vNhyHu01NX77vzSqR4trbVnWJeJ5hH8EB5tgYRwmI17XoQW6Iz8yEXXgO JqUKCTBBexGE+F5RfBkizJ9ap5wXwVrAOIMy/KurSdST+PWMXIPQFaGark01uKcG M4VXg3U9fc/0Zz1QyKpRTI5O7ZSBqPzEh/Xf4TujR39nUtaI5mkT/bmA3+Te7oRT 34QO7ryF7U001Xz2VJCfm9AE8mPPZjMavLTs/XvPSqTdliVCZpjGGHzcJ2BPrni5 LEPBsBBxNsuwFGjnRobQwrkPtmYGFntseMLzCJ3iGXWYwedssBg2LLOx9QaXG04= =PftQ -END PGP SIGNATURE- -- Live Security Virtual Conference Exclusive live event will cover all the ways today's security and threat landscape has changed and how IT managers can respond. Discussions will include endpoint security, mobile security and the latest in malware threats. http://www.accelacomm.com/jaw/sfrnl04242012/114/50122263/ ___ Bitcoin-development mailing list Bitcoin-development@lists.sourceforge.net https://lists.sourceforge.net/lists/listinfo/bitcoin-development -- Peter J. Vessenes CEO, CoinLab M: 206.595.9839 Skype: vessenes
Re: [Bitcoin-development] Trusted identities
On Thu, Apr 26, 2012 at 10:11:51AM -0700, Peter Vessenes wrote: These are interesting thoughts, karma for bitcoins essentially. I would like CoinLab to publish a 'cost of subverting 1-n transactions with 90% probability' metric soon, and I think it would help everyone to understand what that number is. There's gotta be a lot of subtlies there. For instance, if I just want to double-spend, the easiest approach would be to first buy a whole bunch of VPS's, each with different /16's for their IP address to defeat that anti-sybil measure. Then figure out what is the set of nodes closest to my target - easier for an active target that makes a lot of transactions. Then it's just a matter of giving them my transaction, and immediately flooding the network faster with my nodes than their single node. It's not block-replacement, but it would be effective against people who accept 0-confirmations. (although as Gavin has pointed out elsewhere, in the future miners may be very happy to replace transactions for more fees in that kind of circumstance) Of course, this whole trusted identities business could be equally used for the bitcoin flood network as a whole to prevent sybil's, and perhaps even get guarantees of behavior like My node respects nLockTime and won't ignore it for a higher-fee transaction replacement When we started out, you probably needed to wait 5 blocks for $10 or $20 of bitcoin value transfer. Now, I'd happily accept a $1k transaction with 1 confirmation. Yup, especially when a human is in the loop. More difficulty shortens the safe time we can transact large volumes in, which is good for the network. I'm not sure of the current implementation of replacement transactions, can anyone on the core team speak to this? Can I replace transactions, or is that part of the spec unimplemented or deprecated right now? My understanding is it's completely disabled. -- http://petertodd.org 'peter'[:-1]@petertodd.org signature.asc Description: Digital signature -- Live Security Virtual Conference Exclusive live event will cover all the ways today's security and threat landscape has changed and how IT managers can respond. Discussions will include endpoint security, mobile security and the latest in malware threats. http://www.accelacomm.com/jaw/sfrnl04242012/114/50122263/___ Bitcoin-development mailing list Bitcoin-development@lists.sourceforge.net https://lists.sourceforge.net/lists/listinfo/bitcoin-development
Re: [Bitcoin-development] Trusted identities
look at the first line of the if statement
// Check for conflicts with in-memory transactions
CTransaction* ptxOld = NULL;
for (unsigned int i = 0; i tx.vin.size(); i++)
{
COutPoint outpoint = tx.vin[i].prevout;
if (mapNextTx.count(outpoint))
{
// Disable replacement feature for now
return false;
// Allow replacing with a newer version of the same transaction
if (i != 0)
return false;
ptxOld = mapNextTx[outpoint].ptx;
if (ptxOld-IsFinal())
return false;
if (!tx.IsNewerThan(*ptxOld))
return false;
for (unsigned int i = 0; i tx.vin.size(); i++)
{
COutPoint outpoint = tx.vin[i].prevout;
if (!mapNextTx.count(outpoint) || mapNextTx[outpoint].ptx !=
ptxOld)
return false;
}
break;
}
}
From: Peter Vessenes pe...@coinlab.com
To: Peter Todd p...@petertodd.org
Cc: bitcoin-development@lists.sourceforge.net
Sent: Thursday, April 26, 2012 6:11 PM
Subject: Re: [Bitcoin-development] Trusted identities
These are interesting thoughts, karma for bitcoins essentially.
I would like CoinLab to publish a 'cost of subverting 1-n transactions with 90%
probability' metric soon, and I think it would help everyone to understand what
that number is.
When we started out, you probably needed to wait 5 blocks for $10 or $20 of
bitcoin value transfer.
Now, I'd happily accept a $1k transaction with 1 confirmation.
More difficulty shortens the safe time we can transact large volumes in, which
is good for the network.
I'm not sure of the current implementation of replacement transactions, can
anyone on the core team speak to this? Can I replace transactions, or is that
part of the spec unimplemented or deprecated right now?
Peter
On Thu, Apr 26, 2012 at 8:49 AM, Peter Todd p...@petertodd.org wrote:
It recently occured to me that we can use the public nature of the block
chain to create trusted identities, for a specific form of trust.
Lets suppose Alice has some bitcoins held at bitcoin address A. She
wants to establish trust in the identity associated with the ECC
keypair associated with A, for instance for the purpose of having other
users trust her not to attempt to double spend. Since the trust she
seeks is financial in nature, she can do this by valuing the identity
associated with A, by delibrately throwing away resources. A simple way
to do this would of course be to transfer coins to a null address,
provably incurring a cost to her.
A more socially responsible way would be for her to create a series of
transactions that happen to have large, and equal, transaction fees.
Bitcoin makes the assumption that no one entity controls more than 50%
of the network, so if she makes n of these transactions consecutively,
each spending m BTC to transaction fees, there is a high probability
that she has given up at least n/2 * m BTC of value. This of course is
all public knowledge, recorded in the block chain. It also increases the
transaction fees for miners, which will be very important for the
network in the future.
Now Bob can easily examine the block chain, and upon verifying Alice's
trust purchase, can decide to accept a zero-confirmation transaction at
face value. If Alice breaks that promise, he simply publishes her signed
transaction proving that Alice is a fraudster, and future Bob's will
distrust Alice's trusted identity, thus destroying the value needed to
create it.
In effect, we now have a distributed green address system.
Now Alice could try to mount a double-spend attack on a whole bunch of
people at once, hoping to have them all accept the transaction. However
as it is the just trust them model works pretty well already.
A good usecase for this idea, beyond the obvious fast payments
application, is a distributed anonymizer. Alice can now publish her
request to anonymize coins, and other trusted identities can make their
bids. If Alice accepts a bid from Bob, she will want Bob to send her the
anonymized coins *prior* to her transaction going through, thus breaking
the temporal connection between the transactions. Now Alice can give Bob
the signed payment transaction, and Bob can submit his payment
transaction to the network first, knowing that Alice isn't going to try
to rip him off. Bob can also have a trusted identity which signed the
contract for the anonymizer transaction, and similarly if he rips Alice
off, she can publish it for the world to see.
A more subtle effect, is this makes sybil attacks more difficult. To
pretend to be a thousand identities is going to now require 1,000 * n
coins, and attempting to pull this attack off inherently strengthens the
bitcoin network. Obviously we can apply this principle to other things
like tor nodes as well.
--
http://petertodd.org
Re: [Bitcoin-development] Trusted identities
On 04/26/2012 01:30 PM, Peter Todd wrote: More difficulty shortens the safe time we can transact large volumes in, which is good for the network. I'm not sure of the current implementation of replacement transactions, can anyone on the core team speak to this? Can I replace transactions, or is that part of the spec unimplemented or deprecated right now? My understanding is it's completely disabled. Went on a scavenger hunt with Gavin a couple weeks concerning tx replacement. The conclusion was that if, (1) Transaction has lock-time in the future AND (2) Transaction has non-maximum sequence number Then the transaction will both propagate and be accepted into nodes' memory pools, but will not go into any block until locktime expires. If the lock-time is in the past OR sequence number on all TxIns is 0x, then it will be immediately valid and included in the blockchain. But the actual replacement mechanism is disabled. Therefore, the nodes accept the tx as if it's replaceable, but don't allow it to be replaced. This means that it is effectively replaceable *once*, but only if you inject a final transaction into the blockchain. You can't broadcast a final version of the same tx, because it will conflict with the non-final one sitting in all the other nodes' memory pools. You need a miner to agree to remove the non-final tx from their memory pool and specifically include your replacement. -Alan -- Live Security Virtual Conference Exclusive live event will cover all the ways today's security and threat landscape has changed and how IT managers can respond. Discussions will include endpoint security, mobile security and the latest in malware threats. http://www.accelacomm.com/jaw/sfrnl04242012/114/50122263/___ Bitcoin-development mailing list Bitcoin-development@lists.sourceforge.net https://lists.sourceforge.net/lists/listinfo/bitcoin-development
