--- a/handouts/ho08.tex Mon Dec 08 07:14:28 2014 +0000
+++ b/handouts/ho08.tex Mon Dec 08 11:14:33 2014 +0000
@@ -675,28 +675,27 @@
relatively high confidence and ease in the near future.''
\end{quote}
-\noindent The only thing I can add is that with Bitcoins we
-will in the future have even more fun hearing confessions from
-famous or not-so famous people like the infamous
-``I did not
-inhale''.\footnote{\url{www.youtube.com/watch?v=Bktd_Pi4YJw}}
-The whole point of the blockchain is that it public and will
-always be.
+\noindent The only thing I can add to this is that with the Bitcoin
+blockchain we will in the future have even more pleasure hearing
+confessions from reputable or not-so-reputable people, like the
+infamous ``I did not inhale'' from an US
+president.\footnote{\url{www.youtube.com/watch?v=Bktd_Pi4YJw}} The
+whole point of the blockchain is that it public and will always be.
-There are some precautions one can take for ensuring anonymity, like
-to use a new public-private key pair for every new transaction, and to
-access Bitcoin only through the Tor network. But the transactions in
-Bitcoins are designed such that they allow one to combine incoming
-transactions. In such cases we know they must have been made by the
-single person who knew the corresponding private keys. So using
-different public-private keys for each transaction might not actually
-make the de-anonymisation task much harder. And the point about
-de-ano\-nymising `anonymous' social networks is that the information
-is embedded into the structure of the transition graph. And this
-cannot be erased with Bitcoins.
+There are some precautions one can take for boosting anonymity, for
+example to use a new public-private key pair for every new
+transaction, and to access Bitcoin only through the Tor network. But
+the transactions in Bitcoins are designed such that they allow one to
+combine incoming transactions. In such cases we know they must have
+been made by the single person who knew the corresponding private
+keys. So using different public-private keys for each transaction
+might not actually make the de-anonymisation task much harder. And the
+point about de-ano\-nymising `anonymous' social networks is that the
+information is embedded into the structure of the transition
+graph. And this cannot be erased with Bitcoins.
-One paper that has fun with spotting transactions to Silk Road (2.0)
-and to Wikileaks is
+One paper that has fun with spotting transactions made to Silk Road (2.0)
+and also to Wikileaks is
\begin{center}
\url{http://people.csail.mit.edu/spillai/data/papers/bitcoin-transaction-graph-analysis.pdf}
@@ -711,27 +710,27 @@
\subsubsection*{Government Meddling}
-Finally, what are the options for a typical western government
-to meddle with Bitcoins? This is of course one feature the
-proponents of Bitcoins also tout: namely that there aren't any
-options. In my opinion this is far too naive and far from the
-truth. Let us assume some law enforcement agencies would not
-have been able to uncover the baddies from Silk Road 1.0 and
-2.0 (they have done so by uncovering the Tor network, which is
-an incredible feat on its own). Would a government have
-stopped? I think no. The next target would have been Bitcoin.
-If I were the government, this is what I would consider:
+Finally, what are the options for a typical Western government to
+meddle with Bitcoins? This is of course one feature the proponents of
+Bitcoins also tout: namely that there aren't any options. In my
+opinion this is far too naive and far from the truth. Let us assume
+some law enforcement agencies would not have been able to uncover the
+baddies from Silk Road 1.0 and 2.0 (they have done so by uncovering
+the Tor network, which is an incredible feat on its own). Would the
+government in question have stopped? I do not think so. The next
+target would have been Bitcoin. If I were the government, this is
+what I would consider:
\begin{itemize}
-\item The government could compel ``mayor players'' to
- blacklist Bitcoins (for example at Bitcoin exchanges).
- This would impinge on what is called \emph{fungibility}
- of Bitcoins and make them much less attractive to
- baddies. Suddenly their ``hard-earned'' Bitcoin money cannot
- be spent anymore.The attraction of this option is that
- this blacklisting can be easily done ``whole-sale'' and
- therefore be really be an attractive target for
- governments \& Co.
+\item The government could compel ``mayor players'' to blacklist
+ Bitcoins (for example at Bitcoin exchanges, which are usually
+ located somewhere in the vicinity of the government's reach). This
+ would impinge on what is called \emph{fungibility} of Bitcoins and
+ make them much less attractive to baddies. Suddenly their
+ ``hard-earned'' Bitcoin money cannot be spent anymore. The attraction
+ of this option is that this blacklisting can be easily done
+ ``whole-sale'' and therefore be really be an attractive target for
+ governments \& Co.
\item The government could attempt to coerce the developer
community of the Bitcoin tools. While this might be a
bit harder, we know certain governments are ready to
@@ -740,7 +739,7 @@
down their complete operation).
\item The government could also put pressure on mining pools
in order to blacklist transactions from baddies. Or be a
- big a miner itself. Given the gigantic facilities that
+ big miner itself. Given the gigantic facilities that
are built for institutions like the NSA (pictures from
the Utah dessert)
@@ -750,16 +749,15 @@
\includegraphics[scale=0.031]{../pics/nsautah2.jpg}
\end{center}
- this would not be such a high bar to jump over. Remember
- it ``only'' takes to be temporarily in control of 50\%+
- of the mining capacity in order to undermine the trust
- in the system. Given sophisticated stories like Stuxnet
- (where we still not know the precise details) maybe even
- such large facilities are not really needed. What
- happens, for example, if a government starts DoS attacks
- on existing miners: They have complete control
- (unfortunately) of all mayor connectivity providers,
- i.e.~ISPs.
+ this would not be such a high bar to jump over. Remember it
+ ``only'' takes to be temporarily in control of 50\%-plus of the
+ mining capacity in order to undermine the trust in the
+ system. Given sophisticated stories like Stuxnet (where we still
+ do not know the precise details) maybe even such large
+ facilities are not really needed. What happens, for example, if
+ a government starts DoS attacks on existing miners? They have
+ complete control (unfortunately) of all mayor connectivity
+ providers, i.e.~ISPs.
There are estimates that the Bitcoin mining capacity
outperforms the top 500 supercomputers in the world,
@@ -783,7 +781,7 @@
tumble. Some governments have already such an ``impressive''
trackrecord in this area, such a thread would be entirely
credible. Because of all this, I would not have too much hope
-that Bitcoins are free from interference by government \& Co when
+that Bitcoins are free from interference by governments \& Co when
it will stand in their way, despite what everybody else is
saying. To sum up, the technical details behind Bitcoins are
simply cool. But still the entire Bitcoin ecosystem is in my