[Cryptography] Almost decentralized currency

[ianG]

On 24/06/2014 01:33 am, L. M. Goodman wrote:
> ...
> Bitcoin's proof of work system implies that participants need to trust no one, a priori. Yet, a posteriori, they end up placing their trust in very few mining operators. In which world are Ghash.io and Eligius less likely to collude or be compromised than a set of trusted signers such as the EFF, the FSF, Google, Goldman Sachs, Al Jazeera, the University of Hong-Kong, etc?


Precisely.  The end result is that Bitcoin's design has moved the
problem around, it hasn't removed it entirely or at all.

...
> Can we still have an efficient cryptocurrency that does not rely on a proof-of-work system or on trusted mintlets? I believe so.


<cof>  Pre-BTC cryptocurrency business was all about that.  Don't ask
that question around us old-timers, you'll get odd looks ;-)


> Social networks provide a peer to peer fabric of trust that can be leveraged for a cryptocurrency. Imagine a peer to peer network of pseudonymous peers establishing trust links between one another. If such a network could reach a consensus without allowing malicious nodes to take control of the consensus, then it could maintain a pointer to the head of a blockchain, and serve as a ground truth to determine the state of a ledger.


Once you have a trust fabric (to use some unfortunate jargon) then
everything changes.

But, changing these environmental factors also changes the requirements.
 It is a truism that you should base your protocol on the existing lines
of trusted communication;  Bitcoin assumes none which informs its
radical design.  Indeed it could be said that the only requirement it
has is to be fully defended against centralised attack, and as a
corollary, no trust at all is assumed.  This is fine in a sense, but it
doesn't mirror the real world.


> [sybil ignored]

> Such a network could let honest node maintain a consensus over the current head of a blockchain and offer a robust cryptocurrency that is far safer and more efficient than proof-of-work, while appealing to people looking for a non hierarchical protocol.


Yes.  If you are dealing in networks of smaller internally trusted
groups then you maybe don't need the blockchain at all, because they
already trust members internally.  Use that trust, run a small
centralised system, locally.  Then, your challenge is to bring the
groups together.  What do they want?  What does relating to other groups
mean?

BTW, a lot of this is not about crypto.  It's far more about
understanding what the groups are and do, and molding the crypto to
assist that functionality.  You can't just assume the groups behave like
some paper on Sybil attacks and then go find that plastic world.



iang