[Cryptography] [ANNOUNCE] HashCash Digital Cash

[Ashish Gulhati]

> On Jun 21, 2017, at 11:17 PM, Alfie John <alfie at alfie.wtf> wrote:
> 
> Is there a way to prevent a Vault from minting counterfeit HashCash, or
> do users have to trust the Vault?

Users have to trust the vault.

However, if they’re paranoid, they can minimize the amount of time they
keep their BTC with the vault, and this would really be the recommended
method to use HashCash (abbreviated [#] from now) that’s backed by BTC.

You only keep as much in [#] as you expect to need for immediate foreseeable
expenses, and you top it up as needed. Just about the same as how you
top up your physical wallet with paper cash at the ATM. The paper cash
in your wallet is vulnerable to muggers and pickpockets. Your cash in
a [#] vault is vulnerable to vault failure.

If a vault does go rogue or die, you only lose the small amount of cash you 
had stored there. If you want to be really safe, you could further split that $500 
or whatever across 10 or 20 different vaults in different jurisdictions. Now
your [#] is pretty much safer than the fiat cash in your physical wallet.

[#] backed by precious metals would be a different story, as [#] from a
reputable precious metal backed vault would actually be an excellent
long-term store of value as well as great everyday money (assuming 
the crypto holds up to attack).

Additionally, a vault would counterfeit coins at its own peril. It doesn’t
even need to counterfeit them, it can just steal stored BTC directly, it
amounts to exactly the same thing. However if a vault does this, it risks
running out of BTC and being unable to process automated {#] > BTC 
exchanges, which would immediately cause all independent vault rating 
systems to turn its rating to junk, and that’d be the end of that vault’s 
business. 

So this would be something vaults that are in it for the long-term profits 
would never even dream of doing, any more than a centralized trusted 
third party package delivery service (such as FedEx) in a free market would 
risk its entire business to steal somebody’s Amazon package.

>> A HashCash vault requires much less trust than most web wallets as it doesn’t
>> require ID, can’t track transactions, and can’t block the funds of targeted
>> users, or block specific transactions.
> 
> Can you explain further on what you mean by this? Please correct me if
> I'm wrong, but from my understanding, a user's HashCash is associated
> with a single Vault.

No, a user could choose to use as many vaults as (s)he likes. Like email
accounts. You can have 1 or 100, it’s up to you.

> If so, wouldn't this mean that a Vault *could* block a transfer out?
> Moreso if a Vault were to go offline.

A vault can't block transactions, as it doesn’t see transactions, all it 
sees are coins to be verified/spent. All transactions happen out of sight of
the vault, when one user directly transfers coins to another. So the
vault can’t say "I’m going to block this donation to Wikileaks”.
A web wallet can do that. 

Nor can the vault say “I’m going to not pay this X user his Bitcoin” because 
it has no way to identify users. Any coin could be coming from a reputation 
rating bot rather than a real user. Vault can’t tell the difference between 
them. So to keep its reputation up it has to treat every request as if it came 
from a reputation rating bot.

A vault *could* theoretically block a BTC out transfer based on the destination
BTC address, but that’s really a problem with BTC. And vaults wouldn’t do it 
anyway because they’d still lose their reputation.

If a vault went offline that’s a problem of course. If it’s just a temporary
network problem users could use other vaults till the problem is resolved.
Their funds would still be safe. If it’s a deeper issue, the vault’s business is 
going to be toast, so vaults will probably do their best to prevent that. And, 
as above, users can protect themselves from this eventuality by splitting 
their [#] holdings across many vaults.

Once there are 100 competing geographically dispersed well-reputed 
precious metal [#] vaults in operation (and probably a lot earlier than that) 
I will happily pull all my money out of all banks (and BTC) and put 1% in 
each vault. There’s no way I’d ever do that with unbacked blockchain 
cryptocurrencies.

Cheers

#!