[Cryptography] threat models, was Krugman blockchain currency skepticism

[John Levine]

The more I read this stuff, the more I think people really need to tell
us what their threat models are.

In article <d880666a-ae52-3404-65ce-38cedddaed88 at fexl.com> you write:
>Benjamin Kreuter wrote on 08/03/2018 08:23 PM:
>> Except that we know how to solve that problem without all the expense
>> of blockchains.  You use Chaum-style e-cash that supports at least one
>> offline transaction "hop."
>
>Except that a Chaumian e-cash issue would be hosted on an individual
>server (or group thereof), and state actors could interfere with access
>to that server.  Also a Chaumian e-cash issue would presumably be
>redeemable for assets on demand, and the vaulted assets would be
>vulnerable to seizure.

If you're OK with a centralized system with tethered assets, why don't
you use Paypal?  Internal transactions are fast and free, value is
firmly tethered and exchangable into banks all over the world.  Before
arguing that they're not trustworthy, please compare the number of
people who trust Paypal to do their transactions (on the order of 200
million) with those who use any sort of cryptocurrency.  Why are they
all wrong?

>I tend to think the future is in individually issued real bills of
>exchange, redeemable for assets, with invoices signed by the payee and
>those signed invoices further signed by the payer, and exchanges cleared
>by the issuer.  Bills of exchange by different issuers could be traded
>on a market floor to allow price discovery based on issuer reputation
>and asset value.

That worked OK in the 1700s but there's probably reasons we've moved
beyond it.  But again, what's your threat model?  Do you assume these
are recorded on some sort of distributed consensus blockchain?  If so,
who runs it, and why do you trust them?  (The answer isn't "nobody",
someone's doing the mining or equivalent.)  If an issuer doesn't
redeem a bill, what recourse do you have other than to denounce him?
Can anyone be an issuer?  If so, why can't I issue bills each good for
a kilo of unobtainium and run away with the money?

R's,
John