[Cryptography] Bitcoin theft and the future of cryptocurrencies
iang
iang at iang.org
Thu Jan 4 15:30:30 EST 2018
On 13/12/2017 11:21, Georgi Guninski wrote:
> If your bitcoin wallet is compromised, all your bitcoins are gone
> forever. With a credit card, you have some chance of only minor
> damage. If your computer is owned, your wallet is at risk.
Yes.
> This appears major problem for the widespread adoption of bitcoin
> IMHO.
One would think, modulo hype.
> Fixing it appears to contradict decentralization, which opens another
> can of "worms".
>
> Potential approach is to use "trusted wallet proxy", but this may not
> work in practice.
>
> Are these concerns taken seriously?
The Bitcoin community has bought into what might be called the "security
of the chain" fallacy - that the security of the chain is more important
than the security of the users. To an extent this aligns with price
increases, use cases and the like.
Part of the flaw inherent in the approach is what we grey hairs used to
call WYTM - who are you threatened by, how, why? If you are threatened
by the state, then that's one thing. If you are going to be robbed by
your spouse in a legally sponsored attack called divorce, that's another
thing. Cryptocurrency are mostly worried about one set of risks that
could be said to be lower risk than average John Doe cares about.
> Any technical attempts at mitigating cryptocurrency theft?
Since early days, hardware wallets, cold storage and multisig have been
proposed. But these are hard to use.
I am working on a hybrid model where cold storage is issued to a
(governable, reversable) derivative issue that is managed by a TTP that
is "us".
It's complex of course to get the mix right. Part of the problem is
whatever design you come up with, there needs to be some reversibility
built in at some point. Which kinda flies in the face of raw
blockchain. So blockchain needs to compromise, as do the people.
iang
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