[Cryptography] Bitcoin is a disaster.

[Ben Laurie]

On Sat, 2 Jan 2021 at 03:42, jrzx via cryptography <
cryptography at metzdowd.com> wrote:

> On 2020-12-29 11:07, Ray Dillinger wrote:
> > The scarcity of block chain space has led people to re-invent every
> > last feature of the banks they thought they were going to be escaping.
> > Including debt brokering (lightning network) and fractional-reserve
> > banking, starting with the case of Mt.Gox and continuing to ventures
> > today by "responsible" businesspeople who just don't get, or don't
> > care, or both, that the entire reason the system existed, as far as the
> > early adopters were concerned, was to get away from exactly that.
>
> A public and analyzable blockchain is in fact useful, (though proof or
> work is inherently wasteful) because people ultimately want to be able to
> prove that they paid, and because cryptographic cleverness to avoid
> blockchain analysis eats up a lot of inherently scarce blockchain space.
>
> We need a lightning layer on top to support real pseudonymity, to
> economize on inherently scarce blockchain space, and to provide instant
> transactions.
> Unfortunately the bitcoin architecture makes a real lightning network
> impossible, and the so called bitcoin lightning layer is recapitulating
> central banking and fractional reserve banking.  We need to recapitulate
> full reserve correspondence banking instead, to provide real security of
> lightning layer transactions and to provide real anonymity.
>
> Clever cryptography to avoid analysis of the blockchain (Monaro) merely
> reduces, rather than eliminates, the blockchain analysis problem, and the
> trouble is that any time you use a network whose primary job is to provide
> anonymity, you leave a trail on the equally evil DNS revealing that someone
> traceable through DNS has made an effort to avoid being traced.
>
> We need a crypto currency that has, like Jitsi and Namecoin, a name system
> that replaces DNS, a replacement for TCP/QUIK that uses that name system
> instead of the domain system, and a lightning network that means that
> anyone can do full reserve correspondence banking with anyone without any
> information the ultimate beneficiary of payment is being visible to
> intermediaries or the blockchain.
>
> We don't need clever cryptography to support pseudonymity on the
> blockchain.  We need clever cryptography on the blockchain to enable clever
> cryptography on the lightning layers that enables anyone with a full
> reserve to play on the lighting layer without signing up with anyone other
> than direct intermediaries, and without revealing the ultimate beneficiary
> of a payment on the lighting layer.
>
> Proof of stake is inherently tricky, because anything that reduces the
> cost of finding the next block makes attacks cheaper.  It requires a
> protocol that detects Byzantine failure and disincetivises Byzantine
> defection, which are well known to be soluble but very difficult problems.
> But obviously, we need to have the cheapest possible way of finding the
> next block.
>
> A proof of stake algorithm requires a protocol akin to Byzantine Paxos, in
> which stakeholders act not so much as shareholders voting an board, but as
> witnesses that final block was generated without Byzantine failure in
> accordance with the consensus of the chain as to how the next block should
> be constructed.
>

As I mentioned on the other thread; Blockmania:
https://arxiv.org/abs/1809.01620


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