Fwd: [Cryptography] Electronic currency revived after 20-year hiatus

[Cari Machet]

so interesting thread on crypto

---------- Forwarded message ----------
From: Ray Dillinger <bear at sonic.net>
Date: Thu, Aug 18, 2016 at 9:40 PM
Subject: Re: [Cryptography] Electronic currency revived after 20-year hiatus
To: cryptography at metzdowd.com




On 08/17/2016 06:21 PM, Natanael wrote:

> All previous solutions required gatekeepers, because they all failed if
the
> adversary could perform a Sybil attack (flood the network with nodes).

You're wrong.

Existing solutions for the Byzantine Generals Problem provide for any
two correctly functioning nodes to reach agreement regardless of what
any or all other nodes do.  Sybil attacks do not affect the correctness
of the solution.

The problem with them is that required bandwidth per peer scale with the
square of the total number of all other peers.  And sybil attacks DO
affect the scale of the problem for bandwidth purposes.

With block chains the required bandwidth per peer scales linearly with
the number of all other peers (well, technically with the size of the
transactions done by all other peers), making it more scalable (but
still not scalable to the level of a widely used payment network).

The "Lightning Network" solves a problem for people who do many
transactions per day with each other.  There is no merchant nor client
with whom I do more than one transaction per day, so absolutely none of
my transactions would wind up using it.  I expect it to have some real
impact on the bandwidth and size of the block chain because some
business models are absolutely pathological in terms of number of
transactions per day by individual customers (like casinos or
speculative markets) but not nearly as much as its proponents hope
because it simply isn't applicable to ordinary tx (like grocery
stores, office supply vendors, restaurants, or investment markets).

And it still doesn't solve the problem that Trusted parties have emerged
in the form of online wallets and exchanges etc, and they are failing
and/or goxxing people on a regular basis.

Multimillion dollar losses, thefts, and swindles impose public as well
as private expense.  Legislators, Law enforcers, and civil courts cannot
ignore them because the people who get goxxed when they happen won't
allow them to.  Legislation, law enforcement, and both civil and
criminal prosecutions in court are damned expensive, and will
accordingly attract taxation and regulation as the taxpayers
underwriting that expense use their governments to seek to limit their
losses.

Being a self-sufficient or self-regulating system does not include
placing fiscal burdens on the public without taxation. Nor does it
include freeloading on public law enforcement, legislative, and judicial
resources without regulation.

                                Bear


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