bitcoin

[Bloganuary] Uninvention

This post is part of my attempt at Bloganuary 2024. Today’s prompt is:

If you could un-invent something, what would it be?

Fucking cryptocurrency.

I remember when Bitcoin first appeared. A currency based on a ledger recorded in a shared blockchain sounded pretty cool from a technological standpoint, and so – as a technology enthusiast – I experimented with it.

I recall that I bought a couple of Bitcoin; I think they were about 50 pence each? It seemed like a “toy” currency; nothing that would ever attract any mainstream attention. After all: why would it? It’s less-anonymous than cash. It’s less-convenient than cards. It’s (even) less-widely-accepted than cheques. It somehow manages to be somehow slower than everything. And crucially, without any government backing it can’t be used to settle a debt or pay your taxes¹. The technology was interesting to me, but it had no real-world application.

Imagine my surprise when people started investing in the cryptocurrency. Began accepting it in payment for things. I know a tulip economy when I see one, I figured, so I got rid of my “toy” Bitcoins when the price hit around £750 each². Sure, it’d have been “smarter” to wait until it hit £45,000 each, but I genuinely thought the bubble was going to burst and, besides, I’d never wanted to get into that game to begin with: I was just playing about with an interesting bit of technology when suddenly half the world began talking about it.

The world taking cryptocurrencies seriously was the worst thing that ever happened to them. When they were just a toy, nobody “invested” in them. Nobody built planet-destroying mining rigs to compete to produce more of them. Nobody used them as a vehicle to make ransomware feasible or set up elaborate Ponzi schemes or get-rich-quick scams off the back of them.

(Fake) cryptolocker screenshot that implies that DanQ.me has encrypted your files and will only decrypt them if you send 1 EGX (Emma GoldCoin). — DanQ.me has encrypted all your files. As Emma GoldCoin is the only cryptocurrency I can get behind, I demand you send me 1 EGX to unlock them. (No, don’t go and check; I promise they’re encrypted! Just take my word on it!)

And yeah, with few exceptions (of which Emma GoldCoin is the best), cryptocurrencies not only provide a vehicle for scammers, do nothing to combat inequality (and potentially make it worse by tying it to the digital divide), and destroy the planet… but they generally don’t even achieve the promises they make of anonymous, decentralised, stable, utilitarian currencies.

I’m not going to deep-dive into everything that’s wrong with cryptocurrencies³ (and I’m not going near NFTs, but rest assured they’re even stupider). There’s plenty of more-eloquent people online who can explain it to you if you need to; start at Web3IsGoingGreat.com if you like.

So yeah, if we could just uninvent cryptocurrencies, or at least uninvent whatever it is the masses think they see in them, then that’d be just great, thanks.

Footnotes

¹ Being legal tender and being useful to pay your taxes are the magic beans that make fiat currencies worth something.

² Sometimes, people mistake me for somebody with any level of interest in cryptocurrency “investment”. After I’m done correcting their misapprehension, I enjoy pointing out that I made a 150,000% return-on-investment on cryptocurrencies and I still recommend against anybody getting involved in them.

³ If I can pick out just one pet hate, though, that trumps all the others: it’s the “cryptobros” who call cryptocurrencies “crypto”, as if that wasn’t a prefix that already had a plethora of better-established uses, all of which are undermined by the co-opting of their name. It’s somehow even worse than the idiots who shorten Wikipedia to “wiki”.

Asymmetric Cryptography: Works Like Magic

This is a repost promoting content originally published elsewhere. See more things Dan's reposted.

Asymmetric Cryptography: Works Like Magic (cyberhoboing with dominic tarr)

It’s a common complaint that cryptography is too hard for regular people to understand – and that all our current cryptographically secure applications are designed for cyborgs and not humans. While…

It’s a common complaint that cryptography is too hard for regular people to understand – and that all our current cryptographically secure applications are designed for cyborgs and not humans. While the latter charge may well be correct, I argue that the former most certainly isn’t, because we have been teaching children the basic security principles behind asymmetric cryptography for probably thousands of years.

What am I talking about? A fairly tail called Rumplestiltskin, which is actually about bitcoin!

You probably heard this fairly tale as a child – but let me refresh your memory.

There is a miller, who drunkenly brags that is daughter can spin straw into gold.

probably, he was posting about his half baked cryptocurrency ideas on bitcointalk, and creating money “gold” from pointless work “spinning straw” sounds A LOT like bitcoin mining.

Anyway, the king is very impressed with his story.

the king is a venture capitalist?

And wants to see a demonstration, oh and if it doesn’t work he will cut off both their heads.

I have not heard about venture capitalists being quite this evil, but it seems some of them are into this medieval stuff

Of course, the miller and his daughter don’t actually have the ability to create gold by magic, so they are in big trouble! but just then a magic imp appears.

a hacker, who understands cryptography

The imp says he can spin straw into gold, but for a price: the daughter’s first born child.

in the modern version he wants her naked selfies

It’s a terrible deal, but the alternative is death, so they reluctantly accept. The imp spins straw into gold in 3 increasingly dramatic episodes.

The kind is satisified, and marries the daughter, making her queen.

their startup is aquired

One year later, the first child is born. The imp returns demanding his prize. Because they love their baby, the King and Queen pleads with the imp to get out of the deal. They offer him all their riches, but the imp is not interested! Desperately, they ask is there any other way? any at all? The imp replies, “Of course not! not unless you can guess my True Name”

the true name is actually his private key. If they can guess that, the hacker looses his magical power over them

“Okay I will try and guess your name” says the Queen. The imp just laughs! “you’ll never guess it!” “but I’ll give you three days to try!”

The imp skips off into the forrest, and the queen trys to think of his name for 3 days… but can’t figure it out.

The queen trys to brute force his private key. but there is not enough compute in the entire kingdom!

But then, the a messenger is travelling through the forrest, and he happens past a strange little man, dancing around a camp fire, singing:

ha ha ha!
te he he!
they’ll never guess my private key!
just three days! not enough to begin,
to guess my name is rumplestiltskin!

Being a messenger, he had a good memory for things he heard. When he arrived back at the castle, he mentioned the curious story to the queen.

the hacker had been careless with his private key

When the imp arrived in the morning, the queen greeted him by name. He was furious! He stamped his foot so hard the ground split open and then he fell into the gaping hole, never to be seen again. The king, queen, baby lived happily ever after, etc, etc.

they stole all his bitcoin

The simularities between this fairly tale and cryptography is uncanny. It has proof of work, it has private keys, it has an attempted brute force attack, and a successful (if accidental) end point attack. The essential point about your private key is captured successfully: the source of your magic is just a hard to guess secret, and that it’s easy to have a hard to guess name, but what gets you in the end is some work around when they steal your key some other way. This is the most important thing.

It’s not a talisman that can be physically protected, or an inate power you are born with – it’s just a name, but it must be an ungessable name, so the weirder the better.

“rumplestiltskin” is the german name for this story, which became wildly known in english after the brothers grim published their collection of folktales in the early 19th century, but according to wikipedia there are versions of this story throughout the europe, and the concept that knowing the true name of a magical creature give one power over it is common in mythology around the world.

How did the ancients come up with a children’s story that quite accurately (and amusingly) explains some of the important things about asymettric cryptography, and yet we moderns did not figure out the math that makes this possible this until the 1970’s?

Since the villian of the story is magical, really they have chosen any mechanism for the imps magic, why his name? Is this just a coincidence, or was there inspiration?

The astute reader has probably already guessed, but I think the simplest (and most fun) explaination is the best: extraterrestials with advanced cryptosystems visited earth during prehistory, and early humans didn’t really understand how their “magic” worked, but got the basic idea

To be continued in PART 2…

Dominic Tarr

“I Forgot My PIN”: An Epic Tale of Losing $30,000 in Bitcoin

This is a repost promoting content originally published elsewhere. See more things Dan's reposted.

In January 2016, I spent $3,000 to buy 7.4 bitcoins. At the time, it seemed an entirely worthwhile thing to do. I had recently started working as a research director at the Institute for the Future’s Blockchain Futures Lab, and I wanted firsthand experience with bitcoin, a cryptocurrency that uses a blockchain to record transactions on its network. I had no way of knowing that this transaction would lead to a white-knuckle scramble to avoid losing a small fortune…

Mark Frauenfelder (Wired)