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Ideal Legislation Model for State Level?

Tennessee Regulation

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#21 Dario Di Pardo

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Posted 22 July 2014 - 04:57 PM

Sarcasm noted :)

I don't have much to hide, so I wouldn't mind answering yes, as I think most users new to bitcoin wouldn't mind much too.

I am sure you are aware of the fact that the original bitcoin paper didn't mention full anonymity as a key concept or necessity. Actually it explains how bitcoin transactions are anonymous with some similarity to bank transactions nowadays. And that's it.
It doesn't explain the need to hide from the government at all, although we see this as an additional benefit and turned it into a bitcoin concept.

Do you really think the US government will allow themselves to lose massive amounts of income tax money?

Maybe you can persuade them (and that would be fantastic), but I think you will be needing a reasonable sized army for this.

Do you feel that in order for Bitcoin Technology to succeed, users must give up anonymity? Y

#22 Colin Gallagher

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Posted 22 July 2014 - 05:00 PM

Dario, the bitcoin protocol doesn't exist to prevent money laundering.  It isn't going to be developed to accomodate legislator's wishes.  It will move in the opposite direction, actually, to eventually provide support for anonymous transactions.

I mean no disrespect for your expression here on the forum, but no matter what you do to try to corral bitcoin users, we will defeat all legislative objectives.  Total financial noncompliance is the starting point for activity relating to decentralized protocols.  Do not expect any further replies from me (to you) in this thread.

Goodbye.

#23 Dario Di Pardo

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Posted 22 July 2014 - 06:09 PM

Quote

we will defeat all legislative objectives

I hope so and I thank you for your comment anyway.




Dario out.

#24 David R Allen

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Posted 22 July 2014 - 06:23 PM

And they all lived happily ever after....

#25 Dario Di Pardo

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Posted 22 October 2014 - 08:20 PM

Maybe a step in the right direction:

http://www.coindesk....gital-identity/

#26 Colin Gallagher

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Posted 26 October 2014 - 08:15 PM

View PostDavid Allen, on 22 July 2014 - 03:22 PM, said:

Opinion Noted.

It might be worth a POLL on the subject. How would you feel about a poll that asked:

Do you feel that in order for Bitcoin Technology to succeed, users must give up anonymity? Y/N

To begin with, bitcoin users don't have anonymity.  So, the question you ask should really be rephrased, because whether intentionally or not, it can be understood as indirectly suggesting that there is already anonymity provided by Bitcoin.  Yet even if you were to rephrase that question as "Should bitcoin users give up seeking anonymity?" I feel it would be a pointless discussion since anonymity tech is coming anyway.  The real question is "How and in what circumstances will you use anonymity in your transactions, when that becomes available?"  Or something like that. Questions on the subject should be realistic and presented within the context of facts.  The community cannot ignore what is landing on its doorstep.

Some tools can be used with bitcoin to enhance privacy, and right now, as examples, anyone can utilize stealth send including methods in tandem with bitcoinjs (for those who do not know what stealth does, it simply prevents transactions from being correlated or linked to each other so that if you bought an alpaca sweater using stealth send, nobody who looked at that transaction would know that yesterday you used bitcoin to buy beer) and CoinJoin (examples are through blockchain.info's SharedCoin feature, or via an available non-mainline plugin for Electrum).  In point of fact, if you want to be able to use both stealth send and DW CoinJoin right now with bitcoinjs, all you have to do is this:

(install bitcoinjs-lib - dependencies shown here https://www.npmjs.or...e/bitcoinjs-lib)
$ npm install -g bitcoinjs-lib
(compile it for your browser)
$ npm -g install bitcoinjs-lib browserify uglify-js
$ browserify -r bitcoinjs-lib -s Bitcoin | uglifyjs > bitcoinjs.min.js

(add stealth and coinjoin as shown below, and there you have it)

$ npm install stealth.js --save
(Require as node module or as AMD.)
(etc.,)
$ npm install coinjoin.js

(If you are unfamiliar with what 'npm' is and would like to know how to use it, there is a nice guide on it here.)

Even with these very strong tools available - which are privacy tools, not 'anonymity generators' -- I disagree that there are currently any tools that currently provide Bitcoin with anonymity.  It just doesn't exist at the present time (I don't think that you can count offline activities with trezor or generated paper wallets as anonymous ~ from the moment they end up in the blockchain record, there they are for the whole world to see and determine who they came from).  This would be a choice for the users once anonymity tech does become available (as to whether or not they wish to disclose a transaction and all the information that goes with it to the rest of the known universe).

Should bitcoin users have the option of exercising anonymity in addition to the already available, current highly transparent framework?  Absolutely.  There is simply no logical argument (with any basis) against the idea of anonymity.  Furthermore, user choice in whether or not to use anonymity for any given transaction, whether you want it to be or not, will soon be here in the form of zerocash which is interoperable with bitcoin.  This is not something you can legislate away, and its anticipated release will occur at the end of 2014 or in very early 2015 (based on timelines indicated by a developer indicated in May of 2014). Additionally, sidechain developments will likely only make such proposals more viable as time goes on.  Furthermore, it has been well demonstrated that at the present time it is not exactly hard work to deanonymize users of bitcoin as it exists today (if someone really wanted to) within the context of bitcoin use with Tor, as shown here, and it is also suggested that bitcoin users should at least consider not using Tor for other reasons, which are elucidated here. Finally, most users of bitcoin (as it exists today) are not capable of preventing a BitIodine discovery of their identities used in association with bitcoin, as I have mentioned on this forum before in February of 2014.  As should be plainly obvious, bitcoin (as it exists today) has numerous privacy problems that have not yet been ameliorated.

Unfortunately for many users in various parts of the world and indeed for the whole bitcoin ecosystem as we know it, if users in NY, the Russian Federation, or Iceland (or in other states where the use of bitcoin is anticipated to be highly regulated or, as in the case of Russian Federation, where regulators are taking the approach of banning it), at the present time, Tor (as problematic as that is currently with bitcoin) may be the best option for hiding their location, as is suggested here on the Bitcoin Foundation Education Committee twitter presence.  This is problematic though ~ as I indicated above, there are real issues with using Tor with bitcoin and if you don't believe me or didn't read the papers I linked to above, consider what Jeff Garzik had to say on the subject - in 2011(!):  "Bitcoin protocol fingerprint is obvious even over encrypted Tor (which most don't use)."

~ Let us suppose that we consider a set of users who are able to successfully mask their location.  Even with this assumed (and I would argue that is a fairly small set of users), any users who want to ensure that their transactions cannot be linked to one another are responsible for installing and using stealth individually, as stealth is currently not yet finalized in terms of a BIP or within Core.  Even for users who are successfully masking their location, are implementing stealth sends, and using CoinJoin or SharedCoin, anonymity does not exist in bitcoin ~ you will still only have masked your location and made it so that your transactions cannot be linked to one another.   You can still be identified.

So, should users have the option of anonymity? Absolutely.  Does anonymity exist now in the context of bitcoin (as it exists today)?  No.
Is the ability to transact anonymously using bitcoin coming (e.g., with zerocash developments or similar)?  Yes.
Will people use it once it arrives?  Yes.

These are facts.  You cannot legislate away or "filter by survey" these facts.

It is a different question entirely as to whether the Bitcoin Foundation should support anonymity development.
I have argued that they should and I have a pull request that has had a preliminary vote and is awaiting a final vote from the Board, that would add emphases that reference anonymity development.  This was done after considerable review of proposed language by the community, and upon its preliminary review before the Board, there were no objections to the language of my proposal to change the Bylaws.  I do not know whether or not it received a final vote on Oct. 13th, as no answer has come back from the Foundation on that subject, so I have put in a request that if it has not yet gone to final vote that it be considered at the next Board meeeting (which I believe is Nov. 10th if not before).

There is a completely different question than all of what has been mentioned above, but which is related to it nonetheless, and that is the question of whether or not the regulatory component of the much-discussed Windhover proposal (which in part includes a proposal to regulate decentralized identities) should be used by users across a wide variety of services.  I argue that it should not (even if the other elements of Windhover do become common practice), and I have initiated a process to provide for decentralized identity that cannot be regulated anywhere in the world, or (at the user's option) facets of personality that can be shared in common with many other users in a manner which provides for anonymity at the core of a bitcoin-based identity or facet development tool that can (at the user's option) be utilized for authentication, identity system interaction, and other purposes.  At least initially, I call this BitName, and you can find more about it here.

-Colin

#27 Dario Di Pardo

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Posted 02 November 2014 - 01:17 PM

My god, anonymity development for bitcoin.


Please learn from the past.

I'm sure you can remember Napster and other P2P sharing apps.
A summary:
- Big companies are losing significant amounts of money when more and more people start using them.
- Said companies use their influence and power to successfully ban them altogether.


Can you see the analogy with bitcoin?
Except of course that we're talking even bigger companies with even more influence and power here, namely banks and governments.


I'm sure most of us are aware of the pseudonymous nature of bitcoin, meaning currently transactions aren't really anonymous.
However, it will be too costly and time consuming for a government to detect any wrongdoing, and I strongly believe they will ban bitcoin eventually as a result - as we have all witnessed before (Napster, torrent networks), even though we thought they couldn't - if we don't provide them a more transparent system.

The sad reality is that it all comes down to money (as always).

So if anything, we will need more transparency towards those who are likely to lose money, in order for this great new P2P technology to succeed this time.


Please stop this radical anonymity pursuit, because it isn't helping anyone, and it certainly isn't helping bitcoin (I'd say on the contrary).


I surely hope your vote will be rejected, for the sake of bitcoin's survival.

Dario

#28 Mike Hayes

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Posted 03 November 2014 - 02:33 PM

View PostDario DiPardo, on 01 July 2014 - 07:08 PM, said:

I know how it sounds, so I understand your concern.It isn't necessarily a bank that has to provide you your bitcoin addresses, it could be any government institution.As a bank is already in possession of your personal info and in most cases you'd have to physically present yourself in order to create an account there, it seems the safer option with regard to money laundering.An additional benefit is that a bank can provide a direct fiat to BTC exchange service.Please note this bank or government institution doesn't OWN the addresses, it just issues them, so nothing changes in regards to the bitcoin perspective.You could compare it with an online wallet, where you go and create a new address there, instead of using a local bitcoin client to create a new address "under the radar".Personally, I think this would prove to be a great step towards global cryptocurrency acceptance, instead of hindering it.Regards,Dario

Well, you are wrong.  In a large number of ways, but the first and primary way is that when an address such as a private key is given to you by another - you propose a government - that entity knows your private keys.  

Thus, your funds are never, ever going to be safe. Ever.  That means the system is debased and relies on trust, not trustless transactions.

This is not "compromise" as you call it but a fundamental complete change of the system.One result of which would naturally be bitcoins would lose considerable value, because they would simply be worth less.

When you say:Please note this bank or government institution doesn't OWN the addresses, it just issues them, so nothing changes in regards to the bitcoin perspective.

The truth is that there is no "owning of addresses."  There is only "knowledge of addresses", and anyone that knows the address can take the funds therein.  That is the essential nature of a cryptographic secret.  It's very value is in the fact that it is a secret.  There is little or no value if it is not.

#29 Dario Di Pardo

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Posted 04 November 2014 - 08:47 AM

View PostMike Hayes, on 03 November 2014 - 02:33 PM, said:

Well, you are wrong.  In a large number of ways, but the first and primary way is that when an address such as a private key is given to you by another - you propose a government - that entity knows your private keys.  

Thus, your funds are never, ever going to be safe. Ever.  That means the system is debased and relies on trust, not trustless transactions.

This is not "compromise" as you call it but a fundamental complete change of the system.One result of which would naturally be bitcoins would lose considerable value, because they would simply be worth less.

When you say:Please note this bank or government institution doesn't OWN the addresses, it just issues them, so nothing changes in regards to the bitcoin perspective.

The truth is that there is no "owning of addresses."  There is only "knowledge of addresses", and anyone that knows the address can take the funds therein.  That is the essential nature of a cryptographic secret.  It's very value is in the fact that it is a secret.  There is little or no value if it is not.


Mike,

I fully agree a government should under no circumstances keep a copy of your private keys (what I meant by 'owing' the address).
Otherwise, as you mentioned, that would put them back in control, which is far from desired.


In the end all they need to keep a record of, is your public key/address.

So they should provide us some kind of service where we can register our public addresses.

The scope of this service is arguable:
- You create a new private key with your own/custom tool and only use the service to send the public key.
- The service creates a new private key, allows the user to securely save this key and ONLY keeps a record of/saves the public key.

The type of service is arguable too:
- Web application
- Offline (open source?) application



Dario

PS:

View PostDario DiPardo, on 03 July 2014 - 02:52 PM, said:


Edit: Regarding the private key security issue: maybe you could also turn it the other way around: Users generating the private key theirselves, and only registering the public key with the responsible institution...


#30 Mike Hayes

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Posted 04 November 2014 - 12:49 PM

View PostDario DiPardo, on 04 November 2014 - 08:47 AM, said:

Mike,

I fully agree a government should under no circumstances keep a copy of your private keys (what I meant by 'owing' the address).
Otherwise, as you mentioned, that would put them back in control, which is far from desired.


In the end all they need to keep a record of, is your public key/address.

So they should provide us some kind of service where we can register our public addresses.

The scope of this service is arguable:
- You create a new private key with your own/custom tool and only use the service to send the public key.
- The service creates a new private key, allows the user to securely save this key and ONLY keeps a record of/saves the public key.

The type of service is arguable too:
- Web application
- Offline (open source?) application



Dario

PS:
Well, what happens if you "register the public key" is two fold.

First, you are bound to only use the registered public key.  This is totally unsafe, and it means a large number of people can track you.  More secure is to generate a new public key with each transaction.  Cases where this is not true involve things like a charity, where we all would one one identifiable public key to donate to, said key being unchanging, and being owned by that charity, not by an intermediary such as an exchange.  

Second, a fairly large number of people have access to your public key.  Government works in conjunction with contractors that do a large amount of the actual work.  Remember Snowden?  He worked for a contractor.  Thus, any number of agencies as well as the community of contractors may have access to not just your keys, but millions of keys.  Think Russian hacker breakins.

Ways exist to validate that a particular key is owned by a particular person, or "email address."  But to require such a conjunction of data in a government database is the very reverse of personal security.

Generally speaking, "meddling with the algorithm" can have only bad results because it is virtually certain that those doing the meddling do not understand the implications of what they are doing.

#31 Dario Di Pardo

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Posted 04 November 2014 - 08:36 PM

As for the multiple addresses, I'll just quote the proposal:

View PostDario DiPardo, on 25 June 2014 - 11:21 PM, said:

    5. In practice: Issuing a Bitcoin address

It is common for a Bitcoin user to maintain multiple addresses for increased privacy and administrative purposes. Therefore a user should be able to obtain additional addresses at any time.
This calls for an automated process, most likely in the form of a web application made available by the bank or a central authority.

    Obtaining a new address

Users will first have to authenticate using the credentials (username and password) received from their bank.
They can then choose the number of new addresses to create.
After confirmation, the web application will generate the requested addresses and will save the addresses (or public keys) together with the user's profile.
The newly created addresses and corresponding private keys will thereafter be securely presented or sent to the user, who can immediately start using them within the Bitcoin network.
Note that keeping the private keys secure will still be the user's responsibility. The application should not keep a copy of the private keys.



So obviously you should be able to create/register multiple addresses.

Security-wise I see it as follows:

User applies for a login (to access the 'governmental' database) at his/her local bank (ironically, but a better choice than your local city hall because they are more experienced in this area), as one would apply for a new credit card or for online banking.

Bank applies for a new login in your behalf at the central authority responsible for this db, and receives a login in a form of:

- User name: ISSUERID(bank id) concatenated with unique code.
- Password (to be changed at first login)

Bank saves this user name together with your user profile.

User uses this login to login in the 'governmental' database and to register his/her addresses there.

Hereunder a quick and dirty sketch.

Posted Image

Thus, someone hacking this database (or operating it for that matter) would only see public addresses linked to a user name (which consist of numbers).
So pretty safe.

I appreciate you giving feedback, but I suggest before making statements of 'meddling' and what not, you read the proposal first, otherwise you are just 'meddling'.


Dario

#32 Colin Gallagher

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Posted 07 November 2014 - 08:46 PM

I'm running on a platform of user choice, bitcoin development, as well as protection and development of privacy and anonymity.  My recent statements on anonymity (here, and here) are quite clear.  If you disagree (Dario, et. al.) go make up your own platform and run with your own counter-message.  Somehow, though, I get the feeling that corporation-state mandated registration of addresses and identity legislation will be a pretty lousy platform for you to run on, and you'd lose (not to mention it's pretty easy for people to figure out what your views are ~ and they sure aren't supportive of user choice).  But you are free to pursue your fanatical attacks on mathematical progress to your heart's delight.

Cheers,

Colin

#33 Dario Di Pardo

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Posted 12 November 2014 - 01:47 AM

My view is clear indeed:

For bitcoin to prevail in the long run, in a realistic manner.

The proposal also tackles the regulatory burden bitcoin businesses are facing (KYC for one).
In addition, it is a solution for creating more trust amongst bitcoin users.


Although I have some respect for your idealism, the form of user choice and anonymity you are talking about can only exist in an anarchy. Which implies that you are pursuing global anarchy.

I am sure many countries would not be in favor of these views, not now nor in the (far) future.



Ask yourself the following question:


What is more likely for bitcoin to reach mass adoption:

1) Providing governments transparency about what's going on within the bitcoin network.

2) Depriving them of any insight at all.


Now reverse the question:

What is more likely for bitcoin to get banned:

1) Providing governments transparency about what's going on within the bitcoin network.

2) Depriving them of any insight at all.


But you are free to pursue your fanatical attacks on mathematical progress to your heart's delight.


Best,
Dario



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