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A question to the experts: why don't the criminals use smart contract platforms like Ethereum? My amateurish take is that, for instance, a smart contract could

A question to the experts: why don't the criminals use smart contract platforms like Ethereum? My amateurish take is that, for instance, a smart contract could work as an untraceable distributed Silk Road with escrow and everything else. Because there is no one machine where everything runs, it's impossible to shut down the server; there is nothing that links these transactions together, except for the commonly used Solidity code.

elmar 9y ago
because of the same problem as other contracts the lack of trustworthy Oracles, you need some trusted third-party to confirm what happened on the real world.
- vadimberman 9y ago
  And how did it work with the Silk Road?
  - jackpeterfletch 9y ago
    You had one central oracle (Silk Road) of dealer/buyer reviews, and dealers put up a deposit. Scamming was rife, but largely mitigated by the fact that the dealer cant effect their reviews and nor can the buyer. The dealer has the choice to not sell to you based on your history, the buyer has the choice to not buy from a dealer with a bad history. Other than that, bitcoin had little to do with its security apart from providing anonymity. If it was possible to do so anonymously you could have just post them cash.
    - jackpeterfletch 9y ago
      To add to this. This exiting scamming shows it was never watertight.
- the_stc 9y ago
  At my company (details in profile, sex-work related), this is exactly why we are centralized. Some competitors go on about smart contracts, and how people will meet for services and exchange escrow keys...it is far-fetched! For example: We want to prevent underage users and duplicates. We do that by manually screening IDs. Hard to do that on a decentralized system... Another major issue: In sex work, clients present a significant threat. An abusive client needs to be reliably banned. Having them put up a deposit is just not a substitute. E-commerce do not have this as client only receives what seller sends and poses no risk to seller. We from our central point-of-view can detect rings, ban money launderers and traffickers, investigate and appeal if needed. Decentralized system that adds such a feature is ripe for gaming. And yes: Single point to make money, campaign, run ads, provide incentives (sign-up-friend, get-$50-credit) and organize labor...this is an important aspect as well.
dustingetz 9y ago
there's also no central point to make money
- vadimberman 9y ago
  Same as with the open source projects, yet they exist. In case of loosely associated syndicates, there's the incentive of guaranteed uptime and availability. Of course, it'll require a more selfless criminal which is an oxymoron. On the other hand, money can be made from supervision.
jatsign 9y ago
Distric0x is a project working on this. Not necessarily for criminal markets, but for decentralized markets. https://district0x.io/ https://district0x.io/
- vadimberman 9y ago
  This is really cool - good luck with this one, if you're associated with it. This seems exactly the kind of applications Ethereum was meant for; however, is there a dispute resolution organ?
  - jatsign 9y ago
    I'm not working on it, but it's a very cool project. I'm not sure of the details, but this blog post may answer your question about dispute resolution (& malicious actors) https://blog.district0x.io/introducing-the-district-registry-5adb890363b0 https://blog.district0x.io/introducing-the-district-registry... Coding on Ethereum is hard, and this project is ambitious.
apo 9y ago
It's sad to see the "Bitcoin doesn't do smart contracts" line repeated so faithfully - even implicitly as in your question. It's rubbish. Bitcoin supports smart contracts, and has done so since launched in 2009. Even the simplest Alice-pays-Bob transaction is actually running a smart contract written in Script, a Forth-like language custom built for Bitcoin. Bitcoin also supports metacoin protocols that create tradeable tokens, and has done so for a long time (e.g., ColoredCoins and MasterCoin). Only a fraction of Bitcoin's full range of features are used today. This leads me to suspect that Ethereum's much-hyped VM will turn out to be mostly unused. And, the majority of the interesting use cases for smart contracts require extrinsic (non-blockchain) state to operate. The price per barrel of Brent. Whether it rained over a piece of farmland. Randomness. Notice of the publication of a death certificate. All of these applications rely on a trusted server (or a federated system of them) for input. And they can be corrupted or shut down by a powerful adversary. Ethereum might be able to free itself from oracles to a small degree, but the difference will be negligible for many practical purposes. In other words, Ethereum offers little more for day-to-day use than Bitcoin does. Ethereum does, however, enjoy a massive marketing advantage.
- aoeusnth1 9y ago
  > And, the majority of the interesting use cases for smart contracts require extrinsic (non-blockchain) state to operate. The price per barrel of Brent. Whether it rained over a piece of farmland. Randomness. Notice of the publication of a death certificate. All of these applications rely on a trusted server (or a federated system of them) for input. And they can be corrupted or shut down by a powerful adversary. Ethereum might be able to free itself from oracles to a small degree, but the difference will be negligible for many practical purposes. Interesting point, but can't randomness be read from hash of the next block? I'm not familiar with Ethereum's VM - does it not have access to that?
  - apo 9y ago
    Interesting point, but can't randomness be read from hash of the next block? Miners can get into the act to twiddle the next block hash. There are some ideas on this topic here: https://ethereum.stackexchange.com/questions/191/how-can-i-securely-generate-a-random-number-in-my-smart-contract https://ethereum.stackexchange.com/questions/191/how-can-i-s...
jackpeterfletch 9y ago
Ethereum Smart Contracts just aren't able to be that sophisticated due to gas cost and limits.

elmar 9y ago

because of the same problem as other contracts the lack of trustworthy Oracles, you need some trusted third-party to confirm what happened on the real world.

vadimberman 9y ago
And how did it work with the Silk Road?
- jackpeterfletch 9y ago
  You had one central oracle (Silk Road) of dealer/buyer reviews, and dealers put up a deposit. Scamming was rife, but largely mitigated by the fact that the dealer cant effect their reviews and nor can the buyer. The dealer has the choice to not sell to you based on your history, the buyer has the choice to not buy from a dealer with a bad history. Other than that, bitcoin had little to do with its security apart from providing anonymity. If it was possible to do so anonymously you could have just post them cash.
  - jackpeterfletch 9y ago
    To add to this. This exiting scamming shows it was never watertight.
the_stc 9y ago
At my company (details in profile, sex-work related), this is exactly why we are centralized. Some competitors go on about smart contracts, and how people will meet for services and exchange escrow keys...it is far-fetched! For example: We want to prevent underage users and duplicates. We do that by manually screening IDs. Hard to do that on a decentralized system... Another major issue: In sex work, clients present a significant threat. An abusive client needs to be reliably banned. Having them put up a deposit is just not a substitute. E-commerce do not have this as client only receives what seller sends and poses no risk to seller. We from our central point-of-view can detect rings, ban money launderers and traffickers, investigate and appeal if needed. Decentralized system that adds such a feature is ripe for gaming. And yes: Single point to make money, campaign, run ads, provide incentives (sign-up-friend, get-$50-credit) and organize labor...this is an important aspect as well.

dustingetz 9y ago

there's also no central point to make money

vadimberman 9y ago
Same as with the open source projects, yet they exist. In case of loosely associated syndicates, there's the incentive of guaranteed uptime and availability. Of course, it'll require a more selfless criminal which is an oxymoron. On the other hand, money can be made from supervision.

jatsign 9y ago

Distric0x is a project working on this. Not necessarily for criminal markets, but for decentralized markets. https://district0x.io/ https://district0x.io/

vadimberman 9y ago
This is really cool - good luck with this one, if you're associated with it. This seems exactly the kind of applications Ethereum was meant for; however, is there a dispute resolution organ?
- jatsign 9y ago
  I'm not working on it, but it's a very cool project. I'm not sure of the details, but this blog post may answer your question about dispute resolution (& malicious actors) https://blog.district0x.io/introducing-the-district-registry-5adb890363b0 https://blog.district0x.io/introducing-the-district-registry... Coding on Ethereum is hard, and this project is ambitious.

apo 9y ago

It's sad to see the "Bitcoin doesn't do smart contracts" line repeated so faithfully - even implicitly as in your question. It's rubbish. Bitcoin supports smart contracts, and has done so since launched in 2009. Even the simplest Alice-pays-Bob transaction is actually running a smart contract written in Script, a Forth-like language custom built for Bitcoin. Bitcoin also supports metacoin protocols that create tradeable tokens, and has done so for a long time (e.g., ColoredCoins and MasterCoin). Only a fraction of Bitcoin's full range of features are used today. This leads me to suspect that Ethereum's much-hyped VM will turn out to be mostly unused. And, the majority of the interesting use cases for smart contracts require extrinsic (non-blockchain) state to operate. The price per barrel of Brent. Whether it rained over a piece of farmland. Randomness. Notice of the publication of a death certificate. All of these applications rely on a trusted server (or a federated system of them) for input. And they can be corrupted or shut down by a powerful adversary. Ethereum might be able to free itself from oracles to a small degree, but the difference will be negligible for many practical purposes. In other words, Ethereum offers little more for day-to-day use than Bitcoin does. Ethereum does, however, enjoy a massive marketing advantage.

aoeusnth1 9y ago
> And, the majority of the interesting use cases for smart contracts require extrinsic (non-blockchain) state to operate. The price per barrel of Brent. Whether it rained over a piece of farmland. Randomness. Notice of the publication of a death certificate. All of these applications rely on a trusted server (or a federated system of them) for input. And they can be corrupted or shut down by a powerful adversary. Ethereum might be able to free itself from oracles to a small degree, but the difference will be negligible for many practical purposes. Interesting point, but can't randomness be read from hash of the next block? I'm not familiar with Ethereum's VM - does it not have access to that?
- apo 9y ago
  Interesting point, but can't randomness be read from hash of the next block? Miners can get into the act to twiddle the next block hash. There are some ideas on this topic here: https://ethereum.stackexchange.com/questions/191/how-can-i-securely-generate-a-random-number-in-my-smart-contract https://ethereum.stackexchange.com/questions/191/how-can-i-s...

jackpeterfletch 9y ago

Ethereum Smart Contracts just aren't able to be that sophisticated due to gas cost and limits.