38 ms·

> are an absolute boon to tax collectors, forensic accountants and fraudsters Weird that it would be a boon for both forensic accountants and fraudsters. How d

> are an absolute boon to tax collectors, forensic accountants and fraudsters Weird that it would be a boon for both forensic accountants and fraudsters. How do you reconcile that sentence? The fact that something is done in public does not mean that it is centralized. There is public and decentralized, public and centralized, private and centralized, and private and decentralized. Decentralization itself, is a spectrum and not a binary quality. Just as, I assume, public / private also falls on some sort of spectrum spanning from everyone in the world being able to see to VISA/Mastercard corporate privacy policy to national intelligence agencies to group or individual privacy. It is completely possible to conduct transactions privately on blockchains. Monero and z-cash (using zero knowledge proofs) are the best examples of this. The biggest blockchains choose not to either due to legacy design choices (zero knowledge systems are a recent innovation) or the benefits of openness. For example, public transaction history allows for development of an on-chain reputation for a pseudo-anonymous account. It's also quite useful for managing decentralized organizations, as the treasury and spending records is meant to be public to keep the DAO accountable to its members and prospective members. With the recent introduction of zk rollups on Ethereum, it's now possible to have the best of both worlds, in my opinion (see https://aztec.network/index.html https://aztec.network/index.html). Transactions that need to be private will be conducted on zero-knowledge rollups built for privacy. Mastercard is working on this with Consensys for Ethereum (https://www.coindesk.com/business/2021/12/16/consensys-collaborates-with-mastercard-on-new-ethereum-scaling-solution/ https://www.coindesk.com/business/2021/12/16/consensys-colla...).

vmception 5y ago
> Weird that it would be a boon for both forensic accountants and fraudsters. How do you reconcile that sentence? It is very common to track people by the tokens they hold and target them for theft and fraud. One example is to airdrop a backdoored token, and when the user tries to move it they wind up authorizing movement of their other valuable tokens. Or to just use the airdrop to lead a curious user to the airdrop event's website, which is then a phishing campaign that achieves the same result.
- theK 5y ago
  Tracking partial identity through tokens is actually a very common concept amongst the newer blockchain platforms which also have addressed such topics as the drawback you describe. While said attack is theoretically possible it only is applicable to tokens managed by the same contract and only on platforms which do manifest tokens as script state (think erc20). Platforms with native assets (Cardano and some others) are immune to such attacks.
  - vmception 5y ago
    where can I learn more about that approach? I just assumed the eUTXO model would be more like the UTXO model where assets could still be tracked to a single address, like with the old Counterparty or OMNI model in Bitcoin. What would you consider Solana's approach to assets? I was surprised to find that each address has another unique address for its balance and possession of any asset issued on that network.
    - theK 5y ago
      The key is not in eUTXO (allthough eUTXO is a great piece of work, especially because it solves a multitude of scaling issues in the long run), it is in the ledger's capability of handling custom assets natively. This way a wallet exactly shows you which tokens you own are affected by a contract invocation. I don't know how solana handles assets but I personally stay clear from that ecosystem. Too much VC hype for my likes and way too little decentralization of funds.
- seanhunter 5y ago
  Looking at the token standards[1], I can't see how you could create a "backdoored token" that would authorize movement of other tokens but that sounds like a scary threat vector. Could you explain how that would work please? I've heard about ERC20 tokens that allowed the issuer to pull them back (that's the SoarCoin thing[2]) but not a token that allowed other tokens to be transferred. [1] https://eips.ethereum.org/EIPS/eip-721 https://eips.ethereum.org/EIPS/eip-721 https://eips.ethereum.org/EIPS/eip-998 https://eips.ethereum.org/EIPS/eip-998 https://eips.ethereum.org/EIPS/eip-1155 https://eips.ethereum.org/EIPS/eip-1155 [2] https://iterative.capital/erc20-backdoor-allows-you-to-steal-your-payment-back/?__cf_chl_tk=nOfxpUKV22Dau7LfMEFLBiVMLxi00tTae_m.Gc9HviA-1641114914-0-gaNycGzNCGU https://iterative.capital/erc20-backdoor-allows-you-to-steal...
deleted 5y ago
[deleted]
aflag 5y ago
I think the point regarding centralization is that with the blockchain the ledger is central (assuming a single coin ends up winning) whereas right now we have many different ledgers that may not entirely agree. Including single individuals having their own ledgers.
davewritescode 5y ago
> With the recent introduction of zk rollups on Ethereum, it's now possible to have the best of both worlds, in my opinion (see https://aztec.network/index.html https://aztec.network/index.html). Transactions that need to be private will be conducted on zero-knowledge rollups built for privacy. Mastercard is working on this with Consensys for Ethereum (https://www.coindesk.com/business/2021/12/16/consensys-colla https://www.coindesk.com/business/2021/12/16/consensys-colla...). I can’t find any real technical documentation on this system but from what I understand about ethereum, this kind of use case effectively needs to be run off the main ethereum blockchain? I just don’t understand what the purpose of the blockchain really is when most of the interesting ways to scale add features rely on processing transactions OFF the chain.
- anchpop 5y ago
  This is a misunderstanding. The goal of cryptocurrencies is not to process transactions. The goal is to order transactions. The order is the hard part. (Notice that if I have one ETH, and I submit a transaction to send alice an ETH and to send Bob an ETH, alice and bob are both very interested in the order - only one transaction can go through, and which one is determined by which one comes first in the chain). Fundamentally the order doesn’t really matter, as long as it doesn’t change retroactively. Once you have agreement on the order, anyone can process the transactions and know they’ll get the same final result as anyone else. I’m not sure about this specific one, but most “rollup”s use the main chain for agreement on the order, and then outsource the actual processing to someone outside the chain. Some use cryptography from verifiable computing, so the off-chain person can also submit a proof that their processing is right and there’s no possibility of fraud. (the proof can then be verified extremely quickly.)

vmception 5y ago

> Weird that it would be a boon for both forensic accountants and fraudsters. How do you reconcile that sentence? It is very common to track people by the tokens they hold and target them for theft and fraud. One example is to airdrop a backdoored token, and when the user tries to move it they wind up authorizing movement of their other valuable tokens. Or to just use the airdrop to lead a curious user to the airdrop event's website, which is then a phishing campaign that achieves the same result.

theK 5y ago
Tracking partial identity through tokens is actually a very common concept amongst the newer blockchain platforms which also have addressed such topics as the drawback you describe. While said attack is theoretically possible it only is applicable to tokens managed by the same contract and only on platforms which do manifest tokens as script state (think erc20). Platforms with native assets (Cardano and some others) are immune to such attacks.
- vmception 5y ago
  where can I learn more about that approach? I just assumed the eUTXO model would be more like the UTXO model where assets could still be tracked to a single address, like with the old Counterparty or OMNI model in Bitcoin. What would you consider Solana's approach to assets? I was surprised to find that each address has another unique address for its balance and possession of any asset issued on that network.
  - theK 5y ago
    The key is not in eUTXO (allthough eUTXO is a great piece of work, especially because it solves a multitude of scaling issues in the long run), it is in the ledger's capability of handling custom assets natively. This way a wallet exactly shows you which tokens you own are affected by a contract invocation. I don't know how solana handles assets but I personally stay clear from that ecosystem. Too much VC hype for my likes and way too little decentralization of funds.
seanhunter 5y ago
Looking at the token standards[1], I can't see how you could create a "backdoored token" that would authorize movement of other tokens but that sounds like a scary threat vector. Could you explain how that would work please? I've heard about ERC20 tokens that allowed the issuer to pull them back (that's the SoarCoin thing[2]) but not a token that allowed other tokens to be transferred. [1] https://eips.ethereum.org/EIPS/eip-721 https://eips.ethereum.org/EIPS/eip-721 https://eips.ethereum.org/EIPS/eip-998 https://eips.ethereum.org/EIPS/eip-998 https://eips.ethereum.org/EIPS/eip-1155 https://eips.ethereum.org/EIPS/eip-1155 [2] https://iterative.capital/erc20-backdoor-allows-you-to-steal-your-payment-back/?__cf_chl_tk=nOfxpUKV22Dau7LfMEFLBiVMLxi00tTae_m.Gc9HviA-1641114914-0-gaNycGzNCGU https://iterative.capital/erc20-backdoor-allows-you-to-steal...

deleted 5y ago

[deleted]

aflag 5y ago

I think the point regarding centralization is that with the blockchain the ledger is central (assuming a single coin ends up winning) whereas right now we have many different ledgers that may not entirely agree. Including single individuals having their own ledgers.

davewritescode 5y ago

> With the recent introduction of zk rollups on Ethereum, it's now possible to have the best of both worlds, in my opinion (see https://aztec.network/index.html https://aztec.network/index.html). Transactions that need to be private will be conducted on zero-knowledge rollups built for privacy. Mastercard is working on this with Consensys for Ethereum (https://www.coindesk.com/business/2021/12/16/consensys-colla https://www.coindesk.com/business/2021/12/16/consensys-colla...). I can’t find any real technical documentation on this system but from what I understand about ethereum, this kind of use case effectively needs to be run off the main ethereum blockchain? I just don’t understand what the purpose of the blockchain really is when most of the interesting ways to scale add features rely on processing transactions OFF the chain.

anchpop 5y ago
This is a misunderstanding. The goal of cryptocurrencies is not to process transactions. The goal is to order transactions. The order is the hard part. (Notice that if I have one ETH, and I submit a transaction to send alice an ETH and to send Bob an ETH, alice and bob are both very interested in the order - only one transaction can go through, and which one is determined by which one comes first in the chain). Fundamentally the order doesn’t really matter, as long as it doesn’t change retroactively. Once you have agreement on the order, anyone can process the transactions and know they’ll get the same final result as anyone else. I’m not sure about this specific one, but most “rollup”s use the main chain for agreement on the order, and then outsource the actual processing to someone outside the chain. Some use cryptography from verifiable computing, so the off-chain person can also submit a proof that their processing is right and there’s no possibility of fraud. (the proof can then be verified extremely quickly.)