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Fix would be for OFAC to issue guidance for list of burn addresses to send TC dust funds to. It's not hard to perform double entry accounting on triple entry a

by 60secs 4y ago

Fix would be for OFAC to issue guidance for list of burn addresses to send TC dust funds to. It's not hard to perform double entry accounting on triple entry accounting systems like ETH. There are very good reasons why ETH uses accounting vs UTXO and scalability is at the front of those reasons.

SnowHill9902 4y ago
What do you mean by triple entry accounting systems like ETH? Do you have any references?
blurbleblurble 4y ago
Still sucks that unwitting people would have to (1) know this is going on and (2) go through the trouble of paying fees to burn the dust / figure out how much they need to burn. And sure that could work once or twice but if this becomes a regular thing it's most certainly not sustainable.
- romeoblade 4y ago
  With being in the IT field for 25 years, I was still on the fence about cryptocurrency. I wasn't for it or against it because it didn't affect me. I understand the arguments for it and against it, along with the privacy aspect of it. However actions like this push me towards being against it.
  - asah 4y ago
    meh this whole thing is stupid - law enforcement proxies (chainalysis) can trivially ignore the dust in tracking down who's using Tornado to launder material amounts of wealth.
    - amanaplanacanal 4y ago
      Exactly. Every law enforcement agency has prosecutorial discretion. They can easily ignore this and still go after the bad guys they want to target.
      - klyrs 4y ago
        That cuts both ways though. If you're a political dissident and you've been dusted, prosecutorial discretion isn't in your favor.
        asah 4y ago
        If you have crappy legal representation then sure - but I should hope any decent attorney can show that your a member of a LARGE set including a who's who of upstanding citizens, have a witness (or you) explain to a jury what "dusting" is and that it's harmless. There's maybe even an analogy to prosecuting someone because of trace amounts of cocaine on the bills in their wallet, at a level consistent with everyone's paper bills. But I'm not gonna say that political dissidents aren't at risk - heck, a government can just plant evidence. I'm just saying that dusting is a low risk.
        deleted 4y ago
        [deleted]
        klyrs 4y ago
        > If you have crappy legal representation then sure Yes. That describes most people.
      - fernandguil 4y ago
        although you are correct on their ability to enforce prosecutorial discretion, the reality is that the way they exercise that discretion sets precedents in the court of law. It will be very interesting to see how they go about trialing any of the OFAC cases involving Tornado Cash.
    - kragen 4y ago
      I don't think it's so trivial, and it can easily be made much more complicated. Suppose sanctioned party A pays B, a citizen of Indonesia who lives in Indonesia, $X. B's chain analysis decides that $X is "not material", so they continue using the account, and then transfer C $Y < $X. C's chain analysis decides that $Y is "material". What happens now? The first question is whether C delivers B the goods B was paying for without demanding an additional form of payment. If so, they have exposed themselves to sanctions from the US, potentially a large problem if they are a US person. If not, the second question is, do they refund the payment or not? If not, they have defrauded B; if so, they have potentially exposed themselves to additional sanctions from the US. The third question is, what if A decides to only spend "not material" amounts? They spend a small amount on extra transaction fees, but the sanctions become ineffective. All this uncertainty about where exactly the line is seems like it could put significant stress on Ethereum's fungibility. To make it more complicated, consider that we're talking about US$400M here that the OFAC is trying to freeze. That's enough to transfer US$11000 to each of 36000 different accounts, or, more practically, random numbers of thousands of dollars to tens of thousands of different accounts over the next year or two. If the would-be sanctions evaders (who, as R. Nikhil points out in https://rnikhil.com/2022/08/09/tornado-cash-block.html https://rnikhil.com/2022/08/09/tornado-cash-block.html, could include anyone who doesn't want their medical insurance provider to know what OTC drugs they buy, doesn't want their employer to know everything they spend their money on, or wants to donate to a political cause they don't talk about) are willing to spend 30% of their money to unfreeze the rest, they could get a pretty interesting number of people sanctioned with "material amounts of wealth". By the way, I still remember your grilled portobellos decades later. I'm glad to see you're still out there, and I appreciate the chance to discuss things like this with you.
      - asah 4y ago
        Whoa! Sent you email. ;-) Back to the thread, I believe "material" is defined by the amount of the source wallets not the destination wallet. But it's also risky to accept large amounts of money from strangers because of the reasonable presumption of a transaction, and best practice to make a good faith effort to return or dispose it (same qty minus transaction costs), which seems trivial in this case. (But IANAL and we're getting a bit arcane...)
  - tomp 4y ago
    I’d expect anyone that’s been in IT for so long to easily predict such a scenario. “Here have my banned bitcoins” is literally the most obvious action.
- spywaregorilla 4y ago
  If only there was some sort of business that protected your financial holdings for you or perhaps reject (or burn) sanctioned deposits
  - benj111 4y ago
    What would you call a company that specialises in 'Burning And Notburning Koins'?
    - johnny22 4y ago
      a central bank?
  - tomjen3 4y ago
    Or you know, if the us gov could go after guilty people instead. Such as every single bank director.
  - fernandguil 4y ago
    In theory, regulated exchanges could be required to burn/freeze/hold/return assets that interact with the blacklisted entities. This would abstract all essence of decentralized finance and challenge the principles behind web3 finance, but it is theoretically an option. Another, and probably better avenue, is for financial institutions and exchanges to implement crypto compliance and tracing tools. Then, using such tools to holistically understand customer's risk. If sanctioned coins represent a very small % of the total flow as well as a one-time occurrence, it's likely the customer was the victim of a dust attack and hence presents little sanction avoidance risk.
mhluongo 4y ago
UTXO models are actually easier to scale — every Ethereum tx today gets a global state lock, making parallel processing of transactions difficult. Not so for UTXO models.
- Sargos 4y ago
  This is not really how smart contracts work. Cardano uses UTXOs for example and is having big problems due to the fundamental limited scalability of UTXO systems as only one account can interact with a certain contract per block as the UTXO can only be modified once. https://builtoncardano.com/blog/concurrency-and-cardano-a-problem-a-challenge-or-nothing-to-worry-about https://builtoncardano.com/blog/concurrency-and-cardano-a-pr... >The concurrency issue on Cardano is created because each UTxO, and therefore smart contract associated with it, can only be used once. So each smart contract can only produce one transaction per block. Meaning that only one person can interact with a Cardano smart contract each block, meaning that interactions with many DeFi protocols that want to allow multiple users to interact with a smart contract at the same time (concurrently) will not be possible if implemented in their current format. There are reasons Ethereum and other more programmable systems were implemented as accounts instead of UTXOs.
  - mhluongo 4y ago
    > This is not really how smart contracts work. I've been programming smart contracts since 2017, and Bitcoin since late 2013 :) thanks though. Your comments are specific to Cardano, not a UTXO model. Look instead at what Fuel Labs is doing. I'm not suggesting there aren't reasons to use accounts, but scalability ain't one of them.
wyager 4y ago
Accounts are not more scalable than UTXO, except insofar as it helps patch over the fact that there are almost no ethereum full nodes, and most people running what ethereum enthusiasts generously call "full nodes" are actually running pruned nodes with low security assurances.
- yokem55 4y ago
  This is false. Geth full sync mode has every block with every transaction executed from genesis. What is pruned in 'full sync' mode is the per account/contract history. But since you are executing every transaction from genesis, you can know that you are in fact getting the correct state of the chain. And if you want, you can even do some thing like: 1) Do a full sync with a pruned current state database. 2) Delete the state database, leaving the 'ancient-data' (all the historical, already executed blocks) 3) Unplug the machine from the internet. 4) Restart geth in archive sync mode. 5) And after a while you will have an archive node (all the account history cleanly indexed separately), 100% derived from the blocks you synced in full mode.
  - wyager 4y ago
    You said "this is false" and then said a bunch of stuff that's entirely consistent with my (true) statement.
    - yokem55 4y ago
      Your implication was that full nodes are less secure. That specifically is false. You do not need to know the full indexed history of an account to know what its current balance is. There is zero loss of security in not knowing what a specific account's balance was 1,000,000 blocks ago if you have executed through every transaction and every block that has ever been committed to the chain.
      - wyager 4y ago
        > There is zero loss of security The loss of security is to the network. When there are only like 12 actual full nodes, the network is effectively centralized. Also, please stop calling lightweight pruned nodes "full nodes". It's totally dishonest to try to imply the same security level of a bitcoin full node when it's actually a much weaker security model. I know you're not the only person doing this, but nothing is stopping you from using more honest terminology.
UncleEntity 4y ago
> Fix would be for OFAC to issue guidance for list of burn addresses to send TC dust funds to. They have a list already, seized addresses from criminal cases they sell at auctions. Easy peasy…

by 60secs 4y ago

SnowHill9902 4y ago

What do you mean by triple entry accounting systems like ETH? Do you have any references?

blurbleblurble 4y ago

Still sucks that unwitting people would have to (1) know this is going on and (2) go through the trouble of paying fees to burn the dust / figure out how much they need to burn. And sure that could work once or twice but if this becomes a regular thing it's most certainly not sustainable.

romeoblade 4y ago
With being in the IT field for 25 years, I was still on the fence about cryptocurrency. I wasn't for it or against it because it didn't affect me. I understand the arguments for it and against it, along with the privacy aspect of it. However actions like this push me towards being against it.
- asah 4y ago
  meh this whole thing is stupid - law enforcement proxies (chainalysis) can trivially ignore the dust in tracking down who's using Tornado to launder material amounts of wealth.
  - amanaplanacanal 4y ago
    Exactly. Every law enforcement agency has prosecutorial discretion. They can easily ignore this and still go after the bad guys they want to target.
    - klyrs 4y ago
      That cuts both ways though. If you're a political dissident and you've been dusted, prosecutorial discretion isn't in your favor.
      - asah 4y ago
        If you have crappy legal representation then sure - but I should hope any decent attorney can show that your a member of a LARGE set including a who's who of upstanding citizens, have a witness (or you) explain to a jury what "dusting" is and that it's harmless. There's maybe even an analogy to prosecuting someone because of trace amounts of cocaine on the bills in their wallet, at a level consistent with everyone's paper bills. But I'm not gonna say that political dissidents aren't at risk - heck, a government can just plant evidence. I'm just saying that dusting is a low risk.
        deleted 4y ago
        [deleted]
        klyrs 4y ago
        > If you have crappy legal representation then sure Yes. That describes most people.
    - fernandguil 4y ago
      although you are correct on their ability to enforce prosecutorial discretion, the reality is that the way they exercise that discretion sets precedents in the court of law. It will be very interesting to see how they go about trialing any of the OFAC cases involving Tornado Cash.
  - kragen 4y ago
    I don't think it's so trivial, and it can easily be made much more complicated. Suppose sanctioned party A pays B, a citizen of Indonesia who lives in Indonesia, $X. B's chain analysis decides that $X is "not material", so they continue using the account, and then transfer C $Y < $X. C's chain analysis decides that $Y is "material". What happens now? The first question is whether C delivers B the goods B was paying for without demanding an additional form of payment. If so, they have exposed themselves to sanctions from the US, potentially a large problem if they are a US person. If not, the second question is, do they refund the payment or not? If not, they have defrauded B; if so, they have potentially exposed themselves to additional sanctions from the US. The third question is, what if A decides to only spend "not material" amounts? They spend a small amount on extra transaction fees, but the sanctions become ineffective. All this uncertainty about where exactly the line is seems like it could put significant stress on Ethereum's fungibility. To make it more complicated, consider that we're talking about US$400M here that the OFAC is trying to freeze. That's enough to transfer US$11000 to each of 36000 different accounts, or, more practically, random numbers of thousands of dollars to tens of thousands of different accounts over the next year or two. If the would-be sanctions evaders (who, as R. Nikhil points out in https://rnikhil.com/2022/08/09/tornado-cash-block.html https://rnikhil.com/2022/08/09/tornado-cash-block.html, could include anyone who doesn't want their medical insurance provider to know what OTC drugs they buy, doesn't want their employer to know everything they spend their money on, or wants to donate to a political cause they don't talk about) are willing to spend 30% of their money to unfreeze the rest, they could get a pretty interesting number of people sanctioned with "material amounts of wealth". By the way, I still remember your grilled portobellos decades later. I'm glad to see you're still out there, and I appreciate the chance to discuss things like this with you.
    - asah 4y ago
      Whoa! Sent you email. ;-) Back to the thread, I believe "material" is defined by the amount of the source wallets not the destination wallet. But it's also risky to accept large amounts of money from strangers because of the reasonable presumption of a transaction, and best practice to make a good faith effort to return or dispose it (same qty minus transaction costs), which seems trivial in this case. (But IANAL and we're getting a bit arcane...)
- tomp 4y ago
  I’d expect anyone that’s been in IT for so long to easily predict such a scenario. “Here have my banned bitcoins” is literally the most obvious action.
spywaregorilla 4y ago
If only there was some sort of business that protected your financial holdings for you or perhaps reject (or burn) sanctioned deposits
- benj111 4y ago
  What would you call a company that specialises in 'Burning And Notburning Koins'?
  - johnny22 4y ago
    a central bank?
- tomjen3 4y ago
  Or you know, if the us gov could go after guilty people instead. Such as every single bank director.
- fernandguil 4y ago
  In theory, regulated exchanges could be required to burn/freeze/hold/return assets that interact with the blacklisted entities. This would abstract all essence of decentralized finance and challenge the principles behind web3 finance, but it is theoretically an option. Another, and probably better avenue, is for financial institutions and exchanges to implement crypto compliance and tracing tools. Then, using such tools to holistically understand customer's risk. If sanctioned coins represent a very small % of the total flow as well as a one-time occurrence, it's likely the customer was the victim of a dust attack and hence presents little sanction avoidance risk.

mhluongo 4y ago

UTXO models are actually easier to scale — every Ethereum tx today gets a global state lock, making parallel processing of transactions difficult. Not so for UTXO models.

Sargos 4y ago
This is not really how smart contracts work. Cardano uses UTXOs for example and is having big problems due to the fundamental limited scalability of UTXO systems as only one account can interact with a certain contract per block as the UTXO can only be modified once. https://builtoncardano.com/blog/concurrency-and-cardano-a-problem-a-challenge-or-nothing-to-worry-about https://builtoncardano.com/blog/concurrency-and-cardano-a-pr... >The concurrency issue on Cardano is created because each UTxO, and therefore smart contract associated with it, can only be used once. So each smart contract can only produce one transaction per block. Meaning that only one person can interact with a Cardano smart contract each block, meaning that interactions with many DeFi protocols that want to allow multiple users to interact with a smart contract at the same time (concurrently) will not be possible if implemented in their current format. There are reasons Ethereum and other more programmable systems were implemented as accounts instead of UTXOs.
- mhluongo 4y ago
  > This is not really how smart contracts work. I've been programming smart contracts since 2017, and Bitcoin since late 2013 :) thanks though. Your comments are specific to Cardano, not a UTXO model. Look instead at what Fuel Labs is doing. I'm not suggesting there aren't reasons to use accounts, but scalability ain't one of them.

wyager 4y ago

Accounts are not more scalable than UTXO, except insofar as it helps patch over the fact that there are almost no ethereum full nodes, and most people running what ethereum enthusiasts generously call "full nodes" are actually running pruned nodes with low security assurances.

yokem55 4y ago
This is false. Geth full sync mode has every block with every transaction executed from genesis. What is pruned in 'full sync' mode is the per account/contract history. But since you are executing every transaction from genesis, you can know that you are in fact getting the correct state of the chain. And if you want, you can even do some thing like: 1) Do a full sync with a pruned current state database. 2) Delete the state database, leaving the 'ancient-data' (all the historical, already executed blocks) 3) Unplug the machine from the internet. 4) Restart geth in archive sync mode. 5) And after a while you will have an archive node (all the account history cleanly indexed separately), 100% derived from the blocks you synced in full mode.
- wyager 4y ago
  You said "this is false" and then said a bunch of stuff that's entirely consistent with my (true) statement.
  - yokem55 4y ago
    Your implication was that full nodes are less secure. That specifically is false. You do not need to know the full indexed history of an account to know what its current balance is. There is zero loss of security in not knowing what a specific account's balance was 1,000,000 blocks ago if you have executed through every transaction and every block that has ever been committed to the chain.
    - wyager 4y ago
      > There is zero loss of security The loss of security is to the network. When there are only like 12 actual full nodes, the network is effectively centralized. Also, please stop calling lightweight pruned nodes "full nodes". It's totally dishonest to try to imply the same security level of a bitcoin full node when it's actually a much weaker security model. I know you're not the only person doing this, but nothing is stopping you from using more honest terminology.

UncleEntity 4y ago

> Fix would be for OFAC to issue guidance for list of burn addresses to send TC dust funds to. They have a list already, seized addresses from criminal cases they sell at auctions. Easy peasy…