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Quote from the article: “We need 10 people yesterday,” said Ehrsam, a 24-year-old former Goldman Sachs trader. "10 People" in this case == security and crypto

Quote from the article: “We need 10 people yesterday,” said Ehrsam, a 24-year-old former Goldman Sachs trader. "10 People" in this case == security and crypto engineers - like the best the world can get. If you want to lead the largest exchange for a decentralized, anonymous currency, you better have an NSA quality-type security team that can address the intricate mathematics of the problems they will certainly face. I'd suggest they hire a very senior and experienced economist as well. $5m of funding? 500K per hire. Sounds about right.

betterunix 13y ago
"If you want to lead the largest exchange for a decentralized, anonymous currency, you better have an NSA quality-type security team that can address the intricate mathematics of the problems they will certainly face" Their first question would be, "What is the formal definition of Bitcoin's security?" Then they would notice that polynomial time attackers can double spend Bitcoin currency and stop bothering with the entire system. This is the sort of work in this field that top-notch crypto people create: http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.44.8279 http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.44.8... http://link.springer.com/chapter/10.1007%2F11889663_20 http://link.springer.com/chapter/10.1007%2F11889663_20 http://ieeexplore.ieee.org/xpls/abs_all.jsp?arnumber=5443458 http://ieeexplore.ieee.org/xpls/abs_all.jsp?arnumber=5443458
- wmf 13y ago
  Is it a startup's job to address existential risks to the system(s) that they participate in?
  - betterunix 13y ago
    These are not existential risks, they are real security issues. If there is not even a meaningful definition of Bitcoin's security -- a definition that can be used in a mathematical proof, without circular logic -- then how can Coinbase make any kind of claim about the security of their own system? To put it another way, suppose Bitcoin is inherently insecure -- suppose that nothing you do can prevent a polynomial time attack (this is not unheard of in crypto; see Merkle Puzzles) -- can you even claim that Coinbase is secure?
- nazgulnarsil 13y ago
  Chaumian cash requires a central trusted authority just like every other non-bitcoin scheme anyone has ever come up with. The success of bitcoin and the repeated failure of "better" systems shows that your analysis of which properties people care about is wrong.
  - betterunix 13y ago
    The central authority in Chaumiam systems only issues the currency and accepts deposits. It is not required to process transactions. It is worth pointing out that Digicash survived longer than Bitcoin has even been around -- twice as long, in fact. The reasons for its failure are not as simple as "people just did not care." There were forces in the US government actively working against all civilian use of cryptography, especially those systems that might thwart law enforcement investigations. Patents on cryptography (ironically, this includes patents held by Chaum himself) did what they typically do: prevent systems from being deployed on a large scale. There were bad management decisions, like Chaum's refusal to accept a huge monetary offer from Microsoft to integrate his system with Windows 95 and another large offer from Visa. Yes, there was a general lack of concern on the part of credit card users about the security of their card data. That lack of concern is largely fueled by all the legal protections bank customers get -- nobody actually feels the pain of credit card fraud, except for the money mules: https://research.microsoft.com/apps/pubs/?id=143095 https://research.microsoft.com/apps/pubs/?id=143095 That lack of concern is equally challenging for Bitcoin. I suspect that most people do not really care about any of the issues Bitcoin is trying to solve. Few people are seriously worried about runaway inflation of the US Dollar or of the Euro. Bank fees aggravate merchants, but those same merchants are generally unwilling to accept anything other than their nation's currency, and deal in Bitcoin only through intermediaries that perform currency exchange. In another four years, if the news about Bitcoin is something other than, "Bitcoin trading at all-time lows," or "Analyzing the failure of cryptocurrencies," you can at least claim that Bitcoin fared better than Chaum's systems.
    - nazgulnarsil 13y ago
      "only issues the currency" This is not an "only". The central issuer also apparently makes management decisions that lead to the success or failure of the scheme, as the anecdote about Chaum relates.

betterunix 13y ago

"If you want to lead the largest exchange for a decentralized, anonymous currency, you better have an NSA quality-type security team that can address the intricate mathematics of the problems they will certainly face" Their first question would be, "What is the formal definition of Bitcoin's security?" Then they would notice that polynomial time attackers can double spend Bitcoin currency and stop bothering with the entire system. This is the sort of work in this field that top-notch crypto people create: http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.44.8279 http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.44.8... http://link.springer.com/chapter/10.1007%2F11889663_20 http://link.springer.com/chapter/10.1007%2F11889663_20 http://ieeexplore.ieee.org/xpls/abs_all.jsp?arnumber=5443458 http://ieeexplore.ieee.org/xpls/abs_all.jsp?arnumber=5443458

wmf 13y ago
Is it a startup's job to address existential risks to the system(s) that they participate in?
- betterunix 13y ago
  These are not existential risks, they are real security issues. If there is not even a meaningful definition of Bitcoin's security -- a definition that can be used in a mathematical proof, without circular logic -- then how can Coinbase make any kind of claim about the security of their own system? To put it another way, suppose Bitcoin is inherently insecure -- suppose that nothing you do can prevent a polynomial time attack (this is not unheard of in crypto; see Merkle Puzzles) -- can you even claim that Coinbase is secure?
nazgulnarsil 13y ago
Chaumian cash requires a central trusted authority just like every other non-bitcoin scheme anyone has ever come up with. The success of bitcoin and the repeated failure of "better" systems shows that your analysis of which properties people care about is wrong.
- betterunix 13y ago
  The central authority in Chaumiam systems only issues the currency and accepts deposits. It is not required to process transactions. It is worth pointing out that Digicash survived longer than Bitcoin has even been around -- twice as long, in fact. The reasons for its failure are not as simple as "people just did not care." There were forces in the US government actively working against all civilian use of cryptography, especially those systems that might thwart law enforcement investigations. Patents on cryptography (ironically, this includes patents held by Chaum himself) did what they typically do: prevent systems from being deployed on a large scale. There were bad management decisions, like Chaum's refusal to accept a huge monetary offer from Microsoft to integrate his system with Windows 95 and another large offer from Visa. Yes, there was a general lack of concern on the part of credit card users about the security of their card data. That lack of concern is largely fueled by all the legal protections bank customers get -- nobody actually feels the pain of credit card fraud, except for the money mules: https://research.microsoft.com/apps/pubs/?id=143095 https://research.microsoft.com/apps/pubs/?id=143095 That lack of concern is equally challenging for Bitcoin. I suspect that most people do not really care about any of the issues Bitcoin is trying to solve. Few people are seriously worried about runaway inflation of the US Dollar or of the Euro. Bank fees aggravate merchants, but those same merchants are generally unwilling to accept anything other than their nation's currency, and deal in Bitcoin only through intermediaries that perform currency exchange. In another four years, if the news about Bitcoin is something other than, "Bitcoin trading at all-time lows," or "Analyzing the failure of cryptocurrencies," you can at least claim that Bitcoin fared better than Chaum's systems.
  - nazgulnarsil 13y ago
    "only issues the currency" This is not an "only". The central issuer also apparently makes management decisions that lead to the success or failure of the scheme, as the anecdote about Chaum relates.