Chaumian blinding layers

[marcus_of_augustus]

http://www.bitcoinmoney.com/post/6187527905/bitcoin-chauming-blinding-transfer-service

I'm interested in the mechanics of how these will be carried out. Anybody have any insights?

[Jaime Frontero]

no insights here.

After receiving depositing bitcoins the service will sign digital tokens for the depositor which can later be redeemed for bitcoins that would not be associated with the ones deposited.

i have no idea why i would want to deposit Bitcoin into an account, and then receive these tokens in their place - so that i could later redeem the tokens for Bitcoin.

it's a mixing service, near as i can tell.  if i want to use one of those, i think i can find something instinctively simpler.

[unk]

i similarly struggle to see the relevance of chaum's blinding in the decentralised and pseudonymous context of bitcoin.

i'm just not sure what problem it's trying to solve. you can already create and spend coins anonymously. and you can also already transfer a private key to someone outside the block chain (or cyphered and/or steganographically within the block chain) if you wish to avoid public monitoring of the transaction, albeit at the cost of somewhat greater required trust (or at least transaction costs for confirmation) between the two parties.

as jaime says, beyond simple 'laundering' through 'mixing', i don't see what blind signatures practically add unless i'm misunderstanding the use cases people have in mind.

[BubbleBoy]

It's just a roundabout way to launder (mix) Bitcoin. Chaum's blinded cash can protect your identity from a central bank. In the context of Bitcoin it would help you launder coins without trusting the laundering service, i.e provably secure in a mathematical/cryptographic perspective. In their current incarnation laundry services are opaque: they can do a bad job or keep logs that would effectively make them useless. The secret service could setup it's own laundromat with full loging, and there's no way to find if a laundromat is trustworthy, or if a previously trustworthy one has been compromised.
However the effectives of blinded digital cash relies on you finding partners with which to trade good and services. I can't imagine how that would go. "Have 2Kg of pure Colombian, accepting payment in blinded bitcoins" on craigslist ?

[marcus_of_augustus]

Found a better link than the one in the article to the service.

https://blindbitcoin.com/technical.html

[marcus_of_augustus]

It's just a roundabout way to launder (mix) Bitcoin. Chaum's blinded cash can protect your identity from a central bank. In the context of Bitcoin it would help you launder coins without trusting the laundering service, i.e provably secure in a mathematical/cryptographic perspective. In their current incarnation laundry services are opaque: they can do a bad job or keep logs that would effectively make them useless. The secret service could setup it's own laundromat with full loging, and there's no way to find if a laundromat is trustworthy, or if a previously trustworthy one has been compromised.
However the effectives of blinded digital cash relies on you finding partners with which to trade good and services. I can't imagine how that would go. "Have 2Kg of pure Colombian, accepting payment in blinded bitcoins" on craigslist ?

Wouldn't people then just spend them back to themselves on another address with a clean install wallet. No need to trust the integrity of the service beyond, "they took off with the loot" ...

"... put your left foot in shake it all about, put your right foot in, shake it all about, that's what its all about ..."

It seems mathematically complicated but to a user it should be straightforward once the machinery and interface is in place.

[BubbleBoy]

Wouldn't people then just spend them back to themselves on another address with a clean install wallet

Why do you think that would help ? Addresses are not people, you are plenty secure behind your existing key. The way a criminal would be caught by the secret service would be when he spends some of crime money for buying something, i.e spend it to a well known wallet, say an online shop or the grocery down the block, thereby steadily giving clues about his real identity.
The investigators would follow the money trail, i.e where the bulk of the value goes. Spending 1 million BTC known to come from child trafficking to another Bitcoin wallet would achieve nothing. What you need is to spend to very many addresses, which in turn give you coins coming from other sources, that is unlink your identity from the history of the coins in your stash.

[theymos]

Chaumian blinded tokens would fix many of the problems with Bitcoin. They provide much better anonymity and instantly-clearing transactions. It must be centralized, though.

I predict that they will become very popular.

[unk]

any centralised signatures would provide instant clearing if you trust the signer; nothing needs to be blinded for that.

so blinding simply adds anonymity to that centralised scheme. i still don't particularly see the fit in the context of bitcoin. or am i missing your point, theymos?

[theymos]

Bitcoin is not very anonymous, but a lot of people want it to be. With blinded tokens, BTC can be transferred anonymously.

You send some bitcoins to the service and get the appropriate number of tokens back. Transfer of these tokens is untraceable after this, even by the central server. When someone who has tokens needs BTC, they can convert them back.

Instant transactions and low fees can be done without the blinded tokens, but you might as well add that benefit as long as you're using a central server.

[unk]

sure, but that has very little to do with bitcoin, no? the same central signer could support paypal, wire transfers, etc., all at the same time.

i suppose what's novel with bitcoin plus a central signing service is that the signed tokens could be denominated in bitcoins, but that still seems to have little technically to do with bitcoin. in other words, it has about as much to do with the bitcoin protocol as otc trades of bitcoin balances on mt. gox.

[error]

Sure. You could just pull DigiCash out of mothballs and start issuing Bitcoin-backed DigiCash. But then you would be a central bank and people would have to trust you.

[marcus_of_augustus]

Sure. You could just pull DigiCash out of mothballs and start issuing Bitcoin-backed DigiCash. But then you would be a central bank and people would have to trust you.

People trust MtGox and it provides a service for them. If someone supplies a blinding service to met a demand and they trust it what is the difference. If there are a multitude of competing exchanges and those offering differing blinding services it would be different than the "central bank" with monopoly on credit you are referring to, or do you mean something else?

I don't know, maybe there is no real demand for easy access to true anonymity.

[error]

Sure. You could just pull DigiCash out of mothballs and start issuing Bitcoin-backed DigiCash. But then you would be a central bank and people would have to trust you.

People trust MtGox and it provides a service for them. If someone supplies a blinding service to met a demand and they trust it what is the difference. If there are a multitude of competing exchanges and those offering differing blinding services it would be different than the "central bank" with monopoly on credit you are referring to, or do you mean something else?

I don't know, maybe there is no real demand for easy access to true anonymity.

Well, it has a slight advantage in retail point of sale transactions as well, and is probably much easier to put on a smartcard than Bitcoin. So I can see it working. At least until the bank collapses.

[theymos]

sure, but that has very little to do with bitcoin, no? the same central signer could support paypal, wire transfers, etc., all at the same time.

i suppose what's novel with bitcoin plus a central signing service is that the signed tokens could be denominated in bitcoins, but that still seems to have little technically to do with bitcoin. in other words, it has about as much to do with the bitcoin protocol as otc trades of bitcoin balances on mt. gox.

It just seems to fit. Bitcoin and blinded tokens are cryptographic systems with swapped strengths and weaknesses.

Auditing is easier with Bitcoin, since anyone can see the funds owned by the central authority. (Of course, proving that they have a full reserve is more difficult.)

[duncant]

Hi! I'm the guy behind blindbitcoin.com See: http://forum.bitcoin.org/index.php?topic=12751.0

You are all correct in saying that my site is a glorified bitcoin laundry. That's exactly what I intended it to be. The whole purpose is to have a transparent, no-trust-required bitcoin laundry. I hope people find it useful!

[marcus_of_augustus]

Hi! I'm the guy behind blindbitcoin.com See: http://forum.bitcoin.org/index.php?topic=12751.0

You are all correct in saying that my site is a glorified bitcoin laundry. That's exactly what I intended it to be. The whole purpose is to have a transparent, no-trust-required bitcoin laundry. I hope people find it useful!

Okay, so it's a glorious bitcoin laundry, we'll run with that explanation for now. Open source too I see.