Report on the Bitcoin Foundation's Trip to Washington D.C.

[acoindr]

If a great coder sees a flaw in this argument please fill me in. I would love to know if anyone believes clandestine code could be implemented successfully.

Nope. It's highly unlikely anything would be missed.

Generally speaking open source code will be your most secure, and often best performing code. It's the reason for example the Apache server became the most widely adopted deployment server over Microsoft's IIS, and Firefox beats out MS IE for security and increasingly usage, why Google chose an open source approach to its Chrome browser and Android mobile OS. It's why Linux is seeing a surge in popularity and recommendation as compared to the 90s.

The only problem with open source is the motivation of developers to work on it can be spotty, because it's not profit driven by default. It's usually a labor of love, but of course that can produce the best results.

With open source code, especially at the core of something as important, and financially relevant as Bitcoin, though, you can bet everything will get scrutinized, and more so the bigger it gets. It's how the recent Android bug for random numbers was found and patched before real disaster struck.

Contrast that with something like Microsoft software, which despite many billions in backing loses out to free software as noted above. Software which is closed source, proprietary, and increasingly developed in a compartmentalized way, a way which makes it quite easy to for example include a back door for the NSA which Microsoft has been shown to work with.

[Rampion]

The point here is I'm not seeing any complete report on what happened in that meeting, just vague statements that resemble a condescending pat on the back to the community: "do not worry guys, we're hanging out with all the three letter agencies and we are doing great!"

That's BS. If they feel they represent Foundation members and "the community" by extension they should be absolutely transparent, from the very beginning - I'm surprised this "friendly" meeting was not publicly announced on beforehand. If they prefer to do things "behind closed doors" then maybe they just represent themselves and their own agendas, in which case I do not understand how they got so much cheering and "well done, guys!" in here.

TL;DR: if they do not publish a complete report of that meeting this smells very fishy and IMO it is nothing to be happy about.

[NewLiberty]

... No covert changes could me made that wouldn't be immediately recognized by someone using Bitcoin. Let's say, if TBF were contacted by some three letter agency and attempted to code involuntary address tagging using the send IP with a TOR block it would immediately cause a rebellion. This is the open source concepts greatest strength. It's greatest weakness, of course, is bad code written by people trying to help. Some people will tell you how confusing it would be to simple users worldwide if Bitcoin needed to be forked for some reason. I don't believe that and I think the immediate correction to the large block fork in March proved how easy it would be to fix. The problem won't come in the form of code influence it will be in regulations that fail to promote business infrastructure and cripple Bitcoin in the US. If a great coder sees a flaw in this argument please fill me in. I would love to know if anyone believes clandestine code could be implemented successfully.

I don't think anyone is seriously afraid of clandestine code in an open source project, or at least I'm not.  What I'm talking about are forks; FOSS is forked all the time for a variety of reasons, and community <> developer disconnects or big business getting too involved (controlling) are a big motivator.  What I'm saying is if the majority or all of the code commits to master are influenced by a foundation without adequate community input or transparent operations, the decreased trust is more likely to cause a situation where we could see two versions of the blockchain with a hard fork between BF supporters and non-BF supporters, in this example.  The code can be immaculate, pristine, and still see a fork caused by politics, bickering, or fighting amongst user groups.  Any sufficiently large group that feels under-represented by what could be seen as controlling interests can lead to this behavior.

The 80%/20% wealth distribution is another example; if you have a continued accumulation and concentration of wealth, and use that wealth to unduly influence the markets, code, whatever - if the richest quintile loses a majority of the lower 4 quintiles to a chain fork, the same problem occurs, fragmenting something you probably don't want to fragment if you are in that upper quintile.  All I'm saying is that billing an Industry or trade organization as the 'main body' could be problematic for a variety of reasons that should be considered.  I'm also not saying the the foundation has to become a industry lobby group, just that it seems the most likely course given their actions to date.

On open source code security...


Back door in open source SSL?
http://yro.slashdot.org/story/13/07/02/1241246/nsa-backdoors-in-open-source-and-open-standards-what-are-the-odds

Back door in openBSD?
http://marc.info/?l=openbsd-tech&m=129236621626462&w=2

Back door in open source messaging?
http://arstechnica.com/business/2012/02/malicious-backdoor-in-open-source-messaging-apps-not-spotted-for-4-months/

Yet another Open source planted backdoor
http://www.zdnet.com/blog/security/open-source-proftpd-hacked-backdoor-planted-in-source-code/7787

Even a contest for who can do it best:
https://backdoorhiding.appspot.com/

I'd agree that it is not likely.  It could happen though, so stay vigilant.

[acoindr]

I don't think anyone is seriously afraid of clandestine code in an open source project, or at least I'm not.  What I'm talking about are forks; FOSS is forked all the time for a variety of reasons, and community <> developer disconnects or big business getting too involved (controlling) are a big motivator.  What I'm saying is if the majority or all of the code commits to master are influenced by a foundation without adequate community input or transparent operations, the decreased trust is more likely to cause a situation where we could see two versions of the blockchain with a hard fork between BF supporters and non-BF supporters, in this example.  The code can be immaculate, pristine, and still see a fork caused by politics, bickering, or fighting amongst user groups.  Any sufficiently large group that feels under-represented by what could be seen as controlling interests can lead to this behavior.

The 80%/20% wealth distribution is another example; if you have a continued accumulation and concentration of wealth, and use that wealth to unduly influence the markets, code, whatever - if the richest quintile loses a majority of the lower 4 quintiles to a chain fork, the same problem occurs, fragmenting something you probably don't want to fragment if you are in that upper quintile.  All I'm saying is that billing an Industry or trade organization as the 'main body' could be problematic for a variety of reasons that should be considered.  I'm also not saying the the foundation has to become a industry lobby group, just that it seems the most likely course given their actions to date.

Yes, I believe your concern is valid. Your account is new so you're probably not aware this has come up in this community. I've posted often on what I think the resolution is. In fact I outlined my thoughts just yesterday. To bring you up to speed you might read my post here Bitcoin vs LiteCoin vs ... other cryptocurrencies.

excerpt:

Then came the community disruption of the announcement of a new Bitcoin Foundation. Needless to say the apparent move toward centralization of power in a community believing supremely in decentralization caused a huge uproar. I was among those strongly raising objections with concerns over unchecked power. This issue challenged the entire project with talk of hard forks and more.

It was during this period that it dawned on me alt-coins could serve a real purpose and have a value Bitcoin never could: by providing alternative. If there was only to be Bitcoin forever, then any single group with growing influence and power could steer it for better or worse for all involved. I saw alt-coins as solving that problem. As a natural part of the free market Bitcoin relied on they could regulate unwanted behavior as free markets do, by providing options and competition. I outlined all this in a post here:

Solution to The Bitcoin Foundation (the announcement)

[thezerg]

The lack of transparency is pretty embarrassing.  Every single individual in that room probably contained the means to record the entire thing in his/her pocket.  


I would have stood up and held up my phone and asked the regulators "what do you guys prefer?  That this be recorded and published on the internet or that we keep it casual?"  

And when they chose casual, I would have said "Why?  We aren't going to be breaking any laws here.  But I think i know why.  You just don't want to be seen by the world asking stupid questions.  And you don't want to seem for or against this technology before making an informed determination."

And then I would say, "That's called reasonable privacy and THAT's why we use bitcoin."

[NewLiberty]

The lack of transparency is pretty embarrassing.  Every single individual in that room probably contained the means to record the entire thing in his/her pocket.  
I would have stood up and held up my phone and asked the regulators "what do you guys prefer?  That this be recorded and published on the internet or that we keep it casual?"  

And when they chose casual, I would have said "Why?  We aren't going to be breaking any laws here.  But I think i know why.  You just don't want to be seen by the world asking stupid questions.  And you don't want to seem for or against this technology before making an informed determination."

And then I would say, "That's called reasonable privacy and THAT's why we use bitcoin."

The conversation would likely have been different were it recorded.  Folks have egos to protect.
The govt folks would not have wanted to appear as ignorant as they are, and TBF may have not been able to be as candid as they were in explaining the benefits to government for not regulating (some here do not want to offer any information to them even in self defense).
It is what it is.  If it were otherwise, it could have been better or it could have been worse.
Hopefully there will be a future meet that does invite C-SPAN.  The discussion has room for that as well, and C-SPAN will get lots of views on it.

[niko]

Did the Foundation convey to the agencies of Bitcoin's existential threat to fiat currencies?
Do they understand what the implications to governments would be if a significant portion of all commerce was done using bitcoins as opposed to the USD?

Do you understand what the implications to yourself would be if a significant portion of all commerce was done using bitcoins? Few hints to help you get started:

Salaries paid to addresses on the record with revenue agencies

Blockchain data mining for marketing and security purposes

An emerging market for customer data (addresses used)

Mining is a big game. You choose your payment processors, who include and validate your transactions in the blockchain for a fee.

Bitcoins are considered money. Coin mixing services are prosecuted for what they are: money laundering.

[acoindr]

On open source code security...


Back door in open source SSL?
http://yro.slashdot.org/story/13/07/02/1241246/nsa-backdoors-in-open-source-and-open-standards-what-are-the-odds

Back door in openBSD?
http://marc.info/?l=openbsd-tech&m=129236621626462&w=2

Back door in open source messaging?
http://arstechnica.com/business/2012/02/malicious-backdoor-in-open-source-messaging-apps-not-spotted-for-4-months/

Yet another Open source planted backdoor
http://www.zdnet.com/blog/security/open-source-proftpd-hacked-backdoor-planted-in-source-code/7787

Even a contest for who can do it best:
https://backdoorhiding.appspot.com/

I'd agree that it is not likely.  It could happen though, so stay vigilant.

Yes, those links show back doors being found which is the benefit of open source code. There may be a delay before malicious code or bugs are found but they are generally found eventually depending on the nature of the application. With something as financially critical as Bitcoin, which has special upgrade considerations, problems would probably be noticed pretty quick. The recent Android bug is a good example. Were it not for Bitcoin the random number issue might have gone unnoticed far longer, maybe indefinitely because its importance otherwise would be so low.

[GoldSilverBitcoin]

As a business, I feel this is a good progression. I feel we would like Bitcoin to blend in with the overall regulatory framework to protect individuals and promote a freer, more open society there-through. I of course sympathize with those who feel that this a a little "high sagey" of the BTC Foundation. To be sure, the two cultures - one of control and one of freedom - were bound to Clash in the Clampdown!

[chanson]

The Bitcoin Foundation won't disclose what legislators they met with on day 2 of their trip.

http://thegenesisblock.com/bitcoin-foundation-on-capitol-hill-day-two-legislators/

Poking at the beast.

           USA                                   Bitcoin Foundation
              V                                         V
http://bradleysanimalplace.files.wordpress.com/2008/10/pd_elephant_mouse_071115_mn.jpg

"Poking at the beast" may not really be an apt analogy as far as big beats small, because MythBusters showed that elephants give a wide berth to mice if they see them: https://www.youtube.com/watch?v=wXiMs65ZAeU

Would be interesting to figure out what analogy IS apt, though.

[QuestionAuthority]

... No covert changes could me made that wouldn't be immediately recognized by someone using Bitcoin. Let's say, if TBF were contacted by some three letter agency and attempted to code involuntary address tagging using the send IP with a TOR block it would immediately cause a rebellion. This is the open source concepts greatest strength. It's greatest weakness, of course, is bad code written by people trying to help. Some people will tell you how confusing it would be to simple users worldwide if Bitcoin needed to be forked for some reason. I don't believe that and I think the immediate correction to the large block fork in March proved how easy it would be to fix. The problem won't come in the form of code influence it will be in regulations that fail to promote business infrastructure and cripple Bitcoin in the US. If a great coder sees a flaw in this argument please fill me in. I would love to know if anyone believes clandestine code could be implemented successfully.

I don't think anyone is seriously afraid of clandestine code in an open source project, or at least I'm not.  What I'm talking about are forks; FOSS is forked all the time for a variety of reasons, and community <> developer disconnects or big business getting too involved (controlling) are a big motivator.  What I'm saying is if the majority or all of the code commits to master are influenced by a foundation without adequate community input or transparent operations, the decreased trust is more likely to cause a situation where we could see two versions of the blockchain with a hard fork between BF supporters and non-BF supporters, in this example.  The code can be immaculate, pristine, and still see a fork caused by politics, bickering, or fighting amongst user groups.  Any sufficiently large group that feels under-represented by what could be seen as controlling interests can lead to this behavior.

The 80%/20% wealth distribution is another example; if you have a continued accumulation and concentration of wealth, and use that wealth to unduly influence the markets, code, whatever - if the richest quintile loses a majority of the lower 4 quintiles to a chain fork, the same problem occurs, fragmenting something you probably don't want to fragment if you are in that upper quintile.  All I'm saying is that billing an Industry or trade organization as the 'main body' could be problematic for a variety of reasons that should be considered.  I'm also not saying the the foundation has to become a industry lobby group, just that it seems the most likely course given their actions to date.

Ok, this makes more sense to me but you're still missing my point. You don't have to worry about the code being controlled because the last thing a politician or regulator will attempt is a scientific solution. They fight with armament and law and can do far more destruction with those tools than any amount of manipulation to the software. Handing over a clear understanding of the system will only hasten the destruction enough to hinder wide spread adoption. Make them work for it. Make them study on their own. While we're waiting for them to get up to speed, sell Bitcoin to the masses and create a real legislative challenge for them in the future. You're not going to stop legislation but you might make them understand well enough to create tightly written and crippling legislation.

[thezerg]

The lack of transparency is pretty embarrassing.  Every single individual in that room probably contained the means to record the entire thing in his/her pocket.  
I would have stood up and held up my phone and asked the regulators "what do you guys prefer?  That this be recorded and published on the internet or that we keep it casual?"  

And when they chose casual, I would have said "Why?  We aren't going to be breaking any laws here.  But I think i know why.  You just don't want to be seen by the world asking stupid questions.  And you don't want to seem for or against this technology before making an informed determination."

And then I would say, "That's called reasonable privacy and THAT's why we use bitcoin."

The conversation would likely have been different were it recorded.  Folks have egos to protect.
The govt folks would not have wanted to appear as ignorant as they are, and TBF may have not been able to be as candid as they were in explaining the benefits to government for not regulating (some here do not want to offer any information to them even in self defense).
It is what it is.  If it were otherwise, it could have been better or it could have been worse.
Hopefully there will be a future meet that does invite C-SPAN.  The discussion has room for that as well, and C-SPAN will get lots of views on it.

Exactly my point, and one of the key features of bitcoin (reasonable privacy) that regulators seem to dislike.

[xcsler]

Did the Foundation convey to the agencies of Bitcoin's existential threat to fiat currencies?
Do they understand what the implications to governments would be if a significant portion of all commerce was done using bitcoins as opposed to the USD?




Do you understand what the implications to yourself would be if a significant portion of all commerce was done using bitcoins? Few hints to help you get started:

Salaries paid to addresses on the record with revenue agencies

      Isn't this what the IRS already does?
      Transactions can be kept private by sending to addresses not recorded with agencies.

Blockchain data mining for marketing and security purposes

      Isn't this what Google already does.

An emerging market for customer data (addresses used)

     That market exists today.

Mining is a big game. You choose your payment processors, who include and validate your transactions in the blockchain for a fee.

     Not sure what your point is here. Are you implying that miners would "gouge" customers because if so I expect free market forces to easily deal with pricing.

Bitcoins are considered money. Coin mixing services are prosecuted for what they are: money laundering.

     Are they going to arrest everyone? Also, what happens to the country when other nations accept Bitcoin and capital flight ensues.