rpietila Altcoin Observer

[Skinnkavaj]

I have been distracted by the tech-wow factor of mini-blockchains, but the real impact for retail users is XCN enabling zero-confirmation transactions via withdrawal limits.  That is just fucking huge (another Holy Grail) and a totally unreported story previous to BitFreak's recent interview.

Please explain more how this works. How can zero confirmations be possible?

[dEBRUYNE]

XCN is barely a week old, let's give it a couple of months before writing an obituary.    The high and long emission rate is there in part to prevent or at least regulate harmful bubbles; that's a feature, not a bug!  

I never wrote an obituary, I said I would consider buying it! But only after the price goes down. Since I first said this, the price has gone down. A lot. It has more to go.

If I may ask, what do you see as a optimal buy-zone for XCN?

[smooth]

XCN is barely a week old, let's give it a couple of months before writing an obituary.    The high and long emission rate is there in part to prevent or at least regulate harmful bubbles; that's a feature, not a bug!  

I never wrote an obituary, I said I would consider buying it! But only after the price goes down. Since I first said this, the price has gone down. A lot. It has more to go.

If I may ask, what do you see as a optimal buy-zone for XCN?

I think it is attractive at 1000-1500. That puts the eventual constant price market cap at about $10 million, or alternately in the millions over the next few years. That leaves room for upside as the gains awareness, recognition, and maturity. That is assuming everything goes right. I also think the coin is a good candidate for the first high profile catastrophic block chain corruption where nobody knows who owns what. That plus the risk it just goes nowhere means you want to see a lot of upside to invest.

I don't even think the price right now is terrible, just not attractive. I think it goes down more as miners continue to dump.

[iCEBREAKER]

I have been distracted by the tech-wow factor of mini-blockchains, but the real impact for retail users is XCN enabling zero-confirmation transactions via withdrawal limits.  That is just fucking huge (another Holy Grail) and a totally unreported story previous to BitFreak's recent interview.

Please explain more how this works. How can zero confirmations be possible?

Reliably accepting payments with zero confirmations is an exclusive feature of XCN, and due to its innovative use of withdrawal limits on an account tree:

Bitfreak – Unmalleable transactions are possible because of the way transactions are signed and because transactions don’t actually use scripts at all, they simply perform operations on the balance sheet structure we call the “account tree”.

Could you quickly give our readers some insight into the nature of unmalleable transactions, withdrawal limits and 0-confirmations?

Bitfreak – Well withdrawal limits basically help to prevent double spending because they limit how many coins can be withdrawn from an address in one block. So if the withdrawal limit is much smaller than the balance of the address it takes many blocks to empty out the address, which makes double spending extremely difficult because the address cannot be emptied quickly. The withdrawal limit can be changed by the owner of the address but the change is delayed. A merchant could check the withdrawal limit on a buyers address and have much more confidence in any transactions sent to them from that address if the balance is much higher than the withdrawal limit. It even makes quite secure 0-confirmation transactions possible.

http://www.coinssource.com/interview-with-the-founder-cryptonite/

[iCEBREAKER]

I think it is attractive at 1000-1500. That puts the eventual constant price market cap at about $10 million, or alternately in the millions over the next few years. That leaves room for upside as the gains awareness, recognition, and maturity. That is assuming everything goes right. I also think the coin is a good candidate for the first high profile catastrophic block chain corruption where nobody knows who owns what. That plus the risk it just goes nowhere means you want to see a lot of upside to invest.

I don't even think the price right now is terrible, just not attractive. I think it goes down more as miners continue to dump.

Sorry I didn't mean you wrote an obituary, just referring to those who have.

A "high profile catastrophic block chain corruption" would be great fun.  XCN needs the (social) media publicity!   

And the experience/expertise gained from the fiasco would be invaluable.  Nothing like a good chain forking to bring the community together and upgrade its antifragility!     No test net can emulate such real world ecology.

We probably are in a blow-off top, but I will continue to be greedy while others are fearful.   

[ArticMine]

...
Reliably accepting payments with zero confirmations is an exclusive feature of XCN, and due to its innovative use of withdrawal limits on an account tree:
...

I am not convinced this provides in reality any extra protraction to the merchant. In fact it can make things worse. What is to stop the double spender from generating a flood of transactions, using say a script, in excess of the total balance in total, with each transaction just under the withdrawal limit just before the target spend? The merchant would not be aware of this, checks the balance is well over the withdrawal limit, and approves the transaction. Then the merchant waits for N blocks as all the bogus transactions go by one by one (one per block) and the balance dwindles to zero before the merchant gets paid. It is actually worse than BTC or XMR since the merchant does not find out about the double spend until N blocks later, giving the fraudster plenty of time to escape the law.

[AnonyMint]

My point is ultimately if you spend the coin for some hard asset, e.g. land, car, electronic fiat (since paper is going away), then you are identified with some coins that you exchanged for the asset. That you mixed them with ring signatures or CoinJoin to hide the trail where they came from, doesn't stop the authorities from demanding you reveal your private keys to prove you have given them the trail as they may compel you to do.

This is false. Yes, you are personally identified once you buy the land, car, etc. This would be true even if you paid with magical pixie dust coins that are fully anonymous in every sense of the word. This identifies where the seller got the coins from.

However even if you are forced to reveal your private keys, this doesn't unmask where you got the coins from, at least not in the cryptonote design with ring signatures.

As usual, you are incorrect.

You trade some coins for an asset which reveals your  identity. The tax authorities want to trace back where you initially obtained the coins (for capital gains cost basis proof also to track whom you obtained them from), thus they demand you provide both your input and output across any CoinJoin mixes (both the inputs and outputs are on the block chain) or they demand you provide the identity of who paid you in a Cryptonote ring signature. Given that a traceable asset was exchanged, they can trace to the Cryptonote sender and force he/she to give up the private key for the ring signature. The Global Police State (cooperation of the G20 with the NSA was already announced for tracking down tax evasion) is making this a reality soon.

What I am saying is that a really anonymous coin wouldn't make it possible to reveal the trail back to where you originally sourced your coins, even when you are forced to reveal everything the authorities know that you know.

This is a mind twister. Consider it a puzzle for those of you with very high IQ.

stopped reading there

And you will kick yourself later when the solution is revealed.  

On the issue of a programmable block chain, I think what I wrote 14 years ago still applies.

[smooth]

they demand you provide the identity of who paid you in a Cryptonote ring signature.

They can't demand what you don't know, and in general you don't know or have any way to know who paid you, either physical identity or coin source. If everyone is going around recording the physical identities of everyone they transact with, then sure the authorities can go around person to person and collect that chain of IDs. This is out of scope for the coin (any coin) itself however. At the very least it puts a high burden of cost on such investigations (as opposed to downloading transaction data from Visa or Bitcoin and running big data algorithms on everyone in the world).

Furthermore, you can just delete your keys once you are done with them. They are of no real value to you once the recipient has acknowledged receipt.

EDIT: I also don't think ZeroCash allows this form of tracing even if your keys are revealed. If the authorities force you to reveal your keys, all they get to do is see how much you have and spend it. So if that is your goal here there is already a solution (largely vaporware for now though).

[AnonyMint]

they demand you provide the identity of who paid you in a Cryptonote ring signature.

They can't demand what you don't know, and in general you don't know or have any way to know who paid you, either physical identity or coin source.

Cripes man. From the beginning I have stipulated that my statement applies when there is a traceable asset traded, e.g. house, car, fiat. I wrote that cash is going away, and all fiat will be traceable (electronic). That means who paid me is knowable.

If you possess a car that you didn't possess before, the authorities can demand that you show how you paid for the car and whom you bought it from. In fact, they are already doing this in Europe, where it has become increasingly difficult in some European jurisdictions (at least I have reports from Sweden and Switzerland) to move any significant amount of money without having to give proof to the bank of what the funds are being used for.

From the beginning I stipulated that my statement did not apply when an anonymous untraceable asset is traded, e.g. a virtual good or service or perhaps even gold can be traded anonymous with meet ups wearing a mask. But the authorities can make that illegal.

[smooth]

they demand you provide the identity of who paid you in a Cryptonote ring signature.

They can't demand what you don't know, and in general you don't know or have any way to know who paid you, either physical identity or coin source.

Cripes man. From the beginning I have stipulated that my statement applies when there is a traceable asset traded, e.g. house, car, fiat. I wrote that cash is going away, and all fiat will be traceable (electronic).

Exactly. The car dealer is engaging in a traceable transaction. He got your ID and can identify you to the authorities. It doesn't matter what you use to pay. Cash, gold, bitcoins, Moneros or "fully anonymous" pixie dust crypto coins, its all the same at that point.

But once they get to you with a well implemented ring signature-based coin, the trail ends. There is no way for you deanonymize people who sent you coins. At best, they get some list of candidate outputs and can try to trace them back to some individual, but this too is likely to work far less well than it does for Bitcoin, perhaps even provably so (though we aren't quite there yet).

Unless you collected the sender's ID as the car dealer did with you. If we all turn into car dealers recording IDs for everyone we deal with (and presumably reporting that information or at least having a recordkeeping requirement for it), then no coin technology is going to help you.

[AnonyMint]

they demand you provide the identity of who paid you in a Cryptonote ring signature.

They can't demand what you don't know, and in general you don't know or have any way to know who paid you, either physical identity or coin source.

Cripes man. From the beginning I have stipulated that my statement applies when there is a traceable asset traded, e.g. house, car, fiat. I wrote that cash is going away, and all fiat will be traceable (electronic).

Exactly. The car dealer is engaging in a traceable transaction. He got your ID and can identify you to the authorities. It doesn't matter what you use to pay. Cash, gold, bitcoins, Moneros or "fully anonymous" pixie dust crypto coins, its all the same at that point.

I already answered that up thread. The point is that they can force the tracing of the coins all the way back to where you obtained them. The anonymity of the coin is useless. It can't help you obscure the source of your funds. Even cash can't help you, because you always get your cash from someone else, thus you are responsible for accurate bookkeeping.

But I said there is a solution.

Again this is a mind twister and it is flying completely over your head. Which is good. Excellent.  

But once they get to you with a well implemented ring signature-based coin, the trail ends.

No it doesn't. I can be forced to reveal who paid me, and if I claim I don't know, I go to jail for breaking the KYC laws which will if not already require me to keep accurate records.

[cAPSLOCK]

Note that with mixing on the block chain, e.g. Cryptonote, Monero, Zerocoin, authorities can compel you to reveal your private keys and unwind the anonymity, e.g. you end up with some physical asset or fiat system asset which you can't be anonymous on. It shows you paid for it with mixed coins.

Also mixing that is off the block chain, e.g. CoinJoin, DarkCoin, Tor, I2P, authorities can compel you to reveal your inputs and outputs.

But what if there was a way where the authorities could compel you to release everything and they still couldn't break the anonymity.

Now that would truly be an anonymous coin.

Sounds a bit like a teaser.

[smooth]

I already answered that up thread. The point is that they can force the tracing of the coins all the way back to where you obtained them. The anonymity of the coin is useless. It can't help you obscure the source of your funds. Even cash can't help you, because you always get your cash from someone else, thus you are responsible for accurate bookkeeping.

But I said there is a solution.

There is no solution, because whatever solution you think you've come up with (and I know of one as well, but I won't steal your thunder) is defeated by whitelist laws that require you to only receive coins (or other tradable goods) in a traceable manner, using an "approved" technology (grown up version of iTunes). Everything else can be simply banned, and you go to jail for even using it at all (assuming you can arrange for illegally modified hardware to run it).

[AnonyMint]

Everything else can be simply banned, and you go to jail for even using it at all (assuming you can arrange for illegally modified hardware to run it).

There is a solution.  

Hint: the solution is holistic because some bans just won't scale, and note that ring signatures are not essential to crypto-currency.

http://relativisticobserver.blogspot.com/2011/12/2011-year-of-steve.html

But Steve [Job]'s first words were that it wasn't scalable, and he hit the nail on the head. He was like that.

[smooth]

note that ring signatures are not essential to crypto-currency.

Of course not. Computers are essential though, and most of them are being turned into glorified iPhones. The rest are contraband. Game over.

[AnonyMint]

Hint#2: requiring accurate bookkeeping scales because there is an existing framework for it in place in all countries, especially the G20. Banning crypto-currency entirely doesn't scale (at least not within the 2016 - 2020 critical timeframe). Such a ban infringes on many other things and would have domino cascade. In particular, there is a distinction between pre-existing requirements on an identifiable person (doable), and requirements on a proliferation of anonymous entities that can't be identified (implausible). TPTB are fully aware if they push too hard on something that is popular (thus making it more popular by drawing attention to it) where they can't target individuals as examples to scare the herd, then the herd will overwhelm the TPTB. Thus the TPTB will not even attempt to go there. They would then move towards 666 implants so they can track the brain of each person (which is why the Bible is correct).

[AnonyMint]

As an example, they can't ban you from using Gnutella file sharing. They can only ban downloading copyrighted material.

[ArticMine]

note that ring signatures are not essential to crypto-currency.

Of course not. Computers are essential though, and most of them are being turned into glorified iPhones. The rest are contraband. Game over.

Which is why running a FLOSS OS such as GNU/Linux is critical in order to preserve freedom, privacy, democracy, human rights, civil liberties etc.

[JorgeStolfi]

But once they get to you with a well implemented ring signature-based coin, the trail ends. There is no way for you deanonymize people who sent you coins. [ ... ] Unless you collected the sender's ID as the car dealer did with you. If we all turn into car dealers recording IDs for everyone we deal with (and presumably reporting that information or at least having a recordkeeping requirement for it), then no coin technology is going to help you.

There aren't many activities that will pay you a five- or six-figure amount without you knowing anything about the payor.

That money usually must have come in return of some goods that you delivered or some service that you rendered.  Try to explain to the police that you did not want to intrude on their privacy by giving them a receipt...

As for the tax people, they do not care where you got that money from, only that you did not pay taxes on it.

[infested999]

Could anyone explain to me why there's too much fuss about anon coins and how would ordinary users benefit from this feature?
Say, someone wants to buy 2nd hand ps4 from someone. Why would he be so eager to use cryptos with anon feature and hide his transactions?

If you don't feel that privacy is important, I invite you to publish ALL of your UNEDITED credit card and bank statements, ever, on the Internet.

No?  Now consider someone who actually has wealth.  Suppose you have a billion dollars in spare change (after the last multinational corp you bought) and a daughter in elementary school.  Do you want every Corsican and Byelorussian ex patriate within 500km to be able to determine just how large a ransom to ask for, when they leave her left hand in your mailbox?

Suppose instead that you are a middle-level cadre running a department in a satellite city of Chongqing.  Making arrangements for entrepreneurs to build the New China has provided you with a substantial quantity of yuan that you need to move to Cambridge, for Harvard tuition, a boxster and a nice flat.  BoC is off the table.  Bitcoin leaves a trail similar to the heat trail a satellite sees when watching a nuclear submarine transit the pacific:  A big red arrow pointing directly to your location.

These are not merely "first world problems".

No one is asking you to use monero if it doesn't serve your interests.  But I do claim that it is a crucial protection from totalitarian control of your political and religious activism, and can be used to deny ANYONE who may wish to seize your wealth the information necessary to do so.  The tech to make this easy enough to use so that those who are motivated, but not technically exceptional, can do so, is not present.  But Monero puts it in reach.

We live in a world of increasing risks.  Transactional privacy enables you to manage many important risks in useful ways.  The captive coopted mass of circus-goers will not fret about this, as they butter the bread for their grilled government cheese sandwiches.  Those who have something which they consider their own, something to protect, will understand this.

Governments control the cheese consumers.  But those who control the governments have something to protect.

I really think Bitcoin is anonymous already. I know it's not 100% but if someone wants to mix Bitcoin can't they just send x to address A and withdraw x from address B when they need it? Then someone else who wants to remain anonymous sends y to address B and withdraws y from address A. Or some extension of this system.