A very detailed study showing that RSA can be re-engineered in order to remain practical, yet it will no longer be broken by a quantum computer. The essence of the proposal is a multiple-prime RSA with great many 4096-bit primes and with 1 Terabyte public key. A significant potential weakness [for which however there is no attack so far] is the use of small public exponent e=3.
Almost exactly 3 years after this, bitcoin network went down to less than 50% dominance, and has nearly lost its capacity to process payments normally.
This can be seen on the following graph for the last 12 months. The curve does not go down to zero anymore. It can no longer keep with the demand of blockchain space to store newly created transactions. If the curve sometimes went down to zero, maybe transactions would eventually be approved. However, the last time the curve was lower than 10,000 was 2 May 2017. As a result there is a permanent huge backlog of payments which are simply no longer executed in any reasonable way. This looks like a permanently saturated network.
One year ago the norm would be to have just a few thousands of unconfirmed transactions waiting for being mined. Knowing that one block adds some 1000-2000 transactions in 10 minutes, this would mean that you wait for maybe 1 hour for an ordinary transaction to be mined, and that one could reasonably expect it to be mined sooner or later.
Now the situation became MUCH worse: the number of unconfirmed transactions has skyrocketed to 100,000 [later 170,000]. At the same time we still have a strict 1Mb limit on block size because the bitcoin network inability to deliver any sort of sensible reform or upgrade. This means that many users of bitcoin need to wait for DAYS and even WEEKS before their transaction is approved.
Some detailed statistics on waiting time vs. fee: see Fig. 8 on page 13 of this paper written by a UCL researchers Pappalardo et al. Here is a real-life tool which shows how big are the fees used in unconfirmed transactions for the last 24 hours. And here is an example of a transaction not mined for many days from 8 May and even erased/forgotten by blockchain.info (it was seen on 8 May, it was reported as inexistent/unknown on 22 May, and on 25 May it was claimed to be a recent transaction dated 22 May). In fact something like 20% of bitcoin transactions are NOT mined for 30 days or more, cf. again UCL paper. It is also clear that blockchain.info do NOT report these figures accurately, as it is able to forget a transaction and provides inaccurate timestamps. Therefore the actual figures could be higher.
As the demand cannot be met, fees paid to miners went to the moon as shown on the graph below.
Bitcoin has become a network where economic activity is taxed and a lot of small transaction will not happen at all. Now it is not true that the relative cost of processing compared to the transaction volume has increased, it went down to 0.5%, see this graph. It is rather correct to say that the network can now only handle larger payments for the super wealthy and large transactions are executed, cf. Fig. 7 in UCL paper.
Alternatives are to put an exorbitant fee for your transaction to be mined ASAP (within 10 minutes), or to replace your transaction and increase the fee – many apps do not allow this and people see their bitcoins stuck in a limbo for days and possibly forever. For ordinary users this means losing their bitcoins – in practice – for example most ordinary users of many mobile apps will not know how to recover their bitcoins from a backup of their private keys and app developers typically do not explain how to do it.
If bitcoin loses in dominance who are the winners? This curve shows that each time in recent 4 years, bitcoin dominance is eroded, clearly, this has coincided more or less with an appreciation of one single currency. First it was Ripple, then Ethereum, and very recently both at the same time [and few other].
A proportion estimated to be as high as 70% of bitcoin mining chips used worldwide has a backdoor which allows one to trace the miners.
In addition there is a malicious remote shutdown attack which could be triggered by a MITM attacker.
Silvio Micali, one of the most brilliant computer scientists on this planet has just re-invented democracy or blockchains or finance or law order and public authority and few other things, with his ALGORAND system. And some other brilliant crypto innovators are also doing the same thing: see DFINITY.
Possibly this is what we really want, a distributed ledger system which is very hard to corrupt and acts for the benefit of the honest players rather than the bad ones. The anti-dote to our mafia economy and all the fake sponsored consensus run by the corrupted few, in media, science, politics, etc, which we see every day.
On the surface, Dr Micali has the tool which we all want: a weapon for the oppressed, the under-represented, or just ordinary honest players in the market, a major step forward towards building a truly civilized society, towards restoring the market economy and truly democratic finance which benefits everyone. A space where people can live their digital economy lives without fear of being abused by fraudsters and criminals.
The system works by deterministic randomness which is quite hard to control for the attackers and which decides which entities will be able to vote on the future state of the ledger. It is designed to be extremely robust and stable. It is claimed to be secure in some quite strong adversarial settings, for example the attacker is allowed to corrupt the very person who will be [temporarily] in charge of deciding the next update of the ledger. And the system claims to resist this sort of attack. Micali his this nice metaphor: […the powerful attacker] “cannot call back the leader’s message no more than a powerful government can put back in the bottle a message virally spread by WikiLeaks”.
However in fact Micali is doing just this. He has just started to suppress the very brilliant ideas he has been building in the last few years. The process of suppressing these brilliant ideas have already began, and the person who runs the revolution and the counter-revolution is the same, Dr Micali himself. On the first page of their paper we read:
These technologies are the object of the following patent applications: US62/117,138 US62/120,916 US62/142,318 US62/218,817 US62/314,601 PCT/US2016/018300 US62/326,865 62/331,654 US62/333,340 US62/343,369 US62/344,667 US62/346,775 US62/351,011 US62/653,482 US62/352,195 US62/363,970 US62/369,447 US62/378,753 US62/383,299 US62/394,091 US62/400,361 US62/410,721
You bet that for the next 20 years we will be left with what we have: mafia-friendly systems such as bitcoin, hyper-centralized champions of excessively poor network neutrality, which are essentially privately controlled financial systems designed and working exclusively for the corrupt few. Why it is the systems such as bitcoin which are free and open source and good ones patented?
Shame on you Silvio Micali!
Schneier wrote:
Danezis in UCL blog wrote:.
Other observations which many sources reported:
For the last few months Yahoo Finance have been promoting a criminal investment scam.They present it as if it was a legit company, while it is not hard to see that this is a scam run by some serial fraudsters.
Shame on you, Yahoo Finance!
Tomorrow 20 January, Trump will become the next US president. It will allow us to test again the concept of a 51% attack: more than 51% of Americans disapprove of Trump.
Here come the bad news. Possibly 90% would not help either. We have been losing control of the wealth and resources of this planet since the end of 1980s, and this concerns the 90% of us, the whole of the so called middle class included.
ADDITIONS: there are also many good people among the rich and influential.
In the last few years, we have seen an increased awareness that PGP/GPG is a dinosaur of 1990s crypto, and it does not satisfy the need of modern users for secure communication.
PGP model has many perverse effects: like creating a single point of failure where all sensitive communications are compromised with cracking one single key, which sooner or later quantum computer will crack.
Possibly PGP can be fixed and have forward security added etc, but for now many security researchers do not advocate to use PGP.
UPDATES:
Now are there any trustworthy alternatives on this planet? I believe there aren’t. I would recommend users NOT to trust anyone who says them some app is secure, like in this article which advocates Signal/What App . They are going to be disappointed.
We see that the year 2016 was dominated by Ethereum. The year 2017 could be the year of