374 karma · joined June 20, 2022
You can read about the economics of it here:
This isn’t the case with ZK provers. Each computation yields a solution, like regular fixed arithmetic math. Using more powerful FPGAs and adding more parallel provers, you can prove the same circuits in less time and less energy.
Ethereum has successfully merged Proof of Stake on all of its test networks, and is aiming for a complete merge on the main network some time next month.
I would recommend watching the video as the speaker is well educated on the subject of law and blockchain, but you can also see an article on the sanctions here[1].
[1] https://uk.style.yahoo.com/government-takes-tornado-mixer-ma...
The speaker talks about the implications of the first US sanctions that target open source software and ownerless smart contracts.
From that, additional applications can also be built on top - multi signatory accounts, a social graph, ownership of digital property, decentralized exchange and lending services, escrow, crowdfunding, and more.
1. ENS ownership is held by a 5-of-7 multisig. Attacker would need to socially engineer 5 entities instead of just one, Namecheap. Users can also clearly see when ENS ownership changes as it’s broadcast to the network.
2. ENS is set to a 100 year expiry and ownership records are then set to the burn address. Now, short of faulty RPC or frontends, there is no way that the domain can point to a different address.
My previously linked example was that of Meta entering into a court battle with a domain name registrar, who has full control over these records and may decide to alter them to avoid paying the cost of defending themselves in court. See [2] which is loosely related to this discussion of centralized services exerting control over name aliases. In a hypothetical blockchain application where usernames are secured with ENS or another smart contract, there would be limited recourse for anybody except the owner of these aliases to be able to transfer ownership.
[1] https://coingape.com/crv-tanks-over-10-as-attackers-stole-57...
[2] https://www.nytimes.com/2021/12/13/technology/instagram-hand...
In practical terms it might not matter, the funds would just be frozen. But it is still a form of money laundering that obscures the true source of the funds.
To compare, imagine an E2EE chat app built on Matrix protocol is blacklisted in your country. Anybody attempting to use it is treated as criminal, and the app will not be accepted into your country's App Stores. Does this mean the Matrix protocol has failed to deliver on its goals of end-to-end encryption?
In practical terms, it is very possible that a government can "shut down" the usefulness of a blockchain for many people. They could go as far as to criminalize any person who is found to be hosting their own blockchain nodes, or sending or receiving message packets to an RPC without first going through a centralized and permissioned service. If this were to happen, people would not willingly be using a blockchain out of fear of prosecution. Some countries like China and Russia seem to be moving in that direction, and some might argue the US too with their strong-arm censorship of Tornado Cash and all things related to it.
The DAO is a more interesting scenario. Users deposited into a smart contract that had a bug. This happens often in DeFi - see all the recent bridge hacks. The difference with the DAO is that the users were able to withdraw their assets because of a blockchain hard fork.
If you store a lot of cash in your home safe, eventually you will need more space - this is one reason banks exist. If you try to move a lot of cash quickly from one person or location to another, you will have a hard time - this is another reason banks and money transfer exists. If somebody breaks into your home safe, they probably will have immediate access to your cash - see smart contract wallets[1] and social recovery wallets[2] as an example of a more secure "crypto safe."
I agree that a concern in blockchain is that regulation and services may restrict users ability to withdraw to the base layer, see my other comment[3]. To me this is not a failing of the blockchain. It would be like governments restricting the use of internet or E2EE chat protocols - which is happening in some parts of the world - this does not mean the protocols have failed to meet their goals.
[1] https://www.argent.xyz/learn/what-is-a-smart-contract-wallet...
[1] https://twitter.com/vitalikbuterin/status/155692560223356928...
Useful for who? It is often useful for large companies with powerful legal teams who will try to exert control over domain name registrars as they see fit.[1]
The nice thing with the blockchain is that you have the choice. If you want your asset to be recoverable through the legal system and courtroom decisions, it can be put into a centralized custodian. If you want to maintain complete ownership of that asset even though you risk not being able to recover it if somebody steals it from you, you might like to hold it non-custodially.
It is very possible that laws end up being defined around ownership of blockchain assets to give them a stronger degree of legal and intellectual property.
[1] https://domainnamewire.com/2022/03/08/meta-platforms-and-nam...
Many advocates of decentralization and blockchain do not want to support centralized services like Celsius.
This is an area that laws and regulation could be added to protect users. If a service is holding user funds, there should be recourse to allow those users to withdraw the funds to a base layer, or if the funds are at risk of being frozen as we see with Celsius, this should be more clearly indicated. FDIC style insurance could be addressed in some hypothetical future crypto banks, giving users further protection.
Some example applications:
- User wants to anonymously donate to another country that their current regime is currently at war with.
- User wants to pay for an abortion without it being easily traceable.
- User with a public ENS identity wants to hold ETH on a private account that is not linked to their public identity. This might be for safety reasons, or another reason such as wanting to make investments that are not broadcast to the entire world.
The attack against TC is the US government saying "you are not entitled to privacy here, and if you even so much as try to seek privacy, you will be treated as a criminal and have all of your assets frozen."
A better way to understand blockchains is as a base settlement layer: they are a shared, permissionless and open source protocol that is resistant to takeover by a single entity.
What this means is that a company, like Meta or Coinbase or even a US bank, can build a centralized platform that lets users manage their crypto assets. But as long as users can still withdraw into a non custodial address, they have the option to escape to that neutral base layer.
This is a different design than what we see currently in the web and banking sector. You can hold ETH or an ENS domain with nothing but a private key. But with a .com domain, if you want to withdraw from GoDaddy, you will be forced to transfer that into another centralized service like Namecheap that will also extract rent. There is no “neutral base layer” with traditional digital assets.
Still money laundering, just not with clean money on the other side.
Matrix, Tor, PGP, these are all beneficial tools for the world, used by people that are not criminals. These are also widely known as tools used by criminals.
The government has explicitly said that all property and interests in property of Tornado Cash, and anybody found to be supporting it it any way, is blocked. This is why GitHub and all hosting services will refuse to allow it on their platforms.
The code is implicitly sanctioned. Any person who posts the code will probably have their repo removed, and maybe their account flagged or deleted. If you continue to try posting the code to many different hosting services you might be seen as supporting Tornado Cash, and could be facing jail time.
The protocol - the math and rules - is also implicitly sanctioned. If you build a new protocol using similar cryptographic tools, you will probably face similar risks.
> only the concrete instance present on a couple wallet addresses.
If you feel this US will stop at only these addresses, you are very naive. Any individual can fork the protocol, and it will be on a new address. Any individual can also build a competitor to Tornado Cash using similar cryptography, and they will probably also be putting themselves and their project at risk of US sanctions.
> When I use the public knowledge of a library book
However, the information is free - you can find it in a public library, and nobody is attempting to censor it.
There are two separate problems here. One is that the US sanctions are leading to censorship of knowledge and cryptographic research, which is concerning. The other is that the US sanctions are targeting an open source protocol enabling E2EE privacy on the blockchain, not that different than if they were to sanction Matrix protocol.
An obvious place to post this code and protocol would be on Ethereum, which is censorship resistant. This is what the original developers of TC have done, and the result is a contract that becomes immutable and accessible, and is now the target of the sanction.
But I will not do that, as that would put me at risk of 30 years of jail time.
I will also not post the code on Gitlab or another service, as the repercussions can be severe. Whether it is just my Gitlab account being deleted, or whether it is more significant like the US government investigating me, I do not want to put myself in that situation.
However since you are the one saying there is no problem at all with it, I wonder if you would like to do that for us?
> Yes, privacy to help hide your coins acquired through dubious means, we know that.
It is sad that you default to assuming criminal behavior. The same argument is being made today by politicians and governments to try to add back doors to E2EE chat protocols and cryptographic signature schemes.
The government has explicitly said that all property and interests in property of Tornado Cash, and anybody found to be supporting it it any way, is blocked. This is why GitHub and all hosting services will refuse to allow it on their platforms. If you try to publish TC source code, you could be considered aiding the blocked persons, and face up to 30 years in jail.
If you build a new implementation of the same or similar protocol, you might also be putting yourself at risk.
> And the vast majority of TC transactions seem to have been exactly that - ways of hiding crypto from tax offices.
The vast majority of TC transactions are for privacy. How much of that is evading tax offices or illegal money laundering is less clear. Estimates put it in the 10-20% range[1]. There are many users that would like to use TC but have avoided it because of the lack of regulatory clarity. Had the US government instead come out saying specifically that TC-style privacy on blockchain is a right that all users should be entitled to, the rates of non-criminal activity would probably be much higher than 80-90%.
> A better comparison is the Phantom Secure sting
This is a poor comparison. Phantom Secure was not an open source E2EE protocol like Tornado Cash or Matrix - it was a private company and network led by a single individual who profited immensely by selling devices to known criminals.
If you think TC is comparable to Phantom Secure, then Matrix and Tor should also be comparable to Phantom Secure, but of course that is a bad comparison.
But alas, the code and any research knowledge it provided has been removed to comply with this deeply unethical move by the US.
Violence and privacy are also different categories. A weapon that can quickly kill dozens or hundreds of people should arguably be regulated differently than a blockchain protocol that enables user privacy.
> the code or math isn't banned or illegal, the organisation is
There is no organization. The protocol is sanctioned - meaning if you fork the code, or build your own implementation, you risk the same fate as the tornado cash developers.
> That is not what happened so it's not a comparison at all.
It is very similar. The US sanctioned the Tornado Cash protocol and anybody who is using or contributing to it.