whatisweb3

Yes, of course this is my opinion. The transition has been years in the making and the amount of research and contributions to computing, distributed systems, and cryptography that this transition has created has been immense.

Sure? It was both an inefficient and wasteful mechanism to secure consensus. This is why developers have been actively researching and developing how to switch Eth to PoS for years.

Congrats to the devs. This is a historic moment for computing and distributed tech, and will pave the way for Ethereum’s next updates: scalability, privacy, stronger censorship resistance, easier UX and account abstraction.

Congrats to the devs. This is a historic moment for computing and distributed tech, and will pave the way for Ethereum’s next updates: scalability, privacy, stronger censorship resistance, easier UX and account abstraction.

This is how all tech works - trains, cars, power stations. We build things that are initially inefficient. We eventually transition to energy efficient tech. We celebrate. It’s rare the transition can reduce 99.95% of energy footprint the size of a country within a minute of activating the new tech.

This very sanction is against a tech called “Tornado Cash” which is not an organization or person. If somebody forks the protocol and renames it, and everybody uses it in place of TC, it will probably be under scrutiny by US treasury.

You actually could publish “illegal code” because code is protected under 1st amendment, as free speech. Legal precedent has been set by Bernstein v US DoJ.

There is an open question about whether publishing non custodial contract code on Ethereum counts as providing a service. If you post 10 lines of immutable code onto Ethereum, and some years later a user chooses to run this code on their machines for criminal behavior, should you be prosecuted?

The open source software and cryptographic protocol is implicitly targeted with this order. You can see it in how private companies are now handling the Tornado Cash code and contributor accounts. If you create a similar privacy tool with zk-SNARKs do you really think it won’t also become a target for sanctions in time?

This is known as “chilling effect” in a legal context.

25% of funds being illicit does not mean “pretty much everybody” is using it for illicit reasons. Your argument really falls apart here, but the sweeping generalizations don’t help.

Monero and TC are equal parts useful for non-criminals who are seeking privacy.

There is no doubt known cyber criminals and enemies of the US are using this tool. The question I raised is: what percentage of illicit activity is acceptable? If the E2EE chat app Matrix facilitates 10-30%, should it also be considered a primarily criminal tool worthy of a sanction?

Sure. Then it is irrelevant how much money was funding whom, only that a non-zero amount of value was not strictly traceable through typical financial surveillance systems, and so the US automatically deems this activity illegal regardless of how the funds were used.

This is where the “privacy on the blockchain should be a basic right” argument comes in, and what the plaintiff appears to be arguing.

450m is a whopping 6% of all deposits on Tornado Cash[1]. The total percentage of illicit activity on the protocol is reported to be in the 10-30% range[2].

What percentage of activity in an E2EE chat application like Matrix is illicit? If a significant but minority percentage of its use is facilitating criminal discussion, should those open protocols also be sanctioned?

[1] https://dune.com/poma/tornado-cash_1

[2] https://www.eff.org/deeplinks/2022/08/code-speech-and-tornad...

You did not answer my simple question. :) Sorry to be a broken record by comparing this to E2EE privacy protocols, but many commenters on HN only seem to think privacy is worthwhile when in the form of a chat app.

The sanctions apply directly to the protocol and it’s code, and this is the issue. It is not applying to persons, or criminal actions.

It would be like sanctioning the Matrix protocol and it’s code because it has facilitated terrorist communication. Obviously terrorists planning a bombing over Matrix protocol are engaging in criminal behavior, but this doesn’t mean the protocol itself is also a criminal entity.

One exists to facilitate privacy, the other exists to facilitate money laundering.

Compare with E2EE Matrix protocol: it does not exist to facilitate criminal communication, but it does facilitate criminal communication.

TC is also different because it is an open source protocol, not a legal entity or group. You deposit funds into the protocol, and anybody in the network can help you withdraw them by relaying your transaction. It is a set of rules that any group of people can follow to allow for private transactions, and the same protocol can run on many blockchains.

The point is: the protocol encrypts a private key, a private key is an integer, or text hash. Saying that it is OK to build tools that encrypt text, like Matrix protocol, but it is not OK to build tools that encrypt private-keys-as-text is a slippery slope.

Which one is it?

- privacy is a right, and people should be allowed to share knowledge privately

or,

- privacy is not a right, and people should only be allowed to share knowledge if that knowledge is not associated with "value"

Sure, we are in agreement then. It is a great thing as it will enable the blockchain to continue to scale for more users and more applications, and it is the opposite of the energy inefficiencies of the current PoW system.

Yes. Like putting a sanction on the open Matrix protocol, and blocking any user who has interacted with it.

Yes, like computers, the internet, electric trains. Computers used to take up a room and compute a few thousand cycles per second. Now they can fit in our pockets and compute billions of cycles per second.

As hardware accelerated and parallel ZK proving technology increases, the amount of users and applications built on this technology can also increase. This is the opposite of Proof of Work, where more efficient mining rigs and higher hash rates will not lead to more network throughput or activity.

A private key is a 256 bit integer.

> If someone built something that said "Launder your [256 bit integers] here" and it took in a bunch of [256 bit integers], and then [encrypted] it sans fees to hide where it came from... they'd say it was [256 bit integer] laundering and arrest the person.

When you compare this to encrypting 256 bit integers, text, or E2EE chat protocols, the shock is easier to understand. People should not be treated as a criminal for building Matrix E2EE protocol that enables privacy, they should not be treated as criminal for building Tornado Cash protocol that enables privacy.

Matrix protocol’s sole purpose is to obscure usernames and messages and enable privacy. Tornado Cash’s sole purpose is to obscure blockchain addresses and enable privacy. Privacy is not a crime. Using Matrix to hire a hit-man would be a crime, but we don’t sanction the Matrix protocol or it’s developers just because it can be used by criminals to obscure their crimes.

The first time a developer of open source, non-custodial and autonomous smart contract code has been arrested comes days after the US sanctions the same smart contract.

Probably just a coincidence.

There is still no legal precedent around a case like this as it relates to DAOs and autonomous smart contracts, so a law firm could not have told you anything except "we can neither confirm nor deny." If there is another US sanction that targets a non-custodial smart contract and open source project, please do share.

Devastating that it has come to "do not code an E2EE privacy tool because you might find yourself in jail one day."

My comment from 2 days ago:

> The US sanctioning Tornado Cash and the resulting repercussions is deeply concerning. Whether or not you like crypto, you should not be supporting this if you are a researcher, academic, technologist, cryptographer, or privacy advocate. The code for Tornado Cash is a series of cryptographic and mathematical functions that can be repurposed for a variety of applications unrelated to privatizing user wallets. The protocol itself is designed for one reason: to give users privacy through end to end and zero knowledge cryptography.

> Allowing it to remain open source and accessible as a tool for blockchain privacy and codebase for cryptographic research is a net benefit for the entire world.

> A comparison would be that US decides to sanction the open Matrix protocol along with any user, developer, source host, or sponsor that has ever contributed to it in the past - because it can facilitate end-to-end encrypted terrorist communication.

Discussion:

https://news.ycombinator.com/item?id=32404966

By this logic every blockchain developer should be arrested. The TC developers are not collecting fees directly, but they probably did give themselves a large supply of tokens to maintain control over the protocol, since the tokens were designed for governance.

You can name any blockchain and see the same pattern. You can name many applications on top of blockchains, like Uniswap, and see similar. All of these protocols are known to facilitate some amount of illegal activity. Does this mean all developers of these protocols should be charged?

By this logic, all E2EE and open source privacy tools should have their developers arrested. Matrix, Tor, PGP.

The stated goals of TC was privacy. Privacy is not a crime.

US sanctions on mixers in the past have been associated with an individual, not a piece of code. This is the first sanction to target an open source and non-custodial mixer.

This is not a criminal hiring a contractor to work on Tornado Cash. It is an open source project on GitHub that many developers and researchers contributed to, in the interest of privacy.

To use an analogy, see the open Matrix protocol, a tool for privacy that can facilitate encrypted communication between criminals.

The developer was not sanctioned or included in the sanction. Only "Tornado Cash" the open source project and some specific smart contract addresses.

Is anybody really calling git a blockchain? I have only seen this equivalence made by critics saying "we don't need blockchain, we already have git!"