Bitcoin Explanation - Schneier on Security

A Look at DCG & Bitfury's Incestuous Ties With the U.S. Government

Peter Todd Tweet in 2014: https://archive.is/vKZ9C
[email protected] I gotta say, looks really bad legally how Austin Hill's been negotiating deals w/ pools/etc. to get control of hashing power.
Board of Digital Currency Group
Glenn Hutchins
Advisory Board
Larry Summers
DCG of course is an investor in both Blockstream and BTCC.
DCG's money comes from:
DCG also owns Coindesk.
BTCC and Bitfury are the only two large mining pools who are outspoken in their support of Bitcoin Core.
The Bitfury Group Leadership to Present at Clinton Global Initiative (https://archive.is/MWKee)
Full Video (Begins at 32:00)
“The Bitfury Group is proud to be the world’s leading full service Blockchain technology company, we are deeply honored to represent this innovation to an audience of extremely dedicated game-changers, and we look forward to highlighting our company’s groundbreaking ‘Blockchain for global good’ work at such an important event, said Smith. “From the White House to the Blockchain, I know this technology has the power to deliver inclusion and opportunity to millions, if not billions, of people around the world and I am so grateful to work for a company focused on such a principled vision.”
Bitfury Lightning Implementation
  • In partnership with a French firm called ACINQ (http://acinq.co)
  • ACINQ is a subsidiary of the larger ACINQ Financial Services
  • CoinTelegraph: Bitfury Lightning Network Successfully Tested With French Bitcoin Company
  • TEAM: https://archive.is/Q5CNU
  • ACINQ’s US Headquarters is in Vienna, Virginia, a small town of only 16,000. Why would a global financial firm choose to locate here? -- Feeder community into Washington, D.C. Has an orange line metro stop. -- Located in Fairfax County, VA. -- The US Federal Government is the #2 largest employer -- Booz Allen Hamilton (NSA front company) is #6 largest employer -- In fact, most of the top employers in Fairfax County are either US Federal Gov’t or companies that provide services to Federal Government -- The county is home to the headquarters of intelligence agencies such as the Central Intelligence Agency, National Geospatial-Intelligence Agency, and National Reconnaissance Office, as well as the National Counterterrorism Center and Office of the Director of National Intelligence.
Chairman: Avinash Vashistha
CEO: Chaman Baid
CSO: Nandan Setlur
  • https://www.linkedin.com/in/nandansetlur https://archive.is/wp3L0
  • From 1986-1993 he worked for Information Management Consultants (imc) Ltd as a Technical Consultant with various federal government agencies. McLean, Virginia
  • 1993-2000 Technical Consultant for Freddie Mac, in McLean Virginia
  • From 2000-2007, President of InterPro Global in Maryland
  • From 2011-2012, Director of VibbleTV in Columbia, Maryland
  • From 2008-Present has been Executive Director at ACINQ and Managing Partner at Vine Management, both in Vienna, Virginia.
BitFury Enhances Its Advisory Board by Adding Former CFTC Chairman Dr. James Newsome and Renowned Global Thought Leader and President of the Institute for Liberty and Democracy Hernando de Soto (Businesswire)
Bitfury Board of Directors
Robert R Dykes
The other board members include two Bitfury founders, and an investor.
Bitfury Advisory Board
James Newsome
  • Ex-chairman of CFTC
  • Dr. Newsome was nominated by President Clinton and confirmed by the Senate to be at first a Commissioner and later a Chairman of CFTC. As Chairman, Newsome guided the regulation of the nation’s futures markets. Additionally, Newsome led the CFTC’s regulatory implementation of the Commodity Futures Modernization Act of 2000 (CFMA). He also served as one of four members of the President’s Working Group for Financial Markets, along with the Secretary of the Treasury and the Chairmen of the Federal Reserve and the SEC. In 2004, Newsome assumed the role of President and Chief Executive Officer of the New York Mercantile Exchange (NYMEX) where he managed daily operations of the largest physical derivatives exchange in the world. Dr. Newsome is presently a founding partner of Delta Strategy Group, a full-service government affairs firm based in Washington, DC.
Hernando de Soto
  • Hernando de Soto heads the Institute for Liberty and Democracy, named by The Economist one of the two most important think tanks in the world. In the last 30 years, he and his colleagues at the ILD have been involved in designing and implementing legal reform programs to empower the poor in Africa, Asia, Latin America, the Middle East, and former Soviet nations by granting them access to the same property and business rights that the majority of people in developed countries have through the institutions and tools needed to exercise those rights and freedoms. Mr. de Soto also co-chaired with former US Secretary of State Madeleine Albright the Commission on Legal Empowerment of the Poor, and currently serves as honorary co-chair on various boards and organizations, including the World Justice Project. He is the author of “The Other Path: the Economic Answer to Terrorism”, and his seminal work “The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else.”
  • Frequent attendee at Davos World Economic Forum
  • Frequent Speaker @ Clinton Global Initiative http://www.dailymotion.com/video/x2ytfrs https://archive.is/MWKee
  • Criticisms: -- In his 'Planet of Slums'[104] Mike Davis argues that de Soto, who Davis calls 'the global guru of neo-liberal populism', is essentially promoting what the statist left in South America and India has always promoted—individual land titling. Davis argues that titling is the incorporation into the formal economy of cities, which benefits more wealthy squatters but is disastrous for poorer squatters, and especially tenants who simply cannot afford incorporation into the fully commodified formal economy. -- An article by Madeleine Bunting for The Guardian (UK) claimed that de Soto's suggestions would in some circumstances cause more harm than benefit, and referred to The Mystery of Capital as "an elaborate smokescreen" used to obscure the issue of the power of the globalized elite. She cited de Soto's employment history as evidence of his bias in favor of the powerful. https://www.theguardian.com/business/2000/sep/11/imf.comment http://www.slate.com/articles/news_and_politics/hey_wait_a_minute/2005/01/the_de_soto_delusion.html
Tomicah Tilleman
  • https://en.wikipedia.org/wiki/Tomicah_Tillemann
  • Dr. Tomicah Tillemann is Director of the Bretton Woods II initiative. The initiative brings together a variety of long-term investors, with the goal of committing 1% of their assets to social impact investment and using investments as leverage to encourage global good governance. Tillemann served at the U.S. State Department in 2010 as the Senior Advisor on Civil Society and Emerging Democracies to Secretary Hillary Clinton and Secretary John Kerry. Tillemann came to the State Department as a speechwriter to Secretary Clinton in March 2009. Earlier, he worked for the Senate Foreign Relations Committee, where he was the principal policy advisor on Europe and Eurasia to Committee Chairmen, Senators Joe Biden and John Kerry. He also facilitated the work of the Senate's Subcommittee on European Affairs, then chaired by Senator Barack Obama. Tillemann received his B.A. magna cum laude from Yale University. He holds a Ph.D. with distinction from the School for Advanced International Studies at Johns Hopkins University (SAIS) where he also served as a graduate level instructor in American foreign policy. http://live.worldbank.org/node/8468 https://archive.is/raDHA
  • Secretary Clinton appointed Tomicah Tillemann, Ph.D. as the State Department’s Senior Advisor for Civil Society and Emerging Democracies in October 2010. He continues his service under Secretary Kerry.
  • Mr. Tillemann and his team operate like venture capitalists, identifying ideas that can strengthen new democracies and civil society, and then bring together the talent, technology and resources needed to translate promising concepts into successful diplomacy. He and his team have developed over 20 major initiatives on behalf of the President and Secretary of State.
  • Mr. Tillemann came to the State Department as a speechwriter to Secretary Clinton in March 2009 and collaborated with her on over 200 speeches. Earlier, he worked for the Senate Foreign Relations Committee, where he was the principal policy advisor on Europe and Eurasia to Committee Chairmen, Senators Joe Biden and John Kerry. He also facilitated the work of the Senate's Subcommittee on European Affairs, then chaired by Senator Barack Obama. Mr. Tillemann’s other professional experience includes work with the White House Office of Media Affairs and five U.S. Senate and Congressional campaigns. He was a reporter with Reuters New Media and hosted a commercial radio program in Denver, Colorado. http://m.state.gov/md160354.htm https://www.newamerica.org/our-people/tomicah-tillemann/ https://archive.is/u2yF0
  • Director of “Bretton Woods II” initiative at New America Foundation Bretton Woods was an international summit that led to the creation of the IMF and the IBRD, one of five members of The World Bank
Jamie Smith
Jason Weinstein
Paul Brody (no longer appears on site, and his LinkedIn has no mention of Bitfury, but he is mentioned in a Press Release
  • https://www.linkedin.com/in/pbrody
  • Ernst & Young since 2015 as “Americas Strategy Leader”, “Global Innovation Leader”, and “Solution Leader”
  • Prior to E&Y, he was an executive at IBM since 2002
New America Foundation
Muskoka Group
[note: this is worthy of much more research]
  • https://www.bloomberg.com/news/articles/2016-08-29/blockchain-s-backers-embark-on-campaign-to-improve-its-image
  • Don Tapscott, co-author of the book “Blockchain Revolution,” hosted the meeting with his son and co-author Alex Tapscott at his family’s summer compound in Lake of Bays, Ontario. The group included some of blockchain’s biggest backers, including people with ties to IBM and JPMorgan. They considered ways to improve the governance and oversight of the technology behind the digital currency bitcoin as a way to fuel the industry’s growth. They included Jim Zemlin, executive director of the Linux Foundation; Brian Behlendorf, executive director of the Hyperledger Project, a blockchain supporter group that includes International Business Machines Corp., Airbus Group SE and JPMorgan Chase & Co.; and Ana Lopes, board member of the World Wide Web Foundation. Participants with blockchain industry ties include former deputy White House press secretary Jamie Smith, now chief global communications officer of BitFury Group Ltd., and Joseph Lubin, founder of startup Consensus Systems.
Blockchain Delegation Attends Democratic National Convention https://archive.is/k16Nu
Attendees:
Jamie Smith — The Bitfury Group & Blockchain Trust Accelerator Tomicah Tillemann— New America Foundation & Blockchain Trust Accelerator Alex Tapscott— co-author: Blockchain Revolution Brian Forde — MIT, Digital Currency Initiative
Brian Forde
  • Was the founding director of the MIT Digital Currency Initiative -Left his 4 year post as White House Senior Advisor for Mobile and Data Innovation to go directly to the MIT DCI
  • Brian Forde has spent more than a decade at the nexus of technology, entrepreneurship, and public policy. He is currently the Director of Digital Currency at the MIT Media Lab where he leads efforts to mainstream digital currencies like Bitcoin through research, and incubation of high-impact applications of the emerging technology. Most recently he was the Senior Advisor for Mobile and Data Innovation at the White House where he spearheaded efforts to leverage emerging technologies to address the President’s most critical national priorities. Prior to his work at the White House, Brian founded one of the largest phone companies in Nicaragua after serving as a business and technology volunteer in the Peace Corps. In recognition of his work, Brian was named a Young Global Leader by the World Economic Forum and one of the ten most influential people in bitcoin and blockchain. https://www.linkedin.com/in/brianforde https://archive.is/WjEGU
Alex Tapscott
World Economic Forum
  • Strategic Partners: https://www.weforum.org/about/strategic-partners
  • Includes Accenture (See Avinash Vashistha), Allianz, Deloitte (Scaling Bitcoin platinum sponsor, Blockstream Partner), Citigroup, Bain & Company (parent of Bain Capital, DCG investor), Dalian Wanda Group (working on blockchain technology), Ernst & Young (see Paul Brody), HSBC (Li-Ka Shing, Blockstream investor, used to be Deputy Chairman of HSBC), IBM, KPMG International, Mastercard (DCG Investor), PwC (Blockstream partner, also sponsor of Scaling Bitcoin)
  • Future of Financial Services Report [PDF] The word “blockchain” is mentioned once in this document, on page 23 (http://i.imgur.com/1SxyneJ.png): We have identified three major challenge areas related to innovation in financial services that will require multi-stakeholder collaboration to be addressed effectively. We are launching a project stream related to each area, with the goal of enabling tangible impact.... Decentralised systems, such as the blockchain protocol, threaten to disintermediate almost every process in financial services
  • The Steering Group who authored the report is a who’s who of the global financial elite. (Pages 4 & 5) http://i.imgur.com/fmYc1bO.png http://i.imgur.com/331FaX6.png
Bitfury Washington DC Office
Washington DC Office 600 Pennsylvania Avenue Suite 300 Washington, D.C. 20003
http://bitfury.com/contacts https://archive.is/ugvII
Bitfury Chosen for Ernst & Young Blockchain Startup Challenge
Deloitte Unveils Plan to Build Blockchain-Based Digital Bank http://www.consultancy.uk/news/12237/deloitte-unveils-plan-to-build-blockchain-based-digital-bank https://archive.is/UJ8Q5
submitted by 5zh8FoCiZ to btc [link] [comments]

Why the NSA revelations make me worried about the safety of Bitcoin

This has probably been discussed before, but I don't see how Bitcoin can be a safe method of storing wealth, given our current situation where the NSA observes EVERYTHING. Not just that, the NSA has installed backdoors in nearly all of our hardware. Both Intel and AMD processors likely have hardware backdoors for the NSA.
Back in 2010, the NSA broke a variety of cryptographic standards. In addition, we know that the NSA has lobbied organizations to implement weak cryptographic standards. Furthermore, we know that the NSA has pushed for flawed random number generators. Weak random number generators have previously led to the theft of large numbers of Bitcoin on mobile devices.
Bitcoin completely relies on the integrity of the SHA-256 algorithm, which was developed by the SAME NSA that intentionally pushes flawed cryptographic standards. Bruce Schneier no longer trusts the NSA's elliptic curve cryptography standard, as he believes they may have intentionally chosen a weak elliptic curve that the NSA can use. The numbers used are supposed to be random to make it unlikely that anyone could exploit a weak curve, but the NSA provided different numbers, that are non-random.
Vitalik Buterin argues that we can expect Bitcoin not to use a weak curve, as the numbers used in Bitcoin are fairly simple to calculate, whereas arbitrary numbers would create the possibility of Satoshi using an intentionally weak curve.
However, it seems to me that we can argue the exact opposite as well. For p, Bitcoin uses 115792089237316195423570985008687907853269984665640564039457584007908834671663, which is arrived at by calculating 2256 – 232 – 977 and seems fairly arbitrary to me as well.
Perhaps the main cause of my worries is the fact that the NSA in 1996 created a document outlining how to make a digital currency based on cryptography. Thus we know that the NSA has been studying the possibility of cryptocurrencies for a long period. Considering how the NSA manages to keep control over cryptography by releasing weak standards itself, is it possible that the NSA attempts to do the same with cryptocurrency?
Finally, I'm very worried about who this anonymous hacker who calls himself Satoshi Nakamoto might be. The Bitcoin source code contained different incomplete ideas that were never implemented, such as a decentralized marketplace (this is from memory, can't find the link). It all seems very ambitious to be the product of a single individual.
What is most worrying about Satoshi Nakamoto however is what is found in the blockchain. There's a non-random distribution of nonces in the early blockchain. What this means is that Satoshi Nakamoto was mining Bitcoin with a mining rig that was completely different from what everyone else was using back then.
It seems that he used 58 different computers, all with a different ID and all programmed to use different nonces to avoid checking the same possible solution multiple times, and at some point some of the computers broke down and were not put back up. This is not a genius amateur, but rather, someone with access to a lot of equipment. What makes all of this worse, is the fact that most of these blocks appear never to have moved. In other words, whatever entity mined these blocks probably still has control over them and doesn't seem to be motivated by personal gain. Rather, their control over about 1 million Bitcoin seems to have created a kind of "deathswitch", that allows them to crash the market at will.
Finally, Nakamoto's behavior is strange. As noted by others, his timezone seems to indicate he lived on the West Coast, yet his language uses British spelling. Furthermore, he took up to two weeks to respond to comments, indicating that anything he said seemed to require approval from higher ups, or agreement among multiple persons.
In conclusion, there is nothing here that indicates to me that we are dealing with a project designed by a regular Joe. Instead, we seem to be sitting on a ticking time bomb, a ten billion dollar experiment that could be deflated at will and cause economic chaos in the process.
submitted by accountt1234 to Bitcoin [link] [comments]

Bitcoin Civil War (the bright sides)

It will be interesting to see how the next couple of months play out. Whatever happens, there are a couple of positive sides to the situation.
For one, we will see if it is possible to change the rules of the Bitcoin network even against considerable resistance.
The Japanese Constitution has never been amended. But it is very clear what is necessary to amend it. Article 96 of the Constitution states the requirements.
The Bitcoin network has never been challenged by an internal faction in the way it is now. In contrast to the Japanese Constitution, it is not very clear what is needed to push through the block size extension the Bitcoin Unlimited camp wants.
So if they succeed in their attempt, we will have a reference case what is needed to change the protocol against substantial resistance. If they fail, we will have a reference case as well, showing that the failed level of support was not enough.
This civil war will also be an interesting case to study when preparing for war with outside attackers. There has been speculation about "51%-attacks" before. But as far as I know, no one has ever actually pulled off a 51%-attack against the Bitcoin network.
In the course of this civil war, that may change. I hear that Peter Rizun, one of the supporters of Bitcoin Unlimited, is advocating for using hash power to shut down the original Bitcoin chain after a fork, mining empty blocks on that chain.
If that happens, that would be an excellent test case. A highly motivated, well-funded adversary trying to shut down the Bitcoin blockchain has not happened yet in real life.
If such an attack happens, and the Bitcoin blockchain survives it one way or another, that would be real-life proof of its resiliency.
Since all of the value of the Bitcoin blockchain comes from this resiliency against attack and the trust created, surviving such a test would be proof of its value. An eight year track record of unbroken service is valuable, but extending it defeating serious attacks shows even more value.
All cryptography has value only as far as people actually try to break it and fail (Schneier's law). It follows that attacks on the Bitcoin network like the one Rizun wants to happen are a good thing.
We also may get a short-term increase in block space (if the Bitcoin Unlimited faction wins the civil war).
Again, interesting times for the Bitcoin network.
submitted by Karl-Friedrich_Lenz to btc [link] [comments]

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About Bruce Schneier. I am a public-interest technologist, working at the intersection of security, technology, and people. I've been writing about security issues on my blog since 2004, and in my monthly newsletter since 1998. I'm a fellow and lecturer at Harvard's Kennedy School and a board member of EFF. This personal website expresses the Schneier believes that the aims of Bitcoin according to its original whitepaper have been defeated by the reality of its deployment, which means that in addition to being operationally difficult and risky, it also fails to deliver on its basic premise. Bitcoin is hovering around $3,600 handle, down 1.5% since the start of the day. The first digital asset retraced from the recent high of $3,707 late o Andre • December 9, 2013 4:16 PM. It's good for people to start understanding Bitcoin's underlying protocol. To me, what's most fascinating about Bitcoin is that it introduces an open system and protocol for value exchange on the Internet with cash-like properties, most notably decentralized peer-to-peer transactions. Bruce Schneier used the physical limits of computation to put this number into perspective: you “produce” a bitcoin. While this simplified view of bitcoin mining might be easier to convey, it does miss the point somewhat. Bitcoins aren’t produced or created, and the whole ordeal is not really about solving particular math problems

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