there must be something here that I'm missing. At the core of this
protocol seems to be the establishment not of crypto anarchy but of a
crypto elite. in this scheme only the processors of computing power have
economic power. Now I realize that our current economic system is based
on economic power being invested in a closed community of powerful
elites, and is by no means egalitarian, but this looks to be like simply
substituting one group of "haves" for a different group of "haves"
I have to admit not being familiar with the Orthodoxy of crypto
anarchy, but if the premise is a centerless self organizing system of
free agents this protocol seems to miss the mark. or what is it that I
am missing here?
Wei Dei recently announced (on cypherpunks) his "b-money, a new
protocol for monetary exchange and contract enforcement for
pseudonyms".
Below is the text of his proposal.
Comments to follow.
Adam
======================================================================
http://www.eskimo.com/~weidai/bmoney.txt
======================================================================
I am fascinated by Tim May's crypto-anarchy. Unlike the communities
traditionally associated with the word "anarchy", in a crypto-anarchy
the government is not temporarily destroyed but permanently forbidden
and permanently unnecessary. It's a community where the threat of
violence is impotent because violence is impossible, and violence is
impossible because its participants cannot be linked to their true names
or physical locations.
Until now it's not clear, even theoretically, how such a community
could operate. A community is defined by the cooperation of its
participants, and efficient cooperation requires a medium of exchange
(money) and a way to enforce contracts. Traditionally these services
have been provided by the government or government sponsored
institutions and only to legal entities. In this article I describe a
protocol by which these services can be provided to and by untraceable
entities.
I will actually describe two protocols. The first one is impractical,
because it makes heavy use of a synchronous and unjammable anonymous
broadcast channel. However it will motivate the second, more practical
protocol. In both cases I will assume the existence of an untraceable
network, where senders and receivers are identified only by digital
pseudonyms (i.e. public keys) and every messages is signed by its sender
and encrypted to its receiver.
In the first protocol, every participant maintains a (seperate)
database of how much money belongs to each pseudonym. These accounts
collectively define the ownership of money, and how these accounts are
updated is the subject of this protocol.
The creation of money. Anyone can create money by broadcasting
the solution to a previously unsolved computational problem. The only
conditions are that it must be easy to determine how much computing
effort it took to solve the problem and the solution must otherwise have
no value, either practical or intellectual. The number of monetary units
created is equal to the cost of the computing effort in terms of a
standard basket of commodities. For example if a problem takes 100 hours
to solve on the computer that solves it most economically, and it takes
3 standard baskets to purchase 100 hours of computing time on that
computer on the open market, then upon the broadcast of the solution to
that problem everyone credits the broadcaster's account by 3
units.
The transfer of money. If Alice (owner of pseudonym K_A) wishes
to transfer X units of money to Bob (owner of pseudonym K_B), she
broadcasts the message "I give X units of money to K_B" signed by K_A.
Upon the broadcast of this message, everyone debits K_A's account by X
units and credits K_B's account by X units, unless this would create a
negative balance in K_A's account in which case the message is
ignored.
The effecting of contracts. A valid contract must include a
maximum reparation in case of default for each participant party to it.
It should also include a party who will perform arbitration should there
be a dispute. All parties to a contract including the arbitrator must
broadcast their signatures of it before it becomes effective. Upon the
broadcast of the contract and all signatures, every participant debits
the account of each party by the amount of his maximum reparation and
credits a special account identified by a secure hash of the contract by
the sum the maximum reparations. The contract becomes effective if the
debits succeed for every party without producing a negative balance,
otherwise the contract is ignored and the accounts are rolled back. A
sample contract might look like this:
K_A agrees to send K_B the solution to problem P before 0:0:0
1/1/2000. K_B agrees to pay K_A 100 MU (monetary units) before 0:0:0
1/1/2000. K_C agrees to perform arbitration in case of dispute. K_A
agrees to pay a maximum of 1000 MU in case of default. K_B agrees to pay
a maximum of 200 MU in case of default. K_C agrees to pay a maximum of
500 MU in case of default.
The conclusion of contracts. If a contract concludes without
dispute, each party broadcasts a signed message "The contract with SHA-1
hash H concludes without reparations." or possibly "The contract with
SHA-1 hash H concludes with the following reparations: ..." Upon the
broadcast of all signatures, every participant credits the account of
each party by the amount of his maximum reparation, removes the contract
account, then credits or debits the account of each party according to
the reparation schedule if there is one.
The enforcement of contracts. If the parties to a contract cannot
agree on an appropriate conclusion even with the help of the arbitrator,
each party broadcasts a suggested reparation/fine schedule and any
arguments or evidence in his favor. Each participant makes a
determination as to the actual reparations and/or fines, and modifies
his accounts accordingly.
In the second protocol, the accounts of who has how much money are
kept by a subset of the participants (called servers from now on)
instead of everyone. These servers are linked by a Usenet-style
broadcast channel. The format of transaction messages broadcasted on
this channel remain the same as in the first protocol, but the affected
participants of each transaction should verify that the message has been
received and successfully processed by a randomly selected subset of the
servers.
Since the servers must be trusted to a degree, some mechanism is
needed to keep them honest. Each server is required to deposit a certain
amount of money in a special account to be used as potential fines or
rewards for proof of misconduct. Also, each server must periodically
publish and commit to its current money creation and money ownership
databases. Each participant should verify that his own account balances
are correct and that the sum of the account balances is not greater than
the total amount of money created. This prevents the servers, even in
total collusion, from permanently and costlessly expanding the money
supply. New servers can also use the published databases to synchronize
with existing servers.
The protocol proposed in this article allows untraceable pseudonymous
entities to cooperate with each other more efficiently, by providing
them with a medium of exchange and a method of enforcing contracts. The
protocol can probably be made more efficient and secure, but I hope this
is a step toward making crypto-anarchy a practical as well as
theoretical possibility.
======================================================================
Elon Musk: Re: Wei Dei’s “b-money” protocol
1998 Dec 8 See all postsElon Musk
satoshinakamotonetwork@proton.me
https://satoshinakamoto.network
there must be something here that I'm missing. At the core of this protocol seems to be the establishment not of crypto anarchy but of a crypto elite. in this scheme only the processors of computing power have economic power. Now I realize that our current economic system is based on economic power being invested in a closed community of powerful elites, and is by no means egalitarian, but this looks to be like simply substituting one group of "haves" for a different group of "haves"
I have to admit not being familiar with the Orthodoxy of crypto anarchy, but if the premise is a centerless self organizing system of free agents this protocol seems to miss the mark. or what is it that I am missing here?
At 07:37 PM 12/5/98 GMT, you wrote: