Friday, August 17, 2018

Where legacy meets cryptocurrency, there is danger

As presently formulated, ICE's Bitcoin futures market sounds like a bad idea. They are not even creating a separate clearing house. This sort of sloppy risk management is how cryptocurrency could take out the legacy financial system.

Traders, I get that you want to play in cryptocurrency. That's great, and you are welcome, but please do so responsibly. How do you handle forks? What if some cryptography breaks? You should have solid answers before standing up new markets, and I'd have to assume that good answers would involve specialized clearing houses.

Sure, maybe one day Bitcoin will be the global reserve currency. Or, maybe it will suddenly drop to $0, due to a surprise cryptanalytic result. That surprise cryptanalytic result could come tomorrow, for all anyone knows. If that happens we will need our large institutions to survive, so make sure you can. CFTC, please make sure they can, ICE has a conflict of interest without your oversight.

Core devs, be mindful of what ICE is doing, and try to code accordingly.

<whimper>

https://www.theice.com/products/69281872/Physically-Delivered-Daily-Bitcoin-Futures

Friday, August 10, 2018

IoT and traffic analysis

People always seem to forget about traffic analysis, and yet traffic analysis was a big deal in monitoring encrypted traffic even back during WWII.

https://www.theregister.co.uk/2018/08/10/internet_of_things_encryption_snooping/

Some countermeasures are very easy. For example, a device could be programmed to exchange a fixed amount of data on a predefined schedule. It can the batch whatever it cares about into those communications, and use random filler for the leftover space. Easy, yet seldom done...

Converting the Lightning Network into an electricity market protocol

(For sake of expediency, the following will be rather dense and presumes some background in both electricity markets and the Lightning Netwo...