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Bitcoin GNU is Not Unix Privacy The Almighty Buck

Richard Stallman Criticizes Bitcoin, Touts a GNU Project Alternative (coindesk.com) 289

Richard Stallman doesn't like bitcoin, and has never used it, reports CoinDesk: To Stallman, bitcoin isn't suitable as a digital payment system. His biggest complaint: bitcoin's poor privacy protections. He told CoinDesk, "What I'd really like is a way to make purchases anonymously from various kinds of stores, and unfortunately it wouldn't be feasible for me with bitcoin." Using a crypto exchange would allow that company and ultimately the government to identify him, he said.... Asked what he thought about so-called privacy coins, Stallman said he'd gotten an expert to assess their potential, and "for each one he would point out some serious problems, perhaps in its security or its scalability." And speaking broadly, Stallman continued: "If bitcoin protected privacy, I'd probably have found a way to use it by now."
Fortunately, Stallman's GNU Project has a better answer: The GNU Project, which Stallman founded, is working on an alternative digital payments system called Taler, which is based on cryptography but is not -- forgive the hair-splitting -- a cryptocurrency. The Taler project's maintainer Christian Grothoff told CoinDesk that the system is, rather, designed for a "post-blockchain" world.... It's based on blind signatures, a cryptographic technique invented by David Chaum, whose DigiCash was among the first attempts at creating secure electronic money. Plus, Taler's attempt to create a digital money that resists surveillance by governments and payments companies aligns it with many cryptocurrency projects.

Yet, Taler does not attempt to bypass centralized authority. Payments are processed by openly centralized "exchanges" rather than peer-to-peer networks of miners because, Grothoff said, such a system "would again enable dangerous, money laundering kind of practice." Indeed, in a break with the anti-government ethos that has tended to characterize bitcoin and some of its peers, Taler's design explicitly tries to block opportunities for tax evasion.... Privacy in the Taler system, then, is limited to users spending their digital cash. They are shielded from surveillance because, Grothoff said, "the exchange, when coins are being redeemed, cannot tell if it was customer A or customer B or customer C who received the coin, because they all look identical from the exchange. Nobody," he added, "exactly knows who has how many tokens." Merchants (or anyone) receiving payments, on the other hand, do so visibly and in the open, making it possible for governments to assess taxes on their income -- not to mention harder for the recipients to participate in money laundering....

Currently, Taler is in talks with European banks to allow withdrawal into the Taler wallet and also re-deposit from the Taler system back into the traditional banking system.

"I wouldn't want perfect privacy," Stallman says in the interview, "because that would mean it would be impossible to investigate crimes at all. And that's one of the jobs we need the state to do."
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Richard Stallman Criticizes Bitcoin, Touts a GNU Project Alternative

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  • by 93 Escort Wagon ( 326346 ) on Monday November 26, 2018 @03:42AM (#57700176)

    The GNU Foundation plans to release Taler alongside Hurd 1.0.

    • Stupid choice of name, since there already was an actual coin called a Taler.

      Toejam would have been much better.

      • Stupid choice of name, since there already was an actual coin called a Taler.

        a) No, it was the "Thaler"

        b) The American word "dollar" is derived from that name.

        c) Wasn't that the point, re-use a name of an old coin?

  • The funny thing about them, is they're even WORSE than existing crypto algorithms. We have a hard deadline of 2023 before quantum computers can break pre-quantum algorithms with vary slightly modified versions of Shor's algorithm based on a decade-old linear trend in qubit count. That means we are looking at just a few years to get everyone switched over to post-quantum algorithms. Post quantum algorithms are largely shit because they have at absolute best (smallest) signature sizes of 31KB, which has it
    • by Anonymous Coward on Monday November 26, 2018 @04:50AM (#57700300)

      me thinks you are highly optimistic over quantum computers.

    • There are other alternatives for centralized coins, including the ones that use symmetric crypto only.
    • by jythie ( 914043 )
      Ahm, that is not really a 'hard deadline'. Some prognosticators believe there will be a usable quantum computer that is more economical than simulating the same process on a conventional system, but there is no telling how close to the mark they will be. It is quite possible quantum computers will never be useful. So not really a hard deadline, not even a soft one, just an estimate based off people's hopes.
    • by Meneth ( 872868 )
      This StackExchange post thinks differently: https://crypto.stackexchange.c... [stackexchange.com]
    • We have a hard deadline of 2023 before quantum computers can break pre-quantum algorithms with vary slightly modified versions of Shor's algorithm based on a decade-old linear trend in qubit count.

      Remember what happens when you extrapolate trends linearly? You fail. It's getting steeply harder to add more qubits, which is why we're not hearing about it happening every month or two.

      • We have a hard deadline of 2023 before quantum computers can break pre-quantum algorithms with vary slightly modified versions of Shor's algorithm based on a decade-old linear trend in qubit count.

        Remember what happens when you extrapolate trends linearly? You fail. It's getting steeply harder to add more qubits, which is why we're not hearing about it happening every month or two.

        Obligatory XKCD [xkcd.com]

    • We have a hard deadline of 2023 before quantum computers can break pre-quantum algorithms

      Really? Wow! I'll have to tell my colleagues working on Quantum Computer research that they might as well research something else for a few years since they are not going to make any breakthroughs until 2023. Perhaps you could also tell me the hard deadline for when we are scheduled to discover the nature of Dark Matter so I too can avoid wasting my time researching it before it is due to be found?

    • >which from a logistical standpoint will lead to centralization.

      I get the impression he's not trying to avoid centralization - so that doesn't seem like that would present a problem.

    • You are living in a dream world. Most experts fall on the "Never" deadline for the level of qubit density needed to supplant classical computing.
  • by Jarwulf ( 530523 ) on Monday November 26, 2018 @03:48AM (#57700188)
    Its private, supposedly, but by design it requires a centralized authority and also by design it can easily be controlled and shutdown on the merchant end anytime the powers that be want. So in other words we have a boondoggle johnny come lately with the worst of both worlds neither the governments or the antigovernment side wants or needs. Maybe Stallman fried his brain some years back toking MJ and thats why he's changed from OS pioneer to jumping on and trying to split the difference on every hipster and SJW tech trend these days.
    • Re: (Score:3, Informative)

      by AmiMoJo ( 196126 )

      You are missing the point of this. It's about preventing companies like Visa and Mastercaard monitoring all your transactions, and about making sure that the government has to follow legal process to get that information.

      In other words it's like cash. Semi-anonymous, but the shops you spend it in can be regulated.

      Admitted TFA isn't very good, but come on, SJW nonsense? You could at least try to understand it before throwing in such ridiculous claims.

      • by theM_xl ( 760570 ) on Monday November 26, 2018 @05:53AM (#57700454)

        You are missing the point of this. It's about preventing companies like Visa and Mastercaard monitoring all your transactions, and about making sure that the government has to follow legal process to get that information.

        Have a National Security Letter. We'll take everything please, and kindly remember the part that says you're not allowed to tell anyone.

        • by AmiMoJo ( 196126 )

          Okay, but how is that worse than cash?

          • When you withdraw cash over a certain amount, the banks are required to notify the authorities as part of anti-trafficking and anti-money laundering efforts. Also, please explain in detail how one can, say, purchase child porn on line with cash and not leave a trail.
      • by jythie ( 914043 )
        Eh, SJW has become shorthand for anything certain types of people do not like.
        • Re: (Score:2, Insightful)

          by AmiMoJo ( 196126 )

          It's a kind of virtue signalling, except that most of the people who read it think you are an idiot.

      • Re: (Score:2, Interesting)

        by Gavagai80 ( 1275204 )

        In other words it's like cash. Semi-anonymous, but the shops you spend it in can be regulated.

        Actually, cash makes tax evasion a lot easier than this system. That's why some businesses like cash.

        Personally, not being a criminal, I'm with Stallman: privacy to prevent companies from building and selling profiles of customers is good, but privacy for tax evasion is bad and I'm happy for the government to have the ability to round up those bastards. Technically illegal purchases are private under this system, b

      • You are missing the point of this. It's about preventing companies like Visa and Mastercaard monitoring all your transactions, and about making sure that the government has to follow legal process to get that information.

        It doesn't do either of those things. It will wind up in the hands of a massive payment processor immediately, and they will share the data with the government. The government is supposed to have to follow legal process to sniff your internet traffic and phone calls, but they do it to all of us without that anyway.

        In other words it's like cash.

        It's nothing like cash, except that it's serialized.

        • by AmiMoJo ( 196126 )

          How will it end up in the hands of a payment processor? It's specifically designed to prevent that.

  • by slashways ( 4172247 ) on Monday November 26, 2018 @04:01AM (#57700206)
    If you think Bitcoin as a payment system, you are missing the point. Bitcoin is a store of value; 'Lightning' is the payment system of Bitcoin and 'Lightning' can scale without issue. 'Layers' are the answer.
  • Why Use It? (Score:5, Interesting)

    by mentil ( 1748130 ) on Monday November 26, 2018 @04:04AM (#57700216)

    Wait so Stallman wants privacy, but also wants the State to be able to investigate crimes? That sounds suspiciously like "privacy for my use case and noone else's". Furthermore, being able to send money anonymously STILL allows money laundering: "Yeah I sent that money to my restaurant chain, employees paid in cash. Why no I don't own any banks in the Caribbean, why do you ask?"

    • by nnull ( 1148259 )

      The more I read about this stuff, the more I like Japans cash only for everything society. This tracking is turning into absurd levels.

    • Re:Why Use It? (Score:5, Interesting)

      by AmiMoJo ( 196126 ) on Monday November 26, 2018 @05:22AM (#57700360) Homepage Journal

      No, that sounds like cash. What Stallman objects to is people like Visa and Mastercard getting to monitor all your transactions. It's privacy from payment processors and from the kind of "automatic" surveillance that comes with it.

      Cash is semi-anonymous. You don't have to reveal your ID for a lot of transactions with it, but sometimes do if you need stuff like delivery or are buying certain services. There are systems in place to make sure merchants don't cheat the system to avoid taxes or launder money too, although they might not be that effective. Bitcoin doesn't really improve on that, and neither does Taler.

      What Taler does is scale and integrates with the law enough to be widely adopted by legitimate businesses, especially financial services like banks. It's also not tied to mining so doesn't waste vast amount of energy or act as a scam for early adopters.

      • "What Stallman objects to is people like Visa and Mastercard getting to monitor all your transactions. It's privacy from payment processors and from the kind of "automatic" surveillance that comes with it."

        Then this project has failed already. If you create a single point at which the system can be monitored, then it will be. Remember qwest?

        • by AmiMoJo ( 196126 )

          The whole point of this design is that the transaction processor can't determine who is paying for what, only how much money they need to give to the merchant.

          Have you even read the summary?

    • Re:Why Use It? (Score:5, Interesting)

      by JaredOfEuropa ( 526365 ) on Monday November 26, 2018 @05:42AM (#57700418) Journal
      Not really. He wants the state to be able to see who receives money (so they can properly assess income tax and VAT), but not where that money is from. The state can see that I got 5 talers from you (and if I don't declare them they can ask questions about that). They can see that Pornhub received 5 talers for access to certain videos (and charge them the right VAT on that transaction). But they cannot see where I spent my 5 talers. Assessing taxes on monetary transactions is the state's business, but where I spend my money isn't. It also isn't anyone else's business. This coin supposedly is an answer to that problem.

      As for it not being peer-to-peer: most people don't give a rat's arse about that: they want to be able to spend anonymously using a mechanism that allows for instant and cheap transactions. Likewise, banks like the idea of an easy, fast, cheap mechanism for settlement. The real question is: can it deliver on that score?
    • The state should have reasonable ways to investigate crimes that involve large amounts of money. Right now a lot of crimes like kidnapping for ransom are effectively impossible to do because the payout can be traced (even with cash, by serial numbers on banknotes). A truly anonymous currency makes them possible.

      What is a good use for anonymous currency anyway? Buying drugs and hookers?
      • by jythie ( 914043 )
        Outside crime, cryptocurrency value is generally not in its actual utility, but its emotional impact on the user. People do not use it because it is cheaper or quicker or a better system, but because it scratches a certain ideological niche, which is why you mostly see it being used by people who can afford to be wasteful.
        • It's definitely faster for merchants. Bitcoin for instance settles in roughly 10 minutes. Except in extraordinary circumstances which might take two hours. Visa or Mastercard, by contrast, enforce a six-month window where you never know if the payment is finalized or not. That's crazy for merchants, but Bitcoin doesn't have that problem.

          • by Cyberax ( 705495 )
            So how do I get a refund on a Bitcoin purchase? Oh, yeah. I can not.

            You also misunderstand how VISA works. The settlement time in the VISA network is 7 days. So once I sell something I can expect money in my bank account within 14 days.

            VISA allows for 6 month chargeback window for customers. If a customer's bank issues a chargeback then the merchant's bank is legally required to wire money to the customer's bank. But this is a separate transaction, unrelated to the settlement itself.

            If you want fast t
    • Wait so Stallman wants privacy, but also wants the State to be able to investigate crimes? That sounds suspiciously like "privacy for my use case and noone else's". Furthermore, being able to send money anonymously STILL allows money laundering: "Yeah I sent that money to my restaurant chain, employees paid in cash. Why no I don't own any banks in the Caribbean, why do you ask?"

      China, Russia, etc. show why letting government have access to your recorded transactions is a abusive aspect of a panopticon.

      Anything our whining law enforcement claims to need for investigations is immediately abused by dictatorship to maintain its power.

      Much of our constitution revolves around limiting or forbidding government from doing certain things, including surveillance.

      To put it bluntly: money laundering is an evanescent problem for The People compared to loss of freedom, which intrusive surveill

  • "I wouldn't want perfect privacy," Stallman says in the interview, "because that would mean it would be impossible to investigate crimes at all. And that's one of the jobs we need the state to do."

    You need the state to define and enforce laws [lawsandsausagescomic.com], but can't you hire your own (perfectly) private investigator?

  • GNU NIH? (Score:2, Redundant)

    by mveloso ( 325617 )

    It seems as if GNU has been infected with NIH.

    Have they heard the good news about Open Source? They can take someone else's code and build on it.

  • OMG it's mooning right now and I'm hodl'n onto it for dear life.

  • by demon driver ( 1046738 ) on Monday November 26, 2018 @05:54AM (#57700456) Journal

    Seems nobody who's into alternative currencies, whether "blockchain" based or not, understands the principle by which money gets and retains its value, even though it's perfectly simple. No, it's neither by government decree nor by belief, that would be too simple, but then again it's only slightly more complex. It is by the objective trustworthiness of the promise that money invested in the currency area will come back as more money, meaning how reliably the promise is backed by the industry's profitability and growth within the currency area. Any alternative currency needs to be widely established and used in production, commerce and the payment of wages, before it gets such an ability, or the value needs to be fixed to an existing 'real' currency with an institution that can reliably guarantee the exchange into that currency.

    • by Esekla ( 453798 )

      Yes, but the factors you mention ultimately derive [crowdwisers.com] from the rule of law, which means that no crypto-currency will be successful without being government sanctioned.

    • by AmiMoJo ( 196126 )

      This isn't a new currency. Your balance is kept in a traditional currency like Euros or USD. Taler is a digital wallet that you can keep your cash in, and spend it semi-anonymously also just like cash.

      The only trust required is not in the value of Euros or USD or whatever stored in the wallet, it's that the wallet itself is secure and you no-one can alter the balance without making a legitimate transaction.

    • by smugfunt ( 8972 )

      You theory might apply to investors in foreign currencies but it doesn't explain why people value their own government's currency.
      The real reason government currencies have value is that everyone needs them to pay their taxes with.

    • by swm ( 171547 )

      nobody [...] understands the principle by which money gets and retains its value, even though it's perfectly simple

      No, it's neither by government decree nor by belief [...]

      One of the primary ways that fiat currency gets and retains value is by the government decree that you must pay your taxes in it.

    • No, it's neither by government decree nor by belief, that would be too simple, but then again it's only slightly more complex. It is by the objective trustworthiness of the promise that money invested in the currency area will come back as more money, meaning how reliably the promise is backed by the industry's profitability and growth within the currency area.

      Your claim begs the question. You're saying that the trustworthiness of a currency is a result of the effectiveness of the industry among people who trust the currency. Why do the people in this currency-trusting industry trust the currency? Why do they use it rather than something else?

      The truth is the two answers you dismissed as "too simple". But they aren't too simple, they are the real reasons that people trust a currency. Your argument about expected investment profitability is a red herring.

      Cu

  • by Artem S. Tashkinov ( 764309 ) on Monday November 26, 2018 @08:03AM (#57700718) Homepage

    The GNU Project, which Stallman founded, is working on an alternative digital payments system called Taler

    So, Monero/Dash/ZCash/dozens others are not enough according to Stallman and thus he intends to create the 4000th cryptocurrency which will be the "best" among all of them instead of fixing the existing ones which have nodes/users/miners behind them.

    That will certainly work out.

  • "Yet, Taler does not attempt to bypass centralized authority. Payments are processed by openly centralized "exchanges" rather than peer-to-peer networks of miners because, Grothoff said, such a system "would again enable dangerous, money laundering kind of practice." "

    And this is why it is useless. If it can't be used to do an end run around a fascist government then it can't be used at all.

    • And this is why it is useless. If it can't be used to do an end run around a fascist government then it can't be used at all.

      I agree, it is useless. That's why I'll continue to use my master card.

  • by ytene ( 4376651 ) on Monday November 26, 2018 @10:06AM (#57701238)
    Stallman is absolutely right to draw attention to the privacy-stripping nature of crypto-currency, but this is far from the only challenge that this type of model can experience.

    As we saw in Bitcoin trading in early 2018, an even greater threat may be speculation. Earlier this year, investors and speculators all "piled in" to Bitcoin, driving up the value of coins as demand far out-stripped supply. Now, less than a year later, the value of Bitcoins is tumbling to about $3,750, roughly 20% of the value it held at the beginning of the year. That's a shocking rate of loss.

    It is worth mentioning the "speculation risk" with respect to crypto-currency, because there is nothing that Mr Stallman has said which gives any indication that his GNU Project Alternative would in any way mitigate the risk of speculative trading. An only slightly smaller annoyance than the speculators would have to be the conversion fees charged by the so-called "Exchanges".

    As this MSNBC report from last December [cnbc.com] shows, some exchanges were charging an average of $28 per transaction. There are examples of people being charged $15 to send $100 in value - which is ridiculous.

    This is frustrating for many reasons, not least of which is the fact that Bitcoin briefly had the potential to be something that could bring down the banking hegemony on currency conversions: you convert some of your local currency to Bitcoin for next-to-no overhead... you fly to another country... you convert your Bitcoins to local currency for next-to-no overhead. This, had it come to pass, would have allowed Bitcoin to become quickly established in the world and to also force established financial institutions to offer fairly-priced products instead of creaming fat profits off of travellers.

    So even though I'm sure that Mr Stallman and his colleagues will have done some excellent work on enhancing the privacy of their alternative crypto-currency, the simple fact remains that privacy is just one of a multi-faceted problem. In fact, it's entirely possible that different exchanges, working in concert, could price this new offering out of the market by demanding even higher transaction fees (on the basis that they are not getting marketing information out of their users).

    The entire "marketplace" looks to be increasingly rigged by "establishment middlemen". Sadly, I don't think that there is any way of circumventing that, at least not within the scope proposed here.
  • It only works if you use Hurd ...
  • by ElizabethGreene ( 1185405 ) on Monday November 26, 2018 @04:45PM (#57703752)

    My grievances with traditional money supplies are:

    • Governments and Fractional Reserve lending can arbitrarily and capriciously inflate and deflate currencies. (E.g. Zimbabwe, Venezuela)
    • Governments and entities (e.g. Visa) can arbitrarily and capriciously block an individual or organization's access to money. E.g. (Swift blocks, Wikileaks)
    • Transferring money over the internet requires an expensive intermediary. (E.g. Visa, Paypal)
    • Transferring money over the internet is subject to chargebacks, freezes, and holds often with no recourse. (E.g. paypal account freezes)

    Taler does not appear to address these problems. I don't see the appeal.

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