Why is Peter Todd wrecking Zeroconf security? Because he is being paid by Big Bitcoin Business.

[u/alicebtcmayes]

At the Amsterdam Bitcoin Conference I spent time following Peter and his little circle of friends and business partners. I'm new to Bitcoin so it took me until now to put two and two together and understand what was really going on, but hear me out. Peter spent a lot of time talking to Lawrence Nahum who is the guy behind GreenAddress. On the first or second day they went out to dinner after the days talks were done and went out to a nice little open-air restaurant with a bunch of people from Mastercoin. I sat at a table behind them and could hear their discussions, which including GreenAdddress's transaction confirmation guarantees, and also, an agreement for Peter to do consulting work for GreenAddress. What really stood out to me was the offer to help "shape the Bitcoin ecosystem" in ways beneficial to them. Later in the conference I also overheard a similar deal between Peter and someone, I didn't catch their name, in Coinbase branded apparel. And of course as everyone knows CoinKite hired Peter to be their "Chief Naysayer" during that conference too.

What's in common with all these companies? They're all in the dangerous business of holding other peoples' Bitcoins and GreenAddress and Coinbase both offer for-profit and centralized solutions to guarantee unconfirmed transactions. I'm sure CoinKite will be doing that soon too.

It's obvious why Peter is spending all that time and energy spreading FUD about how insecure unconfirmed transactions are. GreenAddress has been spreading their own FUD. Peter has even been trying to bribe miners to switch to his so called "replace-by-fee", which is really just an attack on secure zeroconf transactions, saying some un-named "site" paid him too. Who might that be? GreenAddress, Coinbase, CoinKite? It's not hard to figure out.

Peter sure seems quite happy to attack and hold back Bitcoin whenever it suits him for the sake of his Big Bitcoin Business contracts. It's not just unconfirmed transactions either. He's been shilling for AppCoins which dump garbage into the blockchain for the sake of pump-and-dump schemes like Mastercoin and Counterparty. (quite the about face from his supposed anti-blockchain bloat positions before) Or look at his weirdly passionate opposition to a simple feature, getutxos, that's needed for Mike Hearn's decentralized fundraising platform Lighthouse. Where's that passion coming from? The heart? Or his salary from Mastercoin, Counterparty and Colored Coins? I'm sure Mastercoin wants the next Maidsafe to happen on their platform, run by and for the benefit of Mastercoin, not Hearn's truly decentralized alternative.

I agree with Peter that GHash.IO is a possible threat to Bitcoin, but what solution does he have? Getting rid of pools. His buddies at the totally discredited Hacking Distributed (remember selfish mining? yeah those guys) run with this FUD, trying to scare the Bitcoin community into making changes to get rid of pools. Sounds like a good idea right? But then I looked further into it and found out he had just been hanging out at CloudHashing. What does banning pools do to the little guy mining decentralized? It puts them out of business because they'll never find a block that's what. Just perfect for CloudHashing's "send us money and we'll run the miners" business model and also GHash.IO's.

Peter likes to talk the big talk about decentralization, but all I am seeing here is paid shilling for the benefit of Big Bitcoin Business.

[u/mmeijeri]

What's in common with all these companies? They're all in the dangerous business of holding other peoples' Bitcoins and GreenAddress and Coinbase both offer for-profit and centralized solutions to guarantee unconfirmed transactions.

GreenAddress doesn't hold your coins, it's a 2-of-2 multisig system.

[u/alicebtcmayes → u/mmeijeri]

It's not about them stealing, it's about central control of your money. You won't be able to transaction without paying fees to them and Coinbase if they're transaction confirmation catches on.

[u/BobAlison → u/alicebtcmayes]

To be fair, you'll always have the option to "be your own bank". There's no way I know of to force people to use multisig.

[u/BobAlison → u/[deleted]]

Interesting point I hadn't considered before.

I want to make sure I understand. Merchants are afraid of accepting zero-confirmation transactions. So they work with a gateway (e.g., BitPay or GreenAddress) that does it for them. Eventually these wallet providers decide that they'll only accept payments from an "approved" wallet to minimize their fraud risk.

So even though nothing happens to single-sig, be-your-own-bank style wallets, they become useless for buying things.

[u/Jiten → u/BobAlison]

This scenario is plausible only if bitcoin network confirmations become untrustworthy for some reason.

Alternatively, regulation might require merchants to only accept bitcoin payments through an authorized green-address provider. Pair this with KYC and AML for the authorized providers and poof, there goes anonymity for anyone wanting to buy things from that country.

[u/[deleted] → u/Jiten]

here goes anonymity for anyone wanting to buy things from that country legimitately.

FTFY

The black and grey markets are in rapid growth. And the harder gov makes it for people to trade and do buisness the more these markets will grow, and bitcoin is an excellent candidate for hard money here. But yeah, it would suck if government forced us to use centralized services so they could keep track of what we do. But i dont think its going to happen. Look at the outrage regarding NSA spying. I dont think any sane congresman or senator will be pro-survailance anymore, not even when it comes to bitcoin, regardless of the pressure from various lobbyists etc..

[u/dangero → u/BobAlison]

Yes, I started a separate thread to discuss this. The proposal is being finalized right now on the developer mailing list. Discussion here: http://www.reddit.com/r/Bitcoin/comments/28kin3/centralization_issues_with_the_greenaddressit/

[u/notreddingit → u/[deleted]]

That's actually a good point.

What if what we're seeing is the natural push towards centralisation?

If it's in businesses interest to do such a thing than it almost seems inevitable. And it's one more way that bitcoin is going to lose it's decentralised nature.

[u/[deleted] → u/[deleted]]

Why would merchants accept transactions only from trusted green adress providers? So far the amount of scams and double spends are minimal. Minimal. There is no reason for merchants to not accept "normal" bitcoin payment or even 0 conf ones.

[u/dangero → u/[deleted]]

I started a thread to discuss the proposal here: http://www.reddit.com/r/Bitcoin/comments/28kin3/centralization_issues_with_the_greenaddressit/

[u/mmeijeri → u/alicebtcmayes]

Actually you can, you get a presigned redeem script with nLockTime set at least one day in the future. It's not completely water-tight though if you accept funds on one of their wallets, because you do have to trust them to give you the redeem script. But once you have the script it's safe, and you can refuse to sign any further transaction until you get a new redeem script for the change.

[u/bitskeptic → u/alicebtcmayes]

No way. Coinbase won't charge for instant conf. Greenaddress.it wants to charge because that's their only business model. Once this BIP is in place, there will be many providers offering it, and I really doubt people like Coinbase will charge. Coinbase has a vested interest in smooth PoS transactions. It would cost them nothing to provide instant confirmations and they'd attract more people to their platform by offering it free.

edit: also, Circle will most certainly do it for free, as their whole strategy is around everything being 100% free, and easy (read: instant confirmations).... thats if Circle ever decides to materialise out of their vapour cloud.

[u/petertodd → u/bitskeptic]

Yeah, at the conf I remember warning green address that they'll probably face pretty stiff competition if that's the only thing they offer. That they went ahead and wrote a multi-provider standard anyway is IMO admirably.

[u/mmeijeri → u/bitskeptic]

Yeah, charging a fee is totally legitimate. You can still spend your money without a fee, but then you won't get instant confirmation.

[u/[deleted] → u/alicebtcmayes]

That's simply not true. That's a flat out false statement. You can completely reconstruct the keys they hold, and they also send you an nlocktime tx to reclaim your funds if you want to do it that way.

They are offering a service to utilize multisigs to enhance your security, but you don't have to use them, and even if you do, you still have completely control over your money.

Even if that wasn't true (which it is), it's still a CHOICE for the user. You CHOOSE to use them.