Bitcoin as a law enforcement/natsec honeypot: what is the evidence?

Paranoia appears to be the order of the day, given what we know about the NSA and GCHQ thanks to Edward Snowden. Absent from the stories so far is any mention of Bitcoin. I find this odd - Bitcoin is the most cypherpunky of all crypto technologies, after all.

I want to make the case, without necessarily endorsing it, that we should be much more suspicious of Bitcoin than we are at present.

1) Bitcoin was almost certainly a team effort. The design has been peer-reviewed and is found to be remarkably secure, complete and well-rounded[1]. I argue that this suggests that a peer-review or quality control process has already been applied. If one individual cryptographer had written Bitcoin, it would contain far more idiosyncracies than it does, not just in the cryptosystem design but also in the C++ code itself. The core protocol itself, which uses a Turing-incomplete programming language, has had only one major vulnerability found in its design and execution.

For comparison, the Amazon AWS API is also a huge team effort that was also (I assume) designed with the help of competent Internet protocol and cryptography experts, and also has suffered from only one major vulnerability, which was found by a certified genius, Colin Percival. Likewise Colin's own one-person-product, the highly secure backup facility Tarsnap has also had only one serious vulnerability to date.

Bitcoin is at least one order of magnitude more complex than Tarsnap, or the crypto used in v1 of the Amazon AWS API. We should have seen far more bugs of varying severities if it was a one man band.

2) The author(s) created, maintained and then apparently retired a pseudonym (Satoshi Nakamoto) while staying completely anonymous on the Internet.

As an achievement this is almost as impressive as Bitcoin itself, albeit of a different nature.

Using the Internet anonymously is much harder than one would think. Things like Tor are vital of course, but beyond that there is the practice of operational security to a very high standard. One slip-up is enough to junk the whole identity, e.g. logging on to a pseudononymous account from an insecure location, or even sending a cookie obtained via Tor 'in the clear', is enough.

As a real-world example, the assassination of Rafic Hariri in Lebanon was pinned on Hezbollah because one of their agents made a single phone call to his girlfriend with his dedicated operational phone instead of his personal mobile.

3) Bitcoin is, by design, highly vulnerable to network analysis. Network analysis can be used to comb through large graphs looking for patterns or suspicious behaviour. Because the entire transaction graph of Bitcoin is public, anyone can perform network analysis on the whole Bitcoin network. This is not so significant by itself, but becomes vitally important when combined with the next point.

4) In the absence of good network analysis, the Bitcoin network is not legally attackable at the point where hard currency is converted. Network analysis backed up with law enforcement or hacking, however, could be extremely effective, and this fits the MO for some large three letter agencies: as we have seen with the recent disclosures of NSA attacks against SSL and Tor, the most successful attacks are multi-pronged: they combine, for example, legal strong-arming with technical know-how and hacking.

Obtaining the transaction logs of a currency exchange would give a starting points from which the rest of the transaction graph can be de-anonymised.

5) One single party controls more than 25% of all BTCs in circulation.[2] Someone, somewhere has the ability to destabilise the BTC currency exchange market at will. If you think of BTCs as a commodity instead of a currency, it is obvious that anyone holding large reserves can wreak havoc by dumping their holdings on the market. They could also bankrupt or bleed the exchanges dry of working capital by converting large sums of BTC over a period of time.

6) Whoever wrote Bitcoin must have known that it would attract criminals and wingnuts like flies to a honeypot. After all, look at the history of cyptocash and you can't help but notice Jim Bell's 'assassination politics', or realise the potential for mischief within the combination of hidden servers and cryptocash. Once Bitcoin was established and hidden servers were possible via Tor, Silk Road was inevitable. Even with the demise of Silk Road, Bitcoin is still used for money laundering, paying for skimmed credit card numbers and for 0-day exploits - in this last case, maybe even by the NSA itself.

7) 'Satoshi Nakamoto' is an anagram of 'Ma, I took NSA oath!' :-) But seriously:


To summarise, Bitcoin was apparently designed by good cryptographers and peer-reviewed before it was released. It was almost certainly written by a team of good coders.[1] The entity that did this practiced impeccable operational security. Bitcoin was designed to be difficult to attack by non-state actors, but was also designed to be inherently vulnerable to network analysis, especially so when combined with legal and covert access techniques. A single entity retains the ability to severely disrupt the BTC market through its control of large reserves, and only the most unaware or blinkered recluse could have failed to realise its potential target market mainly consisted of rogues and blackguards.

Whether or not this points to a law enforcement or national security agency as I've suggested, I think it's evident that we cannot assume that the creation of Bitcoin was motivated by altruism, or even by the strain of libertarian cypherpunk ideology that gave Bitcoin such fertile soil in which to grow.

Dan Kaminsky was quoted by Matthew Green as saying "authorship is a better predictor of quality than openness", and likewise, motive is a better predictor of the true purpose of a tool than its quality. The motive of the creators of Bitcoin remains completely unknown.

***

Corrections and footnotes

[1] As per the HN discussion, apparently the first BitCoin client was quite buggy in the beginning. Only one exploit was used on the network, but see the Bitcoin CVE list here for a more realistic list of the software bugs encountered in Bitcoin. Worth noting is that this is a separate issue to bugs in the design of the cryptosystem. Thanks to nwh on HN for the pointer.

[2] I previously stated that "...and has tried to hide that fact" but this is based on a misreading of the paper. Thanks to mcphilip on HN for pointing that out.

There's an interesting discussion over at Hacker News where some good counterpoints are made.

Spring 3.1+ Environment properties not being resolved when using dollar-notation placeholders in bean properties? Read this :-)

So after spelunking through the Spring source, I found out that it was my fault, of course. Why:

1. I needed a in my spring XML, even with nothing else, just to tell Spring to look for ${...}.
2. My spring schema version was on 2.5, which of course doesn't have the global Environment stuff and assumes you don't want it.

This lesson brought to you by many tram rides and a sleeping toddler.

Patterns of Refactored Agency: blogger compels me to post this as the keyboard beckons my fingertips...

Patterns of Refactored Agency: Not that I agree with all of it, but it's a very interesting to apply the refactorings to various aspects of life and see what happens:

"I’ve found it to be a good general-purpose cognitive tool to try to see the world with agency located in unconventional places. Normally, we like to imagine ourselves as the chief agents in our lives – making choices, taking actions, pursuing our own interests that we have identified for ourselves. There is nothing wrong with this, of course. It’s no doubt much more healthy to think in that way than the inverse – to view yourself, for example, as nothing but a puppet of external forces. But it is not so good to be trapped in a single fictional model of the universe. To understand large systems we need to go beyond the everyday model of agency and think in new ways."

Napsterisation - how to educate the world? (for certian values of 'educate')

Napster, Udacity, and the Academy Clay Shirky:

"It’s been interesting watching [napsterisation] unfold in music, books, newspapers, TV, but nothing has ever been as interesting to me as watching it happen in my own backyard. Higher education is now being disrupted; our MP3 is the massive open online course (or MOOC), and our Napster is Udacity, the education startup."

New Left Review - Rob Lucas: The Critical Net Critic

New Left Review - Rob Lucas: The Critical Net Critic:

In this argument, what Carr termed ‘intellectual technologies’ in particular—map, clock, typewriter—both augmented our mental abilities and transformed them. Each carried an ‘intellectual ethic’, a hidden norm of mental functioning, that might be obscure to users—and even inventors—yet which shaped them nonetheless. As these technologies entered general use, passing down the generations, their intellectual ethics became ingrained in the structures of human experience, acquired as standard by each individual. The history of technology could thus be read as a history of transformations in the human mind.

Regardless of whether or not you agree with the thrust of this article, the technology world needs more of this kind of thinking. Completely rejecting the humanities at a cultural level means that the world of technology can be remarkably unreflective.

Three reviews of Pixar's Brave

These links all contain spoilers.

Ebert, The Guardian, and others will say this is Pixar being Disneyfied. But this post is not about them.

• The New Inquiry: "Just Another Princess Movie" on why Brave is not just another princess movie.
• On the other hand, Mr. Teacup says Brave is not brave, and that the central character is actually the Mother, for whom the message is "don’t play too much in the male world of politics and forget your role as mother, or you will be turned into a bear"
• And on the third hand, at the American Prospect, Amanda Marcotte insists the film is feminist.

I leave it to you to decide. And no, I haven't seen it yet.

(Why was this saved as a draft since July? No idea...)

Exit, Voice and Loyalty by Albert O. Hirschman

With a full title of "Exit, Voice and Loyalty: Responses to Decline in Firms, Organisations and States", this is a fairly old (1970) but nevertheless current and interesting book. Written by an economist making forays into political science, his first point is that 'exit' is not necessarily the only response to discontent, dispute or 'unsatisfaction', and that 'voice' - aka protest, causing a stink, making a fuss - is also a perfectly legitimate response, and interacts with exit in interesting and sometimes unpredictable ways.

The book makes a second point, seemingly in reaction to a trend that was only just getting started in 1970, and is sadly now more-or-less embedded into the modern cultural mindset: the applying of free-market principles to absolutely everything in the public sphere - regardless of the benefit gained thereby. Healthcare, in the USA particularly, is of course a prominent and relevant example.

These points, concisely addressed in 125 pages, are slightly ironic given that Albert Hirschman commits the now-classic Thing That Economists Do by insisting on looking at everything as an economic transaction - families, political parties and cabinet politics all fall within his purview. That there are thoughtful things to be said illustrates the utility of this frame of reference, but to the exclusion of all others? Well, this is a treatise on economics after all. I shouldn't grumble :-)

(P.S. an interesting anecdote about how I actually read the book: when it arrived, via a second-hand book seller on Amazon, 12 pages in the penultimate chapter were blank, probably due to a printers error. 'How annoying,' I said to myself, and promptly checked the title on Google Books. No such luck - half the pages missing in my copy were also missing there, too. I checked Amazon 'look inside' and that was even worse. Finally, I googled '"Exit, Voice and Loyalty" pdf'. The first result was a complete copy of the book on a server with a domain ending in .cn. I downloaded the complete book, printed out the pages I needed, folded & glued them into the book, and went about my day. Make of this what you will.)

Seemingly within the realm of conspiracy theory, but:

When half a million Americans died and nobody noticed | News | The Week UK:

"Typical was the headline on a short article that ran in the 19 April 2005 edition of USA Today: 'USA Records Largest Drop in Annual Deaths in at Least 60 Years.' During that one year, American deaths fell by 50,000 despite the growth in both the size and the age of the nation's population. Government health experts were quoted as being greatly "surprised" and "scratching [their] heads" over this strange anomaly, which was led by a sharp drop in fatal heart attacks.

For his Chinese melamine/Vioxx comparison, Unz went back to those 2005 stories. Quick scrutiny of the most recent 15 years worth of national mortality data provided on the US Government's Centers for Disease Control and Prevention website offered Unz some useful clues.

"We find the largest rise in American mortality rates occurred in 1999, the year Vioxx was introduced, while the largest drop occurred in 2004, the year it was withdrawn," says Unz. "Vioxx was almost entirely marketed to the elderly, and these substantial changes in the national death-rate were completely concentrated within the 65-plus population."

The 911 Wars by Jason Burke, and The Don Camillo Omnibus by Giovanni Guareschi

I read about The 9/11 Wars by Jason Burke on Tim Bray's blog and thought "that sounds interesting", and so it is. I'm about half-way through this impressively researched book - it's 1/3rd notes, references, and indexes by weight - and so far I find it both highly educational and deeply depressing. Every time I put down the book I take a deep breath and think "what a mess!".

And so it's a pleasure to recommend the second book I'm working my way through as a light-hearted antidote. Regaling the exploits of the Catholic priest of a small village, Don Camillo, and his constant struggles with the Communist mayor, Peppone, it's hard to stay depressed after reading a couple of these short stories.

"Why fiction is good for you" at the Boston Globe is an interesting look at whether or not fiction is morally improving. Personally I would be a lot less happier without it.

What conditions give rise to great artistic achievements? Wealth, urban centers, belief in God. Wait: What?

20120513:See update below

Future tense, IX: Out of the wilderness by Charles Murray - The New Criterion:

"Upon reading Daniel Boorstin’s The Discoverers many years ago, I became fascinated with the ebbs and flows of human achievement, and especially those points in world history that have been associated with a flowering of great accomplishment. The most famous are Athens in the Periclean age and Florence in the Renaissance, but there have been many other less spectacular examples. Sometimes, the surge of great creativity is most obvious in a particular domain—literature in nineteenth-century Russia, for example—but strides made in one field are usually accompanied by strides made in others. Historically speaking, what accounts for the difference in the fertility of the cultural ground?"

Update: Firstly I should acknowledge that the title is the Arts & Letters Daily summary of the essay.

Secondly, reading a bit more about the author is enough for me to discount the conclusions of the article. Thinking about it a bit more, other, less predjudicial, reasons present themselves.

Assigning scores based on his own judgement to hundreds of pieces of data, it is no surprise that the overall result would reflect his own judgement more broadly. In addition, even if such scores were awarded impartially, which I doubt, it may well generate such a noisy dataset that you could slice & dice any which way you wanted to obtain your desired conclusions.

As such my posting of this article is probably a case of confirmation bias, and my update above is probably an ex post-facto justification. Who knew :-/

Phillip K. Dick: where all those wonderful books came from

LOS ANGELES REVIEW OF BOOKS | The Exegete:

"There are, in fact, numerous ways to find a trail through this wilderness of crazed speculation. At one and the same time, the Exegesis is an expository prop to Dick’s later fiction, a kind of creative workshop testing out ideas that would find form in VALIS and The Divine Invasion; the tortuous searchings of a remarkably resilient spirit mangled by years of drug abuse, failed marriages, and literary neglect; a palimpsest of learned disquisitions on complex philosophical problems, such as the nature of the relationship between identity and time; a contemporary recasting of Gnostic theology, the Dead Sea scrolls rendered as a kind of space opera; and much more.

Personally I think The man in the high castle, A Scanner Darkly, and VALIS are three of his best.

Towards a politicisation of Hello Kitty: a first look what's involved :-)

I Have No Mouth but I Must Scream – The New Inquiry:

"Why doesn’t Hello Kitty have a mouth? Is its absence more than an expedient, minimalist design choice? And does her lack of a mouth necessarily translate into the absence of a voice, as the arguments tend to go? The first Hello Kitty product, after all, was a coin purse with HELLO printed in block capitals over an image of Kitty; her name is her form, and it is speech.

Most political engagements with Hello Kitty have taken the mouthlessness issue as their impetus. They generally, through subversion or perversion, ironize Hello Kitty’s apparent inability to speak, suggesting her lack of expression is being upheld as a model, particularly for the young Asian girls who form Hello Kitty’s immediate target audience. A woman’s value, this particular feminine feline’s lack of mouth seems to say, is contingent on her voicelessness."

What I find interesting is that the whole corpus of modern Literary Theory & cultural studies etc. is normally applied to works of high literature etc. As I understand it, once, applying theory to "contemporary" cultural artifacts was seen as avant-guarde and radical. Now, one could argue that it is these artifacts that need more thought than ever applied to them.

How we ignore the long-term effects of violence on children, adults and our communities

“I See Everything Through This Tragedy” | The Interrupters | FRONTLINE | PBS

"At 10:45 on the night of March 13, 2009, Rodney Orange waited for his 14-year-old grandson, Gregory Robinson, to arrive home. Gregory had been at a high school basketball game, and as the car he rode in pulled up outside the house, Mr. Orange heard the sound of semi-automatic weapons. He remembers two distinct sounds of gunfire, suggesting there were two shooters. More than 50 shots were fired. He rushed to the car. Gregory had been sitting in the backseat and had thrown his body on top of his two younger cousins, one five years old, the other nine months. He saved their lives. Gregory was shot in the back."

The site for the film mentioned, is here: The Interrupters.

How to Read a Poem, by Terry Eagleton

I thought this book would be good to read since I knew very little about poetry; in many ways I still do, but I think I've been made more aware of the nature of poetry itself.

One might think this would be a rather simple book - I did, not knowing that Eagleton is a literary theorist and critic of some stature. The book is actually about modern literary theory applied to poetry, and is pretty densely packed. Given what I now know of Eagleton, it's not surprising that there's a fair dollop of politics too. This seems reasonable if one believes as he seems to, that all culture is political and all politics is cultural. Now and again his Marxist-Christian colours show through rather vividly, and this is no bad thing.

The book, for all it's intellectual heft, is very well-written and has a wonderfully discursive, conversational lilt to it. It was a real pleasure to read, and I would recommend it to anyone who is interested in enriching their reading experience.

The Islamist, by Ed Husain

I read this book having thought a long time ago "that sounds interesting", and it was. What strikes me is how modern the roots of Islamic extremism are compared to traditional Islam as practised for hundreds of years in many different cultures.

The book is essentially a circular, growing-up narrative of rejections and turning-aways, first from traditional Islam, then from modern fundamentalism, following the murder of a student; and then a turning back to traditional Islam again.

Husain now works at the CFR in New York on Middle-Eastern studies.