Cryptography behind the top cryptocurrencies

143 points by unignorant 4 years ago | 71 comments
  • gkfasdfasdf 4 years ago
    After watching the latest Veritasium video about how Newton figured out a novel approach to solving PI which was dramatically simpler than the previous thousand-year old methods, I wonder if someone will come along and figure out a simple mathematical way to break these encryptions. That would be horrifying of course, but also really cool.
    • chrispeel 4 years ago
      Peter Shor did this in the 90s. Lotsa people are working on quantum computers and hoping to, among other things, crack these codes

      https://en.wikipedia.org/wiki/Elliptic-curve_cryptography#Qu...

    • sneak 4 years ago
      That video was one of the best videos on mathematics I have ever seen; the visualizations to aid in the explanation of Newton's "new" algorithm were absolutely top-notch. I'm not sure I could have followed it without them. With them, I feel like I know it well enough now to explain it to someone else.

      The thing with applied cryptography is that everyone is expecting the attacks to get better over time, sometimes in big and inconvenient bursts. There are several strategies to mitigate this, including oversizing security margins by a certain amount (so that an innovation that improves an attack by an order of magnitude or two isn't an instantaneous shattering of your whole security model), and having what's sometimes termed "algorithm agility" (which has somewhat fallen out of favor recently due to having its own class of bugs due to the implementations around, say, an optional NONE pluggable cipher type).

      • willis936 4 years ago
        Check out 3brown1blue if you haven’t already. The animations are excellent.
        • dgellow 4 years ago
          3brown1blue is also the creator of manim, the library used for his own videos: https://github.com/3b1b/manim.

          It's an awesome python library to create math animations, I would highly recommend it.

      • jhardy54 4 years ago
        They will! This is called cryptanalysis, and it's very common for ciphers to be weakened over time.
        • undefined1 4 years ago
          if that happens, how far and fast would Bitcoin fall?
          • meowkit 4 years ago
            As the other guy points out, we have a lot bigger problems than Bitcoin falling.

            But it likely won't happen at all. Lots of work is being done on quantum proof cryptography[1]. IT systems and crypto can be upgraded to use it.

            The real problem is going to be all the stashed encrypted data that US and China have stored on each other of a sensitive nature. The encryption on this information could be cracked by a quantum computer.

            [1] https://en.wikipedia.org/wiki/Post-quantum_cryptography

            • ralph84 4 years ago
              > The real problem is going to be all the stashed encrypted data that US and China have stored on each other of a sensitive nature

              While there's no doubt they've stored lots of encrypted messages sent by each other, would it really be such a huge catastrophe if those messages were decrypted years after they were sent? Presumably neither side is sending the most sensitive information that has long-term value (like weapons designs) across a channel the other can read, encrypted or not. And the US and Chinese governments losing control of some of their secrets wouldn't necessarily be a net negative for the world anyway. Snowden "decrypted" some of the US's secrets and we are better off for it.

              The bigger threat isn't both sides decrypting each other's stored messages, it's one side breaking the other's encryption without them knowing, like what happened with the Enigma in WWII.

              • garmaine 4 years ago
                Unfortunately the work being done on post quantum cryptography is mostly on the topic of symmetric key agreement (since that is what TLS needs), and cryptocurrencies need digital signature and/ zero knowledge proof systems. There is comparably much less work being done on solving those problems.
              • hapticmonkey 4 years ago
                The community would fork the blockchain at some agree-upon moment, add a new encryption scheme, and carry on.

                There would probably be some competing chains as different communities tried to be "the one". Things might settle down at some point as it's really a "winner takes all" market.

                • sneak 4 years ago
                  Signing (or hashing), not encryption. Bitcoin doesn't use any encryption, only hashing and digital signatures.
                  • postalrat 4 years ago
                    How bout the mess of coins being moved by anyone with access to machines able to break the encryption?
                  • dheera 4 years ago
                    If someone wanted to do something malicious with such an exploit they'd probably go after USD first by breaking into bank security, not Bitcoin.

                    That said, it would be such a feat of mathematics (if even possible) that it's highly unlikely a bad actor would be the first one to discover it.

                    • sneak 4 years ago
                      If you could easily break some basic widespread cryptographic primitives, you could mitm TLS and serve valid signature spoofed OS updates, basically giving you total control over the computers of just about any organization you like.

                      The first thing to target would be the network operators, so that you have the technical ability to observe and inject packets into connections from leaf nodes. Then, you could redirect those connections to yourself, proxy their TLS undetected, or serve replies that contain (valid signature) updates or malware.

                      This is one of the many reasons that a defense in depth strategy (that is, not solely/blindly trusting TLS or digital signatures to ensure that your computer doesn't run unauthorized code) is a good idea.

                      It is also probably another reason why so many state-level intel agencies target telecoms first and foremost.

                      • serendipitous 4 years ago
                        The mathematics of Shor's algorithm have been known for decades. The challenge is in building the hardware, not in the math.

                        There are tens of billions of dollars worth of abandoned Bitcoins in addresses with exposed public keys. It would be trivial to get those if you can break ECDSA. Yes, there is much more outside of Bitcoin but I don't see why someone who had this capability wouldn't go after the easy targets first.

                      • O5vYtytb 4 years ago
                        Just as fast as the rest of society in which no message has a guarantee of privacy.
                        • mxscho 4 years ago
                          Strictly speaking, you could still use one-time pads. So it's not "no" message.
                        • Vadoff 4 years ago
                          Lol, who cares about Bitcoin?

                          Every bank account and every website will be able to be able to be hacked.

                      • nayuki 4 years ago
                        More cryptographic details: Bitcoin uses the SHA-256 and RIPEMD-160 hash functions for public keys. It uses double-SHA-256 for transaction IDs and blocks (mining).
                        • garmaine 4 years ago
                          More recent segwit-native addresses on bitcoin use SHA256 only.
                        • kurthr 4 years ago
                          Related question, what are the dominant NFT platforms. I only know of ETH based tokens, but I assume there are others... which is a bit weird for something that's supposed to be unique. Could you be unique on two different platforms and sell a token "twice"?
                          • str33t_punk 4 years ago
                            You can but only really one will have value

                            There are crypto punks on Binance / Tron but they are pretty worthless. Everyone knows which one is the real one

                            For most projects that go multi chain it’s all about wrapping. I.e the main item is on ETH but they are wrapped when on other chains.

                            • CryptoPunk 4 years ago
                              CryptoPunks are Ethereum-based. I think someone cloned them into TRON and Binance Smart Chain.
                            • drak0n1c 4 years ago
                              Rare Pepes built on Bitcoin had some popularity in Venezuela. Besides ETH there isn’t widespread usage for collectibles. There is an assumption that eventually more performant technologies like Cardano or Hashgraph may prove themselves and take up the collectible niche.

                              https://cryptoinsider.media/venezuelan-developers-using-bitc...

                            • CryptoPunk 4 years ago
                              Ethereum is the dominant platform for NFTs, and everything else (e.g. tokens, DeFi, etc).

                              The one notable exception is NBA Top Shot, which is an NFT collection that uses the Flow blockchain.

                            • russbars 4 years ago
                              Perhaps this only refers to the cryptography used to sign transactions, i.e., cryptography used by the clients or wallets. For instance, Algorand uses additional cryptography such as verifiable random functions. Nevertheless, extremely valuable.
                              • monstersinF 4 years ago
                                This is a great table of information. It’s news to me that Tether is based on Ethereum tokens. If Ethereum falls out of favor and offers an appealing 51% attack, or if the proof of stake transition has a vulnerability, would this affect Tether spectacularly and then impact BTC and all other CCs?
                                • Sargos 4 years ago
                                  Ethereum powers 95% of the work in the cryptocurrency space. If Ethereum has a fundamental flaw then it would be quite tragic for the entire industry and might cause years of chaos and set back crypto for a generation. Thankfully Ethereum is one of the most scrutinized and well tested systems ever made so the chances of that are extremely low and there's not any reason to worry.
                                  • anthony_barker 4 years ago
                                    It used to be.. Tron is almost 50% now of USDT issued.

                                    https://wallet.tether.to/transparency

                                    Also USDC is on several chains as well including Stellar.

                                    • iamacyborg 4 years ago
                                      USDT is a fraud though, I wouldn’t believe anything associated with it.
                                    • wtvanhest 4 years ago
                                      I started learning how to program some solidarity for fun and just to understand the whole concept better. While I agree that in the short-run 1-5 years, it’s extremely unlikely that something wins agains ETH, but... in the long run, 10-20 years, it’s a lot harder to know.

                                      Not sure what that means for anything, but it’s important to remember that what we consider the gold standard today, BTC, ETH, they may be tomorrow’s tin.

                                      • herbst 4 years ago
                                        This has happened before. A few years ago many did not understand the concept of smart chains and rather invested into new litecoin clones, all of which are replaced in popularity by smart chain tokens only a few years later. I agree but i think 5 years is enough to disrupt everything.
                                    • hanklazard 4 years ago
                                      Yes, tether (and usdc + dai stablecoins) relies on ethereum for security.

                                      Edit: this is one of the reasons I’m optimistic about the future of ethereum. The stablecoins have become so critical for defi that it’s hard to imagine another platform (like polkadot) gaining critical traction needed to overtake it.

                                      • traeregan 4 years ago
                                        As far as non-ERC20 stablecoins go, Terra’s UST is gaining a lot of traction this year as well.
                                        • gunshai 4 years ago
                                          Terra Labs and the Luna token is one of the few projects out of this latest cycle that has really energized me.

                                          I was completely blown away with the design of the Anchor protocol that they just launched

                                          I really hope that project continues its success.

                                        • CptFribble 4 years ago
                                          Serious question from a crypto noob - what's the point of defi systems if they're all built on stablecoins and depend on the value of a fiat currency at the end of the day? Especially for permanently-deflationary coins like BTC?
                                          • cslarson 4 years ago
                                            Non-pegged stablecoins are now starting to be experimented with on Ethereum, Rai and Bank/Float, for example.
                                            • rawtxapp 4 years ago
                                              You can use them without being affected by Bitcoin's volatility on the same kind of blockchains and smart contract platforms.

                                              And you can borrow stablecoins for your BTC without selling it.

                                              • herbst 4 years ago
                                                Have you seen fiat fonds these days? Most stablecoin defi looks a lot more promising than anything my bank has to offer.
                                                • duskwuff 4 years ago
                                                  Cynical take: a lot of it is effectively financial cargo-culting -- building structures which mimic traditional financial products, like banks, loans, and investment funds, in the (fruitless) hope that this will create value.
                                                  • mandelbrotwurst 4 years ago
                                                    They're built on Ethereum, not stablecoins. The stability of the network currently relies on stablecoins only in the sense that people use stablecoins to store wealth in situations where fiat is more stable than crypto.
                                                  • anthony_barker 4 years ago
                                                    https://wallet.tether.to/transparency

                                                    Tron is growing ... USDC is multichain as well.

                                                  • np_tedious 4 years ago
                                                    I believe the answer is yes, but this receives fairly little attention because people are more concerned about Bitfinex treasury and the USD backing than they are about the ethereum dependency
                                                    • shp0ngle 4 years ago
                                                      Tether is on more networks. I think the most popular one is TRON (most Tether is traded on TRON) but I might be wrong

                                                      edit: Yeah I remember correctly

                                                      https://www.coindesk.com/tron-ethereum-tether-transaction-co...

                                                      The irony of most cryptocurrency market cap depending on mostly scam currency TRON is not lost upon me.

                                                      • CryptoPunk 4 years ago
                                                        Most Tether is on Ethereum:

                                                        https://wallet.tether.to/transparency

                                                        Most Tether volume is also on Ethereum, as the article above notes:

                                                        >>Notably, the total value of tether transacted on Ethereum is still larger than Tron, signaling that primarily smaller transactors are migrating. Meanwhile, parties executing larger transactions who can presumably afford higher fees seem comfortable continuing to use Ethereum.

                                                        The big issue is that there's simply no space on Ethereum for smaller transactions. Hopefully some of this volume will migrate to Ethereum's zkRollups, namely Loopring and zkSync, which increase Ethereum's maximum throughput from 30 to 3,000 ERC20 token transfers per second.

                                                      • ketamine__ 4 years ago
                                                        Justin Sun is good at promoting.
                                                        • ur-whale 4 years ago
                                                          >Justin Sun is good at promoting.

                                                          In less PC-ridden times, this would just have been:

                                                              "Justin Sun is a bald-faced liar."
                                                      • 4 years ago
                                                        • CryptoPunk 4 years ago
                                                          Not really as Ethereum is a public ledger, with copies of the full transaction history distributed across thousands of computers around the world, so any malfunctions can be easily identified and fixed.
                                                          • postalrat 4 years ago
                                                            If consensus was so easy we wouldn't need a blockchain or mining.
                                                            • CryptoPunk 4 years ago
                                                              It's because Ethereum uses a blockchain and mining that there are thousands of computers with identical copies of the transaction history.
                                                        • escalt 4 years ago
                                                          Kind of weird that a page about cryptography has broken https
                                                          • wealthyyy 4 years ago
                                                            I read this as Con behind the Crypto.
                                                            • CynicusRex 4 years ago
                                                              “Cryptography behind the top pyramid schemes.”
                                                              • gunshai 4 years ago
                                                                Is Ad hominem really the best you can do?
                                                                • CynicusRex 4 years ago
                                                                  Just to the potential spectators: that's not an ad hominem.
                                                                • herbst 4 years ago
                                                                  Must be nice to sit on devaluing currencies like USD and EUR these days
                                                                  • 4 years ago