January 16, 2017

Archives for March 2015

Bitcoin and game theory: we’re still scratching the surface

In an earlier post I argued why Bitcoin’s stability is fundamentally a game-theoretic proposition, and ended with some questions:

Can we effectively model the system with all its interacting components in the language of strategies and payoff-maximization? Is the resulting model tractable — can we analyze it mathematically or using simulations? And most importantly, do its predictions match what we observe in practice?

Let’s look at those questions in the context of a “block withholding attack” between mining pools.

Recall that mining pools are groups of individual miners who pool their computing power as well as their rewards. Suppose two mining pools — let’s call them blue and red — are both seeking to maximize their mining rewards.  Let’s say the manager of the red pool decides to infiltrate the blue pool and decrease their efficiency using some of the mining power that red (directly or indirectly) controls. This can be done by submitting shares (partial proofs of work) to earn a share of rewards, but withholding any valid blocks which are found and therefore not contributing any productive work to the blue pool. At first sight this seems like cutting off your nose to spite your face — sure, blue’s efficiency will be hurt, but red is wasting hash power as well.

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Be wary of one-time pads and other crypto unicorns

Yesterday, a new messaging app called Zendo got some very favorable coverage from Tech Crunch. At the core of their sales pitch is the fact that they use one-time pads for encryption. With a few strong assumptions, namely that the pads are truly random and are only used once, it’s true that this scheme is “unbreakable” or more precisely that it offers information-theoretic guarantees that no eavesdropper can learn anything about the encrypted message. Zendo’s founder calls it a “crypto unicorn” and claims it is a game-changer in terms of security.

It isn’t. In this post I’ll explain why we don’t need (and shouldn’t want) to use one-time pads for a consumer secure-messaging app and why we should generally be wary of products like Zendo making grandiose claims about solving security problems through magic crypto. [Read more…]

Why Your Netflix Traffic is Slow, and Why the Open Internet Order Won't (Necessarily) Make It Faster

The FCC recently released the Open Internet Order, which has much to say about “net neutrality” whether (and in what circumstances) an Internet service provider is permitted to prioritize traffic. I’ll leave more detailed thoughts on the order itself to future posts; in this post, I would like to clarify what seems to be a fairly widespread misconception about the sources of Internet congestion, and why “net neutrality” has very little to do with the performance problems between Netflix and consumer ISPs such as Comcast.

Much of the popular media has led consumers to believe that the reason that certain Internet traffic—specifically, Netflix video streams—were experiencing poor performance because Internet service providers are explicitly slowing down Internet traffic. John Oliver accuses Comcast of intentionally slowing down Netflix traffic (an Oatmeal cartoon reiterates this claim). These caricatures are false, and they demonstrate a fundamental misunderstanding of how Internet connectivity works, what led to the congestion in the first place, and the economics of how the problems were ultimately resolved.
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