The Practical Realities of Adhering to Principles

Transparency

The best example of adhering to principles in the context of software development is the open source movement. You’re instantly punished by writing open source code, because you will have a much harder job to monetize it than if you wouldn’t have shared the source with anyone in the first place. But in the long term it pays out.
The classic argument is that open source brings more eyes on your code, which makes it more secure and more contributors, which makes your software generally better.
The counter arguments are that sharing the source code makes it easier for attackers to attack your system, thus it makes the system not more, but less secure and that, unless your project is very successful, you will most likely not get any contributors and even if you do, it is likely that they won’t make any difference. They have no historic understanding of the codebase and by the time they gain that and able to effectively contribute to your project they will just leave.
So who’s right?

Don’t Trust Verify

Tom Robinson from Elliptic blockchain analysis company recently released some information where he suggests bitcoins should be blacklisted from the recent Twitter hack and that the hackers are using ChipMixer and Wasabi Wallet.
I however find it concerning that Elliptic didn’t provide any transaction ID or any deductive explanation to back up their statements and that everyone blindly trusts them. Even if it is true in this specific case, the level of “trust us, don’t verify” gives these companies a lot of power especially considering the unreliability of blockchain analysis in general. Blockchain analysis works with heuristics. Heuristics are by definition aren’t conclusive. How do they know that the hacker didn’t do a P2EP transaction? It is important that conclusions of blockchain analysis companies should not be taken at face value, especially not if their deduction isn’t even explained. Don’t trust, verify!

Trusted Third Parties are Security Holes

One often takes an argument to its extremes to find if the underlying logic takes you to a better place or a worse one. Assuming Tom is right and Bitcoin companies should thrive for using blockchain analysis software and assuming this is always possible (which it isn’t) then that would lead to a future where Monero outcompetes Bitcoin in a no time.

Final Thoughts

Harry Potter conveniently found out that he’s a wizard and there is a community of people that appreciates him doing good things instead of punishing him for it. You may not be that lucky, yet it’s still worth it. Every time you do the wrong thing you lose something inside. Not forking Ethereum, because of the DAO hack to adhere to first principles worth it. Not forking Bitcoin, because of the MtGox hack to adhere to first principles worth it. Why? It’s because the source of the problems with the legacy banking system is the power asymmetry between the trusted third parties and their users. Thus cryptocurrencies were designed to break with this power structure and one of the way they achieve this is through the virtue of unconfiscatability. Breaking up with this first principle temporarily may be the right thing to do in the short term, but ultimately it would lead us back to the legacy financial system, which we are so desperately trying to fix. It does not seem like a good deal to me. In fact, it it’s a terrible deal.

 by the author.

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