Emin Gün Sirer: Bitcoin is Still Broken

Emin Gün Sirer

Emin Gün Sirer is a computer science professor at Cornell University. His research spans operating systems, networking, and distributed systems. He’s also co-director of the Initiative for Cryptocurrencies & Contracts, which is an initiative of faculty members at Cornell University, Cornell Tech, UC Berkeley, UIUC and the Technion to help to advance the adoption of cryptocurrencies and smart contracts.
In 2002, he started Karma, an early cryptocurrency that was the first to utilize a proof-of-work concept. He has written several influential white papers and blog posts (on Hacking Distributed) that have altered the course of Ethereum’s development. He was among the first to warn about the vulnerabilities that led to the collapse of The DAO. He also acts as the Blockchain Advisor for the WeTrust project.
He is currently number 29 on the list of the Most Influential Blockchain People.

Most Influential Blockchain People

Terrance Jackson: In 2013, You and Ittay Eyal wrote “Bitcoin is Broken.” Is Bitcoin still broken?
Emin Gün Sirer: Indeed, we found the biggest known fundamental weakness in Satoshi Nakamoto’s consensus protocol, known as Selfish Mining. Using our strategy, one can subvert Satoshi’s protocol, and possibly make more money than their fair share, at the cost of disrupting the system’s behavior. Luckily, we provided a fix for selfish mining attacks for miners smaller than 25%, but the threat from large miners is always going to be present.
Now that the attack is well-known, the community knows how to detect such attacks and put pressure on the actors who launch them. In fact, if anything, the community is hyper-diligent against miners that are too big, and puts pressure on them to break them up. No Bitcoin miner is big enough to unilaterally go selfish and harm the system.
The situation is quite different in other cryptocurrencies, however. Selfish Mining could be employed against other smaller coins.


TJ: On your Hacking, Distributed blog there are many ideas for updating bitcoin, such as Bitcoin-NG, 2P-POW, ByzCoin, Teechan, PieceWork, Resource-Efficient Mining, and Snow White. Why has the Bitcoin community been so slow to adopt any of these ideas?
EGS: As researchers, we operate on a different time horizon and come up with big new improvements, while the developers spend considerable time and effort on small incremental changes. That said, many of our proposals have already found their way into practice. Bitcoin-NG has been adopted into two different coins, Covenants and Vaults have been implemented in sidechains as well as Ethereum, Teechan-inspired solutions are being developed by at least three companies.
Of course, there is the fact that Bitcoin’s civil war on the block size has caused everyone to spend their energies fighting over a single parameter, the block size. But we seem to be finally moving past that, after 2.5 years of stagnation.

Gun Tweet

TJ: Cypherium builds on two of these ideas Bitcoin-NG and ByzCoin, while the Waves Platform builds on Bitcoin-NG. One, would you like to comment on these efforts, and two, if these are such great ideas, why not create your own cryptocurrency?
EGS: Indeed, Cypherium and Waves build on on-chain scaling ideas we have pioneered. They have the potential to operate at much higher scales compared to, say, legacy Bitcoin. Waves is in deployment today in Russia in conjunction with Burger King, keeping track of consumer loyalty points in a venture dubbed “Whopper Coin” by the press. It is not realistic to achieve the necessary scale, say to serve “billions of burgers,” using conventional blockchains that can only handle a handful of transactions per second.
The field is so nascent that we have found it much more intellectually challenging and fun to work on new cutting edge protocols, instead of dropping research to deploy a new coin. Researchers and developers play different roles, where the former have a different time horizon and tackle a different class of problems. Of course, this might change; we have a number of projects under way right now which involve our group rolling out new cryptocurrencies.


TJ: Bitcoin, Ethereum, Ripple, Bitcoin Cash, Litecoin, Dash, NEM, NEO, Monero, and the list goes on and on. I accessed the list on CoinMarketCap on October 18, 2017, and there were 881 cryptocurrencies listed. One, is this a good thing to have so many cryptocurrencies, and two, how does one begin to evaluate the merits of any particular cryptocurrency?
EGS: Indeed, it’s a fantastic thing to have many new platforms being proposed, each exploring a different set of tradeoffs.
At the same time, many of those 881 platforms offer little in the way of new functionality or new tradeoffs, but are, instead, just a reparameterization of existing code bases. As such, they all have the same weaknesses, and many of them are nothing more than rebranding efforts and marketing gimmicks.
The key to identifying interesting projects, of course, is to evaluate a currency for (1) novel functionality, centered around a new technology breakthrough, (2) actual use cases for said functionality, and (3) a credible team to take the implementation effort to completion. Only a handful of those 881 coins actually bring anything new to the table. For instance, Litecoin, at this point, is just a Bitcoin clone in every way and acts as essentially a testing ground for Bitcoin. Of those that do, the new thing on the table is often something that isn’t serving a market need, or else it’s targeting a market that is already content with the current solution they are using. For instance, Monero seems to target dark money flows, and actually has some new technology, but the darknet markets seem mostly content with Bitcoin at the moment. And of course, there are coins whose developer teams just are not cut out to deliver the promises they have made in their ICOs.

Cornell Tech

TJ: You are a co-director at The Initiative For Cryptocurrencies & Contracts (IC3) and also a member of the Cornell-NYC Oversight Committee. What is the IC3, and what is the relationship between the IC3 and Cornell Tech, the new engineering campus on Roosevelt Inland?
EGS: IC3 is an academic initiative that seeks to develop the science and engineering behind blockchains, cryptocurrencies and distributed ledger technologies. As the largest academic initiative, it serves as the brain trust of the entire area, and helps provide guidance to technologists, regulators, and ordinary consumers through this exciting period of fintech revolution that we are living through. We have pioneered on- and off-chain scaling solutions, consumer security solutions, and invented techniques to preserve decentralization in public cryptocurrencies, as well as helping develop new private and permissioned blockchains for enterprise use. We also examine smart contracts, how they should be expressed, how they can be constructed securely, and what mechanisms they can use to ensure correctness.
Cornell Tech is a new joint initiative between Cornell and The Technion, centered on Roosevelt Island, to develop a new tech campus that has, as its mission, to foster a technology sector in the NYC area. IC3 was formed by researchers at Cornell and Cornell Tech, but has expanded to include other institutions such as UC Berkeley, UIUC, EPFL, ETH Zurich, and University College London.


TJ: What is WeTrust and what is your role at WeTrust?
EGS: I’m an advisor to WeTrust, an effort to build smart-contract-based investment and capital formation products for the developing world. Their initial product was a formalization of an idea commonly used in developing nations to raise capital, known as ROSCAs and chit-funds. These enable, typically, small time farmers in India, South America, and other developing nations, to pool their resources on a regular basis and provide peer-to-peer finance.

Carroll Quigley

TJ: Carroll Quigley was a professor at the School of Foreign Service at Georgetown University. President Bill Clinton mentioned Quigley in his 1992 acceptance speech at the Democratic National Convention. In Tragedy and Hope, Quigley wrote:
[T]he powers of financial capitalism had another far reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent and private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. Each central bank… sought to dominate its government by its ability to control Treasure loans, to manipulate foreign exchanges, to influence to the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world. (p. 324)
I have a computer science degree from a Ivy League school (Penn), I scored in 99th percentile on the math portion of the SAT, and I have taken calculus, differential equations, and advanced statistics. I am still having a difficult time following much of the blockchain/cryptocurrency papers and discussions. In implementing cryptocurrencies, will we be just trading our old monetary overlords in for a new set of more mathematically-skilled and computer savvy overlords?
EGS: I hope not. What attracted many of us into this domain was the democratization that blockchains can bring to the world of finance, where they can transform permissioned systems, whose interfaces are closed to the world, into open systems that many others can then extend. Cryptocurrencies enable anyone to be their own bank, and to interact with the rest of the financial infrastructure as a first-class citizen.
Of course, as with any new technology, there will be new emerging ecosystems, and there will be new emergent winners in these new ecosystems. Those who adopt the technology early stand to gain substantially (though they run the risk of developing MySpace while the world skirts around them to even better technologies), while some existing industries will face possibly an existential threat.
Many of us are working to make sure that consumers are protected during these transformations, that they don’t become captive to centralized powers or emerging natural monopolies. And that includes not just people with credentials as impeccable as yours, but also those who are underserved by the current system, such as the unbanked. They should benefit from what this technology has to offer, without having to understand any of it. Of course, as with any new technology, the products initially show off what’s under the hood, and in fact, it’s impossible to use the initial products without understanding what’s under the hood. But we’ll hopefully evolve towards a world where we have turn-key solutions that don’t require a degree in distributed systems and cryptography.

Turkish President Recep Tayyip Erdogan and United States President Donald Trump

TJ: You grew up in Istanbul, Turkey, so what do you think about the current U.S. – Turkey visa crisis, and also what are your thoughts on the Trump Administration’s immigration policies in general?
EGS: Turkey and the US have many common goals in the region, are partners in NATO, and generally have aligned policy goals. The crisis we are having stems mostly from bad policy choices made by the Turkish Administration, and I hope will get resolved soon. Overall, I’m very concerned by the developments in Turkey, and worry about polarization and destabilization. Turkey plays a critical role in Europe and the Middle East, and needs to be on a path towards increased democracy and economic stability. This would not only be in the interests of everyone who lives there, but also in the interests of the countless American companies with investments there, as well as the American population that has benefited tremendously from having a trusted ally for decades in a geopolitically unstable part of the world. So, I would hope that the US would not follow strategies that might destabilize Turkey, and I would hope that Turkey would, in response, follow a path that moves the country towards the Western world.
TJ: Great interview! Thank you.
EGS: My pleasure, hope this is useful.

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