RSA cofounder: The world would've been better without cryptocurrencies It was a somewhat gloomy Cryptographers' Panel at the RSA Conference in San Francisco on Tuesday, with two of the industry's sages in a pretty grim mood. Adi Shamir, the S in the RSA algorithm and a cofounder of RSA Security, went off on cryptocurrency, saying its early promise has been wasted. While he said Satoshi Nakamoto's …
Crypto is no different from fiat currency. They both delute values one by mining while the other by printing. Most of the argument is crypto can not be traced and gives some anonymity but the same could one say about cash money. But for both once their are being in use for average use they can be traced as well. The issue here is what is intrinsic values behind any currency be it cash, digital or crypto? The real value is that is the value that a seller and buyer agree to exchange. And that real value somehow is pegged to some currency and then the seller can use that currency to buy other stuff of the same value he sold before. If currency is out of the scope the exchange is actually goods and services was values not the currency them selves. On that thought these exchanges also creates a web of trusts between buyers and sellers for valuables exchange. That way you may ship and expect payments in the future from a trusted buyer rather than a month known one or viceversa a buyer may pay in advance before getting the value he paid for. Once the world comes up with such trust system per individual or organizations and the market embraces it all currencies including crypto would be obsolete except in the black market as token for exchanging under the hood. China is probably going on that direction with their social worth credit system experimentation.
Fiat currency has intrinsic value. If you wish to engage in economic activity then you must pay taxes to the government in whose jurisdiction you are earning income. Those taxes must be paid in fiat currency. If you engage in any economic activity withing the jurisdiction of some state, i.e. anywhere other than the high seas, then you must acquire the correct currency in sufficient amounts to pay whatever taxes you owe. Crypto is not accepted for tax payments in any jurisdiction, cannot be used to produce other goods and services, and has no more intrinsic value than baseball cards or beanie babies.
1. Cryptocurrency is a mathematically based decentralized convertible currency that is protected by cryptographic methods, i.e. it uses cryptography to create a distributed, decentralized and secure information economy. Bitcoin replaces the issuer with cryptographic algorithms.
Bitcoin is pseudo-anonymous, in fact, all transactions from each wallet are open by default, and a single contact with the wallet reveals information about all transactions of this wallet, but mostly users hide their ownership of a particular wallet. Even if the user is anonymous, it is possible to identify him by the counterparties known to him.
Bitcoin is omnipresent, a transaction takes place within a few minutes, with virtually no commission, without the possibility of being blocked by a third party, and it can take place between unidentified (anonymous) participants.
Thus, the pros and cons of Bitcoin:
Pros
- extremely low transaction cost;
- Bitcoin is omnipresent - transactions can be sent very quickly to any point on the planet;
- emission is not subject to the human factor - everything is decided by algorithms;
- ultra-small transactions open the way to new business models;
- a Bitcoin wallet cannot be taken away, service cannot be denied for any reason;
- Bitcoins cannot be collected through courts or banks;
- unlimited transactions;
- the system is almost impossible to hack and the account remains safe;
- pseudo-anonymity, the level of which can be developed to perfection with proper preparation. Cons
- Bitcoin can be used to create a shadow economy;
- a simpler tool for tax evasion;
- anonymous transactions of criminals;
- a simplified tool for legalizing criminal funds;
- the impossibility of seizing accounts;
- no mechanism for canceling, stopping and returning a transaction;
- no mechanism for distinguishing dirty bitcoins;
- high volatility.
2. Complexity of the reverse encryption operation > discrete arithmetic root modulo
Key recovery difficulty > factorization problem
c = m^e mod n – direct operation
m = e√c mod n – inverse operation, discrete arithmetic root of degree e.
Humanity has not yet learned how to efficiently calculate such roots, there is no such algorithm only by iteration. Although this can be circumvented, first calculate the private key from the public key, and then decrypt it using the formula (n, e) →(n, d) n→p*q.
The problem of calculating such a root and the factorization problem are complex computational problems.
To date, there are no effective algorithms for solving this problem on classical computers, which ensures the security of RSA.
Shor's algorithm allows us to solve this problem (through the factorization of n), but this requires sufficiently powerful quantum machines, which do not yet exist.
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