Arguably the feature that makes kidnappings for ransom unattractive isn't necessarily traditional banks being trusted, but rather that traditional bank transfers are usually reversible (e.g. due to a court order).
I haven't usually been enthusiastic about GNU Taler's "senders should be anonymous but recipients shouldn't" approach, but I guess kidnapping for ransom is an example where that policy might be beneficial.
I guess is comes down to whether you think it's possible to prevent this kind of thing with nothing more than cleverly aligned incentives and cleverly applied cryptography.
If it is, then we'd be fools not to try, and having the trusted third party is just the better of several bad alternatives.
But it is a pretty audacious claim. I wish there were more radical optimists among us pursuing such things. Pity that that's not what most crypto is these days.
If Trump saw the potential in crypto that I see. He'd like it far less. e.g I've been tinkering with a protocol for refusing to pay federal taxes all at once. (Because it's not a useful threat if we're not united in it).
I draw a pretty thick line between what we're seeing out of it today and what we should be demanding of it.
I’m a big 2A supporter but would still want the would-be kidnapper to be deterred by other means. I can be incapacitated or caught unaware, JP Morgan and Charles Schwab cannot.
How does a game theoretic protocol stop someone extorting your friends into paying a ransom for your life? They weren't trying to get into his wallets, but getting his rich friends and relations to pay.
Transaction rollbacks. In this case the USDT ransom was blocked by Tether.
Rollbacks for non-centralized tokens & networks goes against the goal of most protocols though, so it's unlikely to become the norm.
Crypto aside, kidnappings for ransom are already embedded in a game theoretic protocol. The weights involved (e.g. the amount and probability of payout, the likelihood that you'll actually get to spend that payout, the penalty and probability of being captured, the likelihood of cooperation of victim and friends) are all determined via policy choices made by the state; these are things like regulating banks or making spending decisions re: policing and other such things. They determine how probable the crime is.
The cryptocurrency proposition is that that solution can be improved upon without implicitly trusting the state. I don't have that solution myself, but I'm not convinced that it can't exist. We'll know they've found it when these things stop happening, and it starts feeling like the riskier thing is to keep your money in a bank. Or maybe what they come up with doesn't feel like money at all, who knows.
When I try to imagine such a protocol, it involves a web of trust and crowd-sourced metadata such that people can refuse to accept coins which don't also come with proof that they're involved in activity that those people consent to. (A deficiency of dollars being that when I accept one I have no idea whether the loan that created it is for a venture that helps me or harms me, or whether the previous owner got it as a kidnapping ransom).
In such a scenario, the ransomed coins become useless without a backstory that identifies them to the recipient as non-harmful. If that backstory becomes prohibitively difficult to fabricate, then perhaps the crime doesn't happen.
Like upgrading from a tube radio to a feature-equivalent SDR implementation, nothing will have changed.
Except that having achieved feature parity, we'll then be in a position to consider new features which may not have been possible on the previous architecture.
I don't think crypto people have a great handle on economics along those lines. "We artificially limited the supply so it can only go up; what's money velocity?"
what do you mean? multisig with quorum has been supported by many hardware and software wallets for years. you cannot kidnap one of the signers and steal all the money.
in this case most of the ransom has been blocked which isn't new. many of the major crypto heists ended with arrests due to traceability of the funds or unusable funds due to blacklists.
Are you proposing that these measures have made crypto just as safe or safer for the average person to work with than fiat?
It's nice that there are tools available to prevent such things in theory, and it seems like there's some traction in the right direction, but what matters is whether it's safer in practice. I'd love it if that happened soon, but it doesn't seem likely.
At some point "the rubber meets the road", i.e., you have to bridge the digital world and the physical one. Increase the probability that thugs are caught and increase the severity of the consequences.
In the real world the ultimate countermeasure is bullets. All the rest is to avoid reaching this last resort.
Online the ultimate countermeasure is being a dog. If your currency brings you to the conclusion that you must be protected at all times with deadly force so you don’t get ransomed, I don’t know what to tell you.
I suppose that's an upside to all the crypto companies being headquartered in Dubai and Singapore. The surveillance state in those places can rapidly track down all the attackers. They don't mess around when it comes to violent crime.
You mean like a multi sig wallet? Has been a thing on ethereum for about a decade now. There are also a variety of systems that allow trustless social wallet recovery and other nice creature features that are required in the real world. The programmable nature of ethereum makes these sorts of systems readily buildable.
But its not bitcoin, so somehow its the shitcoin and the glacially frozen development environment that is bitcoin is what all the get rich quick cryptobros obsess about. I will never understand.
Such things don't count for much if they're not in use. The trick will be getting people to use them effectively. It's more of an education problem than a tech problem.
Also it's not clear that that would work. If I got a call:
> They're gonna kill me if you don't sign this transaction.
I'd probably sign it rather than let my friend die to prove a point to the bad guys that you don't kidnap people on FooChain.
Ok, so you make one of the other parties someone who has a fiduciary duty but not an emotional one. "We don't negotiate with terrorists" is a common enough phrase.
I still don't think it's enough. Then you just figure out who the fiduciary is and kidnap their kid instead. It's gotta be something where the coins are useless once stolen because you can't fake a convincing enough history for anybody to risk touching them. And not because maybe the cops show up, but because the recipient is equally concerned about finding people to accept their coins. The value of a given token has to be tied to the acceptability of its externalities such that a theft is just a destruction of value, not a reappropriation of it.
Or at least that's the only way I can see it working. It's gotta be based on consent, not scarcity.
Only newer currencies you could lock your money into a smart contract, or just stake it, such that you literally could not transfer your money for a year (or more). Lower liquidity but would de-fang ransom like this.
Alternatively, a smart contract could require large transfers to escrow for X months, and could have a secret poison pill such that it would abort after 30 days if you used a trap password.
Edit: Given the downvotes I guess people just wanted to snark? I interpreted this as a technical question but maybe I misread.
I'd believe that necessary primitives are out there, but it's not really enough to have a solution in theory. A crypto project will have to stop such things in practice before they can legitimately claim to have obsoleted the banks.
If your intent is to lock funds for a specific number of blocks or a timestamp/block height you don't need more than these primitives (nLockTime, nSequenc, CLTV or CSV)... the first two are fields in any Bitcoin transactions, the others are scripting instructions. Some wallets allow to use these various flavors, from memory, both Bitcoin Core and Electrum offer some of these timelocks through their UI.
The point was not that this alone would make bank obsolete, but rather that this isn't just something "new" cryptocurrencies feature.
