The O'Reilly Radar Podcast: Mike Belshe on making bitcoin secure and easy enough for the mainstream.
In this week’s O’Reilly Radar Podcast episode, I caught up with Mike Belshe, CTO and co-founder of BitGo, a company that has developed a multi-signature wallet that works with bitcoin. Belshe talks about about the security issues addressed by multi-signature wallets, how the technology works, and the challenges in bringing cryptocurrencies mainstream. We also talk about his journey into the bitcoin world, and he chimes in on what money will look like in the future. Belshe will address the topics of security and multi-signature technology at our upcoming Bitcoin & the Blockchain Radar Summit on January 27, 2015, in San Francisco — for more on the program and registration information, visit our Bitcoin & the Blockchain website.
Multi-signature technology is exactly what it sounds like: instead of authorizing bitcoin transactions with a single signature and a single key (the traditional method), it requires multiple signatures and/or multiple machines — and any combination thereof. The concept initially was developed as a solution for malware. Belshe explains:
“I’m fully convinced that the folks who have been writing various types of malware that steal fairly trivial identity information — logins and passwords that they sell super cheap — they are retooling their viruses, their scanners, their key loggers for bitcoin. We’ve seen evidence of that over the last 12 months, for sure. Without multi-signature, if you do a bitcoin transaction on a machine that’s got any of this bad stuff on it, you’re pretty much toast. Multi-signature was my hope to fix that. What we do is make one signature happen on the server machine, one signature happen on the client machine, your home machine. That way the attacker has to actually compromise two totally different systems in order to steal your bitcoin. That’s what multi-signature is about.”
In this O'Reilly Data Show Podcast: Sarah Meiklejohn on analytic applications for blockchain and cryptocurrency technology.
Editor’s note: we’ll explore present and future applications of cryptocurrency and blockchain technologies at our upcoming Radar Summit: Bitcoin & the Blockchain on Jan. 27, 2015, in San Francisco.
A few data scientists are starting to play around with cryptocurrency data, and as bitcoin and related technologies start gaining traction, I expect more to wade in. As the space matures, there will be many interesting applications based on analytics over the transaction data produced by these technologies. The blockchain — the distributed ledger that contains all bitcoin transactions — is publicly available, and the underlying data set is of modest size. Data scientists can work with this data once it’s loaded into familiar data structures, but producing insights requires some domain knowledge and expertise.
I recently spoke with Sarah Meiklejohn, a lecturer at UCL, and an expert on computer security and cryptocurrencies. She was part of an academic research team that studied pseudo-anonymity (“pseudonymity”) in bitcoin. In particular, they used transaction data to compare “potential” anonymity to the “actual” anonymity achieved by users. A bitcoin user can use many different public keys, but careful research led to a few heuristics that allowed them to cluster addresses belonging to the same user:
“In theory, a user can go by many different pseudonyms. If that user is careful and keeps the activity of those different pseudonyms separate, completely distinct from one another, then they can really maintain a level of, maybe not anonymity, but again, cryptographically it’s called pseudo-anonymity. So, if they are a legitimate businessman on the one hand, they can use a certain set of pseudonyms for that activity, and then if they are dealing drugs on Silk Road, they might use a completely different set of pseudonyms for that, and you wouldn’t be able to tell that that’s the same user.
Bitcoin is more than just a currency. Here’s a look at what it is and what it isn’t.
Just what is bitcoin, anyway?
Conrad Barski and Chris Wilmer, authors of Bitcoin for the Befuddled, recently hosted a webcast discussing exactly what bitcoin is (and what it isn’t), how it’s used, how businesses can use it, and some of the disruptive opportunities that bitcoin offers entrepreneurs.
They presented an overview that clears up some of the misconceptions about bitcoin. Read more…
Introducing Bitcoin & the Blockchain: An O’Reilly Radar Summit
When the creators of bitcoin solved the “double spend” problem in a decentralized manner, they introduced techniques that have implications far beyond digital currency. Our newly announced one-day event — Bitcoin & the Blockchain: An O’Reilly Radar Summit — is in line with our tradition of highlighting applications of developments in computer science. Financial services have long relied on centralized solutions, so in many ways, products from this sector have become canonical examples of the developments we plan to cover over the next few months. But many problems that require an intermediary are being reexamined with techniques developed for bitcoin.
How do you get multiple parties in a transaction to trust each other without an intermediary? In the case of a digital currency like bitcoin, decentralization means reaching consensus over an insecure network. As Mastering Bitcoin author Andreas Antonopoulos noted in an earlier post, several innovations lie at the heart of what makes bitcoin disruptive:
“Bitcoin is a combination of several innovations, arranged in a novel way: a peer-to-peer network, a proof-of-work algorithm, a distributed timestamped accounting ledger, and an elliptic-curve cryptography and key infrastructure. Each of these parts is novel on its own, but the combination and specific arrangement was revolutionary for its time and is beginning to show up in more innovations outside bitcoin itself.”
Conrad Barski on the bitcoin and blockchain landscape and how the technology will evolve over the next 10 years.
Conrad Barski, a medical doctor, a cartoonist, programmer, and author of Land of Lisp, has been experimenting with bitcoin since 2011. In a recent interview, Barski talked about the bitcoin and blockchain landscape and noted the potential of decentralization:
“We’re heading into a world where things are becoming more decentralized. Most people already appreciate that because we all know about things like Airbnb and Uber. Of course, there’s kind of a paradox there because we think of Airbnb and Uber as being decentralized, but of course they’re these very centralized companies that run things…I think 10 years from now we’re going to see that these types of semi-decentralized companies are going to be replaced by fully decentralized companies, where the company itself just runs in an automated way on some kind of cryptocurrency. No one knows what cryptocurrency that will be, but there are folks from Ripple, from Counterparty, from Ethereum all trying to build an infrastructure that essentially let’s you run a company that isn’t controlled by any individual person. I think that’s really in the long term the most exciting part about bitcoin.”
What about bitcoin as a currency? In the short term, it’s an open question, said Barski, but he predicted an expansion similar to what we’ve seen with BitTorrent: