'MIT researchers identify security vulnerabilities in voting app' by MIT News discusses research by DCI's Neha Narula, Sunoo Park and DCI Advisor Ron Rivest

“In recent years, there has been a growing interest in using internet and mobile technology to increase access to the voting process. At the same time, computer security experts caution that paper ballots are the only secure means of voting.

Now, MIT researchers are raising another concern: They say they have uncovered security vulnerabilities in a mobile voting application that was used during the 2018 midterm elections in West Virginia. Their security analysis of the application, called Voatz, pinpoints a number of weaknesses, including the opportunity for hackers to alter, stop, or expose how an individual user has voted. Additionally, the researchers found that Voatz’s use of a third-party vendor for voter identification and verification poses potential privacy issues for users.”

Read More
'Blockchain and Money' course taught by DCI Advisor Gary Gensler is now available on MIT Open Courseware

“This course is for students wishing to explore blockchain technology's potential use—by entrepreneurs and incumbents—to change the world of money and finance. The course begins with a review of Bitcoin and an understanding of the commercial, technical, and public policy fundamentals of blockchain technology, distributed ledgers, and smart contracts. The class then continues on to current and potential blockchain applications in the financial sector.”

Read More
'Data Structures Meet Cryptography: 3SUM with Preprocessing' by DCI's Sunoo Park et al.

Abstract

This paper shows several connections between data structure problems and cryptography against preprocessing attacks. Our results span data structure upper bounds, cryptographic applications, and data structure lower bounds, as summarized next.

First, we apply Fiat–Naor inversion, a technique with cryptographic origins, to obtain a data structure upper bound. In particular, our technique yields a suite of algorithms with space S and (online) time T for a preprocessing version of the N-input 3SUM problem where S3 ·T = O􏰖(N6). This disproves a strong conjecture (Goldstein et al., WADS 2017) that there is no data structure that solves this problem for S = N2−δ and T = N1−δ for any constant δ > 0.

Secondly, we show equivalence between lower bounds for a broad class of (static) data struc- ture problems and one-way functions in the random oracle model that resist a very strong form of preprocessing attack. Concretely, given a random function F : [N] → [N] (accessed as an oracle) we show how to compile it into a function GF : [N2] → [N2] which resists S-bit prepro- cessing attacks that run in query time T where ST = O(N2−ε) (assuming a corresponding data structure lower bound on 3SUM). In contrast, a classical result of Hellman tells us that F itself can be more easily inverted, say with N2/3-bit preprocessing in N2/3 time. We also show that much stronger lower bounds follow from the hardness of kSUM. Our results can be equivalently interpreted as security against adversaries that are very non-uniform, or have large auxiliary input, or as security in the face of a powerfully backdoored random oracle.

Thirdly, we give lower bounds for 3SUM which match the best known lower bounds for static data structure problems (Larsen, FOCS 2012). Moreover, we show that our lower bound generalizes to a range of geometric problems, such as three points on a line, polygon containment, and others.

Read More
'Crypto Thoughts From Davos: Encouraging, But Beware Unintended Consequences' Covers the panel 'Creating a Credible and Trusted Digital Currency' at WEF 2020

DCI’s Neha Narula was part of a panel ‘Creating a Credible and Trusted Digital Currency’, Forbes reporter Robert Anzalone covers the story in ‘Crypto Thoughts From Davos: Encouraging, But Beware Unintended Consequences’

Read More
CNBC Interviews DCI's Neha Narula and reports on WEF Davos 2020 'Calls for a US ‘digital dollar’ rise as China powers ahead with a digital yuan’'

DCI’s Neha Narula was interviewed by CNBC whilst she was participating at the World Economic Forum in Davos. The article titled ‘Calls for a US ‘digital dollar’ rise as China powers ahead with a digital yuan’ and was published on Jan 23rd 2020.

Read More
'Privacy-preserving analytics for the securitization market: a zero-knowledge distributed ledger technology application' By DCI Collaborator Sophie Meralli

Abstract

A zero-knowledge proof or protocol is a cryptographic technique for verifying private data without revealing it in its clear form. In this paper, we evaluate the potential for zero-knowledge distributed ledger technology to alleviate asymmetry of information in the asset-backed securitization market. To frame this inquiry, we conducted market data analyses, a review of prior literature, stakeholder interviews with investors, originators and security issuers and collaboration with blockchain engineers and researchers. We introduce a new system which could enable all market participants in the securitization lifecycle (e.g. investors, rating agencies, regulators and security issuers) to interact on a unique decentralized platform while maintaining the privacy of loan-level data, therefore providing the industry with timely analytics and performance data. Our platform is powered by zkLedger (Narula et al. 2018), a zero-knowledge protocol developed by the MIT Media Lab and the first system that enables participants of a distributed ledger to run publicly verifiable analytics on masked data

Read More
'Redesigning digital money: What can we learn from a decade of cryptocurrencies?' by Robleh Ali and Neha Narula of the Digital Currency Inititaive

Introduction

In a 2019 speech, Bank of England governor Mark Carney said that “Technology has the potential to disrupt the network externalities that prevent the incumbent global reserve currency from being displaced.” Certainly one of the most interesting places where technology is disrupting payments and finance is in cryptocurrencies. Cryptocurrencies have emerged from open source development communities in large part because electronic transaction systems are too expensive and they have not evolved fast enough to keep pace with the demand for retail online digital payments and more sophisticated types of financial transactions. The wide variety of experimentation in cryptocurrencies is causing technologists and central bankers to rethink the interface to money and explore a digital form which can be held by users and companies directly. This could lead to a financial system with a simplified institutional structure, capable of serving the public at a much lower cost. Though there has been much discussion about the policy design for central bank-issued digital currency (CBDC), there are important technical points missing from the conversation: CBDC should not be a direct copy of existing cryptocurrencies with exactly the same design and features but there are things we can learn from their emergence - the usefulness of programmability in money and the importance of preserving user privacy.

Cryptocurrency technology, in some instances, can provide an important feature: Anyone can participate and build applications with financial transactions to a standard, which creates a free-entry market that enables competition. These rules are set and maintained by users of the system, not by a coalition of companies or other large market participants. This is due in large part to the fact that many participate in observing, auditing, and validating the creation of money and the legitimacy of payments by observing a highly replicated audit trail of activities.

The cryptocurrency ecosystem should be viewed as a laboratory where developers are inventing different technologies, monetary policies, governance strategies, and reward systems which are competing. The space is still in its infancy, but make no mistake -- successful ideas from this area will eventually find their way into the more conservative world of fiat digital payments. Libra and other stablecoins are the latest prominent example of these ideas breaking through. There will be more.

Read More
DCI's Robleh Ali was quoted in MIT Technology Review's 'An elegy for cash: the technology we might never replace'

Cash is gradually dying out. Will we ever have a digital alternative that offers the same mix of convenience and freedom?

by Mike Orcutt Jan 3, 2020

Think about the last time you used cash. How much did you spend? What did you buy, and from whom? Was it a one-time thing, or was it something you buy regularly?

Was it legal?

If you’d rather keep all that to yourself, you’re in luck. The person in the store (or on the street corner) may remember your face, but as long as you didn’t reveal any identifying information, there is nothing that links you to the transaction.

Read More
The New York Times quotes Neha Narula in 'Twitter and Facebook Want to Shift Power to Users. Or Do They?'

A decentralized internet was hailed as a way to dethrone Twitter and Facebook. But to the tech giants, the idea could unload some of their burdens.

By Nathaniel Popper Dec. 18, 2019. The New York Times.

SAN FRANCISCO — Not so long ago, the technology behind Bitcoin was seen in Silicon Valley as the best hope for challenging the enormous, centralized power of companies like Twitter and Facebook. 

Now, in an unexpected twist, the internet giants think that technology could help them solve their many problems.

The chief executive of Twitter, Jack Dorsey, said last week that he hoped to fund the creation of software for social media that, inspired by the design of Bitcoin, would give Twitter less control over how people use the service and shift power toward users and outside programmers.

Read the full article here

Read More
Coindesk Article: 'Even if a Thousand Projects Don’t Make It, Blockchain Is Still a Change Catalyst' by DCI Advisor Gary Gensler

This post is part of CoinDesk's 2019 Year in Review, a collection of 100 op-eds, interviews and takes on the state of blockchain and the world. Gary Gensler is a professor at the MIT Sloan School of Management, Co-Director of MIT’s Fintech@CSAIL and Senior Advisor to the MIT Media Lab Digital Currency Initiative. He was formerly Chairman of the U.S. Commodity Futures Trading Commission, Under Secretary of the Treasury, and a partner at Goldman Sachs.

Read More
DCI's Neha, Rob and Gary engage in National Crisis Simulation 'Cryptocurrency and national insecurity'. Review by The Harvard Gazette

The year is 2021, and the nation is in crisis. North Korea has just tested a missile that will soon be capable of delivering a nuclear warhead to the continental U.S. The move took Washington by surprise as the project was likely funded via a new Chinese digital currency, which allowed North Korea to bypass the global banking system. In response, the National Security Council House has gathered in the White House Situation Room to formulate short- and long-term responses.

“Digital Currency Wars: A National Security Crisis Simulation” unfolded before a packed audience in Kennedy School Forum on Tuesday night. Hosted by the Economic Diplomacy Initiative and co-sponsored by the Belfer Center for Science and International Affairs, the exercise brought together administration veterans, career diplomats, and academics to dramatize a very real prospect — the rise of an encrypted digital currency that would upend the U.S. dollar’s dominance and effectively render ineffective economic sanctions, like those currently applied to North Korea.

Read More
CES Summit review by Bitcoin Magazine: 'Cryptoeconomic Systems Launched as Open-Source Journal and Conference’

MIT’s Digital Currency Initiative (DCI) has announced the launch of Cryptoeconomic Systems (CES), the name of both a forthcoming conference in March 2020 and a new, open-access journal intended to bring a scholastic level of quality in research and reviews to the world of cryptocurrency, outside of the traditional publication channels.

“Cryptoeconomic Systems is a highly collaborative project with worldwide participation from universities, industrial practice and independent researchers — MIT DCI’s involvement can be thought of as providing impetus to initiate these activities for the common good,” Wassim Alsindi, co-organizer of the conference series and managing editor of the journal, told Bitcoin Magazine. “The journal and conference are intended to be mutually intertwined and reinforcing activities.”….

Read More
DCI's Tadge interviewed by Olga Kharif for Bloomberg article 'The World’s Most-Used Cryptocurrency Isn’t Bitcoin'

By Olga Kharif

September 30, 2019, 8:00 PM EDT Updated on October 1, 2019, 7:42 AM EDT

What’s the world’s most widely used cryptocurrency? If you think it’s Bitcoin, which accounts for about 70% of all the digital-asset world’s market value, you’re probably wrong.

https://www.bloomberg.com/news/articles/2019-10-01/tether-not-bitcoin-likely-the-world-s-most-used-cryptocurrency

Read More
Take the free MIT Open Course taught by DCI's Neha Narula and Tadge Dryja "MAS.S62: Cryptocurrency Engineering and Design"

Course Description

Bitcoin and other cryptographic currencies have gained attention over the years as the systems continue to evolve.  This course looks at the design of Bitcoin and other cryptocurrencies and how they function in practice, focusing on cryptography, game theory, and network architecture.  Future developments in smart contracts and privacy will be covered as well.  Programming assignments in the course will give practical experience interacting with these currencies, so some programming experience is required. Course taught by Tadge Dryja and Neha Narula.

Read More
'Examining Facebook’s Proposed Cryptocurrency and Its Impact on Consumers, Investors, and the American Financial System' - Final Testimony by DCI's Gary Gensler

DCI Senior Advisor Gary Gensler’s Final Testimony on ‘Examining Facebook’s Proposed Cryptocurrency and Its Impact on Consumers, Investors, and the American Financial System’. Presented during the ‘Financial Services Committee’ at the United States House of Representatives on July 17, 2019.

Read Here

Read More
Utreexo: A dynamic hash-based accumulator optimized for the Bitcoin UTXO set

by Thaddeus Dryja (MIT’s Digital Currency Initiative)

AbstractIn the Bitcoin consensus network, all nodes come to agreement on the set of Unspent Transaction Outputs (The “UTXO” set). The size of this shared state is a scalability constraint for the network, as the size of the set expands as more users join the system, increasing resource requirements of all nodes. Decoupling the network’s state size from the storage requirements of individual machines would reduce hardware requirements of validating nodes. We introduce a hash based accumulator to locally represent the UTXO set, which is logarithmic in the size of the full set. Nodes attach and propagate inclusion proofs to the inputs of transactions, which along with the accumulator state, give all the information needed to validate a transaction. While the size of the inclusion proofs results in an increase in network traffic, these proofs can be discarded after verification, and aggregation methods can reduce their size to a manageable level of overhead. In our simulations of downloading Bitcoin’s blockchain up to early 2019 with 500MB of RAM allocated for caching, the proofs only add approximately 25% to the amount otherwise downloaded.

Read More
DCI's Neha Narula Interviewed by Anderson Cooper on '60 Minutes' - 'Bitcoin's Wild Ride'

“Ten years ago, a mysterious computer programmer invented a new type of money that wasn't backed by any government or kept in any bank. There were no coins or bills, just long strings of letters and numbers stored inside a network of computers that anybody could be a part of by downloading some free software over the Internet. Today that computerized currency, bitcoin, is well-known, though little understood, and bitcoin's popularity has inspired the creation of thousands of other types of digital money, known as "cryptocurrency." Over the last decade, you could have made a five million percent profit by investing in cryptocurrency. Or you could have lost everything. It has been a wild ride, and few people have experienced the highs and lows…” Cooper. A (2019, May 19) Bitcoin’s Wild Ride.

Read More