Hashing It Out
Hashing It Out

Episode 24 · 3 years ago

Hashing It Out #24: Loki Network - Simon Harman & Kee Jefferys

ABOUT THIS EPISODE

Anonymity is dead... or so you thought. Marrying the technologies behind onion routing and Monero, the Loki network enables a private cryptocurrency and messaging service that hides information down to the network layer. This fascinating approach scales its privacy mechanism in the same way that Tor does and incentives those who run Loki service nodes through their Proof of Service mechanism. Tools like this keep your transactions and traffic private from any spying eyes and makes it increasingly difficult to leverage your network data as a means to track your activity.

Now enteringa kind aetwork welcome to hashing it out APOTGAS forretalk to the teck intovators, behind blocked in intrestructure anddecentralized networks. We dive into the weeds to get at Wy and how peoplebuild this technology, the problems they face along the way I'm listeningand learn from the best in the business you can joined our ranks. It is a gentleman episode, twenty fourof Hashing it out. As always, I'm here with Collin mytrusticcohost say: what's up, what's U and today platform we are talking toLoki, we have key and Simon here, Um Wy, don't give us a quick introduction asto who you are each of you, how you got answer, how you got introduced into thespace and what Loke is like? What are you trying to solve and how is it adifferent Shaater okayyou go in Gofisky key first, I said Um sir my name's Kat, I'm CTO ortechlid at Lurki. I guess my introduction to blockchain was kind ofthrough mainly Bitcoinat fest, and I think most people were interested inthe astronomical risin price, probably in about like two thousand and fourteentwo thousand and fifteen. That's when I started to notice it and then once I I had a computer science background,some from doing computer science at University and Um. I had just startedlearning about asymmetriic encryption and then I got on to Bitcoin, and Ilarned Bicklen was almost like this beautiful, like applied vasion of likeasymmetric crytography, which I thought was awesome, and I thought okay likethis is this: Is Everything I've been letting inthe cmlike computer sciencecouses, except it's applied in real life 'cause? I always thought ad, likethe theory, isn't too interesting, but when you actually see an application tothis stuff, that's when it really becomes interesting. Si that was kindof my introduction when I was able to apply those two things together: kindof the computer science aspect and then like okay. This is like a real thing.Um, I guess what Loki's trying to do different from coyn is, is trying to bea private crypto currency. But then maybe the further extension to thatquestion is like what is it trying to do different from say something likeManera, which is already out? There is like one of the biggest privacycurrentieszcash, and I guess what Luki is really trying to do is is trying totackle that network M Layo privacy sor, although Minero off, is transactionalprivacy. When you give money to someone else, it doesn't really offer anythingin terms of like anonymity when you're browsing the internet or anonymity whenyou access special services inside of the Infrastructon that we've built. SoI guess really it's about ditof privacy, an Internet privacy, that's really whatLokis trying to tackle, uniquely from other crypter currencies out there, a right well Simon, seem to have droppdfrom the call a Ben having some techical difficulties, we'll. Let himjust reconnect and Wel we'll give hem he chance to to give us the same onmorning that you just gave us and I'm Kindof Curiau it's like. Can you giveus up salmon you there? Sorry speaking of stone, age, Internet,she fa en switch my VP NTO, the? U K, 'cause, that's going to have a badresult! Well, perfect! So Tha key just gave usa good introduction as to who he is and what Lok he is. Why? Don't you do thesame Surtin so I'Nsilon on the project lad one of the directors of thefoundation of the likey project, and I guess my I got into cryptcurrency about the same time as Kay actually but for different reasons. Iwas more philosophically driven at the time I was just finishing off highschool, so I was h very into a lot of political movements andideas at the time, and I saw bit coiners a tool in this kind of scheme,but quickly change my tune from that sort of ideological interest to more ofa financial interest. When I ive spent everything I had on bit coin forreasons that are still unknown to me and H, yeah from there, I just closelyanalyzed and watched the space over the next couple of years and traded it.where I could. I made some gans, I made some losses,as everyone has these stories, but as time went on, I started to take more ofan interest in the technical side of things, particularly after the sort offirst major rush of ICOS that we saw. I...

...was just deeply uninspired by a lot ofthe projects that were coming out and H. I it drove me to be more scepticalabout the inner workings of some of these projects and it sort of led me tohaving a great understanding of some of my favorite projects, one of which wasMiniro, but also a bit coin as well Um and from there we just startedexperimenting with ideas. On the start of last year and Um Yeah from there, wemanaged to come up with this idea, Forluki, which is gradually evolvedovertime as well, but yeah, that's what is hell we go to eeat today. That sounds reasonable, so I guess thefirst question is what what does Loki do? Other I mean likewhat does network privacy mean and what is lacking in Minero, specifically thatyou are overcoming with your network. Well, this is going to be difficultcause wer both going to have e ansence for this yeah. why Arn't you GKI? Okay, so Um? I guess the best way tokind of explain we Manar relaxint of privacy Um is to talk about somethinglike a tall. So if you're familiar with to tares like this network ofanonymizing nodes, the idea is that uses run these these routers and then, basically, when you connectto a sava or you do any kind of like clients, oeroperation there's a bunchof routers in between you and them, the process is called onion routing andbasically, what it means is that really only one hop knows your ipeaddress andHup at the end of the tunnel only knows the the axit nos ipe address so say when I brodcast the transaction inManerro afte broadcast I to the network and typically, what I'm going to do isI'm going to use my local node, which is assigned my Ip address and the I'mgoing to broadcast that to the network, so the network? The first note that Ihit is going to know my I P ad Res Straight Away M and an IP DDRESS forthe people out there who who aren't really familiar with what you can dowith an IP address. Anyone can grabe an IP address and find out your GeneralGerolocation, but people like ISPs m. You know state level. Actors canactually use this information to home down to your specific Um address,because when you sign up with your Ispyou, probably give them someinformation about you. So really. What loke's trying to do is to remove the IPaddrass pot from all of your interactions that you have online and it's doing some things that areinteresting on the the Mixnat side of things above and beyond. What tour is doingbut yeah, if you were really to bring it in like to what it does differentlyfrom an Arrow like you're able to communicate through the network withlike with a very strong degree of anenymity, which Manero has been wakingon with covery. But we haven't really seen. Um Use available release of cover yet, andwe think looking at, which is the product we're talking about, will beable to get wide, wite, usellease and, and hopefully some adoption in the nextC in the next couple of months. I should point out that Minero, when it'stalking about its networking privacy is only focusing on transactionbroadcasting and some other bits and pieces that set withinside the minarenetwork, whereas what locinatis working on is the Internet. More generally, so,through this network, we're talking about a general Internet connectionthat you can use to do a wide variety of things that are not related to crrcurrency, including browsing the Internet, sending private messagesdoing voice calls that sort of thing, so Loki is definitely targeting a muchmore general usage, whereas the networking stuff that's happening inMenerrow at the moment, say what you will about the state thatthat it is currently in is only focusing on the perepeer transactionnewor itself and nothing else so um I work for status and status is built onwhisper, which is a m kind of a dark communication. Protocol M, as that's apart of the etheriums stack, and some of the issues of that is like it. What it woatd it definitely triesto do is make sure that the UM transactionalpart nothe transactionalpart but like werethink. The routing part of a message is completelyoffuscated, so you don't know where a message came from and where it's Godwords being sent to and then also the encryption part of you don't understandthe actual message contents as well, and that's a very a similar situation,whach you're doing but a problem with that in general, at least in someimplementations of it is the scaling aspect of it. If no one knows wheresomething is going, it usually means that all clients and the network haveall the information. How is there a similar issue with how you're doingthings is there? A scalling issue in...

...terms of UH ther amount of traffic going on very simply, onio routing has dealtwith this problem. There is very, I I consider it to be near impossibleto design a system where only the recipient can fully understand thestate of the messages being sent, but in ununurouting. Very simply, the first note gets some information.The second note get some information. Ut thirdno gets some information inthin USI et some information hat, no one, no one or of those nodes can build afull picture of what is going on. So that's the basic concept that underlaysunrouting. We believe that, with the Maka Bas, CIBAL resistanc solution thatwe have in our routing system, we can prevent any given actor from acquiringa large enough number of notes to be able to build up a picture ofnetworking traffic, and so this is thesame system that toy uses.andtor does several Terribu, I don't know the exact numbers, but tetrepothat, Gos throughto on a minut by minute basis is absolutely enormous andthere is absolutely no reason why we shouldn't be able to see the same threePo through the lukig net system. Well, the fact that you don't know how muchnumbers the TOR uses as a testament to t the feasibility of how it works right. The I will like there aresome caveots,O that- and I will like I- I do like to talk about this. This issue, Sir Um.Generally. What these these messaging systems use or like stuff, like tmessage if you've out of it, is kind of like a naive implementation of thisidea that h of what's called a flood film networks or the Idar behind afloodfill network is I have a message and I give that to a router and thenthe ROUTA gives tooll the peers ind knows and then that roter gives it toall of the peers. It knows, and the network floods Aresoe the message:floods throughout the network. So it's very difficult to pinpoint the soucefor that message, because every router receives every message right.Incredibly, an official yeah, it's it is incredibly inefficient. Sir Um Peop,like researches, have been trying to tackle this for ages and what, like sir,there's a couple? There's a couple of people out there like main frame- and II guess thotus- I haven't looked too much into how they actually do things,but there's this idea that you can actually reduce the amount of floodpilio doing so it's kind of like a toggeted floodfill, and we haveelements of that in Loki as well. Sir Um we have, the network is broken intosections called swamps. Sir, imagine you have a thousand notes and you soutthem Um by the block that they were fistregistered in because the aasno that's a bit of a technical detail, but imaging. You can break the network into little swarms and instead of actuallyand then users are also assigned to a swam. So instead of having to flood thewhole network, I can find what swarm a user is in which may relate to tenservis notes, for example, and then I can just send the message to those tenservicnots, so I still have anonymity in the fact that okay, this user is inthis specific swalm, but I only know the IP addresses to the service nodesthere. I don't know the IP address of the user and I only have the flood fildto ten of those notes instead of having to Floodfeld to the whole network. Solike there is this idea of like breaking the network into segments andthen only flooding to the segments. You know where the user is in, which stillprovides a high degree of IES arounanymity Orbe it not as if you weredoing the flood, fill across the whole network, but yeah of course, funfilling.The whole network is terribly an efficient way to do things, so this is.This is a very similar thing to like Um, like what gossip networks are toflooding, but I'm curious to see like H, also, it seems a Thi hint of Um likethe concept of sharting here. If we're talking about state and transactionalmediums like is h, how does that? How does that workfor a blockchin? Well, it's it's not. So the thing isshotting in this t in this time isn't about the block chain. It's aboutmessages right, sir. No one rout in needs to hold every single message thathas been sent on the network because it's not related to consensus at all,because messages in our case are not sent in blocks. They're sent out ofband outside of the network. The block chain is basically what controls thenetworks state. It doesn't actually control the messages that are sent onthe network. Um so like we don't really need to worry about every ROUTAreceiving every message, so we can break the network into smaller potsbecause it's not consensus r related and furthermore, we can take this astep further by not requiring the nods to have to deal with messagesdirectly. We haven't exactly decided whether or not this is going to be inour final impementation, but certainly one of the options available to us isthat users will be able to form an endteend increpted direct connectionbetween each other, so that each client...

...acts as the servint for their ownmessages as well, meaning that these nodes don't have to be involved in thetransmission of messages or the storage of messages just to establish aconnection through inpoints to prevent their IP addresses being known to each other and and the rest of theWhite Internet. So in other words, we can establish a pertepeer networkconnection through this network. So neither of US actually know where weare on the actual Internet. We can establish this connection, which wellallow us to send and received messages and calls between each other withoutactually having to get involved with servicide storage on the service knotesthemselves. Although we do want that to be a fundamental option to allow F, Rofline messaging, where the two our partners are not online at the sametime, which is a very common circumstance, Aicay Diffy, Helman Connection, youbasically negotiating Tu keys between two people using your routing systemand then that enables all messages to be directly connected without anybodyelse being able to interfere or intercept them. Sou E con Sayin Yepeahand the antinencryption that we use is biterally just pulled straight fromsystem, probably heard of coll signal andto all about messaging. That'sdouble rattet right, yeah, yeah th. The basic like idea, though, isthat PTE, pier communication, like I know your Ip address and my ipisp knowsthat I'm communicating with your Ip address as well, so like the privacyaspect of Petepr, communications isn't the best, but we still want to keepthat option available to uses. We just want to have this like system wherethey can choose, like that's up to them. WH T whether they want to c communicatedirectly payd a per or not th. The issue with all of these kind of likedistributed. MESSERE systems is once you start to hold data on any of thenodes. It becomes really taxing on those nodes and you need to give themsome kind of reward or prevents spamming in some way, and that's why we're trying to hold hisminimal amount of data offline as possible? There is still some data. Youneed to hold off line to make a messaging system usable, because if Isend you a message and you're offline, I obviously want you to receive thatwhen you come online, but for a vosst majority of messages, both both usesare online, so I can just route directly to them using onreouting, andthen they don't know my ip address in that situation. It's just there. Thereare some use cases where you need to hold messages: A plint now, speaking of it centivization, itsounds like you're using because people are using these onion routing. Are youare using your currency to incentivize people to relay? have things around so like the easiestway to describe this is like Loki is veryit's very similar to tore, exceptif every tor a Torele was a mastenerd and they getrewarded for the the daute that they route. Sir You'reinen you're, essentially crating an incentivized tor network where allroute is are paid for what they do. So it's not so much related towards Um. You know like this. This h feeling that,like I'm helping the Tornet Work- and this is really good- it's more relatedtowards like financial like I want to earn money and I'm going to provide aservice for that money. Sr more like the coin mining, for example, peopleare doing their com, mineing, B'cause they're, all tristic they're doing itbecause they want to make money- and that's cue, is the network, and we alsorely on the game theory that comes with that, because we require that allrelays on the network also require a stakes. So there is actually a penaltythat comes for behaving IM properly or not meeting minimum standards in thissort of thing so bey introducing the game theory aspect of both theincentivization and a penalization. It gaves us a tool to be Outo, make the network carry certainproperties that we want it to have, whether that distoring messages orrouting in this mixnat relay or SOM, and so on. So as long as we can designa system to enable this enforcement effectively, that is not able to beeasily attacked, then you can essentially get the notes on these mastnotes if you e to do whatever it is you want, provided it fits within theeconomic framework that you've designed now. That brings up the other questionof that I have. Is it's KINDOF like teorm? Has this em any smart contractsystems that the actual coin itself has a innate value within the ecosystem?EITHERIAN builds. What can you use the Loki coin to pay for on the network itself as thereyeah? Okay, I'm M relaying messages, and then I acquire you know H, h, coin, for being a good actor on thenetwork. What do I use that coin on the network for other than maybe sending atransaction n? When I opened up a message with some here appeared o pereconnection with somebody. Do I have to pay for that pure t peer connection? No, we think that would be a very poormove on our part. I mean in theory that...

...would make the most sense, but giventhat free alternatives exist after this kind of stuff already I mean, we'vetalked quite a lot about the toinet work. For example, I don't think it isa viable model to be charging for the usage of them with orstoragic messagesor anything else that would otherwise be a free system. The way we look atLoki is m. We really do have to build an ecosystem around it. That means thatits usage as a currency as a meeting of exchange as t a story of value is thesame as it would be for any other major crur currency up there. So we're hoping that by introducing alot of integrations with the mix software and the messaging softwarethat will be ouht to get a decent level of adoption of Loki as a private CR,their currency, as well as some unchane stuff that we are doing to try andimprove the user experience of of using such a private cryptur currency, Butmyeah, W ve we've looked at this problem and so far we haven't come up with anysolutions to drive an internal economy to do with the Loca Tuken, but that maychange depending on what we see coming clar of something that we have beenlooking at as a cursory glance, it would be to beable to pay for distributed hosting. Although that is quite a complexproblem. Anda is, to be frank, we have some more immediate problems to dealwith. We have a readmath that we want to complete before we start toinvestigate these sort of features, but at the time being, we don't really have a unique solutionto this problem. I think a lot of coins that are relying on stakingpenalization and incentivization also face this question and I think whetheror not theyre successful is going to largete dependon, whether or not themedium of exchange that is involved in this process actually derives someusage outside of this internal system. But who knows to some systems? It maybe purely sufficient to have this looping system where you require a Stakand then you get rewarded, and then you get penalized, if, if you don't dothink properly, that that may be a vaiable economic model. But I don'tthink there's been large enough example of this to be Oueto prove that with any definitive answer whatsoever. So UNFOOTAN nitworkgo ahead. Allright, I might go ahead. EA, unfortunately, like the other wayaround like with something like a theorium, where you need to pay toexecute a smart contractor pay to use the network M, I think we're going tosee and we are seeing like massive user aduption issues, because people expectthings free now, like everything, every sevice that people use is basicallyfree now and getting user adoption when they have to pay a transaction fe everytime and especially if it's ine currency, where they have to go to anexchange and they're just like not sure how to use it and and the userswetargeting as well, are also like these, like the main people that wewant to use. This are people who are like in countries here they have anoppressive government who are like trying to act or get offto them right.SOR like they're, not going to have access to exchanges. So really what we can do is we canprovide a service that is the best privacy coin of its tear, and we thinkthat service nodes are going to be able to offer that but beyon beyond that. We just have to.We just have to build the best currentylay possible and then makeintegrations as well into our system, so that it's usable and if we can dothat, I think itwill become a very usable currency, so yeah itwas going to say like when itcomes to onion routing the more the deeper the deeper the Ounion, theLagerthen, the more you know, acptulaes have to be pilled off the more Umprotected. You are against things like Um timing, analysis and stuff like thatUm, so you don't plan on maybe paying having people pay for moresecurity or anything like that to your network. Do you feel as though that'ssomething that that that even would be valuable to thenetwork? The difficulty, without is, if we were to implement something likethat, that would require us a being able to develop a system that provesthat onion routing has been conducted correctly. With the allotted amount ofhops, I mean you can sort of do that from the userside of things. They canobviously set up the onion themselves, but given up the nodes in the middle,don't actually know the exact naniture of the steps ahead of them. They canonly look at the Packard size really, which is generally the same Um. This issomething that would be very difficult to prove to the network that payment is required in the first place and there are networks out there thatare blaming to be working on or are working on, systems where you can monitor band withusage and pay for it. But, as key is pointed out, banwit is something thatwe already have to pay for in the form of is ps and to have some additional requirement. On top of that is reallynot going to be that successful. I imagine.

I think it also should be pointed outthat the way to get around some of the security issues that you've pointed out-I is not by increasing the number of hops. I think if you have a three Hosolution to to whatever destination you're going to that deals with thevast majority of threat models that people that are dealing with mext netstend to have, as we can see through the usage of tour beyond that tha. Addingthe number of hobs is not actually that effective at preventing various formsof attack. As you point out, timing attacks are not going to be helped muchmore by adding extra hops. The real the real solution to that is to do um w a true mixner in the sense that thereare spoof messages being sent and packets are being are relayed atdifferent times inverst and that sort of thing that's a very complex solutionto will we considered to be a very basic problem? Essentially, if youthink that the threat model that your face is that you're worried about asingle entity controlling enough of the Internet to be able to watch everysingle packet as it floats through your onion, it doesn't really matter howmany holps you add to that you'r threat model. It's going to be broken everysingle time and there are ways around, but we don't. We don't see that as aviable fret model for most people and it's not halfigus. The the other thingwith all of these privacy methods- and this comes from an Arrow included- isthat you talk about anonymity. Sets, sir, when, when you're, using TOR and you're,using three hops you're in this alenumity set with everyone else, who'susing three hops now like in Minero. If you up your ringsize from like whatwhat is the average, I think is eleven or it will be eleven in the nextparticol upgrade and you go to twenty. For example, and YOUALL transactionsreally stand out on the network and you can have that same effect of using anunremounting system, and you start upping your account really high. It cancreate these signatures that are very like easily umseeable from the thelooking from the outside network. In what Simon talked about using like using like lots of sending most packetsor sending Dato. All of the time is an interesting one, but again, like nearlyall of these privacy. Measures to increase privacy also have this traintrade off of like okay, I need to use Mose Sipupao, or I need to expend morebanwith to have like a constant stream of anwith coming out of me. So no onecan analyze, which banwith is related totall on the most extreme end of thesemixnets people are designing the systems where messages get sent out.Every few minutes, you're artificially dramatically increasing the latency tostop timing attacks and while it's an effective solution to those timiattacks, the extent to which those timey attacks are actually happening inthe real world is is not clear and it doesn't appear to be a very significantthreat for most people. I think the original idea of a mixnet was fromDavid Sham. I think, and his idea was like mad. We have this email, Seva and,like everyone sends emails to it and then like, and then it collects them upand then at a sudden time it like folds the well out at once. So like you can'treally know, who's email is going way, but yeah halike the latency is is quite nefficient, though so I'm curious here. It seems asthough that a lot of this is m strikes a strong correlation with a lightningnetwork. That's overlaid on top of big one lot of the St. the rounding aspectof this is that Ave l looked into that and is that a a reasonable enpiraleedor? I hadn't thought of that before I mean were ously targeting verydifferent problems. T yeah sure that that's actually not a terrible Um, not a terrible in ananalogy and thenlike the other part of this, is that youveyouv spent a lot of time talkingabout obfuscating information about the routing of transactions, the networklayer of of blocking systems, an networks, but what about like theoppuscation of things inside the block CHN which they get inside of them? Whatwhat things are you doing to? Try and offer the same sise of guarantees thatpeople'd use for things like Manar, ONS, zcash yeah. I think the the interestingpart about this is like a lot of systems like mainframe and, I think,status to a certain extent, which is an OSI twenty togen. I I might be wrongabout that. Yeit s yeah, okay, sir, like they might have like the bestprivate routing layappossible, but if you need to pay for anything inside ofthe system, you're straight back to using an etherum Targen, which is asgood as using Bitcoin intens of privacy. So Loki is it's a folk of Manarro, soit's it's based entirely off the manarrocord Bas. So we inherit all theprivacy features in Menerra like ring signatures ring ctnd stealth addresses,um or all active in in Loki, and we try to keep us up to date with the privacychanges, hemroving, fds or stuff. Like bullet proofs. U will be implemented inLuki, very showly m. We also have some like ideas on the protical level toenable atomic swops Um, but the wher,...

...where the privacy seene I see it.Moving is far more towards M zero, knowlege prooce and, I think, we'll seesome interesting applications of zeroknolege proofs in Manarro too. Sobulletproofs are our zero zeroknoledge proups and they basically allow us to prove that the amounts of t etransaction are not negative in a much more sustinct way than the current way.That is, that is used, which is a combination of Peterson commitments.Now yous the have this like kind of Um battle ground between starks snarks andbulletproofs yeah yeah do ti, walk so very much of a contender at all. Theythey, I really owned the useful for large datasets and even Thenc nuks. Dothe job just fine! Well, I mean stocks, basically remove the idea of trustedset up from um any any like any kind of zeronolege proof system. It's just theissue. Right now is that they're very computationally, expensive we've seen the same thing happen withZk Sucx, sir. Originally, when they were incepted, they were verycompetationally expensive and on the ZCASH network. Right now they are stillextraordinarily competationally, expensive Um, to the point where onlylike a very small minority of transactions on the seacash network areactually private because of the competational overhead Um. But thething is like they've they're, releasing sapling now, which looks tobe a very big advance in times of computation time and the amount ofprocessing power you need m. So I think it's going to be the same thing withstocks like we'll see these like optimizations, which will bring downthe competation time and also like we're still vaguely following Moslassor like Com. A compentation gets better like the two points will meet in themiddle. I think there'll be optimization and compensationalimprovement and will meet in the middle somewhere whes a case knocks likereally a viable solution, and I think in in terms of like Zcnoxpesses, like traditional privacy methods like ring singnatures, theyreally are much better if they're applied across the whole transactionSep, I w thatapplying it across the wholetransaction, sat its not something. That's even been attempted at thispoint. Yes, iti's still very very early days and as far as the Zka stocksthings go, we already have a solution that doesn't require a trusted setupand it's called range, groof or bult proof in Curio, ijust I've been readingsome material and this stuff lately and I'm not convinced that stocks are goingto be a significant pot ofdicurency any time soon. Rightbut but bulletproofsare R are still large like compared to a Zeroknoledge, a proof Oras. He casenock in in its current generation, which I'm going to forget the fixedsize that it is it's like something ridiculously low, like twenty threekilabites fixed sizes for any size, proofthe you'r producing a bulletproof is still larger than thatO it's around, I think o kill a Vita R or one point three killabutes s at theend of the day. A lot of the stuff is, is s Li? Look. You said it's. It'snovel, we're at th we'rewe're, pioneering a lot of the APP applicablecryptography for offuscating information about systems and that alsobeing provable about like transactions, sor valid Um, and what what is it?Novel or R or is less novel is the routing system that is used to thenpass these messages around. Like tourred tour and onon routing works. Weknow it works. That's not that's not really up fordebate and I think that's something. That's been relatively lacking withinall the networks. In the BLACCHUNICO system, yeah, no one's really beenaddressing the networking side of things all too seriously, and it'sunderstandable. Why? Given that there are so many other problems to work onat the moment, but it's clear that there is an interest in this,particularly with the covery project, that's happening inside Minera. At themoment, athough we've been hearing some things lately in from within our WNdevelopment. Teamte suggest that that's uh, perhaps not on the best state it couldbe in at the moment, but yeah. I think, you're right. I think what is novel in what Lukeisdoing is by combining these technologies and also are making theseassumptions about what we can do with the game. Theory behinddisincentivization scheme at panalization scheme to mitigate some ofthe attacks that tore has face and mitigates some of the attacks thatCRIPP ther Cuncy is faced simultaneously and address a number ofdifferent attack factors in in a single project, which is Exciting D. can youlibrate en t at a bit Sur think I soo essentially what we have come to realize through the inventionof mastenos Dash, described this to an extent in the white paper where there is a gain theoretical assumptionis that above a certain size or like economic size of your network?So essentially we're talking about Ma capialization here in liquidity,...

...it becomes increasingly difficult foran attacker to be able to acquire enough of a given token to be able tospin up enough master nodes on a network to be able to do things like atemporal aalsis, which has been a huge thing for Tal. I think I did some verygrough mats the other day and I figured out that in sturvercosts it would costyou about fifty thousand dollars a month to OARN. I can't remember how much of thetraffic it was. I know it was above the threshold- That's required fortemprporal analysis m. If yeah, if you just spen, UPF t a bunch of x notes, itcost you about fifty thousand dollars a month to be out of control a largeamount of traffic and that four large state level actorsand corporations and a very large number of other actors is quite a smallcost to be able to effectively attack the network. When you introduce the requirement of astake and when you introduce concept such as liquidity, drying up and other sort of market dynamics thatare at play, it becomes increasingly exppensive to perform the sort ofattack and we've been working with an economist to look at some of the macoeconomics of play here. Doctor Brenon, Makly Taw in the University ofQueensland, and he found up the M th the assumptions that we've made mathematically sound to an extent. Soobviously, if Loki never surpasses a ten million dollar market CAP, theCCOST of acquiring the the enough service knows to be oble. To dotemporal analysis on our network would be only a few million dollars, buthistumption Isis that if that changes and if theliquidity assumptions areassumed to be correct, then you know this could easily run into the tenhundreds or billions of dollrs. Depending on how large the network is.When you start the attack. The way we look at it is while Loki is relativelysmall and there is absolutely no usage of the brouting network 'cause, itdoesn't actually UST. It's therefore, a very small target and no one's going tobother trying to own a large percentage of the network in order to attack it.So, but as we progress through time and as we turn on the network and as to pick up, then Um, we see that it becomes moreand more expensive. The bigger a target liky becomes and therefore we areafforded more and more protection as the benefits of doing an attack becomerealized. So there's an issue that I've had with the master notes in general Iuseto like relative to Dash, and that is like Wal. All of what you said istrue. Um, the you have this issue where the people who handle the majority ofthe master nodes on the inception of the network when it isn't that big Um,where the steak isn't that big of a deal be halfe, that distribution of of, I guess,potential colluders. U Grows Witha network as the that is the market capof the network grows too so, as it gets to the point where it is impossible fora new D new attacker to come in and take a good portion of those masternotes, um it. It means that that the there's a large percentage of peoplewho control those master notes who all think very similarly- and it seems asthough Um creating a group of people that cancollude together is very easy and and then also changing. That distributionof people who can possibly clude together is very difficult. You haveanything like to say about that yeah. So the way Loki deals with thisis that the stakand requirement is not a fixed amount, so the stake andrequirements Stot satwits at forty five thousand right now, a Luki and itdecreases quite rapidly overtime. Sir. You see, people will start their emuscl notes, but the entry, the barrier forentry becomes lower and lower as wego on and the network becomes stronger and strong is so there's always a pointat which a new player can enter where, like the the older players and not justlike, strangling them out. This is the problem that we same with. Dashway likethe the masened amount, is like two hundred thousand dollars right now,which is t you're not going to be able to make mone anymore exactly yeah. It'sjust unaffordable for anyone who's like a normal person who wants to getinvolved in the network, sor yeah, like we. We thought about that from theoutset, and we did think that that was one of the problems that Dash. So wedecided to have this like dynamic stake and requirement that Lo is overtime tolet mo network participants and, while still maintaining some h like a amarket based super resistance, as well as more players are on the network, sothat's kind of detailed in th. In the paper I just linked theeconomics sait,the looking network, so we we did go into like a huge amount of tetall aboutthis, like this was a a lot of out thinking process when we started theproject, it really has been like an ongoing process of optimization, though,as we've come to more realizations. So...

...we recently also released economics proposal where we suggestedalteration to the economic to the inition, cove f of the wholt network,and that I tal went through h ae how long ago was in Owous in August, ae monthizing, something like that and h yeah. So, if you're interested inreading about, I think it was like a nine pagemon proposal or something likethat. So there's quite quite a bit of optimization that is included in thatpaper agree. We generally like writing paperson ow ideas and then like briing them to the community as proposals we feellike that's the best way to trough network uprates is to be very clear andthen get community sentiment on board and that'll be more formalized in thefuture. But this is our kind of way to do it. Right now, that's awesome, Um, nowwe've kind ofgiven a good amount of talk towards what you're doing that's novel in thespace and based on what you feel you're doingthat's novel on the space. What type of applications do you see flocking toyour platform and and h? How do you offer that NTO, like Hod of thoseapplications like work better on your platfrorm thaneveryone else, y? Ah, believe you call them snaps and they're part of yourmessengers INERBIS. So, like I'm kind of curious, what what you foresee thatlooking like and how people 'cause, not everybody like this- is great fortransferring messages. Okay, this is a thousandmessenges out there. Yes, as features that are unique to this particularnetwork. But not everybody needs that Um. You know. Most people want to build from what myat least my my take on this most people want to build stuff and then want touse a system of value which they can be insured is live, has significant liveness and hasthe proper security to support their applications and there's alsoscaleability m. What what are what of the? What? How are you addressing thosethree Maj Major Issues with your coin? Are they addressed? What are what dthey just rink rank those issues as how you think they're problematic fordeveloping applications and then talk a little more about the snap stuff. Can you repeat the three, the threethings sure I just asked a tonno crap? I do that a lot, so you know liveness,like I'm, I'm concerned about like thiss M, so you know I want to makesure that my message gets through to the person that I I needed to getthrough too M. I need assured assurance that that happens, and I need you knownetwork to know that my my transactions go through Um security. So obviously this wholenetwork is is based off security. So obviously you built that without a mineOm, so I'm not terribly worried about that with your network and then whatwas the last one? I just said they didn't coing onything, so look ateviity, scal ability, yeah, and I think I think we've Kindo toughed on that,but I would like to just kind of see wha whether or not you feel as thoughany of those are particularly of concern and then I'd like to learn: HeyI'm a developer, whats. Stopping me yeah, sir. I can cover Tho'se three. Ithink I guess those are in terms of the messengers or liveness if you'recommunicating through like if you've communicated if you've got someone's UH technically, it's called a lease set inIu, ow mix that, but if you've got that, you can communicate through a an onionrouting system and the liveness on that is just as good Um as if you werecommunicating with a hidden servicein tar but wet hidden, sevice isn'tactually a shitty unreliable severan. It's just your friend Um on the end ofanother connection, so liveness is l. very strong, like liveness, is verystrong you're, just adding a couple of hops in between and you can becausebecause h, looking et is packet based routing andnot tunnel based routing. Essentially, you can send multiple. You can sendmultiple packets over different pots in the networks or you're not justrestricted to one tunnel endr. If that tunnel fails, you lose all of yourcontact with someone. You can actually create multiple Pastro the network andthen send different packets through those. So liveness is like is very good. liveness is a bits it's a bitdiminished on the offline Messaging Pot, but the way we deal with that is, we m.We use multiple routes again to ensure that if one, if the routes goes down,you still have this like backup route, so liveness is, is pretty strongsecurity yeah. That's like probably the main thing that we're tackling oldmessages are encrypted using the signal protocole. So it's probably the best interms of messaging out there at the moment and scalability, nothing reallyhappens on the block chain. Th, that's the only thing that happens on theblock chain is like the node network is...

...enforced there, but all of the messages are happeningon the Internet, they're they're, not logged on the block chain, or anythinglike that. So we don't really have any issues related to to scalability. Inthat sense, um in terms of snaps, Sir snaps are more accurately refe t yourperhaps his hidden sevices or you probably had a hidden abces onto theseare websites that are hosted inside F, the toie networks, or typically, whenyou're accessing a website, ontoll you're, probably going to the widerInternet Um Sir you're, using an exit note. So basically you have a God. Youhave a middle and you have an exit Nerte and you go through those when you're accessing a hidden serviceon tour. The server also does not expose its IPaddress directly to you, sir. Both the serve as I p address andyour IPD ress are objiscated, whereas generally intour, just the your Ipaddress, is obfuscated. You know the exact Ip address of the SABA sor. Theseare like. These are basically like any web service that can be created on thetraditional Internet can also be hosted inside locignet as a snap. So if Iwanted to create a a service that was entirely private, when no one near theIP address of Myseva so say I wanted to do an image board or something where Iwanted people to have complete anonymity, and I want myself to havecomplete anonymity, Maye we're talking about politically sensitive stuff Um.Then I can actually horst this inside lurkinget and keep everything privateand on the developer side. I don't really need to know anything. All Ineed to know is how to host the Web sebice as I would in the traditionalInternet, and then we just run a proxy to Um to Lokignet and looking athandles the whole other side of it. So you don't need to learn any differentprogramming languages than you already would is a web developer you just eemto download lurkinget and run through a specific pourt and looking ut will dothe rest for you, sir. That's kind of the the appeal of of snaps, however,we're thinking about going beyond that as well by obviously in most of the settings thatlacinet will be access will be through some dedicated rousa dedicated pug. Insoftware, and as a result of that, we see no reason why we shouldn't alsointegrate other useful tools, such as having the the Messenger immediatelyavailable, an well immediately, availablbut, also M, allowingdevelopers to utilize the public hd crytography. That comes along with that.So instead of your your snap being account base that uses, email orsomething else like that, you could just directly use a derivative key ofwhatever is ORT existing within the wall and ow allow users to authenticatethemselves using signatures in browser. So that's another feature thatdevelopers can utilize to increase the anonymity and the security of theservices that they re offering to uses. So this is a little outside of the TechRom, but as a founder, I'm sure you encounter these all the time. What arthe legal remifications of throwing up a project like this. It's an interesting question: Um I'vebeen doaling. Most mostly it' been my role to be dealing with the legasite ofthings from the inception of the project and there really isn't anyrestriction on doing something like this, whetheryouare participating in the tour network, whether Youre developing on itor a similar project working on private CRYPTA currency. Anything like thatthat doesn't seem to be any real restriction on creating or participating in thesenetworks, which is obviously a very good thing. I mean in certain place. Itis, it is obviously illegal. I mean China is an obbious one. They go tohuglinks to prevent people interacting with the TOR network, with mixedsuccess m. So there is a number of considerations with the legalstructuring side of things when you're running you know any prefer currencyproject that dozen ICO theres. Obviously a lot of work has to be donethere, but Um. There is the only real thing that we can see effecting what weare doing in Australia is recently. There is a bill that is trying to berushed through the parliament at the moment, which is t calld. Theassistance and access bill, and the proposition here is that the governmentand law enforcement agencies will be able to secretly contact organizations that are providingservices to um the general public, where they have messaging services oranything like that, where they can, with a warrant request assistance inhelping to undermine the security or privacy of a particular individual.However, the bill is written in such a way that Um the government will not beable to compel organizations to be able to in Sert backdoors into their code. Theywon't be able to stop them, fixing security vunerabilities and theyobviously won't be be able to do anything about or encryptiveinformation. I think this is more of an...

...effort to get governments to force companies to help them untounderstand how best to conduct investigations where encryption isinvolved. However, there are some pretty extreme penalties call failureto comply with Hem such as a ten year prison sentence for anyone that woulwolf information about any investigations that have gone inthese organizations. Sa tthere's some stuff that dot need to be fixed, butpractically speaking, this really won't have any effect on uaw any otherorganization that deals with arm secure communications other than having to spend some timeand money talking to governments to tell them how their system works. Thenyou are a completely open source project, correct thatight, so LRsoftware is provided without warranty, just like every other currency and OCEN source project outthere toar included. So if there are security vulnerabilities, if there arecritical consensus issues that cause people to lose money, as with all ofthese other systems, these a distribut, the networks- we do not own them. We donot control them in any way other than the code that you see and that code canbe forkn altered by someone else. N O is really not a lot that the loky foundation itself for any ofits other organizations that work on the project have it as far as liability,for I think that uses do or things that happen on the network, and you callyourself aes go ahead. I think the biggest thing here is that there, thespecifically, I think this legislation is trying to togget nonencryptedinformation, Sir Menadata. Essentially, so, even if youuse signal entirely correctly, there still is a there's, still a connectionof your Ip adress going directly to signals Savis and although they saythey delete that you have to trust them to delete thatperfectly. And if there's a bill like this, the government can come in andsay: Okay, you just have to secretly keep all of that Medadata, although wecan't break the encryption of your messaging scheme, just keep themedadaughter of everyone who communicates with Yourselvis and thenkeep the medadaugter of all of Yourselv as like when where they send theirmessages too. So, like that's, the type of information that they'r Gointatagget with Loki there is that information isn't caps like there is noone to keep that information, because there's no central servers eachservicenurge will have that information available to them, but because there'sthousands of sevicterds and because we use onion routing, you only really haveone section of that information. You need multiple sections to come to aconclusion on who is talking to WHO, so you call yourself the LookiFoundation. How are you guys structured to fund this project so I'll brieflyexplain how the funding fool likehe has gone down. So in essence, we started anon for profit organization, called Laj Foundation, Limited, which is a companylimited by guarantee, based here in Australia, that the constitution isderived directly from the Australian charities. Commission templateconstitution that they provide so like most other non for profit organizations.We have a rotating board of directors, a membership face that votes on theirperformance and walslegally obliged to spend the money on the objectives thatare laid out in the constitution. We haven't got registered charity status,yet we have made a submission for that, but e weld hope that that would gothrough and essentially the Prema was conducted by the Loky Foundation andfrom there tokens were sold in a soft agreement format, as many other icoshave done, and from ther their tokens were issued and the moneysits within the foundation. There are other companies and individuals thatreceive funding from lag foundation, limited just basically for convenience,as keeping all of the employees inside lag coundation limidities a bit of aheadache for a lot of the operation team, but that they change in time and that's essentially how it works.Well, were any forest, like a very high degree of transparency with the fundingand then thy other aspect of this as well. Is that baked into the phrotocolis five percent of the block award? Although we r planning on changing thisso that part of this five percent is also sent to a decentralized fundingsystem, similar to what we see in Dash where a small amount can use to fundany project, provided that the service nodes agree to Vode on it, bat for theTimen, five percent goes directly to the foundation, so five percent of allomissions goes to the foundation, but for context, that's actually not a veryhigh fee. Given the current economic situation of Loki. If we look at ourcurrent spending rate on the size of the development EAN that we have and yo assumed it we're beingphysically responsible, the the...

...bloccaward itself is even if Luky wasworth a dollar is only really going to cover about a third of out currentBurnra, which is not sufficient to ha sustain a company in any way. So wehope that people can accept that having a large development teaman helping outas many features as we have been in this short time frame is, is valuableand that Isthis deve tax, as people often refer to it, is not onlyjustified but also less than it should be, and I don't expect that well wantto change it up, but it's certainly a consideration. I think the MUDEL WARMOS closely following and probably a diminished vasion of this is that ofthe zcash foundations. O Zecash Foundation is a registered non forprofit in the United States and they also take a percentage of theblockorwood. I think Fuzzy cashit's twenty percent. Actually, I discoveredsomething very, very curious about the Zcach structure that I find to be very concerning actually, which iswhere the foundation the founders reward, that that twenty percent thatyou mentioned does not go directly to the foundation in any regard. It goesdirectly to people like Zuco and some other employees and other founde. It'sa direct payup to direct payout to to Thos nothesepeople, yeah yeah, that's exactly right andthen from there they donate it to the Zcach Foundation. If ask me, I thinkthat's the complete opposite way to do it, and I don't know what accountabilitymechanisms are put in place to ensure that this system is is fair and just, but we, as far as I can tell there,isn't a lot of public information available on this, which is a concern. So I know that you've. So when I first heard about you, I sawthat Tux from a new cipher was, I believe, an advisor or is the advisoror on your board. I can't remember Um. I haven't told him that we want toinvite him to become a member of the foundation yet but uh better, get tist well cool, so osaareyou working with that group at all or is this like? Are you guys operatingmostly alone? What are your partnerships for getting this stuffgoing? I guess syphe Um. We don't really have any direct workingrelationship with anyone else, other than Tuk he's been providing? U Adviceon some of echrytographys schemes who we be doing architecture, but I've beenhanging out with basically all of the new syper team, Os with them in Berlinh. It was three weeks ago now: Oerat Sone conferences and stuff, and no wehave a. We have a great relationship and we share a lot of informationbetween each Othof, but there doesn't appear to be a way inwhich we can collaborate meaningfully at this time. Who knows that may change?We? We have discussed our proxygreeencription, which is whatthey're working on whuld, be readily implementation implemented as anadditional service on the laky network, but that's kind of stealing thatrthunder and is not that interesting to us like that. It's not our pore focusin anyway shape or form, but we are working on similar solutions to thisincentivization problem so y w. They obviously have a incentive ASE, nonetwork, the Goss stuff off Chainn, so tha. We so we've been talking about thedesire of those systems a bit but yeah yeah. That's what I was kind of hoping there was. It doesn't sound likethere is, but like it seems like these two projects, Ma our marriage maide inheaven, um for their incentivization model and their system versus usingsomething THAs anonymous. Firs spend like yours h. You know it just seemslike the two kindo marry very well together and I was kind of hoping youguys were working together on a project or something but doesn't sound likethat's quite come to fruition at this moment. So we've certaly discussed certain possibilities, but I don'tthink that there is any real drive to do that at Mo Werh, both quite smallteams. We don't have infinite funding, we're working up very specific problems.We just happen to be using a similar model and we happen to have ideologicalalignment on certain issues, but I think that's about as much as we cansay for now. I think it would make a lot more. Senseiv were Wer anys twentyTiken as well, then, like collaboration, would be a lot easier, but sincewhereill orminative block cans base on Menaro makes collaboration with H,Syrium and yc twenty tokens quite difficult, re yeah yeah. So I guess Hel me apoint remain question and H, so this is going to be obviously usedfor Badshit like that's just kelike. Yes, there will be good, legitimate usecases, I'm not going to deny that in fact, there's probably they're,probably going to outnumber Um the Bab ones, but it could. It could clearly beused for bad stuff. I mean you brought it up earlier, politically Um,politically um charged. You know messaging shop,pornography, wuldbe one paying for sex...

...sex trade. These are all things thatare currently you know done through bit coin and narrow, Um, teatore and you'rejust kind of taking those two ideas, an mashing them together Um. What do youfeel like you'R, a obviously you pried in the privacy over everything else, buthow do you feel about your network being used for those kind of usecases? Obviously not good, I mean that'sthat's clear, but we're not unique in any regard when itcomes to this stuff, as you pointed out, we are an amalgamation of previoustechnologies that have also had to face this reality. What has always driven me me personallyanyway, as far as privacy goes, is that privacy is the key tenant of democracy,and if we can't have freedom of thought, we can't have freedom of speech. Thenwe really don't have Leke to stand on when it comes toelecting representatives and having a fully functioning rule of law. So Ithink it's important that we have tools available to US wherever we live to beable to express what we think and what we feel, however controversial it maybe in the eyes of whoever currently holds the rains in the West. Things arevery stable or you know. People realized that with trump coming toparents, some other stuffines in Europe that you know things are always not asalays as stable as they have been, but practically speaking, no one is beingsilenced or Tyet or so we're led to belief. But you know there may come aday in the west and it's coming to the front all of the time in otherparts of the world where Um Democraci is being unemined by the repression of people's voices, soany PRIVAC tools such as Lak critical to maintaining freedoms ofindividuals. I think also, when you make even acursory analysis of the traffic that is actually ontall. You see that aboutninety four percent of the traffic is traffic that is exiting to the normalInternet, so people are just using it prowse the normal Internet. So I I think, like this argument thattors only used or as majority used for Um like you know, Li illicit activities.I think it doesn't really stand by itself when you actually look at thestatistics as well, so totally agrey yeah. The other thing is like a I laddthis to Simon's plan. I think he was very correct about the democracy thing.The other point I would add in in here is like accountability. You really needlike some of these big sed potty organizations. facebooked twitter, youknow even even larger governments, they need accountability and if they controlall of the means for which people can get their information, then there's noaccountability anymore. So this is why we're seein like services like wickylakes, Um, really like blow the lit off a lot of things that were happening inthe government. Th, otherwise, probably would have never gotten out o thepeople so m. We need these kind of. We need these kind of organizations andthe best way for them to to move Ford is to use an anonieanonymizing servicesm like Bicuan, Minera, Lokiand and and Tor. So all of these things, Kinda kind of comehand in hand, I think and hike to think of it as the third EST state ofinformation is kind of what we're kindo looking at here. If you know Frenchhistory, so yeah yeah right as a Finanat for those thatthink that the big cech companies are totally benigned andcapable of of ofdoing nefarious. Things say what you will about Alex Jones, but the factthat it was a coordinated shut down of all of his social media and, basicallyninety percent of his traffic. There was a coordinated shut down of hischannels. That's like something that doesn't happen very often for peoplewho aren't terrorists, and there is no reason to believe that things if they,if things, go sideways, that these companies can't be compelled to dothings like that to people with good intentions or sane opinions, it's all about where theoverton window sits in, while Alextrans definitely Sitson the fringes of thatwindow. I think it's a good example o show that these tach companies have thepower and actively utilize the power to suppress an silence, people and I think,H, Lik developing privatcy toos such asLoky and encouraging the public to have an awareness of these tools in eventslike in in potential futures to come. We can see workaround of petentious censorshipissues that when they see to each other, so I think Um like despite whether ornot you agree with the UM t the message of Alexjones. It's the Umdisplay of power that exists with the companies that to silence them and andand WHA e. What you're trying to do and...

...t a lot of people who are doing shesimilar to you is changing the message from don't be evil to can't be evil and that's and that's that's a veryimportant distinction to make, and I think what a lot of cyptography basedsolutions do is moving it towards the needle of can't be evil. If you removethe option altogether, then you don't have to worry about it said it better than I could, and Ithink that might be a great way to wrap up this episode. Is there anything thatUm we didn't get around to asking you thatyou hope you hoped we would? I I can't think of anything other than if you are pre. If you'reinterested in participating in testing of ane routing protocol, we arecurrently rolling out sort of Alfid test of the grouding Credi call itselfand Um Jeff EU primary developer on this on this project is looking forsome people to help test bebug and so forth it to softwas riating to use thedoksat the moment. If you want to get involved in that pleast go get up.Lakey Project Luk a dash project, slashliky Dash Network. His way you'llfind the routing protocol software wher. You can get involved in helping testin.That is pending of interest to you. You can just look up lurking at or Oene,Wok I'll lad that into the shownotes, so people can just Click O. I, wheneverthe listen with this episode, conveon Ot sm all right, guys things Al Cominon the show Um for those of you listeners. If you enjoy this, pleaselook looki up like this. Episodes subscribed to the podcast on theBickuon Pot, gest network or pashing out by itself. You can find a sonanywhere. You listen, UPODCAST! Tell your friends! TALK TO US! SonTwitter Join US on a slack, do whatever you can reach out thanks coming on.

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