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The Little-Known Ways Ethereum Reveals User Location Data

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“People don’t realize how much information is out in the open.”

That’s Péter Szilágyi, an ethereum core developer who manages development on the ethereum software client Geth. He’s referring to the fact that little attention has been paid to ethereum’s underlying network layer, where information is exposed in complex, unpredictable ways.

Indeed, there’s an awareness of the implications of such exposure that’s given rise to an ongoing acceleration in research on how to better obscure user data at the application level, which sits on top of a fully transparent system that publishes smart contract and transaction data the blockchain itself.

In an interview, Szilágyi described the peer-to-peer components that underlie the world’s second-largest blockchain by market capitalization as a “black magic thing.”

This state of affairs was highlighted during his talk at the annual developer conference, Devcon4, in Prague last week. Szilágyi detailed a number of concerns that could cause user metadata to leak out over time – and under the worst-case scenario, provide the basis for an accurate, global map of ethereum user locations.

During last Friday’s talk, Szilágyi focused on two ways in which this could happen, with a focus on websites like popular blockchain explorer, Etherscan, and “light clients” such as mobile or browser-based apps.

“When people are transitioning away from full nodes they are giving up certain guarantees and I just want to highlight what potential issues might arise,” Szilágyi told CoinDesk.

Szilágyi began encountering the issues following his pursuit of a side project: an alternative to Facebook that is decentralized and private-by-default. As a result of the research, Szilágyi said metadata leaks make it difficult to interact anonymously with others.

“We don’t have that in ethereum,” Szilágyi explained. “The reason why these leaks began to bother me is because of that project.”

Speaking on Friday, Szilágyi said that many of the problems are so deeply ingrained that it’s hard to address them without running the risk of breaking applications that run on top of ethereum. Still, the developer detailed methods that could alleviate the risk for users.

“Most people in blockchain and ethereum they want to build on top, while there’s a team at the bottom doing the dirty work,” he told CoinDesk, adding:

“It’s not that they are unsolvable problems, but someone needs to understand that they exist.”

‘Weird trackers’

During the Devcon talk, Szilágyi broke down the various ways in which sensitive user information can be exposed by interacting with ethereum.

Taking the example of Etherscan, Szilágyi said that a particular combination is revealed to the website when users access it – namely, a link between a user’s IP address and their ethereum address.

And that’s notable because, as a unique computer identification number, an IP address reveals user location data – which could constitute a high risk when combined with ethereum wallet accounts.

And again, similar to the ethereum discovery protocol, this can be

done publicly by everyone.”

Best practice

Unfortunately, according Szilágyi, there’s no simple fix for many of these problems, as some are inherent to how light clients and explorers function.

But still, speaking to the audience on Friday, the developer had precise recommendations to share with ethereum users and developers going forward.

Specifically, Szilágyi broke down three ways in which this information can be better concealed in the immediate-term.

First, he argued that users should run full nodes. While more hardware intensive, full nodes mean you can store all data locally and can access that data without interacting with anyone else. Additionally, because full nodes verify that ethereum’s underlying state is correct, running a full node comes with security benefits as well.

“Although people don’t like full nodes, full nodes are actually the best anonymizers in the ethereum ecosystem,” Szilágyi said.

Secondly, Szilágyi contended that developers should look to the work that has been done by anonymizing network layers, such as Tor browser and I2P, for research on how to better conceal metadata leaks at the network level.

“Privacy on ethereum is bad, really, really bad. But that doesn’t mean that it’s an impossible task to solve,” he said. “There have been 20 years of research going into how to do this properly, so let’s at least try to learn from their results and try to fix it.”

Lastly, Szilágy urged developers not to blame users for bad privacy practice when interacting with ethereum. He also noted that many users may be unaware that options like the Tor browser exist in the first place.

As such, Szilágy said: “It’s kind of up to us as dapp and platform developers to figure it out and fix it.”

With this in mind, Szilágy ended on a note of caution. Pointing to Facebook as an example, the developer said that when privacy-enforcing characteristics aren’t embedded at the start, such an approach might carry repercussions in the future.

“I don’t think Facebook was created to gather user data, it wasn’t created to abuse elections, that kind of just happened,” Szilágy said, concluding:

“We don’t want to fix it to protect users from not only external attacks – I think it’s really important to also highlight that we want to protect users from ourselves too.”The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Source :  CoinDesk

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Russian Central Bank Head Says “No Obvious Need” to Issue a National Cryptocurrency

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Speaking at the Finopolis forum of innovative financial technologies, Elvira Nabiullina, Russian economist and head of the Central Bank of the country said the regulator doesn’t see a need to issue a national cryptocurrency, reported Russian News Agency, Tass.

“As Russia’s Central Bank, we have been studying this topic and the need to issue a national cryptocurrency is not obvious for us,”

said Nabiullina addressing Deputy Governor of the People’s Bank of China Fan Yifei.

“Not only for technological reasons, but also because it is (difficult) to really estimate what advantages will the national digital currency give, for example, in comparison with existing electronic non-cash payments. There are many risks, and the advantages may not be obvious enough,”

she added.

Back in July, Nabiullina said that one day the institution could launch its own digital currency but

the technology must ensure “reliability and continuity.” But at that time as well, she said that fiat currency settlement systems are improving and already have

“good dynamics.”

She has repeatedly pointed out in the past that the regulator does not support the legalization of cryptocurrencies as a legitimate payment facility.

Earlier the lower house of the Russian parliament, the State Duma adopted a bill on digital assets.

Meanwhile, Fan Yifei said China is exploring the possibility of creating a national cryptocurrency. He believes it is important to cooperate with other countries so that regulatory standards could be developed.

After five years of research, China is finally ready with its cryptocurrency which is expected to launch soon.

Fan YiFei didn’t specify the launch date but said first there is a need to conduct studies and also take into account other countries’ experience.

Source: bitcoinexchangeguide

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1xBit

Cryptocurrencies and esports: reshaping modern gambling

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Over the course of many centuries, gambling has proven to be very versatile and adaptive to innovations. Presently, it is going through the phase of transition from being reliant on brick-and-mortar casinos, with their limited capacity, regulatory issues, and inability to reach a broad audience, to running the operations solely on online platforms. The emergence of blockchain only incentivized the process of digitization of this industry. 

Cryptocurrencies are the next evolutionary step for gambling

While Bitcoin, the first and the most influential cryptocurrency that still exerts total dominance over all other coins, wasn’t created to serve the needs of the gambling industry specifically, it paved the way for other representatives of this space.

Projects like TRON and EOS are fundamentally designed to disrupt the world of gambling by providing it with such tech solutions as provably fair algorithms for casino games, decentralized gambling applications, and, of course, cryptocurrencies to fuel these ecosystems.

But in order to apprehend the benefits of a symbiosis between cryptocurrencies and the industry of gambling, it is necessary to understand what is crypto, how it works, and what it can bring to the table.

A cryptocurrency is a type of digital asset with strong cryptography features at its core, designed to eliminate the need for a trusted third party, such as banks, to confirm and/or carry out the financial transactions. But what makes crypto and gambling go together like peanut butter and jelly is the nearly total anonymity of digital currencies, the promptness and cheapness of transactions, and the substantially enhanced security. While traditional casinos demand plenty of sensitive information from gamblers (i.e., banking details, real name, date of

birth), the crypto enthusiasts have to reveal nothing but public keys when making a deposit/withdrawals. The transactions usually take no longer than a few minutes and are carried out at an almost negligent fee.

These are the primary reasons why the industry is currently witnessing the emergence of all-for-crypto gambling platforms, such as 1xBit which accepts more than 30 cryptocurrencies, assures total anonymity through the provision of the one-click registration, effortless and low-cost deposits/withdrawals, and, of course, an abundance of casino games and sports betting opportunities.

1xBit places a particular emphasis on esports since this up-and-coming phenomenon represents another disruptive factor for the gambling industry that moves in parallel with the adoption of cryptocurrencies.

Esports make the grand entrance

For decades, video games have been considered as nothing more than a form of recreation. However, the rapid development of Internet technologies and the overall sophistication of online games, along with the acquisition of the global audience, had turned this form of activity into a fully-fledged sport. 

Nowadays, world championships in such disciplines as Dota 2, Counter-Strike: Global Offensive, and League of Legends draw millions of spectators from around the globe. The recognition of esports has reached such a level that the International Olympic Committee considers introducing esports to the official program of the 2024 Olympics in Paris. 

Such an unprecedented surge in popularity made esports one of the main destinations for tech-savvy online sports bettors who are well aware of the benefits that cryptocurrencies will bring to this space. The crypto-oriented platforms, particularly 1xBit, took on the task of being a meeting point for cryptocurrencies, esports, and betting. There is no doubt that this combination will shape the future of the gambling industry. 

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China’s CBDC initiative fills private cryptocurrencies’ missing elements

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The latest Binance Research, while showcasing China’s CBDC initiative, highlighted its possibility of being a renminbi (RMB) replacement. Creating a buzz in the context, the report read,

“The People’s Bank of China plans to replace China’s M0 money supply with its CBDC. Several potential improvement areas were discussed as reasons to justify this move including retail payments, interbank clearing and cross-border payments.”

Moreover, as the Chinese CBDC targets to be a substitute for China’s M0 supply, CBDC-holders would not receive any interest from the central bank if it is not parked in any financial institutions. This will ensure that China’s crypto initiative “would not compete with commercial bank deposits, and would not have a noticeable impact on the existing economy in this regard.”

Interestingly enough, China’s CBDC initiative includes

“some of the missing elements” that is predominantly lacked by the private currencies. The two-layer network setup is also speculated to achieve transaction performance of “at least 300,000 transactions per second.”

Source: Binance Research

The above graph displays PBoC’s “one coin, two repositories, and three centers”approach, which was previously proposed by Yao Qian, the former head of PBoC’s Digital Currency Research Institute. Concluding the report, Binance Research mentioned,

“Despite one of the end-goals from this digital currency initiative being to further internationalize the renminbi, it remains to be seen what legislation would apply on cross-border payments.”

While the report uncovers various technical aspects of China’s crypto initiative, it remains unclear whether that individuals, based outside of China, would rely on the Chinese central bank to both maintain a consistent monetary policy and to protect their financial privacy.

.Source: ambcrypto

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