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IOTA: Collaborative consensus not vulnerable to censorship and dust attacks

  • IOTA developer Hans Moog clarified his comments on the “collaborative consensus” of the Tangle and substantiated his assumptions as to why it is superior to both Proof of Work and Proof of Stake systems.
  • Moog also refuted the supposed vulnerability of the consensus to censorship and dust attacks.

As CNF reported yesterday, Hans Moog, developer at the IOTA Foundation, has posted an argument on Twitter why a “collaborative consensus” of the IOTA Tangle will be superior to both the Proof of Work and Proof of Stake. Moog argued that a Distributed Ledger validated by the “economic actors of the world”, such as corporations, foundations, states and people, is more secure than a Distributed Ledger driven by an “anonymous group of wealthy crypto holders”.

Hans Moog’s statements partly met with incomprehension and confusion in the IOTA community, so he decided to clarify his statements in a series of tweets. Moog emphasized several times that his scenario is not “the immediate future of IOTA”, because the Tangle will introduce Mana as part of the Coordicide upgrade. Instead, Moog said, he was speaking “more of a world where DLT has already become an integral part of our lives”.

The key message was that the Proof of Work (PoW) as well as the Proof of Stake (PoS) via sharding become less secure “because you simply need fewer coins or less hash power to have the majority of votes in a shard”. According to Moog, this is not the case in a “collaborative consensus”:

This is not the case with trust in society and the economy. If all the companies in the world together secure a DLT then these companies could install any number of servers in any number of shards without compromising security, because “trust” does not decrease just by running multiple servers. This is first of all a fact and nothing else.

As Moog further stated, the validators in a Proof of Work or Proof of Stake are driven by one maxim, namely greed (“In the greed of miners we trust!”). Accordingly, “the basic assumption that the miners do not destroy the system that provides them with income […] is fundamental for the security of any DLT”. It would be similar in a collaborative consensus, except that the economic actors provide greater security:

I think a similar assumption would still be correct for the economy as a whole: The companies of this world (and not just the big ones) would not destroy the system their customers use to pay them. To that extent, a system would be which is validated by society and the economy as a whole is probably as “secure” as a system validated by a few anonymous miners. […]

But the point here is not to create a governance solution that has some sort of influence on the development of the technology, or to make nodes give their OK first, but to create a system that allows people to freely choose the validators they trust.

Dangers for the IOTA Tangle? – Censorship and dust attacks

The model presented by Hans Moog was also criticized with regard to a possible censorship. In this regard, the IOTA developer stated that censorship is theoretically not possible because each transaction confirms two other transactions, which grows exponentially. “If someone wanted to ignore one transaction, they would have to exponentially ignore many other transactions after a very short time,” said Moog. He further added: 

In contrast to blockchains, validators in IOTA do not decide what to include in the ledger, but only which of several double spends should be validated. Honest transactions are confirmed simply by being referenced by other transactions, and the “validators” are not even asked.

Another point of criticism also concerned the possibility of a “dust attack”, where hackers try to violate users’ privacy by sending tiny amounts of coins into their personal wallets, thereby identifying the person or company behind each wallet. Moog admitted that “this is indeed something that is more of a problem for IOTA than other DLTs”.

However, they do not pose an unsolvable problem. As Moog discussed, a minimum amount could be introduced analogous to Bitcoin (5430 Satoshis). For IOTA a similar solution would be conceivable and is already being discussed. According to Hans Moog, this would also not be a problem for future applications of IOTA:

And in my opinion this is no problem at all for IOTAs use-case. The important thing is that you can send small amounts of money, but after IOTA feeless it is okay to expect the recipients to send their payments regularly on a merge address. The wallets already do this automatically (sweeping) and for machines it is no problem to automate this process.

So far this has not been a problem because TPS was limited but with the increased TPS throughput of Chrysalis it becomes relevant and solutions are discussed and then implemented accordingly.

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