Re: [Bitcoin-development] A look back and a look forward

[Mike Hearn <mike@plan99.net>]

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>
> This needn't be so, once an optional identity layer, modeled after the
> Internet itself, is provided, as proposed in late August of last year on
> this mailing list
>

I think the observation about Target vs Bitcoin exchanges is a sharp one,
but I'm not sure how your proposal helps. You say it's an optional identity
layer, but obviously any thief is going to opt out of being identified.

For things like the Bitstamp hack, it's not clear how identity can help,
because they were already doing KYC for all their customers. To take that
further at the protocol level would require* all* transactions to have
attached identity info, and that isn't going to happen - it wouldn't be
Bitcoin, at that point.

I think that long term, it's probably possible to defend private keys
adequately, even for large sums of money (maybe not bitstamp-large but
we'll see). You can have very minimalist secure hardware that would have
some additional policies on top, like refusing to sign transactions without
an identity proof of who controls the target address. Very tight hot
wallets that risk analyse the instructions they're receiving have been
proposed years ago.

No such hardware presently exists, but that's mostly because
implementations always lag behind a long way behind ideas rather than any
fundamental technical bottleneck. Perhaps the Bitstamp event will finally
spur development of such things forward.

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