I'm Miles Richardson, one of the authors. This research was my Yale senior project, in collaboration with fellow student Mainak Ghosh, Professor Bryan Ford, and Tor community leader Rob Jansen. I thought now was a good time to post, with the EFF initiative on the front page of HN.
We will be presenting our research at the HotPETS 2014 privacy conference in Amsterdam, in July. Please come by if you can. :)
At a glance, the point of this research is to introduce an alternative cryptocurrency, called TorCoin, that rewards relays with coins for transferring bandwidth. Relay operators can then sell those coins on any altcoin exchange. TorCoin is like Bitcoin, but it's bandwidth intensive, rather than CPU intensive. So in effect, relay operators "mine" TorCoins and make money selling them on exchanges.
Let me know if you have any questions or want to discuss. The next step is developing a prototype, and/or a network simulation to run experiments. Anyone interested in helping, let me or any of the authors know. Email is [email protected]
It also appears to rely on trusted authorities who could simply lie to their own advantage, and appears to suggest no strong mechanism to make this process robust against sybil or collusion. E.g. I can just very cheaply claim to be running millions of nodes— 99.99% of the whole network, unless you pin the existence of trusted participants who could at least force my fake nodes to be reachable (and even then botnets make forgery inexpensive), but if you go the route of pinning certain trusted participants, why not just have them hand out the reward?
While this might be an interesting resource allocation technology, and tor itself has strong assumptions about non-collusion of directory authorities (and their services like bandwidth authorities), it seems disingenuous to compare it to Bitcoin.
What would give "TorCoins" value? It is obvious relays would sell their coins on some altcoin exchange, but who would be purchasing these coins? It seems that the only people purchasing TorCoins would be people looking to donate to Tor relays (this is a totally valid use case, but I was wondering if you have something else in mind.)
Proof of bandwidth is an innovate idea in the cryptocurrency space, but it seems a weak point is "make money selling them on the exchange".
If that is their only value - if there is no economy built around them and they have no purchasing power on their own - then they'd only see a brief pump-and-dump rise/fall like any other new altcoin.
Certainly it's an experiment worth trying, but if its sole value is in its potential for exchange, I don't see anything preventing it from becoming yet another short-lived altcoin.
Then again, the same could be said of many coins out there now that have been lingering whole weeks* without dropping to 0 value
Assuming that there will be more nodes on the Tor network as a result of a financial incentive for running such nodes, how will the TorCoin deal with over supply of nodes, therefore the drop in payout per node?
Can TorCoin be used to subsequently purchase more bandwidth? How would this bandwidth differ from the free bandwidth? Lower latency?
TL;DR: why don't you call your paper "TorCoin.pdf" instead of "paper.pdf"?
Minor nitpick: what is up with PDF naming? When I "save" the PDF to my computer I don't even get the choice to rename it (I guess I could configure that but I am too lazy). So now I have a PDF called "paper.pdf" on my HD. If I ever want to find the paper on TorCoin again, it will fail. This problem seems very common in the world of academic papers.
Ok, 90% of these "useful mining" projects get the economics backwards. Paying coins to miners does not generate demand for the coin! The miners (in this case, tor nodes) will sell and push the price to the ground. Who will buy the coins? Other altcoin enthusiasts who also don't get the economics?
(And yes, this argument theoretically applies to Bitcoin, but you have to use bitcoins to pay the transaction fee to use the bitcoin network, which has value because of its network effect for use in value transfer).
Your last statement is circular. "Network effect in value transfer" exists only when there is "network effect in seeing value in BTC units". You can't transfer value before something has value. Also, act of transferring or fees does not generate value either.
Bitcoin units are rare collectibles. Like gold coins or USD paper bills. They are scarce, hard to counterfeit and they are portable and fungible. They are easy to collect. Once you have a club of people who collect them and speculatively value them, this club can grow (or shrink). If such token is superior than others, then some people will likely sell their inferior tokens in order to acquire superior ones. This way the club grows.
Plus, there is value in liquidity. People generally want to store wealth in something "secure" which means not only secure in terms of storage (personal vault, swiss bank account etc.), but also in terms of purchasing power. The more and quicker I can buy myself something I suddenly need, the more secure my wealth is. E.g. if my computer breaks and I need a new one, my cash will help me buy a new one better than a collection of postal stamps. So people will generally prefer to keep savings in money that is more marketable, i.e. valued by more people. This means that once a superior collectible starts to grow, it will drive the value of inferior collectibles down to zero. (However, if there are currency controls and banking regulation in your country, then you might be stuck with a less marketable local currency.)
I would like to comment that while the intentions seem very good, I think it may be a severe mistake to use monetary compensation as a means to increase the number of TOR relays.
Framing a situation as an economic transaction has been shown to interfere with other motivations. The classic research paper would be
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=180117
where introducing a fine to make parents pick up their children at daycare considerably worsened the situation. The interpretation is that behaviour that was evaluated in a context of prosocial motivations such as being decent towards the staff, keeping a good relation with them, etc, were supplanted by a view that 'it's worth the cost of the fine'.
It is worthy of note that going to an economic reference frame is often easy whereas going from an economic reference frame to one based on social values is frequently difficult - it certainly can't be expected to recover spontaneously just because the money is taken out of the picture again.
Now, TOR is very much about prosocial values - liberty, free speech, the right to communicate without being unjustly surveilled, and so on, and because of that, I think it is potentially quite vulnerable to these kinds of effects.
I think there is a substantial chance that running a TOR node is not going to be worth the economic profit in the long run, but that shouldn't matter, because running a TOR node is about something other and something more important than making an economic profit.
If we start framing it as a business transaction there is a risk we hurt the (in this context) much more important motivations to operate a node.
I think the TOR initiative should be developed on motivation based in the human rights values it naturally supports.
And in this case I believe the option of monetary compensation is genuinely at odds with that.
I'm somewhat sad to be saying this, because as I mentioned, it seems to me that the project is based in the best of intentions. Some components of the TorCoin system may be valuable for other service functions in the network.
I summary, I think the psychological effects of introducing the compensation scheme really should be carefully evaluated before any attempts to introduce it in practice. My spontaneous impression is that it is the wrong method of motivation for growing and maintaining the TOR network and should not be introduced at such. If it is after all introduced, that should be done in a manner that is informed of the psychological consequences.
As a preferred alternative we should emphasize the social and ideological benefits of TOR for core motivation and lower the threshold for contributing by making it technically trivial for the contributor and by making the situation as clear as possible about risks and benefits of operating a node.
It's much better when running a Tor node is a decision that is evaluated in an economic reference frame.
There are very few tor nodes currently because there societal incentive is very low. If you can actually start making money off it, many more people will start doing it. It's a concept so basic I'm wondering how one can miss it.
And the paper you linked to not applicable to the situation at all.
On the positive side, such system could help producing symbiotic relationship with new projects. P2P has for example been discourage because of the damage it could cause to the performance in the network. However, with an enforceable share ratio system in place, you could make sure P2P contributed as much as it used.
And with more users, the privacy is increased. That said, incentive schemes are famous topics for sociology and economics research, so there is validity in being careful.
I think that situation is very different. Tor nodes operators are running nodes not for Tor users. They are running nodes for idea of free, open Internet. They don't ever socialize with Tor users. Social as in "pro my individual view of society" and social as in "pro my relations with people around me" are two totally different meanings.
Parents interact with daycare staff. Tor relay operators don't interact with Tor users.
I would argue that the underlying activity that leads to a cryptocoin being awarded has been the single point of flaw that prevents it from being reliable. If running a tor node and you are able to contribute to the greater good, I think that is a far more valuable proposition than calculating increasingly complex problems across multiple graphic cards that produces absolutely no value other than consume electricity and generate pollution.
I can definitely see the problem if an incentive was offered say on a stackoverflow type of website, because it would directly hinder the quality of the questions but in the case of running a Tor node, it's only a matter of turning it on or off. If someone decides to run it on a better hardware, they would be compensated more.
I'm really excited for TorCoin, it is a serious alternative to Bitcoin.
Couldn't a tor client establish a bitcoin micropayment channel[1] with each relay node instead? This seems much simpler than introducing a separate currency based on proof-of-bandwidth.
I've been running a small exit node for over 5 years, with three providers, none of which have complained (I'm in the netherlands, that might matter).
there's one disadvantage though : a lot of sites refuse my ip because it's an exit node. which is no problem because all my own traffic runs through a vpn anyway...
[+] [-] chatmasta|11 years ago|reply
We will be presenting our research at the HotPETS 2014 privacy conference in Amsterdam, in July. Please come by if you can. :)
At a glance, the point of this research is to introduce an alternative cryptocurrency, called TorCoin, that rewards relays with coins for transferring bandwidth. Relay operators can then sell those coins on any altcoin exchange. TorCoin is like Bitcoin, but it's bandwidth intensive, rather than CPU intensive. So in effect, relay operators "mine" TorCoins and make money selling them on exchanges.
Let me know if you have any questions or want to discuss. The next step is developing a prototype, and/or a network simulation to run experiments. Anyone interested in helping, let me or any of the authors know. Email is [email protected]
[+] [-] nullc|11 years ago|reply
While this might be an interesting resource allocation technology, and tor itself has strong assumptions about non-collusion of directory authorities (and their services like bandwidth authorities), it seems disingenuous to compare it to Bitcoin.
[+] [-] isaacwaller|11 years ago|reply
Looks really cool by the way.
[+] [-] GrinningFool|11 years ago|reply
If that is their only value - if there is no economy built around them and they have no purchasing power on their own - then they'd only see a brief pump-and-dump rise/fall like any other new altcoin.
Certainly it's an experiment worth trying, but if its sole value is in its potential for exchange, I don't see anything preventing it from becoming yet another short-lived altcoin.
Then again, the same could be said of many coins out there now that have been lingering whole weeks* without dropping to 0 value
1. some have even been surviving for months...
[+] [-] rgbrgb|11 years ago|reply
[+] [-] notastartup|11 years ago|reply
Can TorCoin be used to subsequently purchase more bandwidth? How would this bandwidth differ from the free bandwidth? Lower latency?
[+] [-] facepalm|11 years ago|reply
Minor nitpick: what is up with PDF naming? When I "save" the PDF to my computer I don't even get the choice to rename it (I guess I could configure that but I am too lazy). So now I have a PDF called "paper.pdf" on my HD. If I ever want to find the paper on TorCoin again, it will fail. This problem seems very common in the world of academic papers.
[+] [-] chatmasta|11 years ago|reply
[+] [-] jabgrabdthrow|11 years ago|reply
(And yes, this argument theoretically applies to Bitcoin, but you have to use bitcoins to pay the transaction fee to use the bitcoin network, which has value because of its network effect for use in value transfer).
[+] [-] oleganza|11 years ago|reply
Bitcoin units are rare collectibles. Like gold coins or USD paper bills. They are scarce, hard to counterfeit and they are portable and fungible. They are easy to collect. Once you have a club of people who collect them and speculatively value them, this club can grow (or shrink). If such token is superior than others, then some people will likely sell their inferior tokens in order to acquire superior ones. This way the club grows.
Plus, there is value in liquidity. People generally want to store wealth in something "secure" which means not only secure in terms of storage (personal vault, swiss bank account etc.), but also in terms of purchasing power. The more and quicker I can buy myself something I suddenly need, the more secure my wealth is. E.g. if my computer breaks and I need a new one, my cash will help me buy a new one better than a collection of postal stamps. So people will generally prefer to keep savings in money that is more marketable, i.e. valued by more people. This means that once a superior collectible starts to grow, it will drive the value of inferior collectibles down to zero. (However, if there are currency controls and banking regulation in your country, then you might be stuck with a less marketable local currency.)
Nick Szabo explains how money evolved: http://szabo.best.vwh.net/shell.html
I explained why we all want one universal money: http://blog.oleganza.com/post/54121516413/the-universe-wants...
[+] [-] etiam|11 years ago|reply
Framing a situation as an economic transaction has been shown to interfere with other motivations. The classic research paper would be http://papers.ssrn.com/sol3/papers.cfm?abstract_id=180117 where introducing a fine to make parents pick up their children at daycare considerably worsened the situation. The interpretation is that behaviour that was evaluated in a context of prosocial motivations such as being decent towards the staff, keeping a good relation with them, etc, were supplanted by a view that 'it's worth the cost of the fine'. It is worthy of note that going to an economic reference frame is often easy whereas going from an economic reference frame to one based on social values is frequently difficult - it certainly can't be expected to recover spontaneously just because the money is taken out of the picture again.
Now, TOR is very much about prosocial values - liberty, free speech, the right to communicate without being unjustly surveilled, and so on, and because of that, I think it is potentially quite vulnerable to these kinds of effects.
I think there is a substantial chance that running a TOR node is not going to be worth the economic profit in the long run, but that shouldn't matter, because running a TOR node is about something other and something more important than making an economic profit. If we start framing it as a business transaction there is a risk we hurt the (in this context) much more important motivations to operate a node. I think the TOR initiative should be developed on motivation based in the human rights values it naturally supports. And in this case I believe the option of monetary compensation is genuinely at odds with that.
I'm somewhat sad to be saying this, because as I mentioned, it seems to me that the project is based in the best of intentions. Some components of the TorCoin system may be valuable for other service functions in the network.
I summary, I think the psychological effects of introducing the compensation scheme really should be carefully evaluated before any attempts to introduce it in practice. My spontaneous impression is that it is the wrong method of motivation for growing and maintaining the TOR network and should not be introduced at such. If it is after all introduced, that should be done in a manner that is informed of the psychological consequences.
As a preferred alternative we should emphasize the social and ideological benefits of TOR for core motivation and lower the threshold for contributing by making it technically trivial for the contributor and by making the situation as clear as possible about risks and benefits of operating a node.
[+] [-] VMG|11 years ago|reply
There are very few tor nodes currently because there societal incentive is very low. If you can actually start making money off it, many more people will start doing it. It's a concept so basic I'm wondering how one can miss it.
And the paper you linked to not applicable to the situation at all.
[+] [-] belorn|11 years ago|reply
And with more users, the privacy is increased. That said, incentive schemes are famous topics for sociology and economics research, so there is validity in being careful.
[+] [-] exo762|11 years ago|reply
Parents interact with daycare staff. Tor relay operators don't interact with Tor users.
[+] [-] 3pt14159|11 years ago|reply
[+] [-] DennisP|11 years ago|reply
[+] [-] notastartup|11 years ago|reply
I can definitely see the problem if an incentive was offered say on a stackoverflow type of website, because it would directly hinder the quality of the questions but in the case of running a Tor node, it's only a matter of turning it on or off. If someone decides to run it on a better hardware, they would be compensated more.
I'm really excited for TorCoin, it is a serious alternative to Bitcoin.
[+] [-] naturalethic|11 years ago|reply
[+] [-] wcoenen|11 years ago|reply
[1] https://bitcoinj.github.io/working-with-micropayments
[+] [-] furyg3|11 years ago|reply
Assuming I'd like to 'donate' to TOR by just running a node myself, what would be a cost-effective hosting provider to use for this?
This would be a relay node, not an exit node (I can imagine that hosting providers wouldn't be so happy about exit nodes).
[+] [-] tech-no-logical|11 years ago|reply
there's one disadvantage though : a lot of sites refuse my ip because it's an exit node. which is no problem because all my own traffic runs through a vpn anyway...
[+] [-] jaekwon|11 years ago|reply
[+] [-] chris123|11 years ago|reply
[+] [-] aburan28|11 years ago|reply
[+] [-] blahbl4hblahtoo|11 years ago|reply
[deleted]