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From: Peter Todd <pete@petertodd.org>
Date: Tue, 19 Aug 2014 21:27:46 -0400
To: William Yager <will.yager@gmail.com>,
	Bitcoin Dev <bitcoin-development@lists.sourceforge.net>
Message-ID: <e508c8c0-f964-475b-bdfb-6fa8e9547560@email.android.com>
Subject: Re: [Bitcoin-development] Proposal: Encrypt bitcoin messages
Precedence: list

-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA256


On 19 August 2014 21:19:43 GMT-04:00, William Yager <will.yager@gmail.com> wrote:
>On Tue, Aug 19, 2014 at 8:14 PM, Peter Todd <pete@petertodd.org> wrote:
>> In any case, my suggestion of enabling hidden service support by
>default
>> adds both encryption and reasonably good authentication.
>
>
>Enabling hidden service support by default would introduce an insanely
>huge
>attack surface.

Hence my suggestion of separating that surface by using the standalone Tor binary, which runs under a different user to the Bitcoin Core binary.

>And you're conflating two different things; using Tor is valuable to
>Bitcoin because it would provide some anonymity. The encryption aspect
>is
>pretty much useless for us.

First of all, without encryption we're leaking significant amounts of information to any passive attacker trying to trace the origin of Bitcoin transactions, a significant privacy risk.

Secondly the upcoming v0.10's fee estimation implementation is quite vulnerable to Sybil attacks. Authentication and encryption are needed to make it secure from ISP-level targeting to ensure that your view of the network is representative. Tor support used in parallel with native connection is ideal here, as neither the Tor network nor your ISP alone can Sybil attack you. It's notable that Bitcoinj has already implemented Tor support for these same reasons.
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