Quote from: tubro on June 21, 2011, 01:50:12 PM

Well, thanks for trying. Unfortunately, I find your paper largely confusing and unclear. First of all, what problem do you intend to solve that has not been solved by standard techniques already? Second, I get the impression that you have a poor understanding of the state of the art in applied cryptography. For example, it should not be necessary to transmit the "master key" to the server. If you are trying to build this for your own exchange I suggest hiring someone who has read a book or two about theoretical computer science/cryptography.

Transmission of the master key on trade requests is exactly what keeps it secure; an attacker can not break into the exchange and steal coins without also knowing the master key, which is never stored at the exchange.

Quote

Insert Quote
Hi,

The problem is an organizational one, if you don't trust the exchange in holding the money, the only logical alternative is that a user must make a manual effort to verify the transaction before it is processed. This more or less defeats the purpose of an exchange service that gets its added value because it can act on behalf of the user and large amount of transactions are automatically processed. Otherwise you end up with an ebay for bitcoins.

But perhaps I misunderstood your paper or exchanges in general.

Cheers,

Martin

It's not about trusting the exchange, since you must originally trust the exchange when you make trades (because for that short time, the exchange knows the master key and differencing code); rather it is to prevent attackers from gaining access to your wallet after-the-act.

In the case of MtGox, this system would have prevent the type of attack that was seen; an attacker would not have been able to place large trades on accounts unless they observed the user actually making previous trades.

Quote

Not sure what the point is of establish a wallet for each user, the wallet should be buffered and fire walled off and not even accessible from the web server.

Unfortunately if it's firewalled off and inaccessible, then you're implying that the web server also has no automatic way of transferring coins from the user's exchange wallet into the "Active Transactions" pool, which is not an effective situation for an exchange.