Thanks for the excellent response, Vitalik! Since you're a lot smarter than me, I'll just take your word for it that jpeg files will be too expensive to store on ethereum, unless a bitcoin dev comes in here and disputes it. So that takes care of the child porn concern. Could a script could still act as a thumbnail browser and download the images from a Tor server if a cryptocurrency payment was made to an address?
I am also not quite sold on the need for ethereum. It seems to me that the blockchain.info trust model or the "query a bunch of servers" model for low value transactions works just fine for bitcoin. Are there any instances where this has been abused yet? For high value transactions, getting a blockchain copy isn't that big a deal, and will continue to be less and less of a problem as Moore's Law for storage and bandwidth continues to outpace blockchain growth (which is continuing to grow linearly despite massively increased usage).
> What will be the effects of illegal contracts? An assassination market, for example? Will the Silk Road be able to run on ethereum?
Theoretically those use cases are possible, but it is important to point out that you can crowdfund assassinations and create a decentralized Silk Road marketplace with Bitcoin too, even directly on the blockchain using assurance contracts. So the regulatory challenges there are fairly similar to BTC, although we do realize that the legal status of second-generation cryptoledgers is less clear; that is why we are interested in working with
CODA.
It seems to me that, just like bitcoin, the first major use case for ethereum will be to make the Silk Road more usable. Instead of having to download Tor Browser Bundle and find a weird random character string to type into a browser, people will just be able to download ethereum and run it to browse and conduct illegal commerce. It will vastly improve the usability of the Silk Road. Can we really expect to be able to run drug marketplaces in the clearnet just because it is decentralized? It seems to me that this will be illegal in every jurisdiction in the world, which is not the case with bitcoin. It seems likely to me that the ethereum website will be seized and people will be prosecuted.
> Is it reasonable to think the client can be sandboxed?
The security model for Ethereum is similar to that of web browsers with Javascript; we'll design our sandbox accordingly.
I don't know a lot about web browser security, but this does not make me feel safe. Exploits are demonstrated often that can break out of the chrome browser sandbox to claim the bug bounty. There is going to be one hell of a reward for finding an exploit and breaking out of the ethereum sandbox.