News

Hackers donate 90% of profit to charity 2019/06/13

NGI Zero awarded two EC research and innovation actions 2018/12/01

EC publishes study on Next Generation Internet 2025 2018/10/05

Bob Goudriaan successor of Marc Gauw 2017/10/12

NLnet Labs' Jaap Akkerhuis inducted in Internet Hall of Fame 2017/09/19

 

Discover and move your coins by yourself

[Discover and move your coins by yourself]

The numerous technologies behind cryptocurrencies are probably the most difficult to understand compared to any other networks, even for technical experts - and especially bitcoin based networks. Most users, even those familiar with the technology for years, have to rely on wallets or run/sync full nodes. Empirically we can see that they usually get lost at a certain point of time, especially when said wallets dictate the use of new "features", like bip39 and alike, multisig, segwit and bech32. Most users don't understand where their coins are and on what addresses, what is the format of these addresses and what are their seeds and what they need to unlock their coins. This situation pushes users to give their private keys to dubious services, resulting to the loss of all of their coins. The alternative is to let exchanges manage their coins, which removes their agency and puts them at risk. The goal of this project is to correct this situation allowing people to simply discover where are their coins and what are their addresses, whatever features are used. It will allow them to discover their addresses from one coin to another, rediscover their seed if they lost a part, sign/verify addresses ownership, discover public keys from private keys and create their hierarchical deterministic addresses. In fact, all the tools needed to discover and check what is related to their coins - and this for any bitcoin based network, in addition it allows them to create their transactions by themselves and send them to the networks, or just check them. The tool is a standalone secure open source webapp inside browsers that must be used offline, this is a browserification of a nodejs module that can be also used or modified for those that have the technical knowledge.

Why does this actually matter to end users?

Connecting and sharing without a central authority giving permission is what drew users to the internet in its early days. Users could decide for themselves who they wanted to meet and what they did online. This freedom helped break down barriers, although we now know the technology can also be used to put users in a straitjacket and keep tabs on them.

The same dilemma exists today for digital currencies. Unsatisfied with how states and banks handle traditional currencies, they were promoted as a way for people to take back control over their finances. They offer an "internet first" way of make transactions without neither interference nor protection of the traditional system. Digital currencies have been around for over 35 years, but only a decade ago they became a mainstream success when some unknown person(s) put the software for "Bitcoin" online. Bitcoin left many things to be desired, though. Digital currencies are big business, and being at the right place in the right time can and has make a few people very rich. Many attempts have meanwhile been launched, including efforts backed up by large social networks, banks, filesharing technology vendors, etc.

At some point in time this turned into a real hype, resulting in millions of normal people around the world speculating on the future value of these coins. Some people got crazy enough to sell their house, often with very limited understanding of the technology or economy behind it. To make things even more confusing, in order to gain market acceptance, new coins will assign rights to people that already own older coins. So that means one moment you own a coin in one currency, and the next you own some coins in another as well. Of course, this allows for innovation - with the original author(s) of bitcoin still unknown, but also from a philosophical perspective, noone can claim to be the 'ground truth'. So in the end the real value of digital currencies is trust based, although some attempts to financially back them up somehow (so called stablecoins) are being made as well. In the absence of any oversight or proper governance simple pyramid schemes could lead to gullible consumers losing lots of money.

The abundance of technologies and currencies is sure anyhow to leave users puzzled. Meanwhile there are thousands of offerings, many of which of which have confusingly similar names like Bitcoin Classic, Bitcoin Gold, Bitcoin Diamond, Bitcoin Atom, Bitcoin Private, etc). Many claim technical innovations in the complex blockchain backbone, and of course everyone claims to have the next big thing on their hands. There is a real snag there. If you give some online service the secrets to claim your near worthless new coin, they may be able to use that and steal money from your other coins. Users depend on trustworthy tools to handle technological components. But who will perform this community service? In the absence of such tools, greed and ignorance will drive users to shady service providers or code they happen to find on the internet. This make them vulnerable to theft or abuse.

This project wants to put users back in control and at the same time restore the key role that cryptocurrencies were created for in the first place. Speculation is not the right driver, real world usage is. Within their browser users will be able to check which coins they have and in which amounts. They can create transactions by themselves even for smaller coins and sign off on these transactions, without running the risk of someone running away with all their money. The tool should be usable and valuable for both coin holders with relatively little technological knowledge of cryptocurrencies as well as for the more technically inclined, who are free to contribute to the app and modify it in any way they see fit. Creating transparency and improving discoverability of innovative new solutions contributes to a faster and more fair convergence. And doing so in a public benefit way, leaving control in the hands of the user, is essential to help build sustainable public trust in cryptocurrencies as a valid financial system. In the end, euro's nor dollars or renmibi can be sent via email - so for the next generation internet we will need next generation payment systems.

Logo NLnet: abstract logo of four people seen from above Logo NGI Zero: letterlogo shaped like a tag

This project was funded through the NGI0 Discovery Fund, a fund established by NLnet with financial support from the European Commission's Next Generation Internet programme, under the aegis of DG Communications Networks, Content and Technology under grant agreement No 825322. Applications are still open, you can apply today.

Calls

Send in your ideas.
Deadline October 1st, 2019.

 

 
Last update: 2019/05/15