
TorCoin - chatmasta
https://drive.google.com/file/d/0B7r4osQgWVqKTHdxTlowUVpsVmJRcjF3Y3dtcTVscFhEaW5F
======
chatmasta
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
miles.richardson@yale.edu

~~~
isaacwaller
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.)

Looks really cool by the way.

~~~
chatmasta
Yes -- This is one of the open questions for discussion, and one of the most
important. (HotPETS is a "workshop", which in Academia is the precursor to a
conference... papers are meant to be early stage drafts ready for discussion.
So we are curious how people would be interested in the currency.)

You're right, one of the early reasons for purchasing TorCoins would likely be
donating to Tor. But they are a totally usable altcoin, just like Dogecoin for
example. What reason do people have to buy Dogecoin? Not much, beyond using it
as a currency or speculating with it as an investment. I could see TorCoin
working the same way.

~~~
tribaal
Another use you should consider is to follow the FON model - you can spend
TorCoins to buy bandwidth from people operating networks.

The more bandwidth you share for TOR, the more free wifi you get. If you only
"sell" wifi to torcoin owners, you simply trade internet access time, but
running a tor relay would be like "mining" in the traditional bitcoin world.

EDIT: The point I'm trying to make is that instead of "just" the way to create
torcoins, this would also create a way to spend it (and provide value to
people by spending it).

------
facepalm
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.

~~~
chatmasta
Sorry about that, I changed the name for you. :)

~~~
facepalm
Thanks! Well I think it's not just for me, it's just basic "Search
Optimization" :-) In fact your paper was downloaded as "(paper (2).pdf"
because there was already at least one other paper.pdf in my Downloads folder.

------
jabgrabdthrow
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).

~~~
oleganza
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.)

Nick Szabo explains how money evolved:
[http://szabo.best.vwh.net/shell.html](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...](http://blog.oleganza.com/post/54121516413/the-universe-wants-one-
money)

------
etiam
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](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
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.

~~~
vidarh
> It's much better when running a Tor node is a decision that is evaluated in
> an economic reference frame.

That may be true if the economic incentives available are sufficiently strong,
but that is not a given.

~~~
VMG
Even when the reward is tiny, people will try to optimize the process as much
as possible.

It would also be great if people provided internet content out of altruism and
didn't want any compensation for it, but it doesn't work that way. A lot of
websites can only survive by putting up web-ads, even if the compensation is
pretty low.

~~~
sp332
That's not a given. Here's an example: A daycare center was getting tired of
parents not picking their kids up on time. So they implemented a fee -
something small like $5 for late pickup. The result is that even more parents
left their kids late! The social pressure of not annoying the daycare
employees had been replaced with a monetary transaction: $5 for late pickup,
not a bad deal.

If you start paying people tiny amounts of money to run a Tor relay, they will
calculate that it's not worth it and they will stop doing it.

~~~
VMG
Again, that paper is interesting because in _that specific case_ the results
were counter-intuitive. In the overwhelming majority of instance a financial
reward is an incentive.

Parking fines work because people respond more strongly to the monetary
incentive than to stern looks. Paying doctors high wages works because
monetary incentives work better than handshakes from patients. You don't get a
paper published for that, because it's obvious.

~~~
sp332
_And what 's interesting about this experiment is that it's not an aberration.
This has been replicated over and over and over again, for nearly 40 years.
These contingent motivators -- if you do this, then you get that -- work in
some circumstances. But for a lot of tasks, they actually either don't work
or, often, they do harm. This is one of the most robust findings in social
science, and also one of the most ignored._
[https://www.ted.com/talks/dan_pink_on_motivation/transcript](https://www.ted.com/talks/dan_pink_on_motivation/transcript)
I'm linking to a TED talk transcript because it makes the point better than I
can.

~~~
VMG
Running a TOR node is not what I would call a "creative endeavor". It consumes
electricity and bandwidth, and is a legal risk if it is an exit node.

------
wcoenen
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.

[1] [https://bitcoinj.github.io/working-with-
micropayments](https://bitcoinj.github.io/working-with-micropayments)

------
furyg3
Slightly OT...

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
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...

------
jaekwon
Does this protocol use bandwidth to achieve consensus, or is there another
consensus mechanism such as proof of work assumed to be available?

------
chris123
Who is working on a "BittorrentCoin?

------
aburan28
Maybe this somehow be a away of rewarding bitcoin full-nodes

