Bitcoin Security and Ethics with Neha Narula

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“I think Proof of Work is very risky, it’s amazing its been working in practice for 10 years”
— Neha Narula

Interview Location: Boston
Interview Date: Thursday 20th June, 2019
Company: MIT’s Digital Currency Initiative
Role: Director

The security of Bitcoin is one of the factors which gives it so much value, and after ten years there still hasn’t been a single counterfeit Bitcoin created, there has never been a successful 51% attack, and the few potentially catastrophic bugs have been fixed without any negative consequences. But how secure is Bitcoin? Is Proof of Work too risky? Can we trust those that are developing Bitcoin to do so with the right ethical judgement?

In this interview, I spoke with Neha Narula, the Director of MIT’s Digital Currency Initiative to talk about these critical issues. We discuss:

  • How the DCI got started

  • Bugs in the Bitcoin protocol

  • Proof of Work being too risky

  • Ethical development on Bitcoin

  • 51% attacks

  • Government controlled crypto

TIMESTAMPS

00:04:55: Introductions 
00:06:14: Touching on the Bitcoin MIT Expo
00:08:02: Delving into Neha’s background at MIT and discussing her remit as Director, at the DCI
00:14:58: Exploring what the DCI decide to work on and prioritize
00:19:23: Discussing the process of disclosing bugs in Bitcoin and other cryptocurrencies
00:27:43: Neha’s thoughts on the biggest security risks in Bitcoin today
00:32:01: Touching on recent cryptocurrency block re-orgs
00:34:05: Discussing the risks surrounding proof of work and Neha’s belief that it needs more research
00:37:31: Exploring the need for ethical development with Bitcoin and the Bitcoin community
00:39:36: Discussing Libra and the dangers of corporation or government controlled crypto
00:46:25: Touching on what Neha is working on currently
00:48:14: Final comments and how to stay in touch

 

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TRANSCRIPTION

Neha Narula: Do you live in London?

Peter McCormack: Just outside, in Bedford. Have you ever been to Bedford?

Neha Narula: I don't think so, no.

Peter McCormack: Nobody does!

Neha Narula: But everybody is complaining about property prices in London, I've definitely heard a lot of that.

Peter McCormack: Well, yeah, it's unaffordable for most people. Bedford has actually really benefited from it because it's 35 minutes on the train, a lot of money's coming into the town and over the last kind of five years it's changed a lot. But I want to live over here! Not In Boston. I mean, Boston is okay, but I'd like to live in America.

Neha Narula: Like in San Francisco or New York?

Peter McCormack: Probably LA.

Neha Narula: Ah LA, okay got it. Boston is like the opposite of LA.

Peter McCormack: Yeah, but I like Boston. I kind of feel home here, both times I've been here. It's quite British in feeling and the hotel I'm staying at is really cool. Do you know The Verb? It's right by Fenway.

Neha Narula: Oh nice, that's fun!

Peter McCormack: Yeah, but annoyingly the Sox aren't playing while I'm here!

Neha Narula: Oh, that's a bummer! It's really fun to go to a game.

Peter McCormack: I'd love to go. I've been to the baseball in LA and it's great.

Neha Narula: But Fenway is a whole different experience, like the locals and Bostonians, it's crazy! I'm hardly a baseball person, but even... It's an experience, go check it out!

Peter McCormack: So I really enjoyed the EXPO.

Neha Narula: Oh, that's awesome, that's right. You were here for the MIT EXPO and who did you interview when you were here then?

Peter McCormack: I interviewed Andrew Poelstra, Christian Decker and Jack Mallers. The conference was really cool. There was a great speaker line up that you got.

Neha Narula: Yeah it's great because the EXPO I think was started in 2014, I want to say and MIT was really one of the first universities who actually got interested in Bitcoin and and I think therefore the EXPO, it's been around quite a while and it has a reputation and people show up for it, which is great.

Peter McCormack: I met Hugo? He looked after me and was great! Actually I should have told him I was here, I totally forgot about it.

Neha Narula: You should have come a couple days earlier. We had our first BitDevs meeting on Tuesday.

Peter McCormack: I know! Nic Carter told me. Was it good?

Neha Narula: It was surprisingly very good. It was the first one, we didn't really know how it was going to go, but it was really good. There was 75 people, which for Boston is kind of surprising and it was great. It was exactly what I wanted, which was going over all of the latest, with what's going on with Bitcoin in some detail.

Peter McCormack: Amazing! How long have you been here at MIT?

Neha Narula: Oh gosh, I've been at MIT for like 10 years now, but I was doing my PhD here. So I moved here in 08/09 to do my PhD and I have not left!

Peter McCormack: What was your PhD?

Neha Narula: Computer science.

Peter McCormack: So you went from a computer science degree to "60 minutes" superstar?

Neha Narula: Yeah, sure! If 2 minutes on "60 minutes" counts as a superstar, sure!

Peter McCormack: I'm tracking you all down, that's why I'm going to see Charlie afterwards!

Neha Narula: Well you got to go to Laszlo, he's great! He's also in Florida.

Peter McCormack: Did he do the first Lightning pizza?

Neha Narula: He might've, yeah. I think that might've been him, yes. He's interested in Lightning too.

Peter McCormack: So at what point did you start becoming interested in, I'm going to stick with Bitcoin rather than... I know you're neutral here, but when was the transition into that and the creation of... Were you here at the start when they first created the DCI?

Neha Narula: No, I was not actually. So I was finishing my PhD and I did not do anything cryptocurrency related during my PhD. Obviously I knew Bitcoin existed. I think I had bought a Bitcoin or two or something like that. I had some very good friends who were quite obsessed with it, Vijay Boyapati and Ben Davenport.

Peter McCormack: Ah so you know Vijay? He's great.

Neha Narula: Yes, we worked at Google together. So they talked about Bitcoin nonstop and were quite obsessed with it and I remember hanging out with them in 2011 in Seattle and just being like, "eh, these guys are crazy!" So I pretty much ignored it. I think someone in my lab might've been secretly mining Litecoin on a computer even.

But I was working in distributed systems for my PhD and it wasn't until I graduated and I actually like stepped back and spent some time trying to think about what I wanted to do next and got a chance to really take a look at Bitcoin and actually figure out how it worked. I think then what happened was, I went down the proverbial rabbit hole immediately and I was just fascinated by it as a technology and during my PhD, I'd never actually taken the time to really understand how it works.

You kind of have a rough idea, right? You're like, "okay, chain of blocks, transactions, minting Bitcoin, transferring them around." But when you really figure out how it works and why it might actually work, it was a breakthrough. So that's what really got me interested. So that summer.

Peter McCormack: So what was your first role then? Did you go straight to Director?

Neha Narula: Sort of, it was really funny actually. So the DCI, I think in large part, was started by this undergrad named Jeremy Rubin and Jeremy also started the MIT Bitcoin club, the MIT Bitcoin EXPO and organized what's called the MIT Drop, the Bitcoin drop, which is when every undergraduate got $100 worth of Bitcoin.

So he was a very precocious undergrad and I really credit him, he's the one who told me about the DCI and introduced me to Joi Ito, who's the director of the media lab. So from then I sort of informally got involved with the DCI and sort of strengthened those formal relations. Then when the first Director left, I took over.

Peter McCormack: Okay. So as Director, what's your remits?

Neha Narula: That's a great question. So we're part of the MIT media lab. The media lab is a lab at MIT and there's lots of other labs at MIT too, but the thing you have to understand, sometimes people expect MIT to operate as a sort of single controlled organization and that is just absolutely not true. There's a lot of people here who are doing a lot of different things and you might even find that there are people doing the same thing who don't even know about each other. So that happens a lot!

The media lab in particular is kind of this crazy place, where there are people who write operas, there are people who do brain surgery on mice, there are people who do art exhibitions, people who study the ethics of self driving cars, it's really quite a mix of different types of things. Usually what you find is that the types of things people are working on, they span multiple disciplines or they don't quite fit cleanly into any single box. So I think cryptocurrency fits that perfectly.

But the thing is, is that the media lab is chaos and so I think really what's great about being in a position like this, is that you kind of get to make of it what you want. So when the DCI was started, it really in part came out of the demise of the Bitcoin Foundation. So the Bitcoin Foundation went through a lot of upheaval in late 2014, early 2015 and there were these three engineers who work on Bitcoin full time who were jobless with the destruction of the Bitcoin Foundation. So through some negotiation they ended up getting hired at the media lab and the DCI was kind of formed around them.

So we still employ two of those Bitcoin engineers, Wladimir van der Laan and Cory Fields. So that is definitely an important part of what we do, is we serve as, what I call one of the pillars of Bitcoin development. So we're a neutral, non-profit university, that is employing people to just work on the Bitcoin open source protocol in whatever way they see fit to do.

Peter McCormack: That's pretty cool!

Neha Narula: Yeah, so it is really cool and it's awesome because it connects us, I think to pretty cutting edge development and yeah, it's just great. So that's one thing we do, which is a little bit unusual for an academic group at a university. So another component of what we do is we work on research.

So I did my PhD here, I wrote research papers, we continue to write research papers. The way to describe it as we're working on... Cryptocurrency is just not ready for a billion users, it's nowhere near! It's not ready for that level for many, many different reasons. We still have a lot of really fundamental problems to solve.

Peter McCormack: Look I've got it written there, "Bitcoin is not ready for billion of users.".

Neha Narula: Yeah, that's my line, which is okay! I mean that's what makes this exciting and that's why I want to work on it. I think if all of the problems were solved, this would be really, really boring. But there are so many problems that we have to figure out and some of them I think are things that people take for granted. Like, "oh yeah, Lightning's going to scale Bitcoin, it's going to be great. It's going to work perfectly!" It's like, "oh gosh, do you realize how complex this is?!" I'm super excited about it.

I think the progress that the different groups working on Lightning have made is outstanding, it's incredible, super excited, but still a lot to figure out, as you've talked about on this show. Then other things like the security, people take proof of work for granted. There's this assumption that hash power and proof of work, it's very expensive to undo and it's infeasible to think about rewriting the Bitcoin Blockchain.

I don't think people have really delved into that question enough and really unpacked what kind of security are we getting from proof of work? What really are the incentives going on in the ecosystem as a whole, not just with the miners and are there things we can do to make it more secure? Are we getting the security we think we're getting from it?

It's important to ask these types of questions, especially as I think people who are very excited about Bitcoin and really positive about it and really believe in the technology and think it's groundbreaking. Not necessarily as people who just want to say, "ah, proof of work, it wastes energy", but people who actually really are interested but want to understand what we're getting out of it.

Peter McCormack: So how do you decide what to work on? How do you prioritize?

Neha Narula: Yeah, so we are 10 people total and we get together and we talk about it and we talk a lot. We talk about everything that's going on. I think one thing that's really important is that we are here in Cambridge, Massachusetts. We are not in Silicon Valley, we are not in New York and so we have some distance from the noise, the tech chatter, the finance chatter, the investment chatter, we're pretty removed from that. A lot of people on my team I think are pretty anti-capitalist to be quite frank! So it's a little bit of a different area.

I'm reminded of, so Paul Graham who started YCombinator, used to write a lot of essays and one of these essays he wrote was about cities and what cities say. When you walk around the city, what kind of message are you getting? What are the values that are coming out of that city? New York is about money and power. LA is about power, but a different kind of power, right?

It's more at least like entertainment power, it's like social power and San Francisco is about living well, that was the way he sort of described it, making an impact on the world. Cambridge is very intellectual, it's about knowledge. You walk around and everyone's a postdoc or a grad student and they're studying some like arcane part of history and people aren't here to just make a bunch of money.

People aren't here to try to impose their will on the world. The people are here to try to understand and create. So I think being in that environment, having people in that environment think about cryptocurrency, is really important. I think it's an important role we serve, that we're not here just to make a bunch of money. We're here because we actually really like the technology and want to understand it. So long way of answering your question, how do we choose what to work on .

We decide, which is pretty great and I think everything we do is driven from this desire to... We have these values posted on our website. We want to figure out how to build this technology for the public good. So that's really, really important. Things like financial inclusion, user empowerment, user control, open access, things like that, sort of, privacy, all of these things sort of influence what we work on.

Peter McCormack: Okay, but you also neutral, you're not a Bitcoin group? But you have a heavy focus on Bitcoin.

Neha Narula: Yeah, so part of our origin story is we came out of the demise of the Bitcoin Foundation and the DCI was started in, I think officially April 2015. So Ethereum I don't think had launched yet. There wasn't really another dominant cryptocurrency. So we launched in that environment. We were always open to potentially supporting developers from other cryptocurrencies.

I think that what ended up happening was that the token sale model took off and a lot of other cryptocurrencies or other alternative funding models, a lot of other cryptocurrencies have Foundations, they have money to fund development. They have these pools of money to fund development. Bitcoin does not have a pool of money to fund development and a lot of people work on it anyway.

There are a lot of very wealthy people in Bitcoin who fund development out of whatever, the goodness of their hearts or because they realize it will make their Bitcoin worth more and I think the people who don't do that, aren't very smart to be quite frank. I don't think they're really doing what they should be doing for their investment.

But yeah, Bitcoin doesn't have that. So part of it is need, where's the need? I think there's a need in the Bitcoin ecosystem for what we do, it's really important. Another part of it is, yeah, we're not biased or pro one coin. Everybody at the DCI has different opinions to be quite frank. Some people probably are maximalists and some people aren't maximalists and believe in other things and that's totally fine.

But I think what underlies everything, is looking for technical credibility and rigor. So where is the technical credibility? Where do we have people who are actually running things in production at scale that really work, who are really thinking through the security, who are working on things that really have a lot of underlying depth to them. That's what we focus on,

Peter McCormack: Which kind of takes you back to Bitcoin mainly anyway! I watched your presentation from the Bitcoin EXPO this morning, because I hadn't seen it before, as I missed your talk and I liked the way you said... Because I just obviously met with Tadge, that he can't just say no! You can't just say everything out there sucks.

But I thought it was a really interesting talk actually and I thought it'd be great to hear about the process you went through for the bug you found and the responsible disclosure side of things. Because what was really interesting to me is with disclosing a bug, all the different things that you had to think about that I didn't even realize you would have to think about. So can we go into this?

Neha Narula: Yeah of course, what were you surprised by?

Peter McCormack: I mean one of the things is that you had to have legal representation. I'm like, "why would you have to have legal representation when you are finding a problem and telling people about it?"

Neha Narula: Yeah, so this is something that I was also not familiar with, because I've never done a bug disclosure before. I'm not, by background, a security engineer. So this was very much new for me as well and I was kind of somewhat surprised, but then when you think about it, it makes sense. I was a little bit surprised to discover that there was this history of security researchers, getting basically being sued by giant companies or organizations or governments for disclosing bugs, which is shocking when you think about it.

Like why would this happen? Don't you want people telling you if there's a problem in your software? But there's this history of, I guess people trying to get security through obscurity. So they think that it makes their software more secure if people don't know about it or don't know what's going on with it. Obviously if you disclose a bug in something, it can affect reputation and oftentimes people who write something are incentivized to not necessarily want to see the same things that someone who doesn't have those incentives might see. I think that's the real core of the problem and that's pretty prevailing in cryptocurrencies.

So what you end up with, is you end up in these situations. So we were really lucky in that, because a couple of the people that on our team were students at BU and MIT, we had access to the Boston University Legal Clinic and shout out to that legal clinic because they did a bunch of free work for us, which was very nice of them. Maybe we were being paranoid, but I don't think so because we did receive some sort of legal threats on Twitter, whatever that's worth. So I'm really glad that we had that and we had them able to look at stuff.

It's really scary. The Computer Fraud and Abuse Act is very broad and can be interpreted... Basically I was afraid to send a message to a server that I didn't control, that's kind of where we drew the line, was we're not going to send any messages, any network messages to any servers that we don't control and own. So it's kind of weird when you think about it, but you have to protect yourself I think.

Peter McCormack: Yeah, it just wouldn't have crossed my mind, but then also another thing I guess that wouldn't have crossed my mind is that, you also have to be careful how you disclose it, because a bug in one cryptocurrency, would likely appear in many, because many are just forks. So if you disclose it to the wrong person, they might try and exploit that bug on another currency.

Neha Narula: Yes! So this is something that I've been thinking about a lot over the past year, because it turns out that security and bug disclosure and vulnerability disclosure and deployment in cryptocurrencies is really tricky. It's actually quite different than browser security or operating system security, because these are supposed to be systems where no one's in control. No one's supposed to be privileged. We're all supposed to be on the same ground, "I'm running a node, you're running a node, okay, some developers released some new software.

I can look at it and decide whether I want to upgrade or not, but I don't have to. I can just keep running my node." Security and bugs and vulnerabilities kind of throw a wrench into everything, because if you think about sort of the extremes, one extreme is you tell everybody at the same time about a bug. So, okay, there's this horrible bug in Bitcoin. We don't want to privilege anyone, an attacker could steal your money. So we're just going to tell everybody about it at the same time.

What's going to happen? A lot of users are not going to be paying attention. They're not going to upgrade their software. They're not going to know what's going on. A lot of businesses aren't going to be paying attention and you're going to end up with a lot of people losing money probably, if you have a bug like that, which gets out. That's called a zero day. That is a bad thing.

Another extreme is that there's a privileged group of people who learn about it and hopefully those people, instead of exploiting it, fix it and convince everyone to upgrade without them needing to know about it. That's more like the situation that we're in right now, which is there's a security@ email address for most cryptocurrencies and that's where you report these vulnerabilities. But these things are... Like you can trade on them, you can attack and we are seeing lots of attacks in the wild. So it's a pretty scary situation.

Peter McCormack: These are things that I wouldn't normally have thought about. Can we unpack it? Can we go back to where this actually started? So what are the biggest security risks that you think that exist within, say Bitcoin? Obviously there are other cryptocurrencies, but mine's a Bitcoin show. So what are the biggest risks here?

Neha Narula: So that's a great question!

Peter McCormack: Do you know what I wrote underneath? Anonymous bank robbers.

Neha Narula: Anonymous Bank robbers? Okay, what's the bank?

Peter McCormack: Well, I consider all of our Bitcoins as our bank accounts in some way. So it's a decentralized bank.

Neha Narula: What are the risks to Bitcoin? Oh God, there's so many risks!

Peter McCormack: The biggest ones?

Neha Narula: So I think if you talk to a lot of people, one thing that people are pretty worried about is the peer to peer network in Bitcoin. So transactions and blocks get gossiped over this peer to peer network. It's the way your node finds out about what the longest Blockchain is. It's the way that miners find out about the current heaviest weight chain and continue to build on it. I think that that's probably something... Our internet infrastructure in general is pretty controlled and there are a lot of ways to think about isolating Bitcoin nodes, taking Bitcoin nodes off the network, isolating miners.

So things that have to do with the network layer I think, are probably in my mind, the biggest concern right now, it's really hard to answer that question. What does it mean biggest concern? Most likely to get exploited maybe? There probably are bugs in Bitcoin right now. I think the complexity of the Bitcoin software is kind of a bummer. It's not really clear what to do with that, but...

Peter McCormack: I spoke to Bryan Bishop about that once. He said you could probably start a fresh, taking all the knowledge you have now and have it completely rewritten.

Neha Narula: I would really like to see that happen. I'm really, really curious to see if everyone who is working on Bitcoin right now decided, "okay, let's just start over with everything that we've learned." What would that look like? I think that's a really interesting question.

Peter McCormack: Bitcoin 2.0.

Neha Narula: I don't know or maybe Bitcoin 1.0 because it's still like 0.0? So I think that's a really interesting question. But yeah, the software has just sort of grown organically over time. It's super complex and the more complex the software is, the easier it is to introduce bugs and so things like code review become very important. I know this is something that Cory is really, really worried about and is thinking about, how do we do more testing? How do we do things like fuzzing?

Peter McCormack: What's fuzzing?

Neha Narula: Fuzzing is this idea where, if you think about a piece of software as something that takes inputs and then outputs things, you fuzz the inputs. So you try to put in all possible combinations of inputs to this piece of software, as many as you possibly can. Usually it's infeasible to think about sort of creating them all, like it's impossible to do all combinations, but you try as many as you can. So fuzzing means like, "let's just take this piece of software and let's just test the crap out of it. We're going to put in all these different inputs and see if it might break with inputs we didn't expect." That's the idea.

So there are software fuzzing techniques, there's all this stuff. So I'd say the network layer is probably one of the things that I'm most concerned about. I think one of the most interesting things though is proof of work itself and how secure proof of work really is. So there's a lot of people who knock proof of work because of the energy usage. To me that is so backwards that you just look at the raw energy usage and you say, "this is too much." It's like, "hey, how much energy are we using every day to manufacture aluminum? Is that worth it?"

We've decided it's worth it as a society because we buy aluminum and there's a market for creating aluminum and we clear that market. So same with Bitcoin kind of, is that we've decided there's a certain value to this and so we're willing to expend energy that costs this much, in order to secure the Bitcoin network. But the question is, how secure is it really? Also what is the game theory behind proof of work, the miners, the exchanges, the users, like all these different people. I think what we saw with Binance and the hack is just the beginning.

Peter McCormack: Okay, I'm going to need more than that! You can't just say the beginning!

Neha Narula: So what did we see there, is we saw someone who has a lot of money realize that if they wanted to, they could maybe talk to the miners and offer to pay them a lot and get them to mine on a fork where a transaction that was not advantageous to them was removed; the hack that stole the money from Binance.

Peter McCormack: Which also happened in Bitcoin Cash recently, there was a block re-org.

Neha Narula: Yeah, there've been reorgs in Bitcoin Cash, in ETC, in Vertcoin many different times.

Peter McCormack: It was called honest mining, right?

Neha Narula: Honest mining? What does that mean?

Peter McCormack: So I went on to the subreddit to read about it and it was referred to as "honest mining.".

Neha Narula: Bitcoin Cash's subreddit? Interesting. I don't know what that means.

Peter McCormack: I think that's a way of justifying a re-org.

Neha Narula: Okay, well we expect miners to be rational, not altruistic, because if we really expected them to be altruistic, then why are we even bothering wasting all this proof of work in this complicated game. So this idea that they're rational means that, the bigger and more important Bitcoin gets, the more likelihood that something happens where it might make sense to try to bribe the miners. So will the miners do this? Is it in their long-term interest not to do this? People sort of make these hand wavy arguments, but we don't really have the solid math behind, what is the game around this? What is in the interest of the miners or not in the interest of the miners?

Peter McCormack: This is probably why we need Matt Corallo's BetterHash then because that will take the power away from the miners?

Neha Narula: Yeah, so there are all these tools to try to make this better. So one thing is, I don't really know the details of BetterHash, but things like that, I think where mining pools don't just sort of blindly mine on a header that's given to them by the mining pool operator, but instead get some decision making choice in what they want to mine on and this helps with decentralization. So yeah, we need all these things and more of these things.

Peter McCormack: Do you think there's a bigger conversation to be had around proof of work then? You think that it's quite risky?

Neha Narula: Yes, I think proof of work is very risky. It's amazing that it's been working in practice for 10 years though. To be clear, I think proof of work is probably the least risky, but I still think it's pretty risky! I think we have to really understand it better, in order to make accurate comparisons to these other consensus protocols that are popping up.

Peter McCormack: So what would you like to see happen then with this?

Neha Narula: I want to see more research on proof of work. I want to see more people evaluating it, in more realistic models and figuring out how to do actual comparisons like apples to apples comparisons, to things like proof of stake.

Peter McCormack: One of the things I found interesting as well in your presentation and which was quite concerning, I think it was the Zcash bug, that is a bug that could have been exploited without anyone knowing. Being unable to detect an inflation bug being exploited, I think is very scary!

Neha Narula: Yeah, isn't that scary? That terrifies me! You have no idea and just no clue. To be fair, they could implement something like a turnstile, where you take everything... Like you have some idea of how much money is supposed to be in the shielded pool and so if someone were to inflate it, you could force everyone to come out of the shielded pool and then cap it at whatever the amount is supposed to be.

But that doesn't mean that the people are supposed to get the money, get the money. It's just really scary. How do you even know you need to do that? This is something where I think a lot of people disagree with me. I find really complex cryptography and new cryptography, really scary. It's exciting, but I'm not sure we should be making billions of Dollars of value rest on it, until we've put it through some more paces.

Peter McCormack: It's a bit late for that?

Neha Narula: Yeah, it is kind of is late for that, but we'll see what happens!

Peter McCormack: We could get to trillions!

Neha Narula: Yeah, well things like Bitcoin use very conservative cryptography that we understand really, really well. The newer stuff is a little scary and it's not just the cryptographic primitives either. It's the fact that you can't see what's happening. I don't know. I have a lot of debates with people about this. Some people say, "look, the older the cryptography, the more eyes are looking at it, meaning the safer it is." Some people say, "the more people who might know how to attack it, the more time people have had with it."

I don't know! So this is really... This is a hard conversation to have I think, and I don't know what the answer is, but I think we should be a little bit more... You see people creating these new cryptocurrencies and they're like, "cutting edge cryptography. I invented this whole new thing!" Investors should be running the other way from that. Why would you want that? Why would you want this thing that's so completely untested?

Peter McCormack: Yeah, it's amazing to think that we could have a complete financial system worth trillions of Dollars, which is a decentralized platform and just built on code. There could be an unknown bug in there that could make somebody a billionaire, just by a click! So that's what you think about?

Neha Narula: Yeah, that's what I think about! But I mean the counter argument to that is like, "okay, great Neha so what? We're never going to run new code?" And I understand that. I just think that today, we need to be a little bit more careful.

Peter McCormack: What else are we not thinking about? What else do you think within the world of Bitcoin are people not paying enough attention to?

Neha Narula: I think we're not thinking enough about, this is going to sound a little corny, but I think we're not thinking enough about ethics.

Peter McCormack: Okay, no that's important!

Neha Narula: Yeah, so the Internet started out as this kind of nirvana of open publishing. I would run a website, I put my information on the Internet, anybody could see it, anybody could connect to me. There are all these open protocols and then out of that developed Facebook, Google, Amazon, and we didn't really see that coming. Now this topic of ethics in artificial intelligence is really big.

You have these algorithms that are being used to label people in photos, sometimes used for things like law enforcement or used to decide who should get credit and quite rightly, people are a little worried about how they operate, who they might be privileging or not privileging.

I think finance is way more important than both of those things; publishing and the algorithms we use for artificial intelligence and machine learning. So are we even thinking about this? Are we even thinking about who gets access to what and what kinds of unintended systems might be being built on top of this stuff? The people who worked on the Internet in the 80s and 90s also thought they were building this great open system, they did not predict surveillance.

They did not predict the advertising... Well some of them might've, but they weren't able to stop it. I don't want to build that type of stuff into this technology and I think we have to be really aware of how things might've gone wrong in the past and think very carefully about how we might prevent it from going wrong in the future.

Peter McCormack: How could it go wrong? What kind of bad things are you worried that people will do?

Neha Narula: I mean, one example is privacy. I think that's the easiest example to understand. Let's take Libra by Facebook. All the transactions are public! If this actually becomes a thing that people in the developing world are using, they've just signed away all of their transactional privacy and it was just like, "yeah, sure, it's pseudonymous, it's fine!" No, it's not fine. All transactions are public!

Peter McCormack: Are they?

Neha Narula: In Libra, yeah.

Peter McCormack: Do they identify who they're from?

Neha Narula: No, they're pseudonymous. So similarly to the way Bitcoin and Ethereum works, you're a public key and you can generate a new public key. But what we've seen in practice is that stuff is pretty easily de-anonymized in a lot of cases. Also it's not clear that, and this is sort of another thing, you have to be pretty technologically savvy to use this technology right now and to understand the risks you're taking when you do things. For example, here's something very simple, I would like to take donations.

So I'm going to put a public key up on my website and by virtue of the fact that I am using the same address over and over again, I've now linked all of those donations to me. This is a very simple thing that a lot of people probably don't think about and thinking about privacy and thinking about how your privacy might be violated, is really hard. So when we move into a system that is much more technical, I think we might be leaving a lot of the population behind, who haven't had the chance to sort of think about this stuff and compare that to something like cash.

Everybody understands cash. We know how to use cash. We know that if I give you a $20 bill, no one's looking at me giving you that $20 bill. But when it turns electronic, it becomes a much different story and it's much harder to understand. So this technology by its nature, is making a lot of stuff digital, that maybe wasn't digital before and that's a little scary.

Peter McCormack: So you're not a fan of Libra?

Neha Narula: I wouldn't say that necessarily, I'm trying to understand it. So I'm trying to understand what's happening with Libra.

Peter McCormack: Okay, so where are you at with your understanding of it? Sorry I'm jumping in here, but I'm kind of on the fence with it. I see good things, I see bad things. I had a conversation with Caitlin Long and she was saying this could be great for people in developing countries. It gives them access to money, it's an easy way to send money abroad with no fees.

It will probably enforce a better discipline from the central banks of these developing countries. So all those kinds of things I thought was kind of cool. Plus, naturally more people hear about Bitcoin because of it, again cool. But at the same time it's Facebook!

Neha Narula: Yeah, so I think that there is a very dystopian vision for cryptocurrencies that we don't necessarily talk about very much, which is something like, a government that doesn't have a great history of human rights or of preserving the rights of its citizens, creates a digital currency upon which they control most of the access. They require everyone to use it instead of cash and boom, you've got this massive surveillance system for every single financial transaction that's happening in the economy of this country.

I think that that as a tool is really scary and quite possible. Another dystopian vision is a company creating a means of payment, that ends up getting adopted across the world and basically takes what was the government's role, who at least in a lot of places are elected officials who are accountable to the public, who elected them. It takes a responsibility that they had and moves it into the hands of the CEO of the company, which is how do you control the flow of assets in and out of the country?

How do you manage interest rates? How do you sort of manage the economy of this country and become something that the elected officials can no longer do effectively and that's also kind of scary. So if it's some CEO in another country, who is not accountable to the people of that country, who cannot be removed or lose the next election, that's also kind of scary.

I don't know what the right answers are. I don't know. But that terrifies me! It absolutely terrifies me and we have to think about these things. We have to think about what we're making possible. No technology is all good or all bad, never. There are always positives and negatives and there are always unintended consequences and we have to do our best to try to think about this and be thoughtful about it, before we release these things into the world.

Peter McCormack: Zuck’s getting super powerful now, isn't he?

Neha Narula: Yeah, well, we'll see.

Peter McCormack: Yeah, it's a tough one. Also, I actually, just on that point where you said about a country issuing a digital currency and forcing its people to use it, is actually very useful to have physical money at times as well and to suddenly put that on people, that you can only use digital money, you can only use ours. We can block and censor your transactions, actually becomes really, really scary! So you just think about all the scary shit?

Neha Narula: Sometimes! You are bringing that up, you asked me about Libra and that's what I think about, when I think about Libra. Also, I'm kind of struggling myself to fully understand the benefit of a consortium based permissioned Blockchain for anything.

Peter McCormack: It's not even a Blockchain though, is it?

Neha Narula: Yeah, so whatever it is. What is the benefit of having multiple organizations as validators, especially when the set of companies that are... The permissions are very tightly controlled. Why not create a new legal entity that operates under certain restrictions, just run this as a SQL database. I don't understand why you have to have this sort of Blockchain theatre around, everybody's running a node and validating transactions.

I don't really see what you get for that when you have the legal system. So I'm a bit confused about that right now and still trying to understand. But at the same time, Facebook is a pretty big successful company and has a lot of smart people there. So maybe there is something that they're getting from this kind of architecture that I don't quite understand, but that's something that I'm trying to figure out.

Peter McCormack: Okay, so what are you working on now then?

Neha Narula: A few different things. So we're still working on trying to figure out what to do to make cryptocurrency more secure and we are working on sort of a plan to do more things in the Bitcoin ecosystem in order to improve security. The first step of that was to make it easier to find information about where to report vulnerabilities and the next few steps will involve things like writing more testing code, getting more people involved, getting more eyes on it, things like that.

So that's something that we are working on. Also just explaining to people the differences between cryptocurrency and other sort of security realms and getting people to understand how scary it is and what's going on. Just explaining that to people and getting more people involved and more eyes looking at things. Another thing that I personally am working on is this question of how to understand proof of work and the security behind proof of work.

So that's another topic that we were working on and we have some ideas where if you think about the ecosystem as a whole, so not just miners but users and the power that users have to choose between forks and the threat of a fork. How that might help keep miners in line and prevent forking and double spending.

So that's another project that we're working on. Then finally, something that I'm spending a bit of time on is really trying to educate people who are really excited about Blockchains for voting, particularly political elections, why that might be a bad idea.

Peter McCormack: Yeah, I think a lot of people think that's a terrible idea.

Neha Narula: Yeah, well startups are raising millions of dollars and, and jurisdictions are trying it out, so it's happening, which is kind of scary.

Peter McCormack: And if people are interested in MIT and the Digital Currency Initiative, how do they find out more? Who do you want to hear from?

Neha Narula: Well, we have a website, dci.mit.edu. We have a Twitter account, @MITDCI. So hit us up at either of those places. Who are we looking for? If any of what we said resonated with you, I guess, and you're interested in working on cryptocurrency technology, security, scalability, please feel free to get in touch and we'd love to talk to you.

Peter McCormack: Have you got open roles that you are recruiting for?

Neha Narula: It's pretty ad hoc at the moment. So we create roles for the right people.

Peter McCormack: Awesome. Well listen, thank you for coming on!

Neha Narula: Thanks!

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