A blockchain project being developed by MIT researchers gained new attention this week following criticism of its alleged design elements, though the veracity of these claims has been denied by those involved.
In the post, Todd, an expert on threat analysis who has done work with bitcoin and non-bitcoin companies, denounced the project for what he concluded was its plan to "bribe" bitcoin miners by incentivizing these entities not to process transactions in which the participants are not identifiable.
"We’re talking about miners being coerced to only process transactions that have opted into a regulated scheme," Todd told CoinDesk.
The remarks led to criticism of MIT on bitcoin social media channels, and even an attempt to encourage miners to pledge that they would not support this type of scheme.
MIT responded to the criticism today in statements to CoinDesk that denounced the post as lacking substance.
An MIT spokesperson said:
For instance, the ChainAnchor paper positions the project as one that’s aimed to "address the issue of identity and access control within shared permissioned ledgers".
Further, language in the document suggests that the system, while inspired by bitcoin, is not intended to run on the live bitcoin blockchain.
The release of the white paper would seem to call into question an element of Todd’s critique, which was that the system appeared to him, as suggested by the slides he posted, as being for use on the public blockchain, with public mining entities.
"There isn’t a good technical reason to put regulated transactions on the bitcoin network, when you’re already expecting AML," he told CoinDesk. "The main thing I would say, there just isn’t a technical reason to try to pay miners to not mine bitcoin transactions."
He went on to state that, even if the system was used for a private network, it is worth considering how such architecture could be dangerous on a public blockchain like bitcoin.
"It’s worth thinking about threats. I could imagine if you had some big exchanges sign onto this, it could cause serious problems," he said, acknowledging the possibility that his statements might be less relevant should the project be intended for a permissioned network.
Overall, Todd’s comments expressed a notable worry that bitcoin's use case as a store of value is falling out of favor with industry startups, something he worries could convince these entities that drastic solutions are needed to encourage users to the network.
Such comments come in the wake of the long-simmering debate over how bitcoin should best be scaled, though this may finally be stemmed with the upcoming release of Segregated Witness, one possible solution.
Relevant for institutions
As for MIT, the university used the situation to reiterate its support for the bitcoin network, but said that ChainAnchor was more relevant to large consortium efforts such as R3, in which permissioned blockchain systems may require new ways to establish trust.
“We also work on other flavors of blockchain, including permissioned blockchains, [and] these are the kinds of blockchains that a number of mainstream companies are beginning to implement,” the university said.
The spokesperson said that such a system could be used as a way to make permissioned blockchains more compliant with anti-money laundering (AML) and know-your-customer (KYC) regulations.
MIT said it would seek to further discuss issues related to the compliance and regulation of blockchain systems with the public in a forthcoming white paper series due this May.
Correction: A previous version of this article indicated that Ciphrex CEO Eric Lombrozo initiated the campaign to encourage miners to boycott the platform. This has been corrected.
MIT image via Shutterstock
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