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Date: Thu, 5 Feb 2015 23:34:22 +0000
From: Roy Badami <roy@gnomon.org.uk>
To: William Swanson <swansontec@gmail.com>
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Cc: Bitcoin Dev <bitcoin-development@lists.sourceforge.net>,
	Paul Puey <paul@airbitz.co>
Subject: Re: [Bitcoin-development] Proposal for P2P Wireless (Bluetooth LE)
 transfer of Payment URI
Precedence: list

For peer-to-peer payments, how common do we think that the payment is
of an ad hoc nature rather than to a known contact?

If I want to pay my friends/colleagues/etc over a restaurant table
there's no reason why I couldn't already have their public keys in my
contact list - then it would be pretty straightforward to have a
watertight mechanism where I would know who I was paying.  You could
probably even relatively securely bootstrap a key exchange over SMS,
relying only on the contacts already having each other in their
phonebooks.

As for comsumer-to-merchant transactions where the merchant is a
bricks and mortar merchant, IMHO it absolutely has to be "pay that
terminal over there".  It's the trust model we all currently use -
whether paying cash or card - and it's the only trust model that works
IMHO (and customers and businesses alike are well aware of the risks
of a fraudster standing behind the counter pretending to be an
employee accepting payment - and by and large are pretty good at
mitigating it).  OTOH as we've discussed here before there are many
use cases where the custoemr doesn't actually know or care about the
name of the shop or bar they walked into but is pretty damn sure that
they need to make payment to the person over there behind the counter.

Granted, there are cases taht dont' fall into either of the above -
but they're the cases that are (a) harder to figure out how to
authenticate and consequently (b) the use cases that are going to be
most subject to attempted fraud.

roy

On Thu, Feb 05, 2015 at 03:02:56PM -0800, William Swanson wrote:
> On Thu, Feb 5, 2015 at 2:10 PM, Eric Voskuil <eric@voskuil.org> wrote:
> > A MITM can receive the initial broadcast and then spoof it by jamming the
> > original. You then only see one.
> 
> You are right, of course. There is no way to make Bluetooth 100%
> secure, since it is an over-the-air technology. You could try securing
> it using a CA or other identity server, but now you've excluded ad-hoc
> person-to-person payments. Plus, you need an active internet
> connection to reach the CA.
> 
> You can try using proximity as a substitute for identity, like
> requiring NFC to kick-start the connection, but at that point you
> might as well use QR codes.
> 
> This BIP is not trying to provide absolute bullet-proof security,
> since that's impossible given the physical limitations of the
> Bluetooth technology. Instead, it's trying to provide the
> best-possible security given those constraints. In exchange for this,
> we get greatly enhanced usability in common scenarios.
> 
> There are plenty of usable, real-world technologies with big security
> holes. Anybody with lock-picking experience will tell you this, but
> nobody is welding their front door shut. The ability to go in and out
> is worth the security risk.
> 
> Bluetooth payments add a whole new dimension to real-world Bitcoin
> usability. Do we shut that down because it can't be made perfect, or
> do we do the best we can and move forward?
> 
> -William
> 
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