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From: Peter Todd <pete@petertodd.org>
Date: Tue, 19 Aug 2014 21:14:02 -0400
To: William Yager <will.yager@gmail.com>
Message-ID: <e8baf847-6829-4d0f-85fb-5fd194ae9054@email.android.com>
Cc: Bitcoin Development <bitcoin-development@lists.sourceforge.net>
Subject: Re: [Bitcoin-development] Proposal: Encrypt bitcoin messages
Precedence: list

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On 19 August 2014 20:59:14 GMT-04:00, William Yager <will.yager@gmail.com> wrote:
>What, exactly, do we hope to achieve from having end-to-end encryption?
>
>Even if it worked perfectly, it wouldn't be very useful.
>
>But it won't work perfectly, because we don't have any method of
>authentication.

Don't let perfect be the enemy of good.

> The bitcoin network is trivially MITMable. It's
>designed to
>work even in the face of that, but any encryption we implement will
>just
>get blown away by anyone who cares enough to stand in the middle of two
>nodes.
>
>As far as I can see, we get a microscopic obfuscatory advantage over a
>very
>weak passive attacker, at the cost of hugely increased software
>complexity
>(and possibly increased CPU time).

You realize that by your own definition even the NSA is mostly a "weak passive attacker" They do *not* have the ability to attack more than a small, targeted, subset of connection for both technical and political reasons. For starters, MITM attacks are easily detected - "Bitcoin network attacked by unknown agents! Has your ISP been compromised?" would make for great headlines and would soon see the problem fixed both technically and politically.

In any case, my suggestion of enabling hidden service support by default adds both encryption and reasonably good authentication.

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