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Date: Thu, 05 Feb 2015 15:59:33 -0800
From: Eric Voskuil <eric@voskuil.org>
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To: Roy Badami <roy@gnomon.org.uk>, 
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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

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On 02/05/2015 03:34 PM, Roy Badami wrote:
> 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?
>=20
> 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.

In this case there is no need for P2P communication, just pay to an
address you already have for the other party. If you want to avoid
address reuse, use stealth addressing.

But yes, if you don't have a stealth address for the other party you can
certainly communicate in private as peers where you trust that you share
a public key. The core issue here is really bootstrapping of that trust
in an ad hoc manner.

> 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.

Yes, proximity is practically the universal solution to the problem of
the payer identifying the correct seller in any face-to-face scenario.

> 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.

When identification is required (show me some id before I pay you) it
equates to the BIP-70 scenario in the bitcoin model. This is also
required in order guard against repudiation (give me a signed receipt).

> 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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