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Show HN: Kong – Physical Cryptocurrency

kong.cash

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Re: Show HN: Kong – Physical Cryptocurrency

#291

Post by arcticbull »

torgian wrote: post #279
arcticbull wrote: post #191

Earlier quoted context omitted.

The difference is a crypto wallet on your Samsung phone when lost or stolen makes you bankrupt where google pay wallets shrug it off.

And has the potential of being tracked by said companies and service providers

Whereas your crypto transactions are literally published on a digital distributed ledger for all to see including those self same companies. I thought the transparent, digital, decentralized public ledger was the big reason to use it?

Further, I'd suggest you read up on NFC and tokenization, it's not true that the companies in question actually do get access to that information unless they have separate-from-the-technology arrangements with payment processors.

In either case I'd rather be tracked than bankrupt.

Re: Show HN: Kong – Physical Cryptocurrency

#292

Post by ccamrobertson »

eat_veggies wrote: post #290

Can a Kong manufacturer build custom secure element chips that leak key material? It seems that a lot of Kong's security comes from the security of the little HSM, and if you don't trust the manufacturer then a lot of it seems to break down. In addition, the paper cites the cost of decapping and side channel equipment as part of what makes double spends impractical. Given that they're fixed costs that undoubtedly man…

> Can a Kong manufacturer build custom secure element chips that leak key material? It seems that a lot of Kong's security comes from the security of the little HSM, and if you don't trust the manufacturer then a lot of it seems to break down.

This is perhaps the most important question. In short, yes. We use an off the shelf secure element; if it's shown to be broken/backdoored it will influence a vast number of embedded and IoT applications.

> In addition, the paper cites the cost of decapping and side channel equipment as part of what makes double spends impractical. Given that they're fixed costs that undoubtedly many governments and labs already own, it still seems like it could be worth it for some people to extract Kong keys.

We cite fixed costs in hardware, but not in time. Certain extraction techniques would still take hours of time per chip. The secure element we're using has no published attacks thus far (which is not to of course imply that it won't be, simply that it isn't trivial).

Re: Show HN: Kong – Physical Cryptocurrency

#293

Post by eat_veggies »

ccamrobertson wrote: post #292
eat_veggies wrote: post #290

Can a Kong manufacturer build custom secure element chips that leak key material? It seems that a lot of Kong's security comes from the security of the little HSM, and if you don't trust the manufacturer then a lot of it seems to break down. In addition, the paper cites the cost of decapping and side channel equipment as part of what makes double spends impractical. Given that they're fixed costs that undoubtedly man…

> Can a Kong manufacturer build custom secure element chips that leak key material? It seems that a lot of Kong's security comes from the security of the little HSM, and if you don't trust the manufacturer then a lot of it seems to break down. This is perhaps the most important question. In short, yes. We use an off the shelf secure element; if it's shown to be broken/backdoored it will influence a vast number of emb…

> We use an off the shelf secure element; if it's shown to be broken/backdoored it will influence a vast number of embedded and IoT applications

The scenario I'm imagining is one in which someone manufactures a note that looks and behaves exactly like a Kong but has known key material (i.e. a "fake" secure element). You can't verify that the secure element is real without expensive hardware.

And what is the vision for who can mint Kongs? If only the Kong developers can, then it's no better than USD. If anyone can do it, how will you guarantee consistent chips, construction, design, etc. between manufacturers?

Re: Show HN: Kong – Physical Cryptocurrency

#294

Post by arcticbull »

ccamrobertson wrote: post #281
jakelazaroff wrote: post #264

Earlier quoted context omitted.

> Nope, it's in a smart contract that can be deployed into perpetuity. But I would be receiving a physical object, correct? Which means one of the following must happen: - you give me notes in a manner that is not controlled by you (e.g. in the mail) assuming I'll fulfill the contract in good faith - you give me notes in a manner that is controlled by you (e.g. at a bank-like location) to prevent theft - we introduce…

> But I would be receiving a physical object, correct? Incorrect. The lockdrop is for completely virtual Kong token. > Yeah, this is an example of a problem that becomes much more likely if you share "printing rights". Correct, as elucidated above. Likewise each Kong self generates its own private key by design, as outlined in section 2 of the paper. By design, the key is non-extractable. > Ultimately, I remain uncon…

> We can't inflate Kong infinitely unlike every other paper fiat currency. We can only print Kong for four years. After that the only digital Kong produced is via lockdrop.

So what? As soon as you share printing rights the other party can. So can anyone else who has the private key. Not even by minting new Kong but by physically duplicating existing Kong. That's a much bigger problem than a well controlled 2% rate of inflation.

Re: Show HN: Kong – Physical Cryptocurrency

#295

Post by paulgerhardt »

userbinator wrote: post #262
paulgerhardt wrote: post #90

Earlier quoted context omitted.

For lack of an epistemological framework, we can call Kong a 4th generation wallet. If you'll bear with me: Paper Wallet were 1st gen - one couldn't guarantee the person giving you a paper wallet didn't have two copies or kept a copy of the private key for themselves. Probably ok for personal use assuming you trust your printer firmware. Hardware Wallets were 2nd gen - seed phrases made recovering from device loss ni…

Kong - uses a specific kind of secure element which allows for key generation but not extraction In other words, just like almost every other smartcard (including EMV).

See section 2.2 in the whitepaper [1]. There is not an industry specific term that succinctly captures these requirements. Secure element isn't ideal but it's not an HSM or TPM. PUF's are a feature not a chip category. If it's programmable, we don't want to touch it. That goes for most smart cards / java cards. EMV cards specifically have 'get private key' API's which would not work for this application.

[1] https://ipfs.io/ipfs/QmRNRCocj4PwKMXrd1jeUGw7ASQSuEk7BDJu5Ks...

Re: Show HN: Kong – Physical Cryptocurrency

#297

Post by modeless »

paulgerhardt wrote: post #34
jasonlaramburu wrote: post #25

Cool! What is the cost to produce each note today, and how do you anticipate funding that longterm?

Just a bit more expensive than the higher end notes produced by Switzerland/Australia and less expensive than limited edition postage stamps. We looked at existing hardware wallets like trezor and ledger and realized we could create something like this for 1/20th the price. Once we realized the numbers we were playing with we ran with it. Conceptually, I prefer validating something with a cryptographic signing operat…

OK, but how much is that? I don't see the point in being vague about it.

Re: Show HN: Kong – Physical Cryptocurrency

#298

Post by paulgerhardt »

manigandham wrote: post #140
paulgerhardt wrote: post #118

Earlier quoted context omitted.

Current cash instruments are centralized.

For producing new bills? Why does that matter? What do you think will happen if anyone can create new bills?

I'm not sure. Feels like opening Pandora's Box. Historically, taking big centralized things (like the Internet) and letting smaller players participate has interesting results. By taking a technology like printing currency, and innovating in the security domain so non-counterfitability is cryptographically guaranteed I would expect a cambrian explosion in cash-like instruments.

Re: Show HN: Kong – Physical Cryptocurrency

#299

Post by paulgerhardt »

monocasa wrote: post #85
paulgerhardt wrote: post #79

Earlier quoted context omitted.

The bills are intended to be spent hand-to-hand in meatspace with cryptographic validation. See section 2.1 [1] The innovation of Bitcoin was decentralized electronic peer-to-peer cash. Kong does not remove any of those elements and makes the overhead of the peer-to-peer bit easier. Physical cash is still the dominant form of payment. The advancement here is figuring out how to issue physical cash without needing a c…

What does Kong bring to the table that a gold coin does not?

One simple interpretation of Kong is a self-generated, non-extractable private key anchored to a smart contract. Kong is a very simple contract that escrows tokens. One can imagine significantly more complicated contracts.

Re: Show HN: Kong – Physical Cryptocurrency

#300

Post by ccamrobertson »

eat_veggies wrote: post #293
ccamrobertson wrote: post #292

Earlier quoted context omitted.

> Can a Kong manufacturer build custom secure element chips that leak key material? It seems that a lot of Kong's security comes from the security of the little HSM, and if you don't trust the manufacturer then a lot of it seems to break down. This is perhaps the most important question. In short, yes. We use an off the shelf secure element; if it's shown to be broken/backdoored it will influence a vast number of emb…

> We use an off the shelf secure element; if it's shown to be broken/backdoored it will influence a vast number of embedded and IoT applications The scenario I'm imagining is one in which someone manufactures a note that looks and behaves exactly like a Kong but has known key material (i.e. a "fake" secure element). You can't verify that the secure element is real without expensive hardware. And what is the vision fo…

> The scenario I'm imagining is one in which someone manufactures a note that looks and behaves exactly like a Kong but has known key material (i.e. a "fake" secure element). You can't verify that the secure element is real without expensive hardware.

Yes, that's counterfeiting in the case of Kong. The counterfeiter would need to first extract that key material from a previously issued Kong note by breaking the secure element.

> And what is the vision for who can mint Kongs? If only the Kong developers can, then it's no better than USD.

Only the Kong project for now; whether it's better or worse is definitely subjective. There is a ceiling for the amount of Kong that can be issued. Also, as something more akin to an art project than a fully functioning economy, there is no place to spend Kong today. It's ambiguous, but the fact that the Kong project is the only issuer of the physical notes doesn't undermine the cryptocurrency rules upon which it's based.

> If anyone can do it, how will you guarantee consistent chips, construction, design, etc. between manufacturers?

Section 5.1 touches on this; in short there is no solution today, but this in an immensely important challenge. Flipping this on its head -- if we don't have these guarantees today, how can we trust any of the places we store key material (smartphones, laptops, IoT). It's impossible to guarantee a perfect chip, but it is feasible to create economic incentives that deter broken chips. We'll probably write more on this topic in the future.

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