Define a canary protocol

[ripper234]

Context, plus rumors that the SEC are looking deeply into the Bitcoin 2.0 space.

How about we use this git issue to define a 'canary protocol' for the Mastercoin Foundation?

See also http://truecrypt.ch/

[ripper234]

An interesting legal question:

Suppose we decide in advance that our canary protocol is "If Ron paints his hair purple, run to the hills", and write this publicly on this github issue.

Now suppose the Israeli government tells me to do something evil, and that telling anyone of their 'request' would be breaking the law (I am an Israeli resident).

Would this mean that legally I would be forced not to paint my hair purple?

(Laws are such an anachronistic thing)

[dacoinminster]

As of now, we have received no warrants that I know of. I think we break the law if we publish a canary, then trigger it. My understanding is that a canary has to be informal and verbal - an arrangement between us and some trusted person outside the org.

On Fri, Jun 6, 2014 at 5:20 PM, Ron Gross notifications@github.com wrote:

An interesting legal question:

Suppose we decide in advance that our canary protocol is "If Ron paints his hair purple, run to the hills", and write this publicly on this github issue.

Now suppose the Israeli government tells me to do something evil, and that telling anyone of their 'request' would be breaking the law (I am an Israeli resident).

Would this mean that legally I would be forced not to paint my hair purple?

(Laws are such an anachronistic thing)

— Reply to this email directly or view it on GitHub https://github.com/mastercoin-MSC/spec/issues/195#issuecomment-45395998.

[ripper234]

Waiting for our legal team to weigh in. I think something "informal" can be arranged.

[ripper234]

http://www.librarian.net/technicality.html

[ThePiachu]

Would't a canary protocol be more like this:

• Put a notification on some website saying "Mastercoin has not been approached by intelligence agencies bla bla bla"
• In case that stops being true, remove the warning

As far as I remember at least in the US you can't be forced to lie. You can still decline to comment, and removing that line would be exactly that.

[ripper234]

I honestly don't know what you can be forced to do in the U.S or Israel, waiting for the legal team. Thanks @ThePiachu for joining the conversation.

[zynis]

The proper protocol if that is the case is to engage SEC regulators as well as European Commission regulators.

Technologies for issuing securities like bitcoin which is a distributed database and secure communications protocol used by software like mastercoin and etc is not a national security issue by any means.

That is how a normal VC backed company would approach the issue and redefine it in a proactive manner as these technologies certainly have advantages over older securities issuance and trading systems.

-sent from a mobile device- On Jun 7, 2014 2:03 AM, "Ron Gross" notifications@github.com wrote:

Context http://meta.ath0.com/2014/05/30/truecrypt-warrant-canary-confirmed/ and rumors that the SEC are looking deeply into the Bitcoin 2.0 space.

How about we use this git issue to define a 'canary protocol' for the Mastercoin Foundation?

— Reply to this email directly or view it on GitHub https://github.com/mastercoin-MSC/spec/issues/195.

[ripper234]

+1 Dom - we'll need to start contacting these authorities, it's a question of timing. Maybe the time has come.

[zynis]

I spoke to the lawyers located in London who recommended this for the EC at least.

I think it makes sense to bring in a regulatory affairs person and start working on engagement.

Using these protocols holds many advantages over older systems for example not being able to do naked short selling, open data society, equalizing economic opportunity, as well as open accounting of firms financial records at a level of granularity light years ahead of quarterly reports which sometimes have false data.

The only big issue on the negative side is that there is still a lot of code and services development work to be done for allowing issuers of securities to comply easily. However for things like crowd funding legislation compliance a MP like system would be perfect for ensuring the companies doing crowd funding stock offerings comply with income investment thresholds. Who knows we could even get money from the SEC for developing such a system which we practically have in place just missing a couple pieces on the services side.

-sent from a mobile device- On Jun 7, 2014 3:32 PM, "Ron Gross" notifications@github.com wrote:

+1 Dom - we'll need to start contact these authorities, it's a question of timing. Maybe the time has come.

— Reply to this email directly or view it on GitHub https://github.com/mastercoin-MSC/spec/issues/195#issuecomment-45410195.

[ripper234]

A big issue from the authorities perspectives would be that the Master Protocols allows people to break the law by issuing actual securities without even identifying, in a completely anonymous way.

Of course, I believe that such a future is imminent and there is nothing authorities can do to stop it anyway, much like they can't fight Bitcoin.

[zynis]

Replace MP with "paper". It also allows people to break laws.

Do statements like this make sense:

Mysql database and apache on tor allows people to issue securities in a completely anon way using bitcoin. I think there are court cases in the US which don't hold developers responsible for how others use their software. Things like Napster were special because they actually provided a centralized service aka list of ftp servers.

Someone needs to show intent for wanting to break laws by issuing something and not complying with laws that touch that issuance; on the other hand few people would buy anonymous shares in a centralized issuer who does not want to ID himyself and his business. The laws in western countries are fairly easy to comply with regarding ing stuff around securities and I don't see any serious business people with millions+ in turn over wanting to jeopardize a good business simple to avoid paperwork and stay anon.

Now on the other hand in non-westernized countries we may wish to avoid travel lol...

My intent is to provide a system of better accountability for securities, accounting and the basis for making real time decisions from real time distributed inputs. I think politicians and people in western countries are generally in favor of that; that may not be the case in say Iran, Russia or Zimbabwe.

-sent from a mobile device- On Jun 7, 2014 3:48 PM, "Ron Gross" notifications@github.com wrote:

A big issue from the authorities perspectives would be that the Master Protocols allows people to break the law by issuing actual securities without even identifying, in a completely anonymous way.

Of course, I believe that such a future is imminent and there is nothing authorities can do to stop it anyway, much like they can't fight Bitcoin.

— Reply to this email directly or view it on GitHub https://github.com/mastercoin-MSC/spec/issues/195#issuecomment-45410564.

[ripper234]

Here is an interesting suggestion from someone (paraphrased):

1. Set up a wallet, put some btcs in it.
2. Tell people: "this is my legal defense wallet". I will move funds from it if and when I am investigated in regards to the Master Protocol.
3. Ask people to donate btc.
4. If I need to pay for lawyers, I can use these funds ... and people can guess something is a foot.

[zynis]

How about just getting the lawyers involved in the first place and doing things right.

:)

-sent from a mobile device- On Jun 7, 2014 5:31 PM, "Ron Gross" notifications@github.com wrote:

Here is an interesting suggestion from someone (paraphrased):

1. Set up a wallet, put some btcs in it.
2. Tell people: "this is my legal defense wallet". I will move funds from it if and when I am investigated in regards to the Master Protocol.
3. Ask people to donate btc.
4. If I need to pay for lawyers, I can use these funds ... and people can guess something is a foot.

— Reply to this email directly or view it on GitHub https://github.com/mastercoin-MSC/spec/issues/195#issuecomment-45412984.

[ripper234]

+1 :-) On Jun 7, 2014 7:12 PM, "Dominik" notifications@github.com wrote:

How about just getting the lawyers involved in the first place and doing things right.

:)

-sent from a mobile device- On Jun 7, 2014 5:31 PM, "Ron Gross" notifications@github.com wrote:

Here is an interesting suggestion from someone (paraphrased):

1. Set up a wallet, put some btcs in it.
2. Tell people: "this is my legal defense wallet". I will move funds from it if and when I am investigated in regards to the Master Protocol.
3. Ask people to donate btc.
4. If I need to pay for lawyers, I can use these funds ... and people can guess something is a foot.

— Reply to this email directly or view it on GitHub https://github.com/mastercoin-MSC/spec/issues/195#issuecomment-45412984.

— Reply to this email directly or view it on GitHub https://github.com/mastercoin-MSC/spec/issues/195#issuecomment-45414021.

[ghost]

-1

What does "doing things right" even mean? Sounds to me like you're just outsourcing the burden of outlining the future to the necessarily limited imagination of lawyers. I can scarcely imagine an idea more likely to stall innovation.

[ripper234]

+1 for opening up communications channels. Right now we haven't talked to the SEC. If they are interested in talking, so am I.

If we can create the dialog ourselves, all the better.

On Mon, Jun 9, 2014 at 9:02 AM, w-hive notifications@github.com wrote:

-1

What does "doing things right" even mean? Sounds to me like you're just outsourcing the burden of outlining the future to the necessarily limited imagination of lawyers. I can scarcely imagine an idea more likely to stall innovation.

— Reply to this email directly or view it on GitHub https://github.com/mastercoin-MSC/spec/issues/195#issuecomment-45463344.

Ron Gross Executive Director, Mastercoin Foundation mastercoin.org | ripper234.com | ripper234 on skype (Inbox != Zero http://ripper234.com/p/how-i-learned-to-let-go-of-inbox-zero/) | PGP http://pgp.mit.edu/pks/lookup?op=vindex&search=0x7468729E28277264 Schedule my time at meetme.so/RonGross

[zynis]

i, and the foundation, encourage all people who are using the software we fund to play by the rules and to donate to the foundation to help design the next set of rules; ideally in our favor over old systems.

people issuing securities in the USA, who are USA citizens or residents, generally know that they need to file paperwork. some people didn't bother doing their paperwork and now those people are getting fined.

using a new technology for collecting money for a security an incremental process innovation and so talking about how not filing paperwork will stall the realization of an incremental process innovation is just a tad ironic and a poor excuse for encouraging people to put their businesses at unnecessary risk.

Thanks,

Dominik Zynis Skype: dominik.zynis USA: +1-415-800-4155 dominik.zynis@gmail.com

On Mon, Jun 9, 2014 at 8:10 AM, Ron Gross notifications@github.com wrote:

+1 for opening up communications channels. Right now we haven't talked to the SEC. If they are interested in talking, so am I.

If we can create the dialog ourselves, all the better.

On Mon, Jun 9, 2014 at 9:02 AM, w-hive notifications@github.com wrote:

-1

What does "doing things right" even mean? Sounds to me like you're just outsourcing the burden of outlining the future to the necessarily limited imagination of lawyers. I can scarcely imagine an idea more likely to stall innovation.

— Reply to this email directly or view it on GitHub https://github.com/mastercoin-MSC/spec/issues/195#issuecomment-45463344.

Ron Gross Executive Director, Mastercoin Foundation mastercoin.org | ripper234.com | ripper234 on skype (Inbox != Zero http://ripper234.com/p/how-i-learned-to-let-go-of-inbox-zero/) | PGP http://pgp.mit.edu/pks/lookup?op=vindex&search=0x7468729E28277264 Schedule my time at meetme.so/RonGross

— Reply to this email directly or view it on GitHub https://github.com/mastercoin-MSC/spec/issues/195#issuecomment-45463639.

[petertodd]

Suppose we decide in advance that our canary protocol is "If Ron paints his hair purple, run to the hills", and write this publicly on this github issue.

Interesting thought: make the "canary" be an action where stopping you from doing so is itself a highly politically charged act. Something very simple that comes to mind is to say if Mastercoin receives a NSL and you need to use the canary, you'll suddenly come out of the closet. (or go back into it!)

[ripper234]

LOL.

I think we have a good mix of actions and vagueness in this github issue to make for a good canary protocol as is.

On Tue, Jun 17, 2014 at 12:43 PM, Peter Todd notifications@github.com wrote:

Suppose we decide in advance that our canary protocol is "If Ron paints his hair purple, run to the hills", and write this publicly on this github issue.

Interesting thought: make the "canary" be an action where stopping you from doing so is itself a highly politically charged act. Something very simple that comes to mind is to say if Mastercoin receives a NSL and you need to use the canary, you'll suddenly come out of the closet. (or go back into it!)

— Reply to this email directly or view it on GitHub https://github.com/mastercoin-MSC/spec/issues/195#issuecomment-46286912.

Ron Gross Executive Director, Mastercoin Foundation mastercoin.org | ripper234.com | ripper234 on skype (Inbox != Zero http://ripper234.com/p/how-i-learned-to-let-go-of-inbox-zero/) | PGP http://pgp.mit.edu/pks/lookup?op=vindex&search=0x7468729E28277264 Schedule my time at meetme.so/RonGross Chief Ninja Officer http://www.chiefninjaofficer.com/

[petertodd]

Yeah, just acting weird all of a sudden is a good canary in this day and age...

[ripper234]

In light of the SEC letters, I'll take this chance to say that as of right now, I do not know of the Mastercoin Foundation receiving any such letters (and my hair has not been painted purple).

[dacoinminster]

Neither do I. Also, the link (https://www.reddit.com/r/Bitcoin/comments/2kil64/sec_begins_sending_out_investigation_letters/) appears to be offline at the moment. Does anybody have details?

[ripper234]

https://www.cryptocoinsnews.com/sec-sends-inquiry-letters-hundreds-bitcoin-companies-unregistered-securities/

[CraigSellars]

I recommend that this github issue stay open for discussion since we have not received any warrants, subpoenas or letters from a regulatory agency, court or government entity, and we have not been asked to keep anything confidential.

[DavidAJohnston]

Right, we can close this issue on Github should we get a letter in the future. Lets keep it open until then. Good recommendation Craig.

[ripper234]

Hell, we could revisit this every month and say "I have not received any letters requesting confidential treatment from the SEC" with the updated timestamp.

I'm setting a personal reminder for myself for a month from now to do just that.

[ABISprotocol]

-----BEGIN PGP SIGNED MESSAGE----- Hash: SHA512

Ron,

That's a good idea ~ I would also recommend you check out the "warrant canary, hmmm" a.k.a. "less is more better" discussion here:

In which it seemed that the posting of one such as you suggest, and then leaving it there is signal that all is well, but if your notice disappears one day, people will know something is wrong (without you saying so). Even if you are unable to disclose the details. Consult the legal eagles of course, caveat as always: This does not constitute legal advice.

Link to discussion in which this came up (includes links to all messages in the thread archived): https://www.mail-archive.com/cypherpunks@cpunks.org/msg05482.html

Respect,

• -Odinn

Ron Gross wrote:

Hell, we could revisit this every month and say "I have not received any letters requesting confidential treatment from the SEC" with the updated timestamp.

I'm setting a personal reminder for myself for a month from now to do just that.

--- Reply to this email directly or view it on GitHub: https://github.com/mastercoin-MSC/spec/issues/195#issuecomment-60822762

---

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[ripper234]

@ABISprotocol, I'll take this suggestion:

@achamely how about we add a redirect from canary.mastercoin.org to this github issue?

If this redirect ever disappears, it might mean our canary protocol has been activated.

Note - we may not be able to legally do anything, even removing the canary.mastercoin.org redirect ... please just treat this as another indicator, but nothing concrete.

[dacoinminster]

Can the SEC really stop a guy in Israel from dying his hair purple? Not that it would mean anything if you did . . . .

On Tue, Oct 28, 2014 at 2:06 PM, Ron Gross notifications@github.com wrote:

@ABISprotocol https://github.com/ABISprotocol, I'll take this suggestion:

@achamely https://github.com/achamely how about we add a redirect from canary.mastercoin.org to this github issue?

If this redirect ever disappears, it might mean our canary protocol has been activated.

Note - we may not be able to legally do anything, even removing the canary.mastercoin.org redirect ... please just treat this as another indicator, but nothing concrete.

— Reply to this email directly or view it on GitHub https://github.com/mastercoin-MSC/spec/issues/195#issuecomment-60831579.

[ABISprotocol]

-----BEGIN PGP SIGNED MESSAGE----- Hash: SHA512

Also, I recommend consulting with @cryptostorm (https://github.com/cryptostorm - cryptostorm.is) They've developed a unique approach.

Resspect,

• -Odinn

Ron Gross wrote:

@ABISprotocol, I'll take this suggestion:

@achamely how about we add a redirect from canary.mastercoin.org to this github issue?

If this redirect ever disappears, it might mean our canary protocol has been activated.

Note - we may not be able to legally do anything, even removing the canary.mastercoin.org redirect ... please just treat this as another indicator, but nothing concrete.

--- Reply to this email directly or view it on GitHub: https://github.com/mastercoin-MSC/spec/issues/195#issuecomment-60831579

---

http://abis.io ~ "a protocol concept to enable decentralization and expansion of a giving economy, and a new social good" https://keybase.io/odinn -----BEGIN PGP SIGNATURE-----

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[pjstorm]

Yes hello, not technically cryptostorm here... but we worked closely with them on their cryptographic foundations and still do. We (using the collective "we" to include the cryptostorm dev team) have quite a bit of experience with warrant canaries and the related concept of privacy seppuku (backstory: http://seppuku.cryptostorm.org). In formal theoretical terms, the set-apart for the warrant canary (in the pure form) is the use of absence as a carrier for information content (in the Shannon sense); there's nothing complex about the theory, really, for absence of signal is its own signal. Not high bandwidth, admittedly, but for a bit-flip operation it's quite effective.

In practical terms, we have concerns that the warrant canaries being deployed out there nowadays are more about marketing, and less about functional effectiveness. Human beings have daily lives, and any process that requires a manual check-in regularly to work is going to fail in the wild; this is all the more so true when the check-in is watching for a new absence... we're not intrinsically good at noticing things that are gone, versus a shiny pretty new thing that just appeared. And, in pure form, the warrant canary is always an absence.

Yes, someone might notice the absence and then start telling others about it - cascading information flow. But what if that fails to trigger?

We've proposed to cryptostorm a system whereby some meta-channel tunes in to the canary signals - the absences - of a protocol-layer indicator/carrier. Decouple the "call it forth to the heavens" element of this from the subtle, utterly deniable absence of the canary at the first layer of the notification stack. Simple example: a twitterbot that, when notified a given canary has gone awol for a given project, spews out notifications publicly: look out! The signal - the absence - can be subtle and largely nonpublic in fact; then the publisher/presentation layer can amplify that one-bit signal to noticeable proportions via traditional shiny, pretty, new methods.

Legally, well... this all gets into more of an extra-legal question than any formal legal matter, in our experience. Will projects implementing subtle, deniable canaries via bit-flip protocols be subject to extra-legal police state harassment? Quite likely, yes. Is this a black and white issue likely to be clarified by formal court systems, in formal rulings, which are enforceable on the activities of meta-state surveillance agencies largely shielded from any substantive legal oversight? Oh please... the laughter makes our stomach hurt.

Make a protocol - a "reverse RSS" - like a packet-level network session heartbeat. When the heartbeat stops, things happen - we do it in tunnelling scenarios every day, no big deal. But to have the protocol be useful it can't be specific to each project, for if humans are expected to manually track all such things... no way. Generalise it, standardise it, encapsulate its logic behind formal logical interconnections between system layers, and you get something easy to implement, fast to spread across projects, and devilishly difficult to stamp out with threats of state violence.

That's how we see the lay of the land, anyhow, at the high-level/hand-waving perspective.

[ripper234]

Interesting stuff @Baneki.

In the meantime, I submitted this to https://metacanary.org/

[ripper234]

P.S see this open letter published today that among other things, urges Bitcoin companies to incorporate canary / seppuku pledge protocols.

[ripper234]

@Baneki , here's an off topic suggestion: Move this page into a new website seppukupledge.org, and allow organizations to join and declare their commitment to the honor code.

[ABISprotocol]

-----BEGIN PGP SIGNED MESSAGE----- Hash: SHA512

Great idea... It would be excellent to see either @Baneki, @cryptostorm, or @ripper234 take that domain. (still unclaimed, I think!)

Ron Gross wrote:

@Baneki , here's an off topic suggestion: Move this page into a new website seppukupledge.org, and allow organizations to join and declare their commitment to the code.

--- Reply to this email directly or view it on GitHub: https://github.com/mastercoin-MSC/spec/issues/195#issuecomment-60878568

---

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[pjstorm]

Splitting the #seppukupledge off to its own standalone platform has been languishing on the to-do list since last summer, sadly. Languish no more!

✔ seppukupledge.org registered

[pjstorm]

Anybody feeling frisky when it comes to striping some html to get the seppukupledge.org platform up and running? We'll park it on a server and provide account admin creds if there's a willing victim - err, "volunteer" - keen to get things going :-)

[ripper234]

You can start with a strikingly page and migrate to something self hosted later. On Oct 29, 2014 11:18 PM, "Baneki Privacy Labs" notifications@github.com wrote:

Anybody feeling frisky when it comes to striping some html to get the seppukupledge.org platform up and running? We'll park it on a server and provide account admin creds if there's a willing victim - err, "volunteer"

• keen to get things going :-)

— Reply to this email directly or view it on GitHub https://github.com/mastercoin-MSC/spec/issues/195#issuecomment-61006772.

[ripper234]

Note: I deleted this text from the OP:

The following might be deleted, if legally possible, in case of emergency: 29 Nov 2014 - as far as I know, nobody asked us to keep anything confidential. I plan to update this next month.

The reason for the deletion is that I'm no longer in the loop, and even if someone approached us, odds are I wouldn't hear about it, so the protocol is kind of moot at this point.

Just to clarify: I do not know of anyone approaching us asking us to keep anything confidential. The reason for the deletion of the text is just out of convenience.

[pjstorm]

Ok after many delays we're finally getting some proper seppuku foundations pulled together; shortly there'll be a re-map of seppukupledge.org, & we've got our threads in-forum collated in one spot: http://seppuku.cryptostorm.org

Cheers,

~ pj