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Building a Digital Safe Haven

October 31, 2020

Building a Digital Safe Haven

How we can leverage the bitcoin wallet into a gateway into the Digital Safe Haven economy.


October 31, 2020


  1. Introduction - Today a core team of 9 - Small

    footprint but big goals - And big RED LINES “The Intern” “TDevD” - Introducing Samourai - Started in 2015 with a team of two
  2. Introduction / the early footprint - Samourai Wallet - May

    2015 - Full bitcoin wallet (private key manager) - Closed Alpha Testing group (until 2016) - No KYC. No Exceptions (red line) - Non Custodial. No Exceptions (red line) - Strong focus on BTC on-chain privacy while transacting - Strong defaults, novel features, experiment with heuristic busting
  3. Introduction / the footprint today - Samourai Wallet - 125,000

    + downloads on Google Play in “Early Access” program (wen 1.0?) - Stealth Addresses (BIP47/PayNym) - Coordinated Chaumian CoinJoin (Whirlpool) - Peer 2 Peer CoinJoin (Cahoots) - Decoy CoinJoin (STONEWALL) - Full coin control - Connect your own full node - Offline transactions - Tor based encrypted communication layer (Soroban) - And more...
  4. Exploring the meatspace safe haven Before exploring a Digital Safe

    Haven let us explore an example of a meatspace safe haven that existed from the 1700s until 2012.
  5. Highlights of the Swiss Safe Haven ➔ 1713 - Great

    Council of Geneva outlawed the disclosure of information about the European upper class to protestant banks. ➔ 1910s - Swiss bankers traveled to France to advertise its banking secrecy during World War I. ➔ 1920s Swiss bankers gain a reputation for refusing to help foreign governments track down tax evaders of their newly formed income taxes. ➔ 1934 - Swiss legislators make bank secrecy part of Federal Swiss law with Article 47 ◆ Disclosing a bank customer’s identity to a foreign government is a criminal act. ◆ Cash custodians who did not maintain “absolute silence” about their clients’ financial information would face imprisonment and government fines. ➔ 1940s - Protected German Jewish assets along with Nazi gold and cash balances.
  6. Downfall of the Swiss Safe Haven ➔ 2008 - Switzerland

    signs the European Union Savings Directive (EUSD) requires banks to report “non identifying” tax statistics to EU member countries. ➔ 2008 - Swiss bank UBS is implicated in US tax evasion and agrees to disclose information on 4,000+ clients in a prosecution deal with the US DOJ. ➔ 2012 - Switzerland sign the US FATCA (Foreign Account Tax Compliance Act) requires banks to report “non identifying” tax statistics to the IRS. Only one Swiss bank will open accounts for US citizens today, and only if they are not a tax resident.
  7. No Counterparty Risk Obscured Identity Censorship Resistant Permissionless vires in

    numerus Bearer Assets based Low Barrier to Entry Fungible What is a Safe Haven? High Barrier to Surveil
  8. Translating meatspace safe haven to digital ➔ Obscured Identity ◆

    Legislative attempts to enforce privacy will ultimately fail • There is always a bigger and stronger...legislature, with more guns. • Digital doesn’t have the ability to create enforceable legislation even if it did work. ◆ Must find alternative methods of enforcement • Cryptographic systems • Encryption schemes • Hard to change protocols
  9. Translating meatspace safe haven to digital ➔ Easy to create

    new “identities” on demand ◆ Low barrier to entry (permissionless) ◆ Strong avoidance of personally identifiable information ◆ If they know your “True Name”, they can get you to do their bidding. (Vinge, True Names)
  10. Translating meatspace safe haven to digital ➔ Bearer based “cash”

    ◆ The primary and dominant money of the economy must be a bearer based instrument with no central issuer. (censorship resistance) ◆ The current fiat money system is unsuitable for use within the digital safe haven. • Patriot Act (USA, but global implications) • FACTA • SARs • “Crime of unexplained wealth” • “War on cash” • AML/KYC encroachments ◆ A future digital national fiat currency will be even more unsuitable. Time isn’t on our side...
  11. Translating meatspace safe haven to digital ➔ Self Regulating Economy

    ◆ little/no government regulatory oversight ◆ No bailouts if shit hits the fan ◆ Requires “street smarts” to navigate ◆ Natural navigation towards systems that diminish or eradicate counterparty risk
  12. Translating meatspace safe haven to digital ➔ Non Custodial ◆

    The biggest advantage of the Digital Safe Haven is the ability self custody with relative ease • No counterparty risk • Permissionless • Ultimate level of control placed on the individual
  13. It’s the economy stupid. A safe haven requires a safe

    money. And a Digital Safe Haven requires a safe digital money. - Digital currencies offer great promise of serving as the monetary powerhouse underpinning the Digital Safe Haven economy - But also offer the possibility of creating a worse version of the hellscape we’re trying to escape from!
  14. Avoiding repeating mistakes of the past The internet as we

    know it today is an example of a tool of revolutionary change and potential that has been captured by regulatory and special interests and has already been leveraged into new chains, to replace the old ones it “disrupted”. A few examples of early events in internet history... 1998 - International Forum on the White Paper (IFWP) was supposed to be a process to design the ICANN framework by the “internet community”. Powerful tech companies and stakeholders boycotted this open event and wrote their own secret rules that later became the official bylaws and quasi regulations. 2002 - ICANN eliminates the “internet user” representative position from the ICANN Board - ISOC (The Internet Society) revise their bylaws to ensure governance of the society would be controlled by the two largest corporate members.
  15. Avoiding repeating mistakes of the past 2010s - Today -

    Edward Snowden disclosures show the extreme levels of cooperation of industry participants with national intelligence agencies, even in cases where the cooperation would be considered unlawful! - W3C enables DRM as a web standard by secret vote (EME, Encrypted Media Extensions) - FCC “Net Neutrality” - EU - GDPR - “The Internet as a public utility”
  16. Building on Bitcoin ➔ We see Bitcoin as a good

    (but not perfect) form of money for the Digital Safe Haven economy ◆ First mover advantage (largest existing user base, and most likely to grow in the future) ◆ Despite regulatory capture at on/off ramps, the protocol has shown robustness for over a decade ◆ Bearer asset ◆ Pseudonymous
  17. Building on Bitcoin ➔ The bad (but an opportunity to

    provide value) ◆ Strong attitude of compliance within the “industry” can lead to regulatory capture events ◆ Transparent ledger for anyone (including adversaries) to see. Not a big problem in a fully pseudonymous system but big problem when combined with KYC/AML records and other metadata. ◆ Strong retail investment focus distorts the use case from useful money to speculative investment.
  18. The Gateway Digital Safe Haven The On/Off Ramp The Wallet

    as a gateway Exchanges, OTC, Brokers Wallet Goods & Services (Spend) Fiat Currency Gambling Prepaid Debit Cards Prepaid Phone Credit Travel, Hotel, Flights Shopping Private VPN Web Hosting Savings & Investments (Hold) Remittance Asset Protection Company Reserves Capital investments
  19. Practice what you preach Samourai Wallet as the best gateway

    to the Digital Safe Haven ➔ No meat space identity ◆ No KYC / AML. No Exception. ◆ No 3rd party integrations with services that KYC/AML ➔ Low barrier to entry to participate ◆ Android APK ◆ FOSS (Unlicense) ➔ No third party custodial risk ◆ Everything non custodial, all the time ➔ Increases the barrier of entry to surveil ◆ Tor (network privacy) ◆ Encryption (ECDH) ◆ Transaction Privacy (accounting for a public blockchain)
  20. Practice what you preach / PayNym PayNym (BIP47) serves as

    the foundation for a decentralized cryptographic identity system ➔ Based on theoretical work by Justus Ranvier and The Open Bitcoin Privacy Project ➔ The only stealth address implementation in production within the Bitcoin ecosystem ➔ Solves a major privacy issue that bitcoin users have. Sharing an address without worrying about the entire world knowing their balance and history.
  21. Practice what you preach / Whirlpool Whirlpool is designed to

    totally break the links of past history with the future activity of bitcoin as revealed on the public blockchain. ➔ Whirlpool is the only CoinJoin implementation on Bitcoin to offer 100% entropy mixes with zero deterministic links. ➔ Fee structure that is flat and designed to incentivize good post mix behavior ➔ Non Custodial ➔ Strict change output segregation ➔ Address reuse prevented ➔ Windows, MacOS, Linux, Android ➔ FOSS
  22. Practice what you preach / STONEWALL STONEWALL can be both

    a peer to peer CoinJoin and a decoy CoinJoin, both versions being indistinguishable from another on the blockchain ➔ Designed to introduce entropy (confusion) into transactions that would otherwise be deterministic. ➔ Clever use of inputs and outputs create transactions with many combinations
  23. Practice what you preach / Stowaway Stowaway is a peer

    to peer CoinJoin that looks like a standard bitcoin transaction. This particular transaction is designed to directly undermine the common ownership heuristic. ➔ Designed to introduce entropy (confusion) without a specific fingerprint on the blockchain. Any simple transaction (2 outputs) can be a Stowaway. ➔ Actual amount transacted not viewable on the blockchain ➔ First implementation of an idea by Gregory Maxwell that would later be known as “payjoin”
  24. Practice what you preach / Ricochet Ricochet is a type

    of transaction that adds distance between the origin address and the destination address of a transaction. ➔ Designed to help users avoid proximity based censorship and account closures at third party services such as exchanges.
  25. Practice what you preach / TxTenna Offline transactions composed in

    Samourai Wallet can be broadcast to the network over mesh network. ➔ Bypass data network limitations and restrictions with full offline wallet support. ➔ Joint project with goTenna Mesh and Samourai Wallet goTenna Mesh
  26. Practice what you preach / Soroban Soroban is a Tor

    based encrypted communication layer. ➔ Bitcoin agnostic. Can be used for a wide variety of communications between peers. ➔ Use in Samourai Wallet with PayNym decentralized identity to seamlessly and trustlessly coordinate peer to peer CoinJoin transactions. ➔ FOSS
  27. Practice what you preach / Dojo By default our Dojo

    and full node is used to query balances and transactions, users can run Dojo on their own single board computer and connect their wallet to it. ➔ DIY or Purchase a plug-n-play ➔ Tor based ➔ FOSS
  28. Conclusion The relative economic freedom that many of us take

    for granted today is rapidly disappearing. ➔ Digital currencies provide great promise for the individual to reclaim these eroding liberties, but also present new challenges if not handled with care. ➔ We see Samourai Wallet positioned as Bitcoin’s best gateway into the Digital Safe Haven economy ➔ Thank you!