Security Notes: Randomness Is Better Than Math

We were all fascinated, and perhaps intimidated, in school when we learned Euclid’s geometry and the way he was able to prove statements and declare facts that exceeded human experience.

Euclid did not draw all possible triangles to measure and verify that any and all triangles will have exactly 180 degrees for the sum of their angles. He used mathematical logic to back up his claim. And indeed, for thousands of years ever since no one was able to draw a triangle on a flat surface such that the sum of its angles was 179 degrees, or 181 degrees. And nobody is concerned today that the emerging quantum computers will defeat this ancient Greek mastermind. That is why we regard math with such admiration and a sense of awe.

Comes now something called “mathematical money,” most notably Bitcoin. It is built on a mathematical foundation. What could have been better?

Some call Bitcoin “digital gold.” This is rather misleading.  Gold is tested against all sorts of acids and other chemical reagents. Most of us are not chemists, but we trust and believe that gold cannot be chemically corrupted. Likewise, most of us are not mathematicians, but we trust that the mathematical foundation of Bitcoin is as solid as Euclid’s geometry.

Surprisingly, perhaps, this is not the case. Unfortunately, though, very smart, highly respected individuals with solid cryptographic credentials are insisting that the mathematical foundation of common digital coins is unassailable. Imagine that, instead of offering a proof, Euclid had come forward and said: “I have been drawing hundreds of triangles and all of them had 180 degrees, so being smarter than anybody else I know, it is clear that no one can draw a triangle with other than 180 degrees.”

This would not have cut it, and we would not have celebrated Euclid as the great mathematician he was. But this is exactly what contemporary mathematicians are saying about Bitcoin and its ilk: “We tried to crack it and failed, so how would lesser mathematicians put us at risk?”

What protects Bitcoin, Ethereum, Tether, and their like is not a mathematical barrier, but an innovation step. Bitcoin traders claim “In algorithm we trust,” meaning, we bet on mathematics. This is math falsification. Bitcoin traders, in fact, bet against innovation. In this day and age, it is more than a tad ironic, but it is legitimate: people bet for and against many things. What is important is to make it clear. Cigarettes are sold freely, but with a cancer warning. Bitcoin should be traded freely, but with a clear warning that someone may be smart enough to cross this innovative step, and void all the wealth captured by its math.

It was refreshing to hear David Sacks, the new Czar for Crypto and AI, admitting in a Fox interview that if the Bitcoin innovative step were negotiated, Bitcoin would lose all its value, adding that, for now, there is no known success.

The people who wish to cast Bitcoin as a dollar alternative are desperately trying to hide this vulnerability. Many claim that the fantastic benefits of digital money should justify betting against innovation. They are wrong. All the benefits of digital money can be claimed by a different digital currency that relies on randomness rather than on unproven math.

Randomness can deliver what math can’t. Randomness is the cyber equivalent of the material gold, indestructible, durable, shining. Its story will come in a future column.

The fascinating account of how randomness defeats math is presented in my new thriller, “The Cipher Who Came in From the Cold.”

—Gideon Samid gideon@bitmint.com