Nov. 2, 2016

Making 'cryptocurrency' safe and reliable

A team of computer scientists is setting out to make the world safe for electronic money.

So-called “cryptocurrencies” such as Bitcoin and Ethereum offer a way to send, store or invest money online, bypassing private or government financial institutions. Unfortunately, these systems have been vulnerable to online theft. Last summer an online venture capital fund called The DAO was hacked for 36 million ether – worth at least $50 million U.S. dollars. (Cornell experts are assisting a recovery effort.) In recent years four-dozen Bitcoin operations have been taken for the equivalent of $755,964,335.

“The largest physical bank heist was the Dunbar armored truck robbery in 1997, and it was only for $28 million in today’s dollars,” reports Emin Gün Sirer, associate professor of computer science. “Stealing money from Bitcoin banks is where the action is today.”

Sirer is a co-director of the Initiative for CryptoCurrency and Contracts (IC3), an effort by faculty members at Cornell, Cornell Tech, the University of California-Berkeley, the University of Illinois at Urbana-Champaign and the Technion – Israel Institute of Technology to create a foundation on which to build safe and reliable online money systems for the future. The work is supported by a $3 million, three-year grant from the National Science Foundation.

A major goal is to create a programming language that will make it easy to write safe and reliable “smart contracts” – computer programs that set the rules for businesses that work with digital money. The team also hopes to improve the working of “blockchains” that travel around the internet to store records of online transactions. An immediate project is to encrypt the records to preserve privacy.

IC3 is based at the Jacobs Technion-Cornell Institute at Cornell Tech. Co-directors with Sirer are Elaine Shi, associate professor of computer science, and Ari Juels, professor at the Jacobs Institute. Other affiliated Cornell faculty members include James Grimmelmann, professor of law at Cornell Tech and Cornell Law School; Roni Michaely, the Rudd Family Professor of Finance at the Samuel Curtis Johnson Graduate School of Management; Andrew Myers, professor of computer science; Rafael Pass, associate professor of computer science; and Robbert van Renesse, a principal research scientist in the Department of Computer Science.