Firewall property

#1

https://www.youtube.com/watch?v=04D2BP33YI8&feature=youtu.be&t=2m8s

at 16:00 he talks about the fireall property. I want to make a statement, that this brings no security at all.

How does this even bring security. I mean when an adversary moves newly created ADA (ADA that he created via an exploit) back, the “real” ADA cannot anymore be moved back. It makes no sense to call this a security-property, it just brings security for the mainchain-holders, but not really b/c in an event like this ADAs value will drop significantly. So you better peer review both layers (CSL and CL) and not only the CSL.

Am I right?

#2

I understood it in this way:
1.) of course also the side chain usually implements a fully trustless decentralized blockchain.
2.) whoever runs his own sidechain (private, organized nodes, ponzi, adversary, …) is firewalled from the main chain. So he can do whatever he wants (like double spends) in his sidechain but he can’t move this fraudulent gains back to the main chain.

#3

He was talking about a catastrophic failure of an adversary creating new ADA. The adversary could then move his newly created ADA back into the mainchain and everybody who has now “real” ADA on the sidechain cannot move it back anymore. Which ultimately destroys the value of ADA on the market. So in conclusion the firewall-property does not provide any security.

This is not only a problem for Cardano. Bitcoin AFAIK also wants to introduce a 2-way-peg. They developed years with high security in mind and then they give the Bitcoin security into hands of third party devs. Kinda off-topic, but I have a hard time imagining that this will happen (RSK).

So essentially I guess it comes down to saying that seperation of concerns provides security is simply not true. It’s maybe a nice feature from a architecture/readability/autitability point of view .

#4

I understand.
from my understanding, the firewall basically protects the main chain - and so all other sidechains - from gains created in an adversary controlled sidechain.
Of course, every sidechain should offer the same 51% major honest security as a “simple” blockchain would do. I have no information yet how transactions will scale on side chains, but from my understanding, it’s not a transparent multi-channel processing where the user has no idea on which one he is currently running on. I expect the side chains are there to process things like epochs of a business, or a certain project, without creating a transaction for every peanut on the main chain. It then depends on this projects/business requirements if this side chain is private or decentralized. Or they can fulfil regulatory requirements.

Anyway, it would be interesting to know more about, because it’s not only a question of “adversary gains destroys real ADA” but also on how or if ADA can leave a side chain - for example to a private wallet. Or how it would be possible to earn something on this side chain if it’s not possible to move this back to the main chain.

I already posted a similar question regarding this sidechains: Think about when someone sets up a private one, send ADA there, then back and destroy the entire side chain, in order to cut the traceability. That would be more efficient than any mixing service.

#5

I think I understand it. If you move your coins to a not Cardano approved Sidechain and that sidechain would print money and move them back, it should maybe not effect ADAs value. But if such an exploit would happen on the CL, it may have an effect on ADA. Some could argue that if you move your ADA to the CL you were informed that it is less secure. But obviously the value of ADA would then decrease since Cardano would loose the CL in the shortterm (until the problem is fixed).

#6

Please maintain educational work on youtube.

Thx