Topic: Any realistic risks on price decrease/hashrate decrease? - page 2. (Read 575 times)

            Selling BTC on centralized Fiat exchanges does not lead to fair price and transparency. Just take a look at precious metals.

OP, realistically? I believe there is none. The "attackers" would be in a better situation if they mined honestly and supported the network, or invest their money in Bitcoin, instead of spending it to "kill" Bitcoin.

If Bitcoin was really dying, then no one needs to do anything but watch.

It has been 10 years and hashrate has not been always that high and no "destructive" attacker with an irrational agenda has ever showed up.

And it is the point: bitcoin is not designed to resist crazy players ready to burn everything including his assets to ashes but let's take a look at such a hypothetical scenario:
A crazy person or entity ready to burn like billions of dollars to destroy bitcoin for fun or for some political agenda: e.g. Trump fails to making america great again by destroying Iran because they use bitcoin as a detour to buy medicine or food or cellphones so, he decides to ruin bitcoin by spending 1-2 billion dollars (probably he blackmails Bin Salman to cover the budget) now what happens?

Trump buys like 10,000,000 s9s (from nowhere) and plugs them to a huge 15,000 MW power plant. what are the costs? No matter, Bin Laden Salman would pay.  

Now what? Idiots who are running the attack on behalf of Trump, avoid confirming transactions and generate empty bloks while rejecting occasional blocks produced by loyal miners, bitcoin looks to be dead, well it is not, yet!

1- Attackers won't be able to rewrite the blockchain for more than a specific length because a work tens of thousands greater than what they can afford is already accumulated in the history. So, history won't be rolled back very deep.

2- It is a matter of few hours for the jump in hashrate and malicious actions to be discovered and people start considering to fight back.

3- Within 24 hours loyal miners stop operations and Trump crew slow down too, it helps them keeping costs lower. Bad news but definitively not the end as opportunity costs are still high besides human resources, ....

3- The first reaction would be using checkpoints in the code to preserve the history up to the attack start time.

4- The next step would be forking to another algorithm making Trump-Bin Salman investment totally void.

Now they have to recruit new forces and continue chasing us in case Trump gets re-elected and is still pissed off about his failure. We are screwed, but no worries, Bin Salman is screwed too  

Oh yes that's true. To elaborate, I was thinking about the case of an attacker buying / developing / producing a sufficient amount of mining hardware at rather short notice. That I deem close to impossible, even given generous funding (ie. money can speed things up only within a limited margin as the law of diminishing returns kicks in).

Time for preparation may be plenty, but once the preparations are done the clock is ticking -- an attacker only has a limited timeframe before their hardware becomes obsolete.


Come to think of it, I believe there's a flaw in trying to suppress Bitcoin's price to make 51% attacks easier -- you'd have to buy in first, which would likely prop up the price and consequently the overall hashrate. I might underestimate OTC markets and the impact of derivatives though.

@aliashraf: Good point, I think we discussed it in another thread. While price/market cap is a debatable indicator, indirectly it influences the profit expectations of an attacker (or better: all potential attackers). Only for destructive attacks (with the goal to "kill" Bitcoin without mattering costs, e.g. started by a government) the incentive is not tied to price.

For these "destructive" attackers, maybe bear markets with shrinking hashrates are an opportunity. It's however not sure if a "destruction by 51% attack" is even possible, as the community can most likely escape with a snapshot followed by a hard fork with PoW algorithm change.

Agree.

I think an attacker having the funds to buy the necessary hardware should also have the funds to develop it straight away and pay a foundry to produce the ASICs. Also, an 51% attack most likely isn't a goal accomplishable in some days or weeks - but the attacker has all the time he wants to prepare it (and buy/develop/rent hardware).

I doubt a 51% attack would be viable (or close to viable) just yet, the cost is simply still too high.

Problem being, where to get the mining hardware? You'd still need current the hashrate and them some to mount an attack.

The currently known large mining hardware producers are unlikely to defect this way, as that would be throwing away a profitable million dollar business.

The hardware that dropped off the network could probably be bought for cheap but that would be (a) an enormous logistical challenge, assuming we're talking about multiple unrelated operations across the globe, (b) hardware that is most likely outdated, given that unprofitable miners will drop off first and (c) still way too little hashing power.

What is left is either (a) buying miners wholesale from mining hardware producers or (b) developing mining hardware from scratch. Both incredibly expensive and both options that would take a lot of preparation time (ie. in case of (a) only a limited quantity of miners are in stock at any given time so you can't buy all at once, in case of (b) research and development and having the miners produced).

In short, the only ones potentially capable of attacking Bitcoin, even considering a continuous decline of hashrate, are the ones that already have skin in the game. At the point that Bitcoin becomes effectively attackable for an outside adversary it's likely not worth attacking anymore anyway.

Security is not just about how low attack costs are, incentives should b taken into account as well. Bitcoin price is down like 50% in November but hashrate declined just 25%. It implies a highly de-incentivization of attacks in spite of moderate improvement in the costs of carrying out them. Outcome? Improved security!

It is the beauty of bitcoin and PoW, you have not to worry about security because of its self-regulatory mechanism. The same factor that de-incentivizes mining and decreases hashrate secures the network by making it less temptative for adversaries. On the opposite side, price would never go (and stay enough) that high to make bitcoin insecure because once it approaches that thresholds, users feel unsafe and start dumping their funds and correction happens.

As of 50%+1 short range double spend attack: Never mind! It would be the victim's fault not to wait for enough confirmations when trading multi million dollar assets. I think exchanges and traders have learned their lessons after latest btg double spend which was really embarrassing.

I've started a somewhat related topic here, so let's see

IMO, most big miners won't leave from one day to another. They have lots of costs to pay not related to electricity (renting the building, labour costs). So as long as they think the Bitcoin price will increase again, and they have the possibility to do it, it makes sense for them to keep on mining if the price is slightly under their "break even price".

So the attacker must be able to lower the price for a longer timeframe than just one or two weeks, and the price must get really low in a short timeframe.

If the attacker has these funds, it's likely he could also start a 51% attack from the start, without having to buy and then sell lots of Bitcoins. There is one slightly more dangerous option: Shorting. But the supply of Bitcoins available for shorting is very likely too small to move the price that significantly to massively drive miners out.

I was wondering if there is any realistic systemic risks if an attacker with enough funds (see, fiat cartels, with their various tools such as futures, printing funds and whatnot) are able to suppress the price to put miners into bankruptcy in order lower the hashrate (thus security of the network) and once decreased enough, launching a 51% attack of sorts or any other malicious action that could be performed upon a weakened network (as miners left due lower prices). We've already seen a decrease in hashrate and many miners forced to quit.

Is this FUD and an non issue because the numbers are still oto high to make it work for the attacker? or is that a real threat that cloud cause a chain reaction of miners leaving?