Topic: GHash.IO is standing at 51% - page 4. (Read 5482 times)

We should see CEX.IO's statement and see what they are going to do.
Depending on how that unravels, it wouldn't be a bad idea to DDoS.

What's their business model if they charge 0% ?

One of the biggest innovations Bitcoin brings to the world is a way to conduct commerce without the need to trust other human beings.  By passing 50% (one could argue even 40% is too much), ghash.io changes this equation and now requires that we trust the person(s) running them -- whoever they are.  Apologists for ghash.io claim that it is not in their best interest to do anything to compromise the network, but it does not take much imagination to see that there are many scenarios in which this supposed conflict of interest does not prevent malicious mischief from taking place.  This flies in the face of everything that Bitcoin once stood for.

I believe I read recently that some of the core developers (including Gavin) are of the belief that there are no proactive measures they can take (as developers) to effectively stop a 51% attack and must instead wait until it occurs before introducing defensive changes to the code.  While there may be many technical reasons which support such a viewpoint, this should not make anyone who is s stakeholder in Bitcoin feel confident.  One can only imagine the selling frenzy and resulting price drop when the first significant double spends are confirmed.  Bitcoin has enjoyed a first mover advantage since the first altcoins appeared on the scene many years ago, but this is exactly the sort of thing that could erode its lead.

There are other ways to mitigate the problem.  One that has been already tried but appears to be ineffective is to appeal to the community to move their mining power to other pools.  Certainly there are other measures which I haven't seen discussed yet.  In the past, I have seen pools, even large ones, shut down for days at a time by large DDOS attacks.  Perhaps watching their mining revenue drop to near-zero for a couple of days might influence the owners of ghash.io to modify their ways.  Billions of dollars of market value are potentially at stake here compared with a much smaller loss in revenue for ghash.io of they are forced to limit themselves to less than 40% of mining.

Your coins have doubled just in number, not in its purchasability. Before the double spend, if u could buy a harley-davidson with your coin's FIAT value, after the double spend u'll be able to buy a plastic motorbike at a countryside fair with your coin's FIAT value.

Value comes from acceptance. The moment one starts mass double spending with 51% power, the moment they lose their coin's value. This is the same reason a government does not print FIAT as much as they wish.

1. send bitcoins to exchange
2. convert bitcoins to litecoin/fiat
3. pull litecoins/fiat from exchange
4. double spend the bitcoins back to yourself,
5. you now have your original bitcoins plus litecoin/fiat, your money has doubled.
6. go back to 1.

i call this stealing coins.

Just because you can rewrite the blockchain does not mean you have access to the private keys. So you cant actually steal coins. You can however spend coins more than once, but you must own them in the first place.

the amount of damage a single 6 block rewrite can do is massive, they could steal tens of millions from an exchange in a single week as a last bonus before they disappear into early retirement.

You are considering it only from technical angle. From that angle, by an intermittent 51% attack, the whole blockchain can be re-written. But bitcoin is not only a tech product, but also a financial one.

Lets say, if their holding GHash.IO can buy an island now. But, the moment they try to rewrite 6 blocks for 2 days, the purchasability of their holding will come down to a cup of tea on that island.

That is why 6 blocks will never be re-written.

Exactly. The rule of thumb is to take the amount of confirmations you want to reserve times 500 plus 1 will be the amount of minutes it takes to reverse the transaction if the attacker has a consistent amount of exactly 51% of the hashpower.
That translates to around 20 blocks eradicated per week (if they are in the past). For future blocks the attack can be instant after a amount of X confirmations is reached (like 6 conf. deposit requirement on an exchange. After its reached it can be reversed right away if the attacker planned the attack before the first confirmation happened).

When you have Bitcoin dev Peter Todd dropping half his coins because he thinks this is a real problem, I am minded to think this is a real problem.

http://www.reddit.com/r/Bitcoin/comments/281ftd/why_i_just_sold_50_of_my_bitcoins_ghashio/

"'If you can keep your head when all around you have lost theirs, then you probably haven't understood the seriousness of the situation" - David Brent (fictional character, The Office)

you are wrong, with 51% you can reverse any amount of confirmations.

It's not, it would take 301 Blocks or a bit more than 2 days of mining on top of ones own chain instead of the currently highest one in order to reverse a a 6 conf. Tx.

The result would be that at a consistent 51% you would get 154 blocks of 301 blocks with the rest of the network getting 147 blocks, which is a difference of exactly 7 blocks. Since the rest of the network had a 6 blocks headstart (remember you waited for 6 confirmations), you are now 1 block ahead. Release the chain (which is the currently longest) and the 147 plus the 6 blocks headstart including all their transactions are now void including your transaction with 6 confirmations (which actually had 153 confirmations by the time you released your chain).

And that is only if you start your attack after 6 confirmations had already taken place.
If you start accumulating blocks and withhold them, you will always have the longest chain because you have more hashpower. Now you wait for the Tx to get 6 confirmations (avg. of 1 hour), trade your coins at the exchange, get a payout, and release your chain, which is longer than the 6 conf chain on average (on average you won't have 7 blocks yet, but you are going to find your 7th block before the rest of the network and overrule the 6 conf Tx.

Note that this is all based on averages. It might take longer or shorter, but on an average, this is how long it will take.

I'm not sure about other harms the miner may cause with 51%, but the one u r suggesting is not possible. Remember, exchange is big player, just like a miner. They wont allow a miner to play in their ground w/o 6 block confirmation and once u get 6 block confirmation, its almost impossible to reverse even with 51%. So, robbing exchanges with 51% is not possible.

Yes because those are every day happenings. It happened before it will happen again...even if no pool has more than 10% hash power.

as long as they control a majority of hashing power they can rob exchanges by sending bitcoins to an exchange, converting them to litecoin/fiat and then canceling the bitcoin transaction.
bitcoin is going nowhere if we have to trust someone else not to erase transactions.

Some suspicious double spend attacks were recorded lately but we can't tell if it was them for sure. But it doesn't really seem like this is causing large scale problems so far.

It sure looks like that 
If bitcoin was about finding central power that secures whole network, ghas would be it.