One serious problem with a 51% attack is that the attacker can just ignore other people's blocks. Given more than half the hashing power, eventually the blockchain he creates all by his lonesome is longer. At which point, he pockets all the block rewards.
Heck, he could even start mining ten or twenty blocks in the past, forcing a chain reorg when he catches up, and thereby get block rewards that were given to someone else before his attack began.
It is not at all unusual to see seven or eight out of every nine blocks go to one of the top three mining pools. Even the top two account for more than half. If they collude, then they can just freeze out all other miners until they feel like letting go.
Of course you wouldn't want to do it for more than a few hours a week or so, because hey, people would notice and then the value of what you stole would crash to nearly nothing.
Y'all may be more worried about double spends, and a merchant who finds himself out of merchandise that someone bought with coins on an orphaned fork. But that's surely not the only thing you need to worry about.
Topic: How are large mining pools not a threat? (Read 4563 times)
I think it takes about 4-5 of these large pools (BTCGuild Size) to get the %51 enough for this. Now to get all these people insane and to target the network they benefit from can be considered as a conspiracy theory. also if this is noticed miners will simply leave that pool.
You can just go right ahead with your blind ignorance. I respect your freedom to do so.
For those of us actually concerned about Bitcoin's longevity, how about giving some thought to my proposal earlier: what if we (and the Bitcoin devs) just built the concept of P2Pool (something similar) into Bitcoin itself? Basically, for any block to be accepted anywhere, it would have to be mined by someone participating in the one - and only - decentralized "pool".
If a system is only as strong/secure as its weakest component, I would consider mining to be that for Bitcoin. The way mining currently works encourages centralized mining pools (which happen to consolidate over time into large pools). This flies in the face of Bitcoin's core, foundational objectives.
The Bitcoin protocol is a piece of software. As a software developer, I can tell you that no piece of software is EVER perfect. I often get the feeling that people on these forums assume Bitcoin is perfect in its current state. That is not the case (the Bitcoin devs will be the first to tell you it's not perfect), but it's getting better every day.
So, why not fix this aspect of Bitcoin now before it becomes a problem? Why leave it up for debate, letting people speculate about how feasible it may or may not be? Why not just, you know, actually face these problems like clear-minded adults? I realize that changing the protocol (especially to modify it in this way) is no trivial task. But the whole concept of a decentralized cryptocurrency was no trivial task either, yet it exists (thanks to some hard work), and it's pretty dang awesome in my opinion. That doesn't mean we shouldn't try to improve it when weaknesses are identified (however "unlikely" we may think they are).
I think it takes about 4-5 of these large pools (BTCGuild Size) to get the %51 enough for this. Now to get all these people insane and to target the network they benefit from can be considered as a conspiracy theory. also if this is noticed miners will simply leave that pool.
I think one thing you're missing is the fact that the nefarious miner can only succeed with a certain probability. Consider a nefarious miner with 25% of the global hash power:
The probability that he mines the next block = 25%
The probability that he mines the next two blocks is 0.25 x 0.25 = 6.25%
...
The probability that he mines the next six blocks is 0.25^6 = 0.024%
The probability that he mines the next seven block is 0.25^7 = 0.0061%
Consider your example of double-spending to crash the market: the nefarious miner transfers 10,000 BTC to MtGox to dump, and then starts trying to mine a new chain fast enough that he can "undo" this 10,000 BTC transaction. While feverishly mining, he waits till his MtGox deposit has confirmed, and then market sells his 10,000 BTC. Due to slippage he gets significantly below market price. Then it dawns on him that since he only has 25% of the global hash power, the chances that he will actually succeed in this double-spend attempt is remarkably small. He literally must perform this fraud attempt hundreds of times before he is likely to succeed. Each time he fails, he looses a significant amount of his capital (because he just did something stupid like market selling 10,000 coins). In the extremely unlikely event that he succeeds before he runs out of bitcoins, what he did will be pretty obvious since he would orphan a long valid chain, that, hmm, just happens to correspond with the big dump at MtGox.
The probability that he mines the next block = 25%
The probability that he mines the next two blocks is 0.25 x 0.25 = 6.25%
...
The probability that he mines the next six blocks is 0.25^6 = 0.024%
The probability that he mines the next seven block is 0.25^7 = 0.0061%
Consider your example of double-spending to crash the market: the nefarious miner transfers 10,000 BTC to MtGox to dump, and then starts trying to mine a new chain fast enough that he can "undo" this 10,000 BTC transaction. While feverishly mining, he waits till his MtGox deposit has confirmed, and then market sells his 10,000 BTC. Due to slippage he gets significantly below market price. Then it dawns on him that since he only has 25% of the global hash power, the chances that he will actually succeed in this double-spend attempt is remarkably small. He literally must perform this fraud attempt hundreds of times before he is likely to succeed. Each time he fails, he looses a significant amount of his capital (because he just did something stupid like market selling 10,000 coins). In the extremely unlikely event that he succeeds before he runs out of bitcoins, what he did will be pretty obvious since he would orphan a long valid chain, that, hmm, just happens to correspond with the big dump at MtGox.
Don't forget that no exchange will actually send your funds instantly, they all wait days/hours, and large transactions are manually processed. Additionally, a double spend is not only publicly viewable but OBVIOUS once it has successfully happened. You'd never get any money from the exchange........
......because Bitcoin is really just a centralized form of privatized currency that is under the control of non elected officials called exchange and mining pool owners.
Mine on p2pool.
P2Pool seems like a good solution from what I understand. Yet according to blockchain.info, it accounts for only 2% of mining power. Can someone familiar with P2Pool vs other pools explain why it's not more popular? Is there something that could be done to help it grow?
The variance in payouts is pretty big since each share has a larger difficulty than shares of other pools.
Also p2pool has a 1% fee or something, I think other large pools can afford to take no fee at all.
It shouldn't matter in the long run. I guess miners don't know or don't care as long as the btc keeps coming in.
People can donate to p2pool which adds to the rewards miners get. If enough people do it publicly it might convince miners to switch.
Instead of relying on people doing something "smart" and supporting a solution like P2Pool, is there some way the concept behind P2Pool could be built in to the Bitcoin protocol itself, disallowing any mining that doesn't happen in a decentralized way? In my opinion, the solution needs to be built in to Bitcoin at a fundamental level.
How do you counteract such an attack? Fork the blockchain, and orphan the cheating block.
By the time you detect the block as being a "cheating block", the attacker will have already spent their coins and converted them into something that can't be taken back. All your fork does is restore the attacker's original balance, allowing them to repeat the attack again and again.
Mine on p2pool.
P2Pool seems like a good solution from what I understand. Yet according to blockchain.info, it accounts for only 2% of mining power. Can someone familiar with P2Pool vs other pools explain why it's not more popular? Is there something that could be done to help it grow?
The variance in payouts is pretty big since each share has a larger difficulty than shares of other pools.
Also p2pool has a 1% fee or something, I think other large pools can afford to take no fee at all.
It shouldn't matter in the long run. I guess miners don't know or don't care as long as the btc keeps coming in.
People can donate to p2pool which adds to the rewards miners get. If enough people do it publicly it might convince miners to switch.
they aren't a threat because they are not nefarious.
So why don't we just cut to the chase and pool all the mining power into a single pool owned by a single, non-nefarious, person?
The pool may not be a threat, but the possibility of downtime weakening the network is.
It isn't worth doing something that will just be erased within the system itself.
This is the first time in history where thieves/bankers can't steal without being publicly seen throughout the whole system.
A fork would terminate any massive attempts, and it would have to be massive for the resources used to be almost worth it, but again it will never be worth it period.
This is the first time in history where thieves/bankers can't steal without being publicly seen throughout the whole system.
A fork would terminate any massive attempts, and it would have to be massive for the resources used to be almost worth it, but again it will never be worth it period.
You have got to be kidding me. Did you hit reply and quote me without reading what I said?
BEING "WORTH IT" DOESN'T MATTER.
If the attack is possible, then it CAN and WILL happen. Just give it time. If you are all really too blind to see that, then gosh, this community really isn't what I thought it was. I thought we (most of us) wanted Bitcoin to succeed. I thought we'd support a discussion about possible measures that would help ensure the long-term success of Bitcoin. Instead, all I hear is people saying "you're an idiot for thinking someone would want to do that."
Sheesh.
To me the issue is this, lets say 95% of the network hashing power is spread across 5 pools. All a malevolent group needs to do is disable these 5 pools for a matter of hours to successfully attack the network. As Im sure all miners know, even the best pools dont have 100% uptime. Now imagine the 5 biggest pools all went down within minutes of each other. Im quite sure a group with big resources and talent, let alone the nearly omnipotent NSA, could achieve something like this with relative ease.
It isn't worth doing something that will just be erased within the system itself.
This is the first time in history where thieves/bankers can't steal without being publicly seen throughout the whole system.
A fork would terminate any massive attempts, and it would have to be massive for the resources used to be almost worth it, but again it will never be worth it period.
This is the first time in history where thieves/bankers can't steal without being publicly seen throughout the whole system.
A fork would terminate any massive attempts, and it would have to be massive for the resources used to be almost worth it, but again it will never be worth it period.
You have got to be kidding me. Did you hit reply and quote me without reading what I said?
BEING "WORTH IT" DOESN'T MATTER.
If the attack is possible, then it CAN and WILL happen. Just give it time. If you are all really too blind to see that, then gosh, this community really isn't what I thought it was. I thought we (most of us) wanted Bitcoin to succeed. I thought we'd support a discussion about possible measures that would help ensure the long-term success of Bitcoin. Instead, all I hear is people saying "you're an idiot for thinking someone would want to do that."
Sheesh.
I'm all with you on this.
It's depressing to see how people advocate Bitcoin as being trust free, yet chose to ignore any threat that makes it trust based.
If the developers won't address such threats, Bitcoin will be destroyed sooner or later.
It's value is derived from its main promise; of being trust free. Without this promise, Bitcoin is nothing.
Mine on p2pool.
P2Pool seems like a good solution from what I understand. Yet according to blockchain.info, it accounts for only 2% of mining power. Can someone familiar with P2Pool vs other pools explain why it's not more popular? Is there something that could be done to help it grow?
It isn't worth doing something that will just be erased within the system itself.
This is the first time in history where thieves/bankers can't steal without being publicly seen throughout the whole system.
A fork would terminate any massive attempts, and it would have to be massive for the resources used to be almost worth it, but again it will never be worth it period.
This is the first time in history where thieves/bankers can't steal without being publicly seen throughout the whole system.
A fork would terminate any massive attempts, and it would have to be massive for the resources used to be almost worth it, but again it will never be worth it period.
You have got to be kidding me. Did you hit reply and quote me without reading what I said?
BEING "WORTH IT" DOESN'T MATTER.
If the attack is possible, then it CAN and WILL happen. Just give it time. If you are all really too blind to see that, then gosh, this community really isn't what I thought it was. I thought we (most of us) wanted Bitcoin to succeed. I thought we'd support a discussion about possible measures that would help ensure the long-term success of Bitcoin. Instead, all I hear is people saying "you're an idiot for thinking someone would want to do that."
Sheesh.
OP is perfect example of people still not understanding every tiny thing in BTC is recorded.
The resources used to attempt and cheat the system will never be worth it ever.
The resources used to attempt and cheat the system will never be worth it ever.
Believe me, I understand the idea of a distributed, peer-verified ledger. Perhaps you still do not understand that "being worth it" SHOULD NOT MATTER. The system is built to be mathematically strong, not strong due to someone's predictions regarding human nature and incentives.
It isn't worth doing something that will just be erased within the system itself.
This is the first time in history where thieves/bankers can't steal without being publicly seen throughout the whole system.
A fork would terminate any massive attempts, and it would have to be massive for the resources used to be almost worth it, but again it will never be worth it period.
You realize how big the hashing power of the network already is right? And getting bigger by the day
...
The hashing power size is barely relevant for this discussion.
If an attacker has 51% of it, its absolute size doesn't matter.
There is one final defense against a 51% attack.
Nodes can refuse to propagate blocks made by a malicious node.
I don't see how your statement invalidates, or even relates to mine.
Regardless of last-defense measures (which don't exist yet in the client anyway), what determines the possibility of an attack is not the total hashing power, but its relative concentration.
A network with trillion times the power of the current network, concentrated in 1 hand, will be horribly weaker than the current.
Mine on p2pool.
You realize how big the hashing power of the network already is right? And getting bigger by the day
...
The hashing power size is barely relevant for this discussion.
If an attacker has 51% of it, its absolute size doesn't matter.
There is one final defense against a 51% attack.
Nodes can refuse to propagate blocks made by a malicious node.
You realize how big the hashing power of the network already is right? And getting bigger by the day
...
The hashing power size is barely relevant for this discussion.
If an attacker has 51% of it, its absolute size doesn't matter.
OP is perfect example of people still not understanding every tiny thing in BTC is recorded.
The resources used to attempt and cheat the system will never be worth it ever.
The resources used to attempt and cheat the system will never be worth it ever.
Believe me, I understand the idea of a distributed, peer-verified ledger. Perhaps you still do not understand that "being worth it" SHOULD NOT MATTER. The system is built to be mathematically strong, not strong due to someone's predictions regarding human nature and incentives.
OP is perfect example of people still not understanding every tiny thing in BTC is recorded.
The resources used to attempt and cheat the system will never be worth it ever.
The resources used to attempt and cheat the system will never be worth it ever.
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