Topic: How exactly would a 51% attack work? - page 3. (Read 19294 times)
I think the most important thing about a 51% attack is not what the entity will do with a new block chain... it is only the fact that it happened and the bitcoin network will crumble! unfortunately.
I think there are many misunderstandings about a 51% attack. There isn't much you stand to gain by using 51% of the hashing power to double spend. Let me explain...
There can only be one entity at a time who is in a position to do a 51% attack. It's not like everyone you transact with is suddenly going to burn you with a double spend. All the honest miners will focus their efforts on identifying who this 51% attacker is and not doing trades with them. Once it's known the network is under a 51% attack, the honest nodes will quickly start blacklisting addresses that performed double spends and limit the attackers ability to spend his coins. He would essentially be destroying all his coins.
There can only be one entity at a time who is in a position to do a 51% attack. It's not like everyone you transact with is suddenly going to burn you with a double spend. All the honest miners will focus their efforts on identifying who this 51% attacker is and not doing trades with them. Once it's known the network is under a 51% attack, the honest nodes will quickly start blacklisting addresses that performed double spends and limit the attackers ability to spend his coins. He would essentially be destroying all his coins.
Ahh, I see. So 51% is the magic number because that's the point at which a person can make alternative blocks faster than the rest of the network combined, and then spring the alternative, longer blockchain on everybody all at once, later on, where it replaces the blocks everyone thought were already finalized and settled.
Thank you!
This attack isn't the only thing you can do with high hashrate, though.
The key thing to note in Meni's explanation is 'eventually'. Due to variation it would be quite possible that the attacker might not find more blocks than the 49% for days or weeks even.. There is a HUGE amount of luck involved on the attackers end if they are to be successful. Plus the attacker would have to ensure he actually had complete control of the daemon that was keeping tabs on his attack blocks. A pool in itself over 50% means nothing unless it can be hacked and controlled completely or the OP was in on it. In the case of most pools they would lose more than they would stand to gain from what would certainly only be allowed to happen once.
That being said, we are seeing more spread of hashing power these days and there are projects in the works that will help to maintain a high overall network hashrate, detering 'lone' 51% wolves from gaining enough to beat the entire network on their own.
If you have a lower percentage but still reasonable, like 40% or something, you can do a Finney attack.
I can't think since I'm listening to the bitcoin interview, but have a look here: https://bitcointalksearch.org/topic/m.48384
I can't think since I'm listening to the bitcoin interview, but have a look here: https://bitcointalksearch.org/topic/m.48384
Your understanding is close.
If I had 51%, I could mine a chain of blocks in which I transfer all my coins to my personal wallet. I'd mine this chain about 10 long, but not tell the rest of the network. At the same time, I convert all my coins to dollars on the exchange and withdraw them. This happens on the normal blockchain.
After my withdrawal has gone through. the normal blockchain is about 9 long, while my blockchain is 10 long. I announce all my blocks to the network, and lo and behold, the network confirms I am right.
But dollars can't be reverted! So the exchange takes a loss.
Instead of the exchange, I could do this with buying anything for bitcoins. If this happens a few times, it will probably kill bitcoin, or at least hurt the trust in the system severely.
If I had 51%, I could mine a chain of blocks in which I transfer all my coins to my personal wallet. I'd mine this chain about 10 long, but not tell the rest of the network. At the same time, I convert all my coins to dollars on the exchange and withdraw them. This happens on the normal blockchain.
After my withdrawal has gone through. the normal blockchain is about 9 long, while my blockchain is 10 long. I announce all my blocks to the network, and lo and behold, the network confirms I am right.
But dollars can't be reverted! So the exchange takes a loss.
Instead of the exchange, I could do this with buying anything for bitcoins. If this happens a few times, it will probably kill bitcoin, or at least hurt the trust in the system severely.
Ahh, I see. So 51% is the magic number because that's the point at which a person can make alternative blocks faster than the rest of the network combined, and then spring the alternative, longer blockchain on everybody all at once, later on, where it replaces the blocks everyone thought were already finalized and settled.
Thank you!
This attack isn't the only thing you can do with high hashrate, though.
What else can you do ? Please share. Thank you !
Your understanding is close.
If I had 51%, I could mine a chain of blocks in which I transfer all my coins to my personal wallet. I'd mine this chain about 10 long, but not tell the rest of the network. At the same time, I convert all my coins to dollars on the exchange and withdraw them. This happens on the normal blockchain.
After my withdrawal has gone through. the normal blockchain is about 9 long, while my blockchain is 10 long. I announce all my blocks to the network, and lo and behold, the network confirms I am right.
But dollars can't be reverted! So the exchange takes a loss.
Instead of the exchange, I could do this with buying anything for bitcoins. If this happens a few times, it will probably kill bitcoin, or at least hurt the trust in the system severely.
If I had 51%, I could mine a chain of blocks in which I transfer all my coins to my personal wallet. I'd mine this chain about 10 long, but not tell the rest of the network. At the same time, I convert all my coins to dollars on the exchange and withdraw them. This happens on the normal blockchain.
After my withdrawal has gone through. the normal blockchain is about 9 long, while my blockchain is 10 long. I announce all my blocks to the network, and lo and behold, the network confirms I am right.
But dollars can't be reverted! So the exchange takes a loss.
Instead of the exchange, I could do this with buying anything for bitcoins. If this happens a few times, it will probably kill bitcoin, or at least hurt the trust in the system severely.
Ahh, I see. So 51% is the magic number because that's the point at which a person can make alternative blocks faster than the rest of the network combined, and then spring the alternative, longer blockchain on everybody all at once, later on, where it replaces the blocks everyone thought were already finalized and settled.
Thank you!
This attack isn't the only thing you can do with high hashrate, though.
Your understanding is close.
If I had 51%, I could mine a chain of blocks in which I transfer all my coins to my personal wallet. I'd mine this chain about 10 long, but not tell the rest of the network. At the same time, I convert all my coins to dollars on the exchange and withdraw them. This happens on the normal blockchain.
After my withdrawal has gone through. the normal blockchain is about 9 long, while my blockchain is 10 long. I announce all my blocks to the network, and lo and behold, the network confirms I am right.
But dollars can't be reverted! So the exchange takes a loss.
Instead of the exchange, I could do this with buying anything for bitcoins. If this happens a few times, it will probably kill bitcoin, or at least hurt the trust in the system severely.
If I had 51%, I could mine a chain of blocks in which I transfer all my coins to my personal wallet. I'd mine this chain about 10 long, but not tell the rest of the network. At the same time, I convert all my coins to dollars on the exchange and withdraw them. This happens on the normal blockchain.
After my withdrawal has gone through. the normal blockchain is about 9 long, while my blockchain is 10 long. I announce all my blocks to the network, and lo and behold, the network confirms I am right.
But dollars can't be reverted! So the exchange takes a loss.
Instead of the exchange, I could do this with buying anything for bitcoins. If this happens a few times, it will probably kill bitcoin, or at least hurt the trust in the system severely.
Ahh, I see. So 51% is the magic number because that's the point at which a person can make alternative blocks faster than the rest of the network combined, and then spring the alternative, longer blockchain on everybody all at once, later on, where it replaces the blocks everyone thought were already finalized and settled.
Thank you!
Your understanding is close.
If I had 51%, I could mine a chain of blocks in which I transfer all my coins to my personal wallet. I'd mine this chain about 10 long, but not tell the rest of the network. At the same time, I convert all my coins to dollars on the exchange and withdraw them. This happens on the normal blockchain.
After my withdrawal has gone through. the normal blockchain is about 9 long, while my blockchain is 10 long. I announce all my blocks to the network, and lo and behold, the network confirms I am right.
But dollars can't be reverted! So the exchange takes a loss.
Instead of the exchange, I could do this with buying anything for bitcoins. If this happens a few times, it will probably kill bitcoin, or at least hurt the trust in the system severely.
If I had 51%, I could mine a chain of blocks in which I transfer all my coins to my personal wallet. I'd mine this chain about 10 long, but not tell the rest of the network. At the same time, I convert all my coins to dollars on the exchange and withdraw them. This happens on the normal blockchain.
After my withdrawal has gone through. the normal blockchain is about 9 long, while my blockchain is 10 long. I announce all my blocks to the network, and lo and behold, the network confirms I am right.
But dollars can't be reverted! So the exchange takes a loss.
Instead of the exchange, I could do this with buying anything for bitcoins. If this happens a few times, it will probably kill bitcoin, or at least hurt the trust in the system severely.
Let's say a person drops a few million bucks and now has 51% of the network hashing power, and he wants to run the 51% attack we hear so much about. What does he do?
My understanding is that he makes a payment to a person for goods, receive the goods, and then quickly make a second payment to an address he owns. If he happens to mine the next block (which he will with 51% probability), he includes the payment to his own address in the block but not the payment to the person who he received goods from. Then what? Will all further blocks reflect that the first transaction to the defrauded person never happened and the second transaction did happen?
The problem I have with my understanding of this is that there is only marginal benefit to having 51% of the network - having 51% of the network only allows you to double spend 51% of the time. But if you had 40% of the network, you would be able to double spend 40% of the time, which is still a pretty serious problem. There's nothing really special about getting 51%, right?
Is my understanding of this wrong? Thanks.
My understanding is that he makes a payment to a person for goods, receive the goods, and then quickly make a second payment to an address he owns. If he happens to mine the next block (which he will with 51% probability), he includes the payment to his own address in the block but not the payment to the person who he received goods from. Then what? Will all further blocks reflect that the first transaction to the defrauded person never happened and the second transaction did happen?
The problem I have with my understanding of this is that there is only marginal benefit to having 51% of the network - having 51% of the network only allows you to double spend 51% of the time. But if you had 40% of the network, you would be able to double spend 40% of the time, which is still a pretty serious problem. There's nothing really special about getting 51%, right?
Is my understanding of this wrong? Thanks.
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