Topic: Is 51% attack a double-spending threat to bitcoin? - page 4. (Read 914 times)

You are rehashing the same argument the old "Don't trust, verify" thing which has fed the community up. It'd be a good occasion to make a re-assessment, I suppose and will do my best to help.

look, God is dead, and with him the absolute, eternal, big picture view of the universe. There is no highly privileged point of view, nobody is in charge of everything, Satoshi is gone and there are only millions of users, individual users and they should take care of their security, one by one, there is no community, we are not members of a sect.

Your notion about full nodes and how they are securing the network is misleading, full nodes are not securing anybody other than themselves, their own wallets and their own mining resources (for solo miners), this is it!

Now, please read my 3 above conditions and tell me from YOUR very own personal point of view: IF a hypothetical system could be able to fulfill all three of them do YOU or do YOU not feel absolutely secure?

It's actually because of the full nodes. They secure the network, to make sure the miners are following the rules, and make sure to mine the type of blocks that the full nodes demand.

Plus, https://twitter.com/bitcoinmagazine/status/1197161029832265729

Ambiguity and loosely defined terms circulating around in the community have bad consequences. In my previous post, I've presented some examples.

Accusing proposed schemes and improvements to bitcoin of being vulnerable to double-spending (because PoW is kinda suspicious to be 51% attacked by colliding pools/miners) is nothing less than cutting them out forever.

I'm not much of a conspiracy theory believer but I see a lot of bad incentives and I wouldn't be surprised if it found to be a deliberately implanted confusion. Anyway, it is time to get rid of this ambiguity and move forward, imo.

I see what you mean. When you restrict the meaning of double-spending in that way, then can I agree with you.

But what you call a "misinterpretation" is really a different understanding of the word's meaning. If you modify your approach, you could reduce the confusion about your point.


I agree that those are major challenges  to sharding. I look forward to your solution.

There are many proposals and ideas being abandoned or lack support in the community because of slogans like "Don't trust, verify" and wrong narrow assumptions about the criteria in which one can count on PoW and miners. For instance:

- We have UTXO commitment proposals that could help with the insane "sync form Genesis" policy but are not getting support because of a general hesitation of relying too much on PoW.

-  We have Drivechain and sidechains scaling solutions being left in darkness and confusion because people are arguing about how miners can steal all funds deposited there overnight.

- Most importantly, sharding schemes are being criticized for their too much reliance on PoW and mining.

The problem with this paranoia about mining is its lack of theoretic transparency. The advocates representing such paranoia have never established a reasonable framework to specify in what aspects and by what extent one can rely on PoW and where it is not a reliable source of trust.

In this topic, instead of vague and political ideas about how reliable are miners in bitcoin, I'm establishing a criteria-based measure:

Miners are reliable as far as:
1- Provably, they are not inflating the supply of bitcoins by breaching the regulations built into the protocol.
2- There is proof that any incoming fund to a wallet approved by miners, comes with an equal deduction from the ledger maintained by them.
3- There is a safe threshold for the number of confirmations where the costs of rewriting the blockchain outperform any criminal incentive for defrauding users by orders of magnitude.

what exactly do you mean by "put trust in miners" here?


it may be possible to cause some short term drama and maybe some small damage to bitcoin but it is extremely hard for a 51% attack to destroy bitcoin.
such attacks must be accompanied by scamming of a large number of bitcoin users out of a very large sum of money to be able to damage bitcoin. the scenario you describe requires that  country to start trading with other bitcoin users and then scams them by reversing the transaction! the cost of such scam is too huge which includes legal problems for that government.
otherwise just finding the same blocks that were mined and ending up with a longer chain could not "destroy" bitcoin.

To be even more clear:
Defrauding people by re-org attacks on blockchains is not double-spending because it doesn't inflate the coins in circulation, it is just a fraud!

- Collided miners/pools could be spotted and being put behind bars!

- Smart people should wait for enough (weeks maybe) confirmations before releasing large amounts of assets in exchange for digital tokens as long as they are concerned about such a threat.

There is absolutely no double-spending threat, bitcoin is an ultimate solution to this problem. let's elaborate more:


What is the double-spending problem?
For a digital token to be used as peer-to-peer electronic cash, a medium of exchange, it is absolutely necessary to have an inflation regulatory mechanism because digital streams are reproducible trivially bu consuming almost zero resources. Owners of digital assets have full incentives and sole power to send multiple copies to different users. Electronic signatures are of negligible relevance to help with mitigating this issue and trusted third parties gain too much power. A decentralized, trustless, permissionless, open solution is the only acceptable solution to this problem.

How bitcoin solves the double-spending problem?
The most critical game-changing innovation of Satoshi and bitcoin is the core idea of using a distributed ledger, synchronized by consensus. PoW and game theory are used in bitcoin as instruments to prevent spamming and adversary behavior by establishing a fair voting mechanism. As long as the distributed ledger is balanced and there is no inflation we have the solution and whether the instruments used are perfect or not is irrelevant. They are secondary problems.


Is bitcoin perfect?
Hell no! Bitcoin is just a first attempt to implement the solution, besides there is no such system in the universe, a perfect system! The most important flaw in bitcoin, which I've been investigating/trying_to_address for a long time is the infamous pooling pressure flaw and its 51% consequential threats.


Is the 51% problem a cloned form of the double-spending problem?
No! The 51% problem is secondary and has nothing to do with double-spending because it has no irregular inflation consequence. The main concerns with 51% are fraud and censorship/DoS vulnerabilities.

Is there any built-in countermeasure to mitigate 51% problem?
Yes, there is, PoW plus game theory, the former is flawed (pooling pressure)but working now and the later is not flawed.  

Is the "rational behavior assumption" in the way game theory is employed in bitcoin is a flaw?
No, it is not. There is no version of game theory without such assumption and it has been used in economics and politics exactly the same way as bitcoin is using it.

What's the point?
The point is about the infamous "Don't trust, verify" and how it is exaggerating the situation with miners in bitcoin. Putting trust in miners is discouraged too much and in a vague and confusing way. It is a major obstacle in the development scene of bitcoin IMO.

Specifically financial stability or long term financial plan. Double-spend via 51% attack could have good short term financial incentives if :
1. Network hashrate is relative low
2. Attacker have access to 51% or more hashrate (compared with network hashrate), either by own or rent mining hardware.
3. There's vulnerable exchange/service with relative low minimum confirmation and fast time to process withdraw request/send digital goods.

51% attack on BTG is the prime example.

Bitcoin is not a perfect solution to the double-spending problem, so there is always a threat.

The security of Bitcoin depends on financial incentives, specifically the assumption that the participating parties try to maximize their financial gain and that they act rationally to achieve that goal. The security can fail in cases where that assumption does not apply. A double-spend via a 51% attack can never be dismissed as impossible.

Two plausible examples:

Bitcoin could be doomed if a country decides that Bitcoin is a threat to national security and is willing to spend whatever it takes to dominate the hash rate and destroy Bitcoin via double-spends and DOS.

In 2014, ghash.io achieved more than 50% of the hash rate and could have performed a double-spend. Normally, a pool would not do that because it would mean the end of the pool as miners would desert them. But suppose ghash.io decided that they wanted to become famous for being the only pool to successfully execute a double-spend via a 51% attack regardless of the consequences. In the end, it turns out they really had nothing to lose because they lost all of their miners anyway. They didn't do a 51% attack, but they could have and they might have been motivated.

My answer: No!

My argument: By definition, bitcoin is a solution to the double-spending problem:

The way Satoshi puts it in the very first line of the white paper, as a solution, bitcoin is immune against, rather than resistant to, double-spending. Double-spending makes digital cash absolutely worthless because of its potential to suffer from unregulated inflation. Bitcoin is safe against such inflation inherently and it is not because of PoW on top of or game theory behind bitcoin. In its most vicious (and ignorant) way of malfunctioning, a majority of hash power could defraud single users and won't be able to create bitcoins out of nowhere.

Misinterpretation: A majority of hash power collided is claimed to be a double-spending threat to bitcoin because of the sole power of chain-reorgs that let them defraud users. Yet it is not a proper classification of this threat as such practices are bound by cost/incentive tradeoffs according to the game theory employed by bitcoin.

My take (which is a surprise somehow):
Unlike what is said ever and ever, one could put trust in miners as long as there is proof that:

• Miners are not inflating the supply illegally,
• The costs involved in defrauding him/her (personally) by re-org attacking the bllockchain are orders of magnitude higher than the assets he/she has put in stake.
  

This is the fundamental principle behind a hierarchical sharding scheme which I'll propose later.