Topic: Is 51% Attack possible (Read 309 times)

Reputation is a secondary factor that only pools have to pay attention to as long as they need and profit from individual miners joining their pool to add hash power to the pool.

Bitcoin's trustless mechanics doesn't care about reputation or need it at all. It is designed to not need any trust or reputation, to be clear. Trustless PoW encourages honest mining which gives you better yield than any malicious actions. Required costs for 51%-attacks would be enormous, as already said here, the gain pretty much not sustainable and non-existant in the long run overall.

Governments would likely try to hurt Bitcoin by other means and not by investing and mining themselves.

Bitcoin was very susceptible to a 51% attack in the very early days when there were so few miners, but the incentive to earn 50BTC in reward per block was more attractive than whatever gain they could make during a short-lived attack on the network. Same thing today, some of the top mining companies can collude and attack the network, but the incentive of 6.25BTC per each confirmed block is higher than what they can gain from attacking the network.

The system is supposed to constantly make the reward for being an honest miner higher than trying to attack it.

The problem is that while there are some mining entities that are publicly known, in theory the individual miners at least are anonymous (on the network). Even if they were publicly known: would it be an option to blacklist blocks from miners which are known to having tried an 51% attack? Pools would be more at risk due to reputation problems, but you could simply start a new pool.

If "reputation of miners" was part of Bitcoin's security model, then it would be relatively weak, and above all not trustless.

My "rebuttal" of the possibility of an 51% attack is actually a bit different. Most important variable is the attack cost. But even attack cost would mean nothing if it was easy to earn a profit which outweighs the cost. But this seems difficult to me. Where could you (even if "you" were a massive group of malicious miners) steal billions of US dollars?

First possibility would be a series of double spends to several exchanges and service providers with high liquidity. But actually most of them use KYC. If you wanted to cash out to fiat the long payout process could be a problem, and if you cash out via altcoins, you have still to cash out from these coins in some way, and additionally you still could face legal action. So what you'd have to do is to create a farm of a lot of fake accounts with fake KYC, and even then I doubt if cashing out billions is possible.

Second possibility is a massive short, to profit from the lowering BTC prices. But also there: it would be quite obvious, those who initiated such big shorts just before the attack, for sure would face investigation for insider trading. Also here: you need additional resources to build up a big farm of fake accounts.

Atomic swap and non-KYC exchange volume is way too low to be able to cash out such large amounts. Same with gift cards or similar items which can be purchased fast (and can be invalidated in some cases).

So for me the only variant which stays possible (albeit with a very small probability) is the "malicious government attack". It's likely however that they would not be able to cause much harm, for the same reasons I outlined above, because all they want is to 51% the chain (to harm Bitcoin), and thus they would like their attack to be as cheap as possible (and would for example not bother about farming thousands of fake exchange accounts). It would be like the FTX or MtGox cases, perhaps - some people could lose money, but it wouldn't be worse than a major hack.

It was possible and will be possible in future but in the past, some big pools did not attack the network because they did not take an action like Shooting to themselves.

In future, there will be risk but with higher value of Bitcoin, mining pools will not have reasons to attack the network with similar reasons above. If they do attacks now, they will get bigger loss than loss they get with attacks in the past (if they do).

How many Bitcoin confirmations is enough?

 

But how long will the hacker sustain the "attack" to make it profitable for him/her/them. I'm very confident that the miners themselves would pull the plug out of their miners before the attacker could do some actual damage in the network - IF they could truly do some real damage.

The path to Bitcoin's failure might be when the incentives won't make sense anymore to continue to participate.

Yes, it is possible, but it is more likely that a hacker will obtain malware that is transmitted on the network, taking power and proceed to attack, than groups of miners will unite to destroy bitcoin, because if this happens the price will drop to zero.

Plus the miners, and mining pools have already made very large amounts of investments in the network to avoid any dishonest actions against it that absolutely would undermine their investment. They would be shooting themselves if they act dishonestly, but they would be paid in Bitcoin if the act honestly.

OP, study Bitcoin's incentive structure.

A mining pool would certainly not be able to maintain a 51% attack, and that's what really matters. They do not own the mining power; they rent it. If the miners ever realize that their pool operator intentionally reorgs the chain (which is trivial to notice), they would go mine somewhere else.

The mining pool would have ruined its reputation and a lot of money to just gain the privilege of double-spending a transaction of theirs that was mined very recently. The solution is to just accept more than 6 confirmations for unusually high value transactions.

This is a good point and while some people might be thinking that suing is still a losing game in the BTC sphere because they believe it to still be the wild west, those times are over. Due to the institutional involvement of large and politically relevant actors and due to ETFs being set up and a legal framework that has been incrementally established, it is guaranteed that this would have severe legal consequences. There is no getting away with such an attack from a publicly known and detected entity.

I remember when there was some talk about the mistakenly sent transaction fees that were way too high. All of that was returned to the rightful owners as everyone involved knows that legal consequences would otherwise be inbound. Same here for a 51% attack. The attacker would lose the resources to attack the network and lose the legal case. Doesn't sound very tempting to me.

Well said in this context, possible not probable.
It keeps it in the theory of possibilities but, not something that could be archived with the many protocols and persons that works the network.

It would be financial suicide for any of the pools to do that. And even if they did, so what?
People would notice, people would freak out, people would move their miners to other pools, and that pool(s) that tried it would be dead in a week.

If it's a large public pool like foundry, could you imaging the lawsuits that would hit it from their institutional clients? The owners / operators would spend the next decade of their life in court.

-Dave

Thanks for the headsup....  UPDATED

Ah, the specter of the 51%-attack again. Possible, if current larger pools would collude to do it together, otherwise quite improbable, in my opinion. Why improbable? What exactly do you think are the gains of such a feat? Remember, you can only double-spend your own transactions, you can't change or rewrite other transactions for which you don't have the private keys.

Entities who would do this, do not really gain much, compared to what they put at risk. They'd certainly loose reputation, gain a big shitstorm from Bitcoin community, nobody sane would trust them anymore.

The honest miner succeeds and stays in business, not the one playing the worst foul.

That image contains old data (the reported hashrate is far lower than current ones), other reader should visit https://insights.braiins.com/en for more recent data.


It's possible, but it's not probable. I say it's not probable since,
1. 51% attack can be detected easily.
2. Such pool would lose it's popularity quickly.
3. If 51% attack also used to perform double-spend attack, there's risk they got sued by the victim.

Over the years, there has been establishment of minning  pools  and this was right from the launch year of Bitcoin (2010)  the first poll then Braiins pool which was originally  known before  as Slush pool.

Currently, there are more pools working together to combine minning  powers toward achieving  a common  goal of minning  block of transactions.
 Among  which are this pools stats:

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   Is 51% Attack still possible
Firstly what's  51% Attack:
51% Attack is the deliberate  building  of a new form of longest blocks of transactions  to replace the blocks present already  in the blockchain.

   My overview
The current  difficulty was around 83947913181361 from the block I checked as at the time I was making  this post which is Block 835933, this difficulty  is going to get harder continuously
At some time, I think there would be a group of pools  coming together to form more bigger pools which will eventually  eliminate single miners by then (in my view not just anyone will be able to mine just at it meant to be )maybe and the purpose of allowing  anyone to mine is to discourage this 51% Attack although  a sole individuals could run a minning  power which will still allow him/her to be in the game but the chance will be very slim.

This  brought me to the question
If there are bigger mining pools with bigger minning powers,
Could there be a possibility  of 51% Attack since they could easily merge their minning  powers and is there any possibility  of a minning pool having a minning  power which surpass the other minning networks
All corrections  are also welcome...