Interesting! But then you would have the problem of actually nothing at stake (an attacker would just have to create millions of full nodes) plus own stake. In the end you have NXT like POS with the additional requirement to create a ton of full nodes to attack the network. It could be said that an attacker might be better at creating full nodes at scale than the average stakeholder which would make the system more easy to attack.
1) You are assuming there in only one attacker creating nodes which is unlikely as Bitcoin has grown to such a degree that you should assume multiple attackers. Multiple attackers creating nodes only strengthens the Bitcoin protocol.
2) In the rare case only one attacker is present or there is collusion between attackers than PoW would prevent the attack for any transaction of value. Confirmations from PoNode only are to validate small purchases where the tradeoffs of instant confirmation are justified like buying a cup of coffee. Transactions of greater value will be confirmed with both PoNode and PoW confirmations.
An attacker would have to trick stakeholder into thinking that his delegates are good delegates. The DPOS implementation of BTSX is in its early days. Today almost all delegates are some reputable forum members.
Yes, and this is how I would carry out an attack on DPoS with only a few thousand dollars:.
1) 6 months ahead of time create many faux delegates by creating identities and usernames in the community.
Each one of these users will have a unique personality which would appeal to a certain demographic. I would pay a few people to
develop and post and interact with the community to build the reputations of these members.
2) Buy a few old usernames(Lengendary) on forums and carry on interacting with the community
3) Create one or multiple user campaigns to help the DPoS or charity that people could get on board with both the created users and the existing purchased identities of "legendary" members.
4) Have many of these created and purchased usernames run as delegates
5) Take polls and see who are likely potential delegates
6) Take the best delegates that are likely to win and pad their votes with:
a) for an internal attack from an existing large stakeholder(s): many faux wallets each voting for the fake candidates to insure many of them are elected
b) For an outside attack I would slowly buy up some stake over 6 months and than use that stake amongst many fake wallets to pay(vote for) my own fake delegates
7) Since all of the stake is paid to my own fake usernames I have lost nothing except a few thousand from the PR campaign and buying up a few usernames
8 ) Once 51 or more seats are won I have plenty of time to sell off my stake to lose nothing or possibly profit while I plan the attack
This initial PR investment could be paid off and a large profit made by an attack on the network once 51 or more delegates are claimed.
Later the idea is that big companies or trustworthy public individuals from the crypto (currency) world would provide delegates: Exchanges, payment processors, DAC developement companies, trustworthy stakeholders; basically everyone that has an interest in a working BTSX system provides a delegate. Those entities then would have a lot more to loose (credibility of an exchange for example) than they could gain from a 51% attack which might be reversed anyway by a fork.
Regarding your attack: Stakeholders would have to be convinced that the random flood of delegates the attack set up are more trustworthy then the current delegates. That might work with 1 or even a few but not with 52.
I agree that delegates with known identities would make the above listed attack very difficult to accomplish. But the anonymous nature of delegates was one of the selling point of DPoS and for good reason. Using real identities with DPoS delegates introduces a whole new set of weaknesses.
1) Lobbyists
2) Kidnapping and ransoms
3) Makes it easier for Hackers to infiltrate their wallet/node( with anonymous delegates, hackers have to spread their resources and make probabilistic attacks instead of targeted ones)
4) Government regulation
When you have real identities running a DPoS those real identities can be attacked by gangs, hackers, or governments. With PoW or PoNode you can be anonymous.
Do you have any idea what happens to delegates who don't go along with the "helpful" plans of government regulators? Quest was the only large cell company to not roll over and give the the NSA an unconstitutional backdoor (
initially)to their systems and this is what happened shortly after:
http://www.fbi.gov/oklahomacity/press-releases/2010/ok111210.htmCoincidence? The NSA has many large databases of all the crimes everyone is committing worldwide that they can retroactively charge you with if you don't play ball.
Now if that happens there could be a fork that reverses the double spent / reversed transactions. Like you said correctly this might harm others who made transactions between the point in time when the double spend happened and when transactions are halted to fork. Those ppl could be compensated through a fund. The advantage would be that the incentive for a double spend attack would decrease to zero when the attacker knows that there is such a fund and a fork would reverse his double spend anyway. How could such a fund be funded (work only work if BTSX grows and tx volume picks up; but gives you an idea what delegates could be good for apart from tx processing): Buy a delegate or several delegates who commit to paying parts of their delegate pay into such a fund. Those delegates then campaign among Stakeholders with this fund.
As for forking to protect a network in general: Let's assume someone has acquired 51% of all hashing power for Bitcoin's sha256 mining then Bitcoin would have to find and implement a new proof of work algorithm in order to fork and get rid of the 51% control of a single party.
When someone has acquired 51% of stake in a POS coin you can simply fork and not honor this 51% and let the market decide which network is considered more trustworthy (probably the one without the 51% control....).
You keep mentioning a hard fork to reverse the transaction in case of an attack. This is a separate conversation because:
All coins allow for this. We are discussing how to protect a currency before this is needed. Even suggesting this is problematic as relying on this protective measure reduces trust and fungibility in the currency. Why do you think the Nxt Community decided to bribe/settle with the hackers recently who cleared out BTER exchange instead of reversing the transaction ?
Your insurance scheme is also outside the discusion as any currency can implement this insurance plan. We are discussing security to dissuade or prevent an attack in the first place and insurance doesn't do this.
