Topic: MIner Question - page 4. (Read 1781 times)

As PrimeNumber7 pointed out, they would be economically irrational with regard to Bitcoin's incentive system.

That doesn't rule out incentives external to Bitcoin. Let's say the Chinese government simply wanted to crush Bitcoin with a sustained 51% attack. They could systematically co-opt mining farms, threaten pool admins with imprisonment if they don't cooperate, etc.

Not that I think it would be successful long term -- I'm just pointing out a situation where a majority of miners might be incentivized to collude against the network. Indeed a POW change could eventually thwart the attack, but it's interesting to ponder what kind of damage they could do in terms of market confidence and adoption.

Any attack will be short lived. People will forget about it in a few days and only the affected parties will have something to complain about. Unless of course, the attack is done on a multitude of people or of such a scale that it affects entire groups or populations or accounts.

Again, anyone who actually gets to control 51% would much rather keep the coins mined honestly than risk losing it to some attack they're not sure will have any effect anyway. If I had 60% of bitcoin hashing power, I'd make it look like I had 6 different mining pools or something so no one else knows, and just keep the coins.

splitting millions of dollars into smaller sizes is so hard and it also needs to ge as many people involved as the victims. not only finding that many victims accepting such still large amounts is hard but also it means more legal action against the attacker. nowadays with all tracking that is done specially in exchanges it is not easy to get away with that kind of scam.

That "economically irrational attacker" would be wasting resources. The network is made of people, capable of coming to consensus if there was a direct threat.

What the troll said was that the miners could collude. But would they? They would be opening a strong debate for a POW change.

A potential attacker would need to act economically irrationally to successfully launch a 51% attack, when only looking at the attack in terms of bitcoin.

This means that bitcoin, or crypto in general would need to be an immediate threat to whoever is launching the attack. I don't see bitcoin being this much of a threat to any entity with the resources to pull off a 51% attack.

^^ the thing about  51% attack is that it can only be considered an attack and also be profitable if it is accompanied by an actual double spend otherwise just replacing an already mined block with a block the attacker mines has no benefits with the same exact transactions has no benefits.

when speaking of profit you first have to factor in the cost. and since the cost of 51% attack is in the millions of dollars the transaction that is being double spent must be worth millions of dollars.

now that we establishes the tx value we have to think of a trade that involves a transaction worth millions of dollars and the other party doesn't ask for a high number of confirmation such as at least 30. such trade does not exist in real world. nobody has ever made such a transaction and only accepted low number of confirmations ever.
with that kind of high confirmation requirement the cost of performing a successful 51% just shot up into billions of dollars instead.

Somewhere in the troll's post, is part of the answer on WHY anyone who can afford a 51% attack will never dare actually do it.

Plus he discounts the fact that, if an attack was indeed successful, the Bitcoin network is composed of people, the community. There will be damage, but it won't be "irreparable damage". Bitcoin has reached the stage that it can actually do "the honey badger don't care".

Newbies, learn about Bitcoin's basic incentive-structure.

The troll discounts the fact that miners/pools/ASIC-producers have a direct long term incentive for the success of the network.

Plus if they were truly colluded, the troll discounts the fact the Bitcoins is composed of people, who can be in consensus to fork the network away from anyone who tries to co-opt the network.

point is with even 1 pool the network would be relatively safe as the costs for attack would be significant for miners (who could just switch to another pool they make if it's the operator causing issues)

either way miners answer to the users via the market or they lose money they can't recover

Two colluding partners is difficult to maintain (since either partner can gain an advantage by first agreeing to collude and then operating outside the collusion).

More colluding partners is even more difficult to maintain.  There is more opportunity for a partner to operate outside the collusion, and more opportunity for the secret to leak.

Even if you could get 10 pools to collude without cheating on each other, there's nothing stopping me or anyone else from starting up another pool.

miners have sunk costs and depend on selling coins to cover the sunk costs

at equilibrium the coin rewards and costs are nearly equal, forcing sale of majority of coins

by selling coins miners depend on the users on the market to give them value

if coin owners don't like what miners are doing, they can sell the coins costing miners money so miners are unable to cover sunk costs

miner abuse could easily cause a fork via algorithm change or user activated forks

then coin owners can sell only on specific forks to effectively
1. crash the security of that chain
2. profitability of miners on that chain (i.e. losses)
3. crash value of every owner of coins on that chain (exodus)

Big difference in 25 coins/block worth $7000 each and 25 coins/block worth $1 each

miners answer to users, both depend on each other.

https://i.imgur.com/eDY9gGY.png

If the pool operators collude...

Why won't the pool participants just leave the pool and join some other pool?

I've seen some miners or entities approach 51%. They need much more than 51%.. or 50% + 1. It has to be sustained too. I'm not talking about PoS, we are talking about miners, proof of stake was never in the discussion. I'm not confused.

I've yet to see any miner or group of miners or government even attempt to try to do 51% (or more, as needed). You say it's so easy, but why haven't they done it? There's also a lot of bureaucracy involved.

As for vendors, if they just wait 10 seconds after they first see the transaction and then check the transaction in question, they can determine if a double spend is likely or not. Part of that would be to not immediately accept if RBF was used.

That video is mostly false propaganda, but I stopped watching after about 20 seconds when they started using the usual "bad" words to describe bitcoin. Waste of time to watch the rest of it. The first few comments says a lot already.

Uhm I mean, why would fiat become worth 0 when Crypo space goes down? Like Fiat is a seperate market system from cryptospace though? Plus, BTC plummeting to zero doesn't necesarily mean that Altcoins would also follow, though the possibility of them following is high, it isn't a 100%. Plus, if what you were to say DOES happen ( in which I case I doubt it is) that everything goes to zero, the world would go back to the bartering system of the old age, where no currency was upheld between trading parties.

Plus, starting from the initial idea, it is plainly a worthless and wasteful endeavor for the part of whoever is gonna lead the attack through using miners. I mean, that is over 51% of the mining network, who would spend an astronomous amount to do that. And if it does happen, the guy or group doesn't even take profit in there since they are pretty much crashing the BTC market.

First, a large entity or government would need much more than just 51% of the network. They'd need at least maybe 70% or 80% of the network hash power, sustained at that rate for several hours or days.

And the most they could do is a double spend ... any sufficiently large private organization would be more interested in how it can benefit them, and I don't see how else than to just mine bitcoins honestly and normally and receive a few hundred coins a day as they get the block rewards.

50% of the network implies they get 50% of the block rewards in a day, so that means 72 blocks * 12.5 BTC = 900 BTC per day.

I think a private company would do much better to simply keep $6 million dollars a day a secret, rather than try to do anything else and fail at making any profit. Unless it's controlled by some crazy dude who doesn't care about the money.

For the first part of question, a random group of miners CAN collude but only at the expense of rendering their expensive hardware meaningless. A credible threat in this direction is from Bitmain due to their pro-BCH stance. They are the only entity with an alternate network to bet on, in case they try to attack Bitcoin. That scenario is gradually getting implausible due to the ongoing diversification of mining hardware.

If you consider the threat from a nation-state, there isn't a way to do this covertly. It'll be open war and grant legitimacy to bitcoiners stand that Governments are afraid of the money properties that Bitcoin has. It'll only make people want more of it.  Why would they do it?

Still, Let us assume they people actually begin questioning the Fed and Govts over legitimacy of their monopoly on money supply. They grow tired of being constantly questioned and decide to demonstrate that bitcoin is not the answer. They will need to show it to be insecure with a double spend/ bug. This is all that needs to be done:

• Secretly takeover mining operations in China while opening up fast connections bypassing the Great firewall. Doing it anywhere outside China would take away any chance of doing this covertly.
• Whisking away all the core devs to a secret location in a way that nobody knows something is amiss...ooohh..
• Build up 65-75% of network hashrate without anyone getting to know it. This can include seized miners hardware that has been custom made in some super-secret lab. Keep in mind that the sudden surge in hashrate from the second case will be a noticeable event.
• Now that they have the hashpower, what do they do? How do they show that it is not an "attack" but a bug? How do they let all the full nodes accept their "buggy"/ "double spend" transactions without letting it be known that it is a fork.

Whatever they do next is a noticeable event, assuming that it hasn't already been caught. This is where the full nodes and the independent miners come into picture. It'll be a flurry of maddening activity with internet restrictions and cypherpunks revving up their judgement day radios to broadcast messages to each other about potential fightback. It'd be a glorious few days and in the end, they would have only proven bitcoin right.

Even if the pools work together to ruin the whole network, why should they initially carry out such an attack on the bitcoin? It would ruin their own company or the profits they were gaining all these days mining bitcoin. For instance, Ghash once had 51% of the total hashrate, but they requested the miners to move onto other pools making the network decentralized again. Same goes for the Bitmain and its hashrate as well. They made over $4 billion in profits in 2017 through mining and selling of ASIC chips and if they were to attack the network, it would ruin their future business completely.

Checkpoints were one such thing which could prevent 51% attack to happen, but they were removed citing they created unnecessary confusions and I agree to that. They were introduced in code to prevent DOS attacks and were not meant to prevent 51% attacks on the network. But if some mining company/pool in future tend to involve in such an attack, developers would write a new code and insist miners to run that. As ranochigo pointed out, 51% is basically making fake transactions to get accepted by the network and if the node has sensed a fake transaction/double spend it would make the subsequent blocks as invalid I guess.

It would be a VERY EXPENSIVE attack, with very little to gain.  In most cases, they'd gain more value by using all that hash power to mine honestly than by attacking the network.


Again, it would be very expensive, and wouldn't gain them much.  Nation states have better things to spend their money on.  That being said, there aren't many Nation States that have more than 50% of the global hash power within their own borders.


Bitcoin has a built in incentive structure to discourage collusion to attack.  If this incentive structure works, then Bitcoin is a success.  If this incentive structure does not work, then Bitcoin is a failure.  After more than a decade of operation, so far, Bitcoin is a success. Only time will tell if that remains true.

But if BTC is the Global Reserve for all Cryptos , Wouldn't that hinder the entire crypto space? If i took down BTC value and made it plummet to 0 , all the other alt coins would follow , and if this does happen , then everything is worth 0 in fiat and 0 in BTC value because BTC no longer has value correct? If all of the money were to leave the ecosystem , then everything goes to 0 right?


I'm assuming at this point , that they would move to something that allows for ASICs for SHA-256...? But if Nation states were to extort or try to kill miners , we would be screwed if they managed to take over the network.


Well if BTC is the digital gold standard by which all other Cryptos are backed by (Assuming DCR / BTC value) , It would make everything else plummet... in fiat and BTC value because they no longer have value thus nation states or governments which may have an interest in destroying the world of crypto (and the trustless nature of it) and bring on their centralized shitcoins that they control , maybe backed by gold or fiat money?

Economical rationality ?