Topic: Miners attempting cheating (Read 135 times)

baseline miners(asics) dont compete for adding blocks

baseline miners compete with other baseline miners to find a special hash that meets the rules of difficulty a block needs to achieve
the baseline miners earn 'shares' for each attempt of a hash which if one of the miners has the winning hash. the mining pool uses that hash to then broadcast a solved block and the baseline miners share the reward based on the shares.

EG the reward of 6.25
if pool had 5 asics working
30000000000000 shares(attempts)  gets 0.3btc
21000000000000 shares(attempts)  gets 0.21btc
10000000000000 shares(attempts)  gets 0.1btc
1000000000000 shares(attempts)  gets 0.01btc
5000000000000 shares(attempts)  gets 0.05btc
(total 62.5trill for easy math)
the baseline miners are competing for hashrate/shares of a block reward
the mining pool is the one competing with other pools to be the first to broadcast a block

if there were too many baseline miners asics on a pool then all baseline miners shares are worth less because they have to share more of the reward
EG
if pool had 10 asic workers
30000000000000 shares(attempts)  gets 0.15btc
30000000000000 shares(attempts)  gets 0.15btc
21000000000000 shares(attempts)  gets 0.105btc
21000000000000 shares(attempts)  gets 0.105btc
10000000000000 shares(attempts)  gets 0.05btc
10000000000000 shares(attempts)  gets 0.05btc
1000000000000 shares(attempts)  gets 0.005btc
1000000000000 shares(attempts)  gets 0.005btc
5000000000000 shares(attempts)  gets 0.025btc
5000000000000 shares(attempts)  gets 0.025btc
(total 125trill for easy math)

as you can see the one at the top that was still doing 30trill attempts but gets half as much by mining in a pool with 2x total asics
however by having 2x hashpower from asics, that mining pool might get 2x lucky by miners able to find a hash sooner, thus mining a hash for next block faster thus maybe solving 2x blocks in same time speed as if there was half as many miners

there is a economic competition balance that needs to play out of finding the right balance of the luck of finding a winning hash vs how many miners are in competition within the pool

there is a economic competition balance that needs to play out of different mining pools broadcasting solved blocks first vs not finding too many too quickly as it affects the difficulty requirement every 2 weeks,slowing them down next fortnight if they run too quick this fortnight

Ahh.. haha thanks for the info It helped to understand a new concept because I've never felt that understanding the core terminologies and the technical aspects, but I was sure enough to discuss any of the basic terminology and their role in the network, as for baseline miners compete to add blocks and the nodes enforce the consensus rules by validating the transaction and block on the network.

ACIS's technology was a tonic for the network hash power and integrity on the Bitcoin network to establish a much more secure system. But at the same time, I have a question why miner's incentives can be downgraded and here I'm talking about the other than block mining.

for clarity
mining POOL managers with 51% of networks asic(miners) under management

an asic(miner) alone cant do nothing. they dont have harddrives or OS in a miner to collate transactions and form blocks. a miner(asic) just does SHA256 hashing

Thanks, that is really helpful.
I think my misunderstanding comes from me confusing two very different topic. The rules VS the miners (asics) controlling more than 51% of the network's mining hash rate.

Both or your response are helping me make sens out of this complexity. I am far from technical genious, so I am just trying to make sens of this.




Thank you for the time you put in this response.
Reading this list got me to learn things I was not aware...or flat wrong
Definitely will go back to this !

a mining pool does not need to self fund billions of hardware and electric to achieve managing dominance of network hashrate. they can just incentivise independent asic owners to join their pool.
(imagine a government managed pool offering asic owners tax free earnings or other tax rebates/grants/incentives/public services)
(imagine a electric company managed pool offering asic owners free/discounted electric or other incentives)
(imagine a CEX/merchant offering zero fee trading/withdrawals on all reward deposits)
[tin foil hat] ban mining in a state/country unless they use government official pool
[other examples exist]

so a majority hash attack need not be expensive for the mining pool manager..
infact just being a mining pools actually has low operation costs as it is now

the hopes of avoiding this strategy is that the independent asic owners notice the malicious mining pool is causing annoyances and they jump out of the pool and join honourable pools

anyways, pools cannot change the rules by just sending a funky format block.
but here is a list of some(not all) things a network majority hashrate mining pool could achieve:
       - ignore transactions of certain government black list/sanction list of known funds from certain countries/entities
       - ignore transactions of certain government black list/sanction list of known funds to certain countries/entities
       - ignore transactions of certain known funds to certain unregulated, unregistered services
       - empty block (no transactions at all) just to annoy the network, cause mempool congestion
       - ignore low fee transactions but only include extreme high fee's
       - ignore lean transactions but include extreme bloated transactions
       - ignore all transactions but include their own bloat, spam transactions with high fee, at no real fee cost as fee comes back to them
       - re-org latest blocks by going back to previous blockheight and re make old height blocks with different/less/no transactions included
       - build faster list of solved blocks but only release 2 at a time if competing pool built 1 block ontop of theirs, to remove the competitor block

As franky1 has pointed out, there are certain rules that the miners have NO CONTROL over. For those rules, it doesn't matter how much computing power they can control. They could have 99.99% of all the block hashing power in the world, and if they tried to break any of those rules, ALL of the remaining 0.01% of the mining power AND the non-mining nodes, merchants, and users would simply ignore every block that they created. They'd have spent huge amounts of money to aquire their equipment, huge amounts of money on electricity to run the equipment, huge amounts of money on locations to store the equipment, and huge amounts of money to cool the equipment, and in return they'd get nothing.

However, this doesn't mean there's nothing they could do with that computing power to have an effect on the Bitcoin system.  It just means that there are certain things that they can't do (such as increase the amount of new bitcoin that gets created in each block or include transactions with invalid signatures in their block).  Some malicious things that they COULD do if they control more Bitcoin hashing power than the rest of the world combined (at least until a significant number of Bitcoin participants decided to create a new system that excluded them) would be to choose to block certain transactions from ever being confirmed, or to mine 100% of all the blocks (keeping all the block rewards for themselves and making it impossible for anyone else to mine any bitcoins) or to choose which other miners or pools they want to allow to participate.  They'd also be able to completely erase recent blocks from the blockchain and replace them with other valid blocks that they prefer.

yep
analogy:
follow the house rules or your not getting in the blockchain door to be able to sit on the blockchain sofa.. thats the maximum penalty
you might aswell not even knock on the door if you dont intend to follow the house rules

not getting in the blockchain for you to not be able to spend rewards, thus wasting all your time and resources trying = maximum penalty

Thank you Franky1, a lot of food for thought here !
You did introduce some notions I was not aware about.
This is clearer now. In short, as from my understanding now, and in a grossly simplified version, ''maximally penalized'' stands for Respect The Rules or Your block attemp will be reject

firstly
we are long passed CPU days

secondly "miners" are not what they used to be either

bitcoin now uses asics. miners are asics.. but
.. asics(miners) dont collate transactions nor create the block template format for the reward amount/collated transactions. they just do the PoW hash power work of sha256 hashes

mining POOL's are the management of the block creations
a mining POOL is the manager of those PoW hash power workers(asics(miners))..
a mining POOL is the manager that collates transactions and forms the template of a block format

if a mining pool accumulated enough hashpower(convinced asic owners to be managed by him, or he bought alot of asics to self run), where there was enough hashpower to solve hashs for blocks..  to solve blocks. but the block format/data did not meet the rules the network agree to.. the network would reject that block, in milliseconds of receiving it.. thus no negative affect on networks blockchain. its just never added.. thus the mining pool wasted its time..

mining pools dont set the rules. they just collate transactions ina block format that must be within the rules the rest of the network agree on.
so its actually financially beneficial for a mining pool to make blocks in a acceptable format with the accepted amount of reward the network rules expect, for his block to be accepted and thus able to spend his reward..
if he doesnt, then his block attempt is rejected instantly and cant spend anything.. because his block just doesnt exist on the blockchain, so wasting his time trying to mine blocks that dont meet the rules

Hi,

Currently reading Parking Lewis stuff and there's one thing I cant seem to understand. It is in regard of honnest/dishonnest miners.
I hear this many times in podcast and articles, the notion of ''high cost'' for miner going against the rules/consensus and being Rejected by the network.

Here's what Parker says :
The halvening is important not just because the supply of newly issued bitcoin is reduced, but also because it demonstrates that the economic incentives of the network continue to effectively coordinate and enforce the fixed supply of the currency on an entirely decentralized basis. If any miner attempts to cheat, it will be maximally penalized by the rest of the network. Nothing other than the economic incentives of the network coordinate this behavior;

All I am trying to understand is this : Suppose that an entity manages to amass a huge amount of computional power. What happens when it is unmasked by the network's honnest nodes?

Later in the game, the entity would not suffer huge lost if it finally decides to play by the rules and perform valid work, right ?


***edited




Source : https://unchained.com/blog/bitcoin-is-not-backed-by-nothing/