Topic: Positive Bitcoin write-up on Zerohedge - page 2. (Read 4402 times)

There is a valid fear of a savvy entity that sees BTC as a threat. If said entity decided it wanted to try and destroy BTC it could invest a few million dollars to protect hundreds of millions of dollars of future revenue. At the moment you could attack BTC legally by funding lobbyists or by attacking the network itself. Attacking the network, given a few days of reading about BTC, would logically happen via an ASIC of comparable efficiency to what is being released to consumers now.

Assuming Avalon made $0 USD on their first batch, I believe it was 300 units @ $1300/each. That's a paltry $390000 USD for 18 TH/s. In reality the fixed costs of the masks are likely a fraction of this and the chips are in the $1-10 USD/chip range. Pulling numbers out of my ass, throw $1-5 million USD in renting rackspace and producing 300+ TH/s to counter the expected production of BFL and Avalon for the next 6 months and you can effectively control the network. If you are wise you'll wait until you have an astronomical amount of hashing power and then flip the switch at one moment and double-triple the network hash rate. Guaranteed within hours BTC miners/developers will notice "oh shit, someone owns the network". Crash user trust in the security of the network and crash the value of BTC. Before the developers can change the protocol and get enough users over to the new network BTC will be trashed. Sure, other more complicated cryptocurrencies may crop up(LTC for example) but the damage is done.

THIS is what I fear and it'll be an issue until the cost to attack the network exceeds what I'd consider to be 'pocket change' for larger entities. At this moment if my net worth was sufficient that I could throw $2-3 million at a private ASIC endeavor as 'fun' I'd do it just to fuck with people. It would be supreme trolling, not casual forum trolling.

They would have to buy up all the ASIC coming on the market now and all future production ... i.e. not going to happen.

After we get widespread ASICs (3-6 months time) then it is a battle for who can get more on the network ... and the same arguments apply all over again as for GPUs. i.e. can one or several huge installations compete with a distributed network of thousands of motivated individuals? ... go figure, the network wins every time.  It is not about the particular type of hardware but what is the most efficient resource allocation mechanism ... and the answer every time is distributed network (for this kind of application).

Bottom line is that the scaling of costs for big, centralised computing centers  is a greater power than distributed networks ... you can throw more money, people, hardware at the same site and return in compute power just doesn't go up like it does when those resources are distributed over many individuals on a network. Do the math on that then get back to me.

I am with Gabi on this one.  Yeah, sure government can be more inefficient with money on average, but if you think this means they are all idiots who can't get anything done ever, you are sorely mistaken.  And as noted, there are corporations out there too...

Also, for the calculations, you are all working with outdated info.  The new proven ASICs are <$2000 for >60GH/s.  Sure the network difficulty will go up, but a lot of the hardware investment already done in the network is now worth a lot less dollar/computing power-wise.

Nonono. This is wrong. The 51% attack means that the attacker has the 51% of the power. Your attack would fail. Current power: 28. You would then have 14. Final power: 28+14= 42. You would only have 33% of total power, not enuff. For a 51% attack you need to have the same amount of current power. So, at least 28. (meh yesterday it was 21thash, not 28 lol)

A 6990 is expensive, two 7950 costs like 400$ and do more than a 6990.

The argument that the government is slow, inefficient and won't spend so many money (40 millions a lot? lol) doesn't makes sense, just look how many billions they spend in military, if they notice that bitcoin CAN be a threat to their existence (>and to their epic money printing) they will act quickly, very quickly. Also a bank or whatever other financial organization can do such attack.
Yes, our hope is that we are too small, but right now we are growing, and a lot.

(note that the fact that they can print money out of nowhere means that the cost of this attack don't really matter to them)

Marcus is right, the government never does anything quickly. Ever. Except perhaps for things related to money-grabbing.

Also, the numbers are a bit crazy. If you look at the mining hardware comparison and pull one of the higher producing cards on it you'd get the following: (https://en.bitcoin.it/wiki/Mining_hardware_comparison)

ATI 6990 - $772/ea - 772 Mhash/sec

Total network hashrate: 28.081 Thash/sec, which translates to 28,081 Ghash/sec, or 28,081,000 Mhash/sec

Fifty one percent of the network hashrate is then approx ~ 14,321,310 Mhash/sec

To hit this target, you'd need (14,321,310 / 772) = 18,550 ATI 6990 Video cards at a cost (just for the GPUs) of:

$14,320,600

If you factor in other costs, like motherboard, CPU, and power supply at a rough cost of $1,200 - that boosts the total by:

($1,200 x 18,550) = $22,260,000 for a grand total of: ($14,320,600 + $22,260,000) = $36,580,600
(This number will be different if you factor in three video cards per motherboard... but, whatever.)

And you don't even have a facility lined up yet to house them all, in addition to cooling and electric costs.

That is one expensive attack. That is why this will never happen at the current network hashrate.

Don't they spend hundreds of billions in military each year?

Lol. What is not clear "their aim is to destroy bitcoin, not profit"

Lol, insults  

Between military and private corporations, there are thousands of entities that can make such attack. Even soccer players have enough money for that!

Exactly.  Wouldn't that be some egg on your face if you threw $100 million into a black hole and all you got out of it was some bitcoins that cost you more to produce than the average miner.

I didn't say anything like that ... I'm giving you a comparison with similar size of govt. owned installed equipment to show how far out of whack your pathetic cost estimates are ....

First they would need to Phase I; spend millions just researching the problem. Then there is the phase II; protoype pilot operation to prove operations, scaling, etc and finally Phase III; the full rig. Each phase is put out to competitive bid and scrutinised by legion of bureaucrats who's only job is scrutinising so they make sure it stays on their desks for an appropriate length of time .... it would take at least 3-5 years for the project you are talking about.

No govt. department is going to risk $100 million (and a possible cost blow-out to much higher numbers, billions?) on a possibly failed attempt to ruin a global community-based network phenomena.

As I said you don't know much about govt. projects do you? You must be smoking drugs or something?

Is Gabi short for gabby, as in "run your mouth off"?

And you don't know much about mining. The fact that you are citing supercomputers when speaking about mining is nonsense. Please tell me, how the 10Petabyte of hard disks and the 710terabytes of memory are needed for mining?  and again, why should you build a supercomputer to mine?

You don't know much about big govt. super-computing projects do you?

For reference, the bigger HPC projects out there (10 petaflop);

~ e.g. http://en.wikipedia.org/wiki/Titan_%28supercomputer%29
~ $100 million (this is installed cost only and doesn't include staffing, power, maintenance, operations)

Not 10? Meh, 20 are enough? Remember that a government/bank/company has billions. For us poor guys a million of dollars is a lot, but not for them.

Mkay, current mining hash is 21 Th. With 2 7950 you can make a gighash. 200$ per card, 400$. Add 300$ to complete the computer, It is 700$ per gigahash. You can buy 21Th for like 15 millions $ and it would be like 21000computers. 10500 if you put 4 cards in a computer. You can put them in some buildings, add some millions. Some more millions for the staff, and we have done a 51% attack 

Please break down that $10 million calculation for me.  I don't believe you.

So Gabi, do you own bitcoins?  If so, why?  Are there reasons to think no government or payment service provider will try to pull this off?

Sorry notme but you are totally wrong. A 51% attack is not so hard to do. As i said, it is pretty easy, with 10 millions $ you can buy all the hardware, infrastructure and hire enuff people to do it. Keep to expand it? Beh, after such attack the mining power will decrease, not increase.

You guys speak about profit, but a government have other reasons to destroy bitcoin

Please, not the IP ban fail in 2013, you will blacklist no one, it take an instant to get a new IP

Bitcoin is the largest computing network in the world.  It would take multiple datacenters filled with hardware to pull off such an attack.  Just the electrical infrastructure needed for powering the hardware and cooling would make this attack very difficult to pull off.  Unless they can actually pull off >50%, they will only have a very small chance of maintaining the longest chain for any significant time period.  Sure, if you crack 50% you are good... unless a new client is quickly released with an IP blacklist (not even a complete blackout, just don't relay their blocks, or relay them with a delay).  If anytime in the months it would take to even start setting the hardware up the difficulty rises 10% you suddenly need 10% more capital before you can begin your attack.  Project on this scale can't be turned on overnight.

That said, at this size Bitcoin isn't a big enough threat to Paypal or anyone really for them to spend the capital.  By the time it is big enough to worry about, it will be too late.

Care to explain why you give this a small chance?

FTFY

Because joining it can be risky because others can attack it.  And attacking it if you are part of a money-making business could ensure that you eliminate competition.

I am not saying this definitely will happen.  I wouldn't own bitcoins otherwise.  I just see it as a serious risk.

Why attack it when you can join it?

I don't quite understand, what is to stop for example Paypal from buying a shitload of ASICs (or FPGAs should ASICs all be a fraud) and shut down the network by DOS?
I fear such an attack would severely undermine bitcoin user confidence, send prices really low, and undermine incentive for other miners to up their game by buying new equipment etc.
I don't understand how a client update could prevent this problem.  Wouldn't the attacker just upgrade too?  Is there a way to distinguish between attackers and "true" miners?  

I would love a good answer to this as together with scaling issues this is my main concern for bitcoin's survival and success.