Topic: What are rebuttals to argument that China could mine empty blocks to kill BTC? (Read 198 times)

I am convinced that there are ways to prepare the spam transaction set which are not easy or outright impossible to detect. The attacker has all the time of the world to do the preparation and accumulate coin age, to create a spam transaction set which looks exactly like an average "honest" transaction set.

It would not be free for the attacker, of course, as he has to pay lots of transaction fees in the "real" chain while he prepares the attack, but he can later try to get some of this money back shorting BTC.

You could try to do some kind of "social defense", i.e. a group of nodes could simply refuse to relay and validate blocks from all nodes which do not relay or mine their own transactions.

Big exchanges could believe to have the power to do that. But this would be in some way a kind of centralization. And all the attacker has to do to stop the defense is simply including a few transactions of the "social defense cartel" in his blocks. Even if he accepts 50% of the normal transactions and fills the rest of the blocks with spam, he can do a lot of damage. And then it becomes almost impossible to detect the "attack blocks".

For these reasons I think a UASF/UAHF would be much cleaner.

PoS alone is less secure, I agree. But combined with PoW for a certain time, as a defense, could make this kind of attack much more complex. But It would only be necessary if the attacker 1) can sustain his attack and 2) has prepared for an algorithm-changing UAHF.

China has most of the mining hashrate for bitcoin, but this doesn't mean that the Chinese government would be able to use this as they please. Also, most miners who would be involved in such an action would suffer tremendous losses, as this event would instill fear and loss of confidence over bitcoin holders causing bitcoin's value to crash. Finally, the rewards for suppressing bitcoin isn't as glamorous or worth it for China. They'd gain nothing, apart from enemies and more alliances stacked against them.

I don’t think the government would do that as this idea isn’t really profound.

It’s actually nonsense to them and China will never spend $6 billion only to kill bitcoin. Competitive or not, bitcoin will not influence China’s economy.
It might be a person who has little knowledge of economics who actually made this false threat.
The reason why China blocked bitcoin is to strengthen their economy, and killing it would only be considered as bad spending. Mark that.

It depends on what kind of effect we are talking about. For example during 2017 those miners involved in the spam attack could have had 10% of the hashrate and still mined empty blocks (or blocks that were filled with their own fake transactions in order to not look suspicious) to contribute to the inflation of the backlog and the fees.
Obviously the more hashrate the malicious party has the more damage they can do but also the investment they need to make in ASICs and all the other costs (electricity, maintenance) is increased dramatically. To actually cripple the bitcoin network a much higher hashrate is needed but also the bigger the size of such an attack the easier it would be to detect it and eliminate it by switching algorithm and making the trillion dollar investment of the malicious party worthless.

Do you think that the Chinese government has endless amounts of money,so they could spend 6 billion dollars on something they don't care about and without getting any benefit from blocking the Bitcoin blockchain?
Bitcoin isn't even a priority for the government of China.Do you think that the Chinese government officials view Bitcoin as something like a hostile environment or a tool that helps for damaging the economy?
I believe that,sooner or later,China will view BTC as something "western" and they will try to ban BTC mining,but spending 6 billion dollars for such attack seems like nonsense.

The game theory works economically where the actor cares about his financial profit. However, if you're going to factor in state actors, they're more likely to have non-economic related incentives which can't be measured in monetary terms.

The potential profits from 51% Bitcoin is not a factor for a state actors in furthering their agenda. Given how high their GDP is, the attack would probably be a pocket change. However, they're still bound to the limitation that I've mentioned.

doesnt require that even.
it would require 144000 utxo(even as small as 1sat per utxo). so a cost of just 0.00144btc

putting 1000utxo per block but not using that set for 1 day. and repeating with 144 sets each day

but the thing is in that one day of seeing a pool use only one day old utxo. nodes can just disconnect from peers relaying such ..thus not get relayed from that node. thus. its just making blocks in its own small lill intranet(same as the empty block explanation)

..
whether its empty blocks or spam blocks. the point is. disconnect nodes sending it. and thus the network doesnt propagate them

by the way PoS mining is less secure and has no underlying value. ..but maybe. that is this fantasy scenario attackers plan. empty/spam the blocks to try making devs flip the code to a crappy less secure hashing mechanism
and yes PoS can be gamed easier than bitcoins PoW can. the reason no one tries is PoS coins are crap by default so no one even bothers trying

What do they get from mining empty blocks?

It wouldn't make sense that they spend lots of energy and then don't get anything from it. It will just make them spend money on electricity bills all for nothing. This is why 51% attack wouldn't be possible because there is no incentive in doing it while they can earn more in mining the right way and then earn.

I wrote something about that in my last post but had connection problems and the two sentences mysteriously disappeared (was probably my fault though).

The problem is that the attacker could have exactly the same effect if he fills the blocks with spam transactions. I believe there is no way to distinguish these from "normal" transactions.

You could try to invent some restriction based on coin age, yes; but all the attacking mining pool has to do is to buy some keys containing old coins (if he has that big pockets he will be able to do that), or prepare for the attack already accumulating coins from months before.

Where I see more potential is perhaps a reorganization limit like in some PoS currencies. Temporarily, all economic nodes and honest miners could reject reorganizations of e.g. more than 10 blocks, which would make a 51% attack of this kind already harder, as the attacker needs much more than 51% of the hashrate to succeed.

I agree however with you both that the fear about China is completely exaggerated and even may have racist connotations. There is a similar (extremely low) probability for this attack to be carried out by a big cartel of hedge funds trying to short bitcoin in the same way some shorted Gamestop.

i know some have read "china owns bitcoin"... but china doesnt

even the pools headed as being "china" have alot of miners dotted around the world.just using that pool because its 'popular'

users will just pool jump to other pools if they find the pool they are attached to is playing silly games

so a attacker pool would need alot of its own hashpower. which is costly

also there is no need to swap to PoS or swap to CPU mining.
first of all CPU can be gamed.. thats what happened in 2010-2021 already (gpu solo/gpu pooling/asic pooling)

solutions are far simpler
minimum transactions per block
     meaning dont relay dummy blocks
          meaning disconnect nodes sending dummy blocks.
               meaning majority of network dont get any dummy blocks

if no node is receiving dummy blocks. then the network just carries on without noticing the attacker.
the attacker pool can create as many blocks as they like but unable to relay them to the network
the attacker can waste time building blocks on their own lil small intranet fork.
everyone else just sees and accepts valid blocks with content

another safety measure could be to avoid another type of attack (full blocks with only tx data from one source with only 1 block coin-age)
if utxo of say 1000tx has a total coin-age of only 144000 blocks (one day each on average) then thats also ignored. to stop a attacker from just filling blocks with transactions that moved in their previous same day block

China government doesn't control mining pool.

Even if they could control mining pools located in chain, those pools would get smaller rewards from blocks. The miners would get away from those pools, as they pay less. The hashrate would just move to another pools.

I made a dashboard which shows empty blocks mined per day. You can see it here (https://bitcoindata.science/blockdata-dashboard.html)

Last week, in 7 days (from 2021-03-29 to 2021-04-05) there were 3 empty blocks

The average block reward last week 6.86 btc, which is 0.61 BTC more than the block subsidy (6.25). That means about 36000 dollars less.

I doubt miners would agree with this and keep their hashrate in such pool.

Let's analyze a "worst case scenario":

China (or any other malicious government or entity with enormous amounts of funds) controls much more than 51+% of the hashrate and mines empty blocks for a long time, reorganizing all attempts to mine other blocks. The community isn't able to respond via conventional means (hiring enough hashrate to counter the attack) and responds with an UASF (or UAHF?) changing the mining algorithm to a CPU-only one. Now the attacker obviously can prepare for that and simply hire massive CPU power to continue its attack.

But even then there is a possible defense: The community could introduce Proof of Stake as complementary validation mechanism, again with an UASF. This would allow the Bitcoin whales to take partly the control of the chain. If PoS would be allowed to validate ~50% of the blocks then all the attacker could do is to reduce capacity by 50%. The community could again change that with another UASF changing the maximum weight per block (e.g. duplicate it), which would give stakers enormous profits via transaction fees ... (big blockers would be happy then, but it is possibly only a temporary measure, later one could hard fork back to a pure PoW protocol with current weight limits).

So there is a big variety of defense strategies the community could adopt, even if they can't hire enough hashrate to break the attacker's attempt.

For this censorship to be effective, China government has to control at least 51% of the network's hash rate. Note that while a good percentage of the hash rate is located in China, it doesn't mean that the government has direct control of the hash rate. Something like this would take some time to plan and would probably be leaked out at some point.

The argument against this is the same as the one against 51% attacks. There is a lack of incentives and that the attack would be fairly shortlived. Once the attack becomes known, it would be a matter of time before people switches to another crypto or the community decides to go on another fork with a different PoW. As such, there is a limited effectiveness of the attack and China has just destroyed their fairly lucrative ASIC industry while not really achieving much. For the above scenario, I'm assuming that China has in fact 51% of the hash rate and is able to consolidate them in the first place which is fairly hypothetical.

$6 billion a year is not a small sum even for China, and what's the point in doing that for them? Bitcoin is not a big threat to China or any other government, pretty much everyone, including Bitcoiners, are still using fiat money for most of their purchases. If anything, it would make China look weak and scared.

That's an interesting scenario but I don't see a logical reason why the Chinese government would spend that much to try and hijack the Bitcoin network when they can simply sit and earn from taxes. The chain will continue even if they kept mining empty blocks so they are not really killing it. Miners from other countries would continue to mine normal blocks and will be happy earning from block rewards and transaction fees.

Are there any strong counter-arguments to idea that China could "kill bitcoin" network by mining empty blocks and essentially spending something like 6$ billion a year to block the bitcoin network.

For a nation state those $6 billion might not be much.

If China were to do this, what could be done?

Or is that an actual weakness of Bitcoin network?