Topic: Withholding attacks - analysis of 200 tera-hash withholding attack (Read 5403 times)

Withholding attacks don't make financial sense - that's easy to prove with math.

The thing is, however, that sometimes people do things that don't make sense.  Like mining at a loss instead of buying coins.  Somebody with a grudge may very well want to see certain pools get hurt.  It is also possible that the attacked was genuinely stupid and didn't know his custom CGMiner wasn't working - although many people doubt somebody with 2PH/s would be that stupid, but as we all know money doesn't buy intelligence 

BTCGuild had a 2PH witholding attack earlier this year. Are you saying that withholding attacks over a certain hashing size are not true, worthwhile, or both?  It's also been alleged that in the withholding attacks, that the miners aren't really mining either.

In this scenario, our villian has a 200 tera-hash pool of equipment that he is willing to hire out to anybody who wants to launch a withholding attack. The hypothetical cost of power is $6,000/month or $20/month per tera-hash. At 1KW per tera-hash that works out to roughly 25% of the best month-to-month hosting quotes out there. Not going to happen. Assuming the villain rolls his own data center for this 200KW footprint $80/tera-hash is far more realistic all in cost. Assume the miners cost $1/giga-hash and we have a $200K capital investment plus about $24K/month operational cost.

Given the short life of mining equipment, our villain needs to recoup that investment in, say, six months or about $34K/month. So he needs someone to pay him $34+24 = $58K + profit margin per month for 6 months to be a villain.

What is the payback to the larger pool initiating the attack? Assume our villain can operate without detection by rapidly changing identities and payout addresses and can drive three 1200 tera-hash pools out of business in six months. Right now the network hasth rate is about 160,000 tera-hashes. 3600 tera-hashes must be re-allocated. Looking at Eligius where I mine, their portion of the total pool about 6%. So Eligious would stand to gain about 220 THS of the newly available mining capacity. At a cost of $344,000 plus profit to the villain.

I don't see a huge payoff to anybody to a withheld block attack. Too much work, too expensive and too easy to detect.

Moving this analysis from an unrelated thread for discussion.