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I think the argument is that by doing a 51% attack you undermine the market value so you never get the rewards. This makes sense, but only for the leading crypt
by tlarkworthy 8y ago
I think the argument is that by doing a 51% attack you undermine the market value so you never get the rewards. This makes sense, but only for the leading crypto coin. As we see here today, you can 51% attack smaller coins, which should imply an increase in the value of Bitcoin from consolidation.
- tehsauce 8y agoThe spooky thing that this made me realize, is that if anyone did find a vulnerability in bitcoin (or any cryptocurrency) is that they would have a greater incentive to only slowly leech off the system, because they will be able to siphon out much more over time than if everyone panics over security. The weapon is no good unless it's secret.
- dragonwriter 8y agoAssuming you want to make money directly, sure. If you want to harm a community in which the currency is widely used, the incentives are different.
- h1d 8y agoWhat kind of incentive does the attacker have to just harm a community of a distributed system?
- rspeer 8y agoHow about environmentalism?
- mlvljr 8y agoNot this again!!
- jungturk 8y agoAn interest in a competing financial system.
- root_axis 8y agoPure carnage? Blackhats are real.
- dragonwriter 8y agoAssociation with or interest in a different (crypto or not) currency, leading to wanting to shake faith in the target currency. Hostility toward a community in which the target currency is particularly popular. “Some men just want to watch the world burn.”
- TeMPOraL 8y agoConcern over the impact Bitcoin has on global energy use?
- actsasbuffoon 8y agoIf you had a strong interest in Ethereum (for example), then I think you’d want to avoid the wholesale destruction of Bitcoin. If the biggest crypto currency fails, it’ll probably send shockwaves through out the entire crypto currency market. Mind you, I say this as a crypto currency outsider.
- dragonwriter 8y ago> If you had a strong interest in Ethereum (for example), then I think you’d want to avoid the wholesale destruction of Bitcoin. If the biggest crypto currency fails, it’ll probably send shockwaves through out the entire crypto currency market. That's true as long as cryptocurrency itself is seen as fringe; it's less true if cryptocurrency becomes generally accepted. Of course, a nation-state or other actor interested in preserving the role of fiat and keeping cryptocurrency on the fringes is also a possibility.
- asimpletune 8y agoJust to say they did it.
- deleted 8y ago[deleted]
- lugg 8y agoMoney? Tax is a pretty good motivator for governments.
- grigjd3 8y agoTrolling, because the internetz.
- sudomake 8y agoMaking GPU prices great again
- oh_sigh 8y agoEven finding a single double spend attack that only double-spends 1 satoshi would be enough to destroy bitcoin.
- vntok 8y agoNo it would not. Finding a BTC double spend attack vector would be like finding a 0-day: good and maybe even profitable up until fixed, which would take hours, days at most. Have 0-days destroyed Microsoft, Android, Firefox, Electron or Chrome?
- alttab 8y agoSo it's ok if your currency becomes unreliable for many hours? It would immediately negate the trust of what happened during that period of time, affecting the trust of any balance in participating addresses.
- vntok 8y agoIf Visa or SEPA got hacked over 12 hours and then fixed the root cause, would you stop using credit cards or bank transfers altogether? I would not.
- djsumdog 8y agoCredit Card companies and banks can reverse the transactions, so long as they keep track of things in batches, have strong backup system for their ledgers. So long as they're not SWIFT transactions that leave the country, and the country that's attacked as a strong/regulated inter-bank transfer system. If a bank is critically hit so bad funds become impossible to correctly attribute to people (Fight Club type unrealistic scenario), at least in the US FDIC would probably come in to play. The bank might even have to be treated as a failed bank. People wouldn't stop using banks, but they would stop using that bank.
- eric-hu 8y ago
- droidist2 8y agoBut what if someone else also finds the vulnerability? You can't be sure they'll also act slowly. It's like a game theory dilemma.
- MereInterest 8y agoNah, you could short-sell Bitcoin. Take out a sell option, crash the value, buy cheap, then exercise the option. Information is valuable, no matter which direction it predicts the market to go.
- pgwhalen 8y agoAn interesting thought, but in practice, trading derivatives affects the value of the underlying pretty strongly. Whoever is selling you those puts is selling bitcoin (or futures) to hedge, which would drive the price down as you try to put on your position.
- physguy1123 8y agoWith options, buying deep OTM puts won't result in an immediate impact on the underlying market because they have such low delta and market makers aren't going to move a lot of spot to hedge it.
- AndrewBissell 8y agoThe problem is that if you successfully rook put sellers in this way for some ungodly amount of money, they will never be able to pay out on your claim. Kinda like when all the big Wall Street Banks were caught out because AIG was threatening to go bankrupt and default on their CDS.
- physguy1123 8y agoYou might never exercise the option, but you could probably resell the option at a far higher price
- pgwhalen 8y agoIt wouldn't be immediate, but the second you put on a trade with any kind of size that far out of the money, the market makers will wise up.
- 8y ago
- paulgb 8y agoThis is basically the plot of F. Scott Fitzgerald's The Diamond as Big as the Ritz, which takes it to its logical conclusion (but I won't spoil it, it's a fun short read.) https://en.wikipedia.org/wiki/The_Diamond_as_Big_as_the_Ritz https://en.wikipedia.org/wiki/The_Diamond_as_Big_as_the_Ritz
- C7H8N4O2 8y agohttp://www4.ncsu.edu/unity/users/m/morillo/public/fitzgeraldstories1.pdf http://www4.ncsu.edu/unity/users/m/morillo/public/fitzgerald... [PDF]
- mortdeus 8y agoWhat about state level actors, say the NSA, that consider bitcoin supplanting the US dollar as the standard medium of international currency exchange a huge threat to the world economy? (or at least their ability to control it) I think people need to be concerned that Governments, at any point of time, with their incomprehensibly huge computation power, can use it to crush bitcoin. Not only that but they can pass laws that allow them to forcibly seize the fattest wallets. Which ultimately ensure's that the Government can, behind the scenes, kick the scaffolding out from beneath us. All I see right now is state level actors experimenting in this regard, because seriously who single handedly has the computation power to take control of these cryptocurrency's if its not the government or a company like Google?
- stale2002 8y agoYou are not wrong to argue that state level actors are a serious threat. But fortunately, these state actors seem to have no interest in attacking crypto. It seems like the governments that matters IE the 1st world, are perfectly happy to allow people to have access to a censorship resistant method of financial transactions. This makes a certain amount of sense. The governments of the 1st world claim to care a lot about freedom. And it seems that they are getting us have it.
- DmenshunlAnlsis 8y agoOr you know, they love the idea of an immutable record that’s far from anonymous. Cash is hard to trace, a Bitcoin is easy to trace for something like the NSA. It’s a giant digital paper trail by design! Besides, Bitcoin is as likely to become a dominant currency as shells or promises. No one outside or BTC fanatics honestly entertain that idea, and only a few who do espouse it do so because they really think it’s likely. For obvious reasons hyping the currency translates directly into profit, so it’s hype all the way down.
- stale2002 8y agoWell, a couple of the cryptocirrencies out there have privacy baked in, such Monero. I don't see any of these privacy coins being banned yet, so..... But anyways that is besides the point. The argument that the OP was making was that governments are areal threat to crypto. And MY point was that these governments are NOT actually attacking cryoptocurrencies so I guess things are going to work out fine for cryptocurrencies.
- quickthrower2 8y ago"Don't bite the hand that feeds you"
- beager 8y agoMy assessment is that the greatest vulnerability in Bitcoin is its breathless supporters, who will look past the dynamics of Bitcoin in adoration of the mechanics of Bitcoin. To that end, larger, more sophisticated enterprises (banks, hedge funds, etc) are likely leeching slowly off the system, propping the price up and inflating it when they can, so they can extract as much value as possible out of its correction to a value commensurate to its utility. Every other technical vulnerability, notional or demonstrated, is at least an order of magnitude harder to exploit.
- wpietri 8y agoI think the split you draw between people looking at Bitcoin-the-real-thing and people adoring the machinery is an excellent one. If you look at the original paper, it's pretty clear that Bitcoin was meant to be peer-to-peer electronic cash: https://bitcoin.org/bitcoin.pdf https://bitcoin.org/bitcoin.pdf In practice, it has failed at this aim. I don't think that was necessarily so; plenty of things start out rough and become more useful over time. But the mechanics-adorers I've talked with seemed willfully blind to all the practical issues. We can't fix problems we refuse to see, so Bitcoin has preserved its machinery at the expense of fulfilling its vision.
- nicky0 8y agoHow would you change the machinery?
- wpietri 8y agoPersonally, I wouldn't. Most people don't want digital cash for the same reasons they don't use real cash: your risk of theft is higher, it's not as convenient to use, transactions can't be reversed, and you lose a lot of buyer protections. I use technology to solve problems for people. The few niches Bitcoin has found (e.g., speculation, money laundering, ransoms, light drug crime) are not really what I would call solving problems for people.
- 8y ago
- zitterbewegung 8y agoOn certain exchanges you can short USD to cryptocurrency pairing.
- jaaames 8y agoBe careful, you have to use Tether as a currency, which by their own terms of service is worthless. In addition to this you have to do it on margin, and most exchanges have a history of dubious liquidation of margin positions.
- cocoablazing 8y agoYou can profit from undermining the market. Futures volumes may currently be too low to find enough liquidity to use them for financing a major attack but this could change when BB’s start selling them in earnest to clients.
- EGreg 8y ago1. Short bitcoin cash 2. Rent 51% and mine a fork in secret for a week 3. Wreak havoc 4. Collect money
- gbhn 8y agoMy conclusion is that since this is true, the real thing maintaining the system is mutual cooperation of sufficient mining interest. When you look at the theoretical division of hashpower in btc, it looks too stable over generations of hardware. Any non-colluding ecosystem should have centralized. I conclude btc is a collusion system. So why the pow? Is this stabilizing the actors somehow? It seems like an explicitly managed network would be no less centralized, way more efficient, and way more user friendly.
- dnomad 8y agoIt's important to understand that a "51% attack" isn't an attack at all. No algorithm or protocol has been compromised. The system is working exactly as it should. This is a fundamental aspect of all distributed systems: if the majority of the network elects that the state of A is X then that's the state of A. There is no mechanism by which one peer can disagree and override the majority -- unless the majority have also deigned to follow that peer and recognize it as a "leader." > Any non-colluding ecosystem should have centralized. Not exactly. There's real laws and borders and market realities that prevent the ultimate centralization of hashpower but what's clear is that centralization is works, centralization is extremely profitable, it's happening and it will continue [1]. Centralization, I would suggest, is the true goal of bitcoin and is the inevitable conclusion. > So why the pow? I see what you're getting at but it should be obvious. The miners are paid very, very handsomely not to collude. Bitcoin miners charge fees that are effectively far greater than any centralized authority. They reap billions in profit each year [2] for turning on a bunch of computers and plugging them in. A cynic might say the "proof of work" is a marketing tool to disguise what is really just the mass transfer of wealth to the miners. Certainly, bitcoin holders believe that miners have somehow "earned" these outrageous profits. [1] https://blockchain.info/pools https://blockchain.info/pools [2] http://fortune.com/2018/02/24/bitcoin-mining-bitmain-profits/ http://fortune.com/2018/02/24/bitcoin-mining-bitmain-profits...
- diogenescynic 8y agoSo you’re saying this is good for Bitcoin?
- bb88 8y ago> I think the argument is that by doing a 51% attack you undermine the market value so you never get the rewards. Only if you make it public. A 51% attack works at a poker table too, but only if the marks don't know the game is rigged. A successful double spend makes it public, as well as announcing your intentions to get to 51%. If you're quiet and can pull off a successful 51%, you can create the double spend before anyone knows.
- brandonsometig 8y agoTo be in the position of being able to do a bitcoin 51% attack however you would have had to sunk enormous costs into buying ASIC miners. The minute everyone finds out that a 51% attack occurs you will have pressure to change the mining algorithm and suddenly all your miners are worthless.
- bb88 8y agoWhat jhpriestley pointed out is that what's really saving bitcoin from a 51% attack is the inefficiency of obtaining computing power. If renting asic miners becomes vogue (and it might because it makes the computing market more efficient) then it might be possible just to rent asic miners for nearly free, since you'd be acquiring bitcoins while you were amassing the 51% computing power.
- cslarson 8y agoThe value of bitcoin gold doesn't seem to have gone down in correlation with this attack.