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I'm still a bit unclear as to what prevents someone (government, IBM, Amazone EC2, ...) from setting up shop and throwing CPUs at mining. I know that it will sl

by Corrado 16y ago

I'm still a bit unclear as to what prevents someone (government, IBM, Amazone EC2, ...) from setting up shop and throwing CPUs at mining. I know that it will slow everyone down but surly the NSA has enough horsepower to drown almost everyone else out. Right?

tedkimble 16y ago
I'm not sure of the technical details of how they are doing it, but I believe the difficulty of mining a bitcoin is proportional to the speed with which they are being mined (and thus the amount of mining going on). So throwing a lot of resources at it just makes it that much more difficult to mine, and would seem not to be productive. (edit: well, at least not based on their current value)
baberuth 16y ago
nothing. anyone can. right now its mostly inefficient to allocate cpus for mining. its just not worth it for them. as more bitcoins are mined they get harder to mine. http://news.ycombinator.com/item?id=2265491 http://news.ycombinator.com/item?id=2265491
joe_the_user 16y ago
Indeed, if the system became common enough, one could hypothesize a good percentage of the world's energy running "mining" machines... and the related global warming...
dekz 16y ago
They have to get ahead of the chain and then out compute the rest of the grid of "honest" nodes. I believe currently all clients will just accept the current block chain with the most amount of work on it. So if they can drown out everyone they can spawn off their own chain, take a look at the thesis by Satoshi (http://www.bitcoin.org/sites/default/files/bitcoin.pdf http://www.bitcoin.org/sites/default/files/bitcoin.pdf) where he talks about this under Calculations.
- mshron 16y ago
  I believe OP is not concerned about bogus chains, but imbalances in computing power. This is not a serious problem but it looks like one on the face of it. If a massive amount of computation suddenly went into computing bitcoins there are two issues you could be worried about. The first is that it isn't very fair. The reply to this is that the current balance of money isn't fair either, we just didn't get to watch it happen. And as people have said elsewhere, it's not reasonable to expect a currency to solve social inequality. The second is that, if the cost of mining a bitcoin goes through the roof but there is not enough economy to make money on transaction fees, then people will drop out of mining. However: difficulty is not automatically increasing, it's proportionally increased or decreased relative to the difficulty of the past two weeks. If it becomes prohibitively expensive for Amazon to mine for bitcoins and they drop out, the threshold will fall again. Either way there's always an incentive to keep it running, until the system is out of coins. (edit for clarity)
  - Groxx 16y ago
    >until the system is out of coins. Which won't happen. They exponentially decrease in value per block as time goes on. And to offset this, as fewer are created, they will be worth more, because by that point there will be far more people using Bitcoin (if it doesn't bust, first).
    - euccastro 16y ago
      As currently designed, the system has an absolute cap at ~21 million coins.
      - delinka 16y ago
        But if coins are [infinitely?] divisible, then the currency just undergoes deflation.
        weavejester 16y ago
        Not infinitely, but divisible to 8 decimal places IIRC.
rfugger 16y ago
If an entity that could harness sufficient computing power like the NSA wanted to take control of the block chain by throwing more computing power at it than is currently devoted to computing the block chain, then, yes, they would be in control of which transactions were permitted, and could undo very recent transactions that seemed to have been committed. Older transactions would be very difficult to undo, however.
ch0wn 16y ago
"An attacker that controls more than 50% of the network's computing power can, for the time that he is in control, exclude and modify the ordering of transactions. This allows him to: * Reverse transactions that he sends while he's in control Prevent some or all transactions from gaining any confirmations * Prevent some or all other generators from getting any generations" Source: https://en.bitcoin.it/wiki/Weaknesses#Attacking_all_users https://en.bitcoin.it/wiki/Weaknesses#Attacking_all_users
frodoslembas 16y ago
Computing power costs money. The more power thrown at mining, the more power required, and the less money is made per BTC generated. Throw enough at it and everyone else will stop even trying to generate coins, but for good reason: they wont be worth as much as you are paying for them.

by Corrado 16y ago

tedkimble 16y ago

I'm not sure of the technical details of how they are doing it, but I believe the difficulty of mining a bitcoin is proportional to the speed with which they are being mined (and thus the amount of mining going on). So throwing a lot of resources at it just makes it that much more difficult to mine, and would seem not to be productive. (edit: well, at least not based on their current value)

baberuth 16y ago

nothing. anyone can. right now its mostly inefficient to allocate cpus for mining. its just not worth it for them. as more bitcoins are mined they get harder to mine. http://news.ycombinator.com/item?id=2265491 http://news.ycombinator.com/item?id=2265491

joe_the_user 16y ago

Indeed, if the system became common enough, one could hypothesize a good percentage of the world's energy running "mining" machines... and the related global warming...

dekz 16y ago

They have to get ahead of the chain and then out compute the rest of the grid of "honest" nodes. I believe currently all clients will just accept the current block chain with the most amount of work on it. So if they can drown out everyone they can spawn off their own chain, take a look at the thesis by Satoshi (http://www.bitcoin.org/sites/default/files/bitcoin.pdf http://www.bitcoin.org/sites/default/files/bitcoin.pdf) where he talks about this under Calculations.

mshron 16y ago
I believe OP is not concerned about bogus chains, but imbalances in computing power. This is not a serious problem but it looks like one on the face of it. If a massive amount of computation suddenly went into computing bitcoins there are two issues you could be worried about. The first is that it isn't very fair. The reply to this is that the current balance of money isn't fair either, we just didn't get to watch it happen. And as people have said elsewhere, it's not reasonable to expect a currency to solve social inequality. The second is that, if the cost of mining a bitcoin goes through the roof but there is not enough economy to make money on transaction fees, then people will drop out of mining. However: difficulty is not automatically increasing, it's proportionally increased or decreased relative to the difficulty of the past two weeks. If it becomes prohibitively expensive for Amazon to mine for bitcoins and they drop out, the threshold will fall again. Either way there's always an incentive to keep it running, until the system is out of coins. (edit for clarity)
- Groxx 16y ago
  >until the system is out of coins. Which won't happen. They exponentially decrease in value per block as time goes on. And to offset this, as fewer are created, they will be worth more, because by that point there will be far more people using Bitcoin (if it doesn't bust, first).
  - euccastro 16y ago
    As currently designed, the system has an absolute cap at ~21 million coins.
    - delinka 16y ago
      But if coins are [infinitely?] divisible, then the currency just undergoes deflation.
      - weavejester 16y ago
        Not infinitely, but divisible to 8 decimal places IIRC.

rfugger 16y ago

If an entity that could harness sufficient computing power like the NSA wanted to take control of the block chain by throwing more computing power at it than is currently devoted to computing the block chain, then, yes, they would be in control of which transactions were permitted, and could undo very recent transactions that seemed to have been committed. Older transactions would be very difficult to undo, however.

ch0wn 16y ago

"An attacker that controls more than 50% of the network's computing power can, for the time that he is in control, exclude and modify the ordering of transactions. This allows him to: * Reverse transactions that he sends while he's in control Prevent some or all transactions from gaining any confirmations * Prevent some or all other generators from getting any generations" Source: https://en.bitcoin.it/wiki/Weaknesses#Attacking_all_users https://en.bitcoin.it/wiki/Weaknesses#Attacking_all_users

frodoslembas 16y ago

Computing power costs money. The more power thrown at mining, the more power required, and the less money is made per BTC generated. Throw enough at it and everyone else will stop even trying to generate coins, but for good reason: they wont be worth as much as you are paying for them.