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>There is currently no defense for this attack in Bitcoin, as the simulation demonstrates. The entire Bitcoin miner reward model is the defense for this attack

>There is currently no defense for this attack in Bitcoin, as the simulation demonstrates. The entire Bitcoin miner reward model is the defense for this attack. Nation states have powerful computers... but nowhere near as powerful as the decentralized Bitcoin mining network combined. Even if they did currently, the endgame for Bitcoin as envisioned by Satoshi Nakamoto was for everyone on the planet to be mining Bitcoin at the same time. If a Nation State could ever become more powerful than every single private processor on the planet combined... I think it would be game over for a lot more than just Bitcoin.

AffableSpatula 6y ago
ASIC chip fabrication is centralised in China. The government could seize the means of production, as well as the centralised mining operations that they've attracted by subsidising electricity.
- reitzensteinm 6y ago
  If a handful of governments that control fabs agree Bitcoin has to go, the efficiency of ASIC mining becomes a big threat. Governments can purchase large runs of ASICs while other mining will revert to GPU. Controlling 51% of the hash rate in this manner isn't as outlandish. Further, you're not limited to double spend attacks. If you're the government with a decent advantage, you just treat your own chain as true and never accept blocks from other miners. The reward for mining will collapse, since even if you produce a valid block it'll not be on the longest chain once government miners catch up. And once the reward for mining collapses you can probably even power down some of the ASICs. There are counter measures, but combined with attacking the financial onramps and making possession criminal, it's hard for me to believe that BTC would survive an attack like this. But of course, it's predicated on large governments agreeing it's worth seriously attacking. I don't know how likely that is.
flixic 6y ago
Nation state wouldn't need to become more powerful than all miners if most miners (more accurately, vast majority of hash power) were located in one, authoritarian country with a penchant of controlling "private" businesses.
xur17 6y ago
I also imagine that after a few days of the network being jammed up, getting social consensus to fork the network to use a different hashing function would be fairly viable.
- dingus9 6y ago
  Right. And now this theoretical actor that controls 10x the hashrate of the rest of the world has lost 10x the amount of capital invested compared to the rest of the mining world. It's the equivalent of shooting a bullet through your chest to shoot your enemy in the finger.
  - AffableSpatula 6y ago
    The purpose of this project is to have people be specific about what ruleset they would fork to which could prevent this kind of attack.
PragmaticPulp 6y ago
I don’t think the realistic attack vectors include nation states trying to out-compete the network on hash rate by building a competing network. If China wanted to make this a priority, for example, they’d just use military force to seize existing mining operations which are heavily centralized and easy to find. A more realistic attack angle would be a large mining corporation recognizing a financial opportunity to undermine Bitcoin. If some organization could position themselves as a superior alternative to Bitcoin, crashing the Bitcoin network with periodic mining attacks could be worth the cost. Alternatively, if an entity could amass a large enough short position on Bitcoin, attacking the network to drive down the price might be attractive. We’d have to run the math on the scenarios, which is the point of projects like this. > Even if they did currently, the endgame for Bitcoin as envisioned by Satoshi Nakamoto was for everyone on the planet to be mining Bitcoin at the same time. The amount of wasted energy would be insane if everyone on the planet was mining Bitcoin. Currently, it looks like we’re on a trajectory where large mining operations will centralize a lot of the eventually custom mining hardware. Individuals will have less and less incentive to mine Bitcoin as the reward decreases.
onlyrealcuzzo 6y ago
Who needs processors when you've got big guns? They don't need the processors - they can simply change the laws.
dingus9 6y ago
Right. The protections against this are already baked into the protocol. 51% attacks don't make sense because you're hurting yourself 51% and hurting everyone else 49%. And for this theoretical attack you'd probably need to sustain 90%+ hash power for a long time. Your first hurdle will be producing enough ASICs to surpass current hashrate by nearly 10x. Solve that problem and you'll need a massive amount of energy and you'll have to set up huge mining facilities in various locations to prevent crippling local power grids. This would take years to plan & execute. A lot of people would have to be involved. Good luck keeping it a secret. Network hash rate will continue to increase while you're building this infrastructure. If by some miracle you've pulled this off, Bitcoin users will switch to a fork of Bitcoin that uses a different mining algorithm and your entire investment is now completely worthless.
- AffableSpatula 6y ago
  The protections aren't baked into the protocol because they don't account for external real world motives of nations states which could incent them to act in a "non-economic" way according to the internal rules of the Bitcoin game.
  - dingus9 6y ago
    It's baked into the incentivization structure, if you prefer it worded that way. Investing hundreds of billions of dollars and years of work to place a temporary speed bump in front of Bitcoin's growth doesn't make sense.
  - AffableSpatula 6y ago
    This isn't a temporary speeedbump, it's a permanent end to proof of work mining as an investable activity (and viable sybil resistance mechanism for bitcoin).
    - dingus9 6y ago
      Remember UASF? If incentives align amongst users, nodes, merchants and exchanges Bitcoin absolutely will switch to another mining algorithm and now the attacker has to start from 0. If the attacker attempts to keep up the game of cat-and-mouse long enough they will eventually go bankrupt and will no longer be able to participate. And this theoretical discussion completely dismisses the fact that it's nearly impossible to execute an attack like this at this stage in the game anyway.
playingchanges 6y ago
Right, it seems like there would be plenty of gamers more than willing to replace those ASICS given the opportunity.
samsonradu 6y ago
I think eventually it will be nation states that bring the endgame, on national security grounds, through regulation. Looking mostly at the US here. It is highly unlikely the government will sit by and watch trillions of US capital flowing into a Chinese-controlled infrastructure, undermining their reserve currency status. Also worth mentioning that the US has leverage over the entire world’s banking system, that is how they enforce sanctions. Cutting the link between crypto and major currencies would qualify as an endgame.

AffableSpatula 6y ago

ASIC chip fabrication is centralised in China. The government could seize the means of production, as well as the centralised mining operations that they've attracted by subsidising electricity.

reitzensteinm 6y ago
If a handful of governments that control fabs agree Bitcoin has to go, the efficiency of ASIC mining becomes a big threat. Governments can purchase large runs of ASICs while other mining will revert to GPU. Controlling 51% of the hash rate in this manner isn't as outlandish. Further, you're not limited to double spend attacks. If you're the government with a decent advantage, you just treat your own chain as true and never accept blocks from other miners. The reward for mining will collapse, since even if you produce a valid block it'll not be on the longest chain once government miners catch up. And once the reward for mining collapses you can probably even power down some of the ASICs. There are counter measures, but combined with attacking the financial onramps and making possession criminal, it's hard for me to believe that BTC would survive an attack like this. But of course, it's predicated on large governments agreeing it's worth seriously attacking. I don't know how likely that is.

flixic 6y ago

Nation state wouldn't need to become more powerful than all miners if most miners (more accurately, vast majority of hash power) were located in one, authoritarian country with a penchant of controlling "private" businesses.

xur17 6y ago

I also imagine that after a few days of the network being jammed up, getting social consensus to fork the network to use a different hashing function would be fairly viable.

dingus9 6y ago
Right. And now this theoretical actor that controls 10x the hashrate of the rest of the world has lost 10x the amount of capital invested compared to the rest of the mining world. It's the equivalent of shooting a bullet through your chest to shoot your enemy in the finger.
- AffableSpatula 6y ago
  The purpose of this project is to have people be specific about what ruleset they would fork to which could prevent this kind of attack.

PragmaticPulp 6y ago

I don’t think the realistic attack vectors include nation states trying to out-compete the network on hash rate by building a competing network. If China wanted to make this a priority, for example, they’d just use military force to seize existing mining operations which are heavily centralized and easy to find. A more realistic attack angle would be a large mining corporation recognizing a financial opportunity to undermine Bitcoin. If some organization could position themselves as a superior alternative to Bitcoin, crashing the Bitcoin network with periodic mining attacks could be worth the cost. Alternatively, if an entity could amass a large enough short position on Bitcoin, attacking the network to drive down the price might be attractive. We’d have to run the math on the scenarios, which is the point of projects like this. > Even if they did currently, the endgame for Bitcoin as envisioned by Satoshi Nakamoto was for everyone on the planet to be mining Bitcoin at the same time. The amount of wasted energy would be insane if everyone on the planet was mining Bitcoin. Currently, it looks like we’re on a trajectory where large mining operations will centralize a lot of the eventually custom mining hardware. Individuals will have less and less incentive to mine Bitcoin as the reward decreases.

onlyrealcuzzo 6y ago

Who needs processors when you've got big guns? They don't need the processors - they can simply change the laws.

dingus9 6y ago

Right. The protections against this are already baked into the protocol. 51% attacks don't make sense because you're hurting yourself 51% and hurting everyone else 49%. And for this theoretical attack you'd probably need to sustain 90%+ hash power for a long time. Your first hurdle will be producing enough ASICs to surpass current hashrate by nearly 10x. Solve that problem and you'll need a massive amount of energy and you'll have to set up huge mining facilities in various locations to prevent crippling local power grids. This would take years to plan & execute. A lot of people would have to be involved. Good luck keeping it a secret. Network hash rate will continue to increase while you're building this infrastructure. If by some miracle you've pulled this off, Bitcoin users will switch to a fork of Bitcoin that uses a different mining algorithm and your entire investment is now completely worthless.

AffableSpatula 6y ago
The protections aren't baked into the protocol because they don't account for external real world motives of nations states which could incent them to act in a "non-economic" way according to the internal rules of the Bitcoin game.
- dingus9 6y ago
  It's baked into the incentivization structure, if you prefer it worded that way. Investing hundreds of billions of dollars and years of work to place a temporary speed bump in front of Bitcoin's growth doesn't make sense.
- AffableSpatula 6y ago
  This isn't a temporary speeedbump, it's a permanent end to proof of work mining as an investable activity (and viable sybil resistance mechanism for bitcoin).
  - dingus9 6y ago
    Remember UASF? If incentives align amongst users, nodes, merchants and exchanges Bitcoin absolutely will switch to another mining algorithm and now the attacker has to start from 0. If the attacker attempts to keep up the game of cat-and-mouse long enough they will eventually go bankrupt and will no longer be able to participate. And this theoretical discussion completely dismisses the fact that it's nearly impossible to execute an attack like this at this stage in the game anyway.

playingchanges 6y ago

Right, it seems like there would be plenty of gamers more than willing to replace those ASICS given the opportunity.

samsonradu 6y ago

I think eventually it will be nation states that bring the endgame, on national security grounds, through regulation. Looking mostly at the US here. It is highly unlikely the government will sit by and watch trillions of US capital flowing into a Chinese-controlled infrastructure, undermining their reserve currency status. Also worth mentioning that the US has leverage over the entire world’s banking system, that is how they enforce sanctions. Cutting the link between crypto and major currencies would qualify as an endgame.