4 ms·

BTC proponents don't want to admit it, but performing a 51% attack has never been difficult: just form a large mining pool. The only issue is convincing all tho

BTC proponents don't want to admit it, but performing a 51% attack has never been difficult: just form a large mining pool. The only issue is convincing all those miners to go against their economic interest. China could have relatively easily done that previously but now it will be more difficult for any one country to become that non-economic actor with both control over hash rate and the ability to coerce miners.

deweller 5y ago
...for some definitions of "difficult" and "large mining pool"
G3rn0ti 5y ago
> The only issue is convincing all those miners to go against their economic interest. Well, you gave the reason yourself why this is not that "easy" ... Interestingly, it's the same reason why large cartels of several companies, ultimately, are doomed to fail to control the price of their product: In a cartel each member is incentivized to undermine the cartel's price to gain a profit. So usually cartels are effective only for a short time (and, yes, even the oil "cartel").
gccs 5y ago
Its easy. Offer a 0% fee pool. They will all flock to it.
- bitxbitxbitcoin 5y ago
  Until said Pool gets close to 51%. This has actually happened before many years ago. Look up the Ghash fiasco from 2014.
  - gccs 5y ago
    Okay so run two 0% fee pools. Don't disclose the owner.
- deweller 5y ago
  That is not how Bitcoin works. You would need over 51% of mining power to make this switch. What you are proposing is a zero-fee fork of Bitcoin.
Majromax 5y ago
> The only issue is convincing all those miners to go against their economic interest. That's the problem, isn't it? Bitcoin "longs" are very unlikely to profit from a 51% attack, since its success would destroy the speculative value of the currency they hold. On the other hand, increasing financialization of cryptocurrency allows people and institutions to build up short positions without directly holding bitcoin, and a 51% attack would cause those short positions to pay out. It may not even be illegal to do this, since there's no direct fraud in a 51% attack unless it's used to double-spend. I wonder whether these two factors -- 51% resources and largest viable short positions -- still differ by an order of magnitude or two.
- naveen99 5y ago
  Being short is by definition not holding any. If you hold some and go short, that’s just plain old selling.
  - phyalow 5y ago
    Not quite. Being short is borrowing Crypto, selling into USD (or something else) and having an obligation to return the borrowed Crypto position at some point (agreed or not) in the future. Returning a borrowed position in a subsequently forked chain which is no longer economically valuable could be incredibly profitable. It is of course entirely possible the collateral held by the counter-party securing the borrow is seized in such a scenario (legitimately or not).
    - Majromax 5y ago
      Which is why a prospective attacker would probably seek to build its short position at the ordinary Wall Street level. Nobody will try to seize collateral for "winning" if you've sold Microstrategy shares short, for example, or even the BTCC Bitcoin ETF (trading on the Toronto stock exchange). My gut feeling is that we aren't yet at the point that you could build an entirely on-exchange short position sufficient to fund a 51% attack, but that may change. To estimate the cost of a 51% attack, miners currently get 6.25BTC/10 minutes at $35k/bitcoin, so the value of mining is about $32m/day. Rounding that up to even $50m/day to account for transaction fees, that's not very expensive if a hedge fund can build a $1bn short position. The saving grace might be that you can't rent bitcoin mining hardware in unlimited quantities. A hedge fund might have to own the miners used for the attack, and if executing the attack causes bitcoin's value to drop to near-zero that would also devalue the mining hardware.
PragmaticPulp 5y ago
> The only issue is convincing all those miners to go against their economic interest. The minute someone comes up with a 51% attack that actually is in the financial interests of the miners, this becomes easy. This is likely why it will be so difficult to ever move Bitcoin to a more economically friendly system: The miners will see any attempts coming and use their power to manipulate the system in the direction that benefits continued mining instead of more eco-friendly forks. Bitcoin mining is a cash cow for a relatively small number of big players who have heavily invested in mining gear. They have no interest in letting this golden goose slip away.
keymone 5y ago
> The only issue is convincing all those miners to go against their economic interest. this is almost verbatim from bitcoin whitepaper. more news a 11?
bitxbitxbitcoin 5y ago
The participants in a mining pool gravitate towards the largest pool because the. Their mining reward is more predictable. That benefit is the only reason to go with a larger pool. That pro is quickly outweighed if the large mining pool turns out to be a bad actor and attempts a 51% attack or other hash rate related attack. That is to say. Miners are self interested in avoiding 51% attacks. Pools can’t coerce their miners to do anything because switching pools is so damn easy. Likewise, governments can’t just coerce pools to coerce miners to do anything anti-Bitcoin. The incentive structure that is PoW works, still works, and this is it working before our eyes.
shusaku 5y ago
The whole GME affair is this constant reminder that “convincing to go against their economic interest” is always on the table.

deweller 5y ago

...for some definitions of "difficult" and "large mining pool"

G3rn0ti 5y ago

> The only issue is convincing all those miners to go against their economic interest. Well, you gave the reason yourself why this is not that "easy" ... Interestingly, it's the same reason why large cartels of several companies, ultimately, are doomed to fail to control the price of their product: In a cartel each member is incentivized to undermine the cartel's price to gain a profit. So usually cartels are effective only for a short time (and, yes, even the oil "cartel").

gccs 5y ago

Its easy. Offer a 0% fee pool. They will all flock to it.

bitxbitxbitcoin 5y ago
Until said Pool gets close to 51%. This has actually happened before many years ago. Look up the Ghash fiasco from 2014.
- gccs 5y ago
  Okay so run two 0% fee pools. Don't disclose the owner.
deweller 5y ago
That is not how Bitcoin works. You would need over 51% of mining power to make this switch. What you are proposing is a zero-fee fork of Bitcoin.

Majromax 5y ago

> The only issue is convincing all those miners to go against their economic interest. That's the problem, isn't it? Bitcoin "longs" are very unlikely to profit from a 51% attack, since its success would destroy the speculative value of the currency they hold. On the other hand, increasing financialization of cryptocurrency allows people and institutions to build up short positions without directly holding bitcoin, and a 51% attack would cause those short positions to pay out. It may not even be illegal to do this, since there's no direct fraud in a 51% attack unless it's used to double-spend. I wonder whether these two factors -- 51% resources and largest viable short positions -- still differ by an order of magnitude or two.

naveen99 5y ago
Being short is by definition not holding any. If you hold some and go short, that’s just plain old selling.
- phyalow 5y ago
  Not quite. Being short is borrowing Crypto, selling into USD (or something else) and having an obligation to return the borrowed Crypto position at some point (agreed or not) in the future. Returning a borrowed position in a subsequently forked chain which is no longer economically valuable could be incredibly profitable. It is of course entirely possible the collateral held by the counter-party securing the borrow is seized in such a scenario (legitimately or not).
  - Majromax 5y ago
    Which is why a prospective attacker would probably seek to build its short position at the ordinary Wall Street level. Nobody will try to seize collateral for "winning" if you've sold Microstrategy shares short, for example, or even the BTCC Bitcoin ETF (trading on the Toronto stock exchange). My gut feeling is that we aren't yet at the point that you could build an entirely on-exchange short position sufficient to fund a 51% attack, but that may change. To estimate the cost of a 51% attack, miners currently get 6.25BTC/10 minutes at $35k/bitcoin, so the value of mining is about $32m/day. Rounding that up to even $50m/day to account for transaction fees, that's not very expensive if a hedge fund can build a $1bn short position. The saving grace might be that you can't rent bitcoin mining hardware in unlimited quantities. A hedge fund might have to own the miners used for the attack, and if executing the attack causes bitcoin's value to drop to near-zero that would also devalue the mining hardware.

PragmaticPulp 5y ago

> The only issue is convincing all those miners to go against their economic interest. The minute someone comes up with a 51% attack that actually is in the financial interests of the miners, this becomes easy. This is likely why it will be so difficult to ever move Bitcoin to a more economically friendly system: The miners will see any attempts coming and use their power to manipulate the system in the direction that benefits continued mining instead of more eco-friendly forks. Bitcoin mining is a cash cow for a relatively small number of big players who have heavily invested in mining gear. They have no interest in letting this golden goose slip away.

keymone 5y ago

> The only issue is convincing all those miners to go against their economic interest. this is almost verbatim from bitcoin whitepaper. more news a 11?

bitxbitxbitcoin 5y ago

The participants in a mining pool gravitate towards the largest pool because the. Their mining reward is more predictable. That benefit is the only reason to go with a larger pool. That pro is quickly outweighed if the large mining pool turns out to be a bad actor and attempts a 51% attack or other hash rate related attack. That is to say. Miners are self interested in avoiding 51% attacks. Pools can’t coerce their miners to do anything because switching pools is so damn easy. Likewise, governments can’t just coerce pools to coerce miners to do anything anti-Bitcoin. The incentive structure that is PoW works, still works, and this is it working before our eyes.

shusaku 5y ago

The whole GME affair is this constant reminder that “convincing to go against their economic interest” is always on the table.