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If nvidia straight up just stopped selling any cards, declined all their client/customer base, and just put 100% of their global output to mining cryptocurrenci

If nvidia straight up just stopped selling any cards, declined all their client/customer base, and just put 100% of their global output to mining cryptocurrencies, I think it's a good chance nvidia can do a 50%+1 attack on both bitcoin and ethereum at the same time. Once they successfully do the attack, they can take over the blockchains and allocate all cryptocurrencies to themselves, cash out, and it'd probably register as a good profit on their income statements.

cultofmetatron 5y ago
as a thought experiment, lets say I had a time machine. I go back in time with a super computer and mine all the coins the first year and lock them up in my wallet. I then return to the present day. Are they worth anything?
capableweb 5y ago
Yeah, they could do that, but what most of these claims ("X could easily profit Y by doing 50%+1 attack") miss, is that once that attack has been made, who'd trade anything with the currency that was attacked? Lets say nvidia does "conquer" Bitcoin and have all the bitcoins, who'd in the right mind would continue to buy/sell Bitcoins after that? The market for Bitcoin would collapse faster than nvidia could excitedly scream "PROFITS!" to their shareholders, making the whole attack unnecessary in the first place.
- belltaco 5y ago
  Can such an attack be done without detection?
  - capableweb 5y ago
    No, the whole point of using a blockchain is to have a publicly verifiable ledger of all transactions. If anything goes wrong, there will be so many alarm bells ringing across the world that probably it'll be a hearable event for most people living in places that resembles modern civilization.
    - stouset 5y ago
      You can sell your cryptocurrency for real dollars before openly performing your 51% attack.
      - toolz 5y ago
        The idea that you could buy a real-world item worth half as much as the amount of ETH/BTC you would mine in an hour or two or 51% is simply unrealistic. ETH mining at 500TH (a solid chunk over 51% just for ease) would net you 300 ETH an hour...that's 1.1 million USD, which means you would have to be able to purchase millions of dollars worth of real world items that would be released to you within the time-frame of your attack (in this case an hour) to make this even approaching "worth it" from a risk/reward viewpoint and even that calculation is ignoring just how profitable they'd be just mining normally for the foreseeable future. No one is waiting for just an hour worth of confirmations for millions of dollars of real world goods exchanged for ETH.
        rasz 5y ago
        Wouldnt 51% attack allow you to rewrite contracts?
        toolz 5y ago
        no, contracts are immutable, I'm unaware of any base-layer chain attacks that can affect contracts negatively (outside of contract level logic that may be vulnerable itself)
- paulgb 5y ago
  A 51% attack can only reverse a transaction anyway, it can’t arbitrarily take money from someone you haven’t transacted with. But they could get short exposure to btc/eth in the market, profit when it went down from the ensuing panic, and then sell the graphics cards to retail (there are other complications that make this unrealistic, of course.)
  - Proven 5y ago
- jcranmer 5y ago
  Well, the history of actual 50% attacks on cryptocurrencies in the past few years seems to suggest that effect of a 50% attack on the value of the cryptocurrency is... pretty close to nil, actually. Admittedly, a successful attack on a major cryptocurrency like Bitcoin or Etherium is likely to have far different impact on cryptocurrency society than one on a minor cryptocurrency, but the ability of the community to twist every bad news into "this is good for Bitcoin" should not be underestimated.
- sdenton4 5y ago
  I suppose any of the Faang companies could sacrifice a data center for a day or two to do the same. Just crash the currency and get out, to eliminate proof of work currencies.
  - capableweb 5y ago
    Again, why would they? They only stand to lose on it, so why do it in the first place?
    - sdenton4 5y ago
      NVIDIA would reduce demand, but for the FAANG companies it's a neutral proposition, aside from the cost of doing the work to crash the currency. And there's plenty of reasons to want to do so: Proof-of-work currencies are what make ransomware payments possible, and there's a large daily CO2 cost for proof of work currencies. The question is simply when is the cost of the externalities greater than the cost of acting?
      - trulyme 5y ago
        Am I missing something? Why would NVIDIA want to reduce demand for their graphic cards?
        hnaccount_rng 5y ago
        There is actually a good case to make here. Nvidia currently is in the tough spot of a) not having the capacity to saturate the market and b) not being able to expand the production to match. B is because they don’t have enough confidence that the crypto people will be there as costumers in 5 years. And A is a problem, because their traditional user base (ie gamers) won’t match the spending, but will still get their fix (just not from Nvidia). And that breaks the strangle hold that they had a couple of years ago on that market. So short term: having the high prices paid by crypto people is nice. But it destroys their relationship to their old customer base. Depending on where the crypto market will be in 5, 10, 15 years, this can be the 5x of their market cap or the 0.2x
cjbgkagh 5y ago
Who would they cash out too, they would have destroyed the market that cost them so much to acquire.
- throwaway6734 5y ago
  Short the currency?
  - hashimotonomora 5y ago
    Who’s the counterpart to your short?
    - throwaway6734 5y ago
      I guess you'd have to wait for the market to mature a bit more or short companies that hold large quantities of btc
quickthrowman 5y ago
> they can take over the blockchains and allocate all cryptocurrencies to themselves, cash out Assuming this was even possible, your plan has a fatal flaw. Who the heck is going to buy the BTC back?
short12 5y ago
That's an interesting concept Why doesn't Nvidia use the cards themselves to mine? Not for the attack but for the profit? Each card is obviously cheaper to produce than they are selling it for. Why not maximize all the profit?
- dehrmann 5y ago
  Just guessing, but there's probably more risk to running a mining operation than miners realize, and Nvidia doesn't want that risk. There are also PR issues with energy use. There's enough money in selling pickaxes.
  - XorNot 5y ago
    This is exactly it. NVIDIA are also not building more factories to meet the demand because they are (correctly) assessing that a bigger risk for them is demand collapse and a glut of used hardware.
runeks 5y ago
> If nvidia straight up just stopped selling any cards, declined all their client/customer base, and just put 100% of their global output to mining cryptocurrencies, I think it's a good chance nvidia can do a 50%+1 attack on both bitcoin and ethereum at the same time. No, not for Bitcoin. GPUs are no good at mining Bitcoin; you need an ASIC for that. > Once they successfully do the attack, they can take over the blockchains and allocate all cryptocurrencies to themselves […] No. Having a majority of mining power does not enable anyone to assign currency to themselves, except for the mining reward. That would require faking digital signatures.
throwaway858 5y ago
Would this be legal? Obviously bitcoin has no "terms of use" that Nvidia (or anyone) is bound to, but the US has very broad "hacking" laws like CFAA. I imagine that if Nvidia were to openly "steal" someone's bitcoin using a 51% attack then the victim could sue Nvidia in a US court and things could get interesting. What laws would apply and what would the outcome of such a case be? And could the act also be considered criminal?
- NullPrefix 5y ago
  Stealing is stealing. 51% attack is just a method to rollback a transaction. No different than ordering stuff and doing a willfully fraudulent chargeback.
- naruvimama 5y ago
  How would you prove it? What if you are a drug dealer or dictator?
dehrmann 5y ago
I assume hedge funds are keeping an eye on interesting attacks like this. Short BTC futures, collapse the currency, cover. Nvidia wouldn't do this because it might hurt GPU sales.
knubie 5y ago
I would imagine that compromising the network like that would tank the value of those currencies.
elvatoloco123 5y ago
Even after a decade, users here still don't know the basics of how blockchains work. Lol "A GPU attack on BTC" Jésus help us
- freemint 5y ago
  There is no reason enough GPUs can't do it. Yes it is more expensive then getting the same hash rate via ASICs but the profitability off a 51% attack is a lot higher and NVIDIA would get their own chips at a reduced rate.
  - elvatoloco123 5y ago
    Yeah bro enough balloons can lift a house.
emteycz 5y ago
Doing a 51% attack doesn't mean the rest of the network users will accept your new blockchain fork.
djohnston 5y ago
ETH yes but not BTC. GPUs can't touch ASICs
- freemint 5y ago
  Enough GPUs can.
  - louloulou 5y ago
    For bitcoin at least, a top of the line ASIC miner can do ~1,000,000x more hashes per second at ~1/100th the power per hash compared to a top of the line GPU. The current total hash rate for the Bitcoin network is ~200EH/s. So a 51% attack would require ~2 trillion GPUs consuming/costing 100x as much power as the Bitction network does today.
    - freemint 5y ago
      I stand corrected Nvidia doesn't have that many GPUs.
shiohime 5y ago
You haven't been able to GPU mine bitcoin in like a decade, every miner uses dedicated ASICs specifically for mining btc. It's been impossible to compete without ASICs for a very long time.
- barkingcat 5y ago
  Nvidia can design and manufacture asics too you know. Likely they have enough expertise to revolutionize the asic market as you know it, using the 3nm process at tsmc. Since Bitmain asics are currently being made at around 16nm nodes, using 3nm process that Nvidia has access to - think about that for a bit.
  - thesz 5y ago
    Please bear in mind that 3nm is an "alpha" - a multiplier characterizing the process. If you took your time and find out difference between processes with different "alphas" you will find that transistor density is nowhere near what difference in "alphas" would suggest. If I remember correctly, the difference in transistor density improves as 1/alpha whereas area of transistors, if everything gets shrunk with alpha decrease, should decrease as square of 1/alpha. I.e., if alpha differs two times, there should be 4 times more shrunk transistors whereas practice shows only 2 (and often less) more shrunk transistors. This is because you cannot make transistors too small in every dimension, they will leak. So the difference between 3nm and 16nm will be less than five times. Not 25 times as difference between these parameters would suggest. The difference in getting masks and first prototype should be quite substantial in terms of upfront payments and time-to-production. I remember that 25 square millimeters proof of concept in 180nm process needed $50K of money and half an year of delay. The 35nm (5 times less) prototype of the same area would cost about $500K and more than half an year delay. The difference between 16nm and 3nm is about the same, I can expect several millions of dollars of upfront cost of small chip and year long delay before prototype arrives for 3nm process. These Bitmain guys should be assumed to be not stupid and they most probably have access to latest processes after second prototype. Yet they choose 16nm - we must ask ourselves "why?" and Nvidia should too. As a matter of fact, Nvidia had its share of problems with tiny processes in past.
groone 5y ago
The part where you say "cash out" is hilarious. There is no cash in it. You only get to keep the bits. Any cash comes from buyers and if there is any attack all the buyers are scared away.
- ncmncm 5y ago
  Only if they know. "Clue" and "holding coin" have not so much overlap.
  - philipov 5y ago
    The part where they stop selling cards will sure go completely unnoticed by everyone and not draw any scrutiny at all.
    - ncmncm 5y ago
      They could re-route 10% of their wafers with no one noticing.
- littlestymaar 5y ago
  > Any cash comes from buyers and if there is any attack all the buyers are scared away. Well, assuming any kind of rationality in the crypto market is always hazardous: meme coins (doge coin, shiba inu) are worth billions in market cap, so do hard forks of bitcoin, and Ethereum didn't not collapse after they decided to rollback a bunch of things they didn't like during the DAO “hack” while they are advertising Ethereum as immutable and tampering resistant. You can never be sure how this market will react in any event (well, except Elon tweets I guess)
- andy_ppp 5y ago
  This is the terrifying thing about a bug in one of these systems or some other kind of attack. The whole network can suddenly drop to zero in the blink of an eye.
  - mikotodomo 5y ago
lostcolony 5y ago
Nah nah. What you (and all the other comments miss), is if you were going to do that, you'd just reduce the sale of cards tremendously, while hoarding your own production output to take over. You wouldn't cut out all sales and hoard all of them. See, if they just stopped selling them, people would ask questions. If, however, you just reduced the supply by like 80%, said it "was due to all those crypto miners hoarding them", and then proceeded to use that hoarded 80% to do a 50%+1 attack, you'd be able to -quietly- take over, and turn around and sell those coins to the still preserved market. applies tinfoil hat In fact, who is to say that isn't exactly what they're doing, and hence the existing shortage?
deleted 5y ago
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itsoktocry 5y ago
>Once they successfully do the attack, they can take over the blockchains and allocate all cryptocurrencies to themselves, cash out, and it'd probably register as a good profit on their income statements. So they're going to manage to not sell any cards (without disclosing that as a public company), set up the infrastructure and do a 51% attack on bitcoin in front of everyone, then "cash out" as if there would be people lined up waiting to buy bitcoin when this has just happened in front of their eyes? Unlikely.
- bittercynic 5y ago
  I hadn't considered this before, but that's a really compelling reason that a 51% attack would not be worth anyone's while. Seems like a successful 51% attack would just wreck bitcoin, and there wouldn't be any way to cash out.
  - johnny22 5y ago
    you only 51% this stuff if the goal isn't to make money, but something else.

cultofmetatron 5y ago

as a thought experiment, lets say I had a time machine. I go back in time with a super computer and mine all the coins the first year and lock them up in my wallet. I then return to the present day. Are they worth anything?

capableweb 5y ago

Yeah, they could do that, but what most of these claims ("X could easily profit Y by doing 50%+1 attack") miss, is that once that attack has been made, who'd trade anything with the currency that was attacked? Lets say nvidia does "conquer" Bitcoin and have all the bitcoins, who'd in the right mind would continue to buy/sell Bitcoins after that? The market for Bitcoin would collapse faster than nvidia could excitedly scream "PROFITS!" to their shareholders, making the whole attack unnecessary in the first place.

belltaco 5y ago
Can such an attack be done without detection?
- capableweb 5y ago
  No, the whole point of using a blockchain is to have a publicly verifiable ledger of all transactions. If anything goes wrong, there will be so many alarm bells ringing across the world that probably it'll be a hearable event for most people living in places that resembles modern civilization.
  - stouset 5y ago
    You can sell your cryptocurrency for real dollars before openly performing your 51% attack.
    - toolz 5y ago
      The idea that you could buy a real-world item worth half as much as the amount of ETH/BTC you would mine in an hour or two or 51% is simply unrealistic. ETH mining at 500TH (a solid chunk over 51% just for ease) would net you 300 ETH an hour...that's 1.1 million USD, which means you would have to be able to purchase millions of dollars worth of real world items that would be released to you within the time-frame of your attack (in this case an hour) to make this even approaching "worth it" from a risk/reward viewpoint and even that calculation is ignoring just how profitable they'd be just mining normally for the foreseeable future. No one is waiting for just an hour worth of confirmations for millions of dollars of real world goods exchanged for ETH.
      - rasz 5y ago
        Wouldnt 51% attack allow you to rewrite contracts?
        toolz 5y ago
        no, contracts are immutable, I'm unaware of any base-layer chain attacks that can affect contracts negatively (outside of contract level logic that may be vulnerable itself)
paulgb 5y ago
A 51% attack can only reverse a transaction anyway, it can’t arbitrarily take money from someone you haven’t transacted with. But they could get short exposure to btc/eth in the market, profit when it went down from the ensuing panic, and then sell the graphics cards to retail (there are other complications that make this unrealistic, of course.)
- Proven 5y ago
jcranmer 5y ago
Well, the history of actual 50% attacks on cryptocurrencies in the past few years seems to suggest that effect of a 50% attack on the value of the cryptocurrency is... pretty close to nil, actually. Admittedly, a successful attack on a major cryptocurrency like Bitcoin or Etherium is likely to have far different impact on cryptocurrency society than one on a minor cryptocurrency, but the ability of the community to twist every bad news into "this is good for Bitcoin" should not be underestimated.
sdenton4 5y ago
I suppose any of the Faang companies could sacrifice a data center for a day or two to do the same. Just crash the currency and get out, to eliminate proof of work currencies.
- capableweb 5y ago
  Again, why would they? They only stand to lose on it, so why do it in the first place?
  - sdenton4 5y ago
    NVIDIA would reduce demand, but for the FAANG companies it's a neutral proposition, aside from the cost of doing the work to crash the currency. And there's plenty of reasons to want to do so: Proof-of-work currencies are what make ransomware payments possible, and there's a large daily CO2 cost for proof of work currencies. The question is simply when is the cost of the externalities greater than the cost of acting?
    - trulyme 5y ago
      Am I missing something? Why would NVIDIA want to reduce demand for their graphic cards?
      - hnaccount_rng 5y ago
        There is actually a good case to make here. Nvidia currently is in the tough spot of a) not having the capacity to saturate the market and b) not being able to expand the production to match. B is because they don’t have enough confidence that the crypto people will be there as costumers in 5 years. And A is a problem, because their traditional user base (ie gamers) won’t match the spending, but will still get their fix (just not from Nvidia). And that breaks the strangle hold that they had a couple of years ago on that market. So short term: having the high prices paid by crypto people is nice. But it destroys their relationship to their old customer base. Depending on where the crypto market will be in 5, 10, 15 years, this can be the 5x of their market cap or the 0.2x

cjbgkagh 5y ago

Who would they cash out too, they would have destroyed the market that cost them so much to acquire.

throwaway6734 5y ago
Short the currency?
- hashimotonomora 5y ago
  Who’s the counterpart to your short?
  - throwaway6734 5y ago
    I guess you'd have to wait for the market to mature a bit more or short companies that hold large quantities of btc

quickthrowman 5y ago

> they can take over the blockchains and allocate all cryptocurrencies to themselves, cash out Assuming this was even possible, your plan has a fatal flaw. Who the heck is going to buy the BTC back?

short12 5y ago

That's an interesting concept Why doesn't Nvidia use the cards themselves to mine? Not for the attack but for the profit? Each card is obviously cheaper to produce than they are selling it for. Why not maximize all the profit?

dehrmann 5y ago
Just guessing, but there's probably more risk to running a mining operation than miners realize, and Nvidia doesn't want that risk. There are also PR issues with energy use. There's enough money in selling pickaxes.
- XorNot 5y ago
  This is exactly it. NVIDIA are also not building more factories to meet the demand because they are (correctly) assessing that a bigger risk for them is demand collapse and a glut of used hardware.

runeks 5y ago

> If nvidia straight up just stopped selling any cards, declined all their client/customer base, and just put 100% of their global output to mining cryptocurrencies, I think it's a good chance nvidia can do a 50%+1 attack on both bitcoin and ethereum at the same time. No, not for Bitcoin. GPUs are no good at mining Bitcoin; you need an ASIC for that. > Once they successfully do the attack, they can take over the blockchains and allocate all cryptocurrencies to themselves […] No. Having a majority of mining power does not enable anyone to assign currency to themselves, except for the mining reward. That would require faking digital signatures.

throwaway858 5y ago

Would this be legal? Obviously bitcoin has no "terms of use" that Nvidia (or anyone) is bound to, but the US has very broad "hacking" laws like CFAA. I imagine that if Nvidia were to openly "steal" someone's bitcoin using a 51% attack then the victim could sue Nvidia in a US court and things could get interesting. What laws would apply and what would the outcome of such a case be? And could the act also be considered criminal?

NullPrefix 5y ago
Stealing is stealing. 51% attack is just a method to rollback a transaction. No different than ordering stuff and doing a willfully fraudulent chargeback.
naruvimama 5y ago
How would you prove it? What if you are a drug dealer or dictator?

dehrmann 5y ago

I assume hedge funds are keeping an eye on interesting attacks like this. Short BTC futures, collapse the currency, cover. Nvidia wouldn't do this because it might hurt GPU sales.

knubie 5y ago

I would imagine that compromising the network like that would tank the value of those currencies.

elvatoloco123 5y ago

Even after a decade, users here still don't know the basics of how blockchains work. Lol "A GPU attack on BTC" Jésus help us

freemint 5y ago
There is no reason enough GPUs can't do it. Yes it is more expensive then getting the same hash rate via ASICs but the profitability off a 51% attack is a lot higher and NVIDIA would get their own chips at a reduced rate.
- elvatoloco123 5y ago
  Yeah bro enough balloons can lift a house.

emteycz 5y ago

Doing a 51% attack doesn't mean the rest of the network users will accept your new blockchain fork.

djohnston 5y ago

ETH yes but not BTC. GPUs can't touch ASICs

freemint 5y ago
Enough GPUs can.
- louloulou 5y ago
  For bitcoin at least, a top of the line ASIC miner can do ~1,000,000x more hashes per second at ~1/100th the power per hash compared to a top of the line GPU. The current total hash rate for the Bitcoin network is ~200EH/s. So a 51% attack would require ~2 trillion GPUs consuming/costing 100x as much power as the Bitction network does today.
  - freemint 5y ago
    I stand corrected Nvidia doesn't have that many GPUs.

shiohime 5y ago

You haven't been able to GPU mine bitcoin in like a decade, every miner uses dedicated ASICs specifically for mining btc. It's been impossible to compete without ASICs for a very long time.

barkingcat 5y ago
Nvidia can design and manufacture asics too you know. Likely they have enough expertise to revolutionize the asic market as you know it, using the 3nm process at tsmc. Since Bitmain asics are currently being made at around 16nm nodes, using 3nm process that Nvidia has access to - think about that for a bit.
- thesz 5y ago
  Please bear in mind that 3nm is an "alpha" - a multiplier characterizing the process. If you took your time and find out difference between processes with different "alphas" you will find that transistor density is nowhere near what difference in "alphas" would suggest. If I remember correctly, the difference in transistor density improves as 1/alpha whereas area of transistors, if everything gets shrunk with alpha decrease, should decrease as square of 1/alpha. I.e., if alpha differs two times, there should be 4 times more shrunk transistors whereas practice shows only 2 (and often less) more shrunk transistors. This is because you cannot make transistors too small in every dimension, they will leak. So the difference between 3nm and 16nm will be less than five times. Not 25 times as difference between these parameters would suggest. The difference in getting masks and first prototype should be quite substantial in terms of upfront payments and time-to-production. I remember that 25 square millimeters proof of concept in 180nm process needed $50K of money and half an year of delay. The 35nm (5 times less) prototype of the same area would cost about $500K and more than half an year delay. The difference between 16nm and 3nm is about the same, I can expect several millions of dollars of upfront cost of small chip and year long delay before prototype arrives for 3nm process. These Bitmain guys should be assumed to be not stupid and they most probably have access to latest processes after second prototype. Yet they choose 16nm - we must ask ourselves "why?" and Nvidia should too. As a matter of fact, Nvidia had its share of problems with tiny processes in past.

groone 5y ago

The part where you say "cash out" is hilarious. There is no cash in it. You only get to keep the bits. Any cash comes from buyers and if there is any attack all the buyers are scared away.

ncmncm 5y ago
Only if they know. "Clue" and "holding coin" have not so much overlap.
- philipov 5y ago
  The part where they stop selling cards will sure go completely unnoticed by everyone and not draw any scrutiny at all.
  - ncmncm 5y ago
    They could re-route 10% of their wafers with no one noticing.
littlestymaar 5y ago
> Any cash comes from buyers and if there is any attack all the buyers are scared away. Well, assuming any kind of rationality in the crypto market is always hazardous: meme coins (doge coin, shiba inu) are worth billions in market cap, so do hard forks of bitcoin, and Ethereum didn't not collapse after they decided to rollback a bunch of things they didn't like during the DAO “hack” while they are advertising Ethereum as immutable and tampering resistant. You can never be sure how this market will react in any event (well, except Elon tweets I guess)
andy_ppp 5y ago
This is the terrifying thing about a bug in one of these systems or some other kind of attack. The whole network can suddenly drop to zero in the blink of an eye.
- mikotodomo 5y ago

lostcolony 5y ago

Nah nah. What you (and all the other comments miss), is if you were going to do that, you'd just reduce the sale of cards tremendously, while hoarding your own production output to take over. You wouldn't cut out all sales and hoard all of them. See, if they just stopped selling them, people would ask questions. If, however, you just reduced the supply by like 80%, said it "was due to all those crypto miners hoarding them", and then proceeded to use that hoarded 80% to do a 50%+1 attack, you'd be able to -quietly- take over, and turn around and sell those coins to the still preserved market. applies tinfoil hat In fact, who is to say that isn't exactly what they're doing, and hence the existing shortage?

deleted 5y ago

[deleted]

itsoktocry 5y ago

>Once they successfully do the attack, they can take over the blockchains and allocate all cryptocurrencies to themselves, cash out, and it'd probably register as a good profit on their income statements. So they're going to manage to not sell any cards (without disclosing that as a public company), set up the infrastructure and do a 51% attack on bitcoin in front of everyone, then "cash out" as if there would be people lined up waiting to buy bitcoin when this has just happened in front of their eyes? Unlikely.

bittercynic 5y ago
I hadn't considered this before, but that's a really compelling reason that a 51% attack would not be worth anyone's while. Seems like a successful 51% attack would just wreck bitcoin, and there wouldn't be any way to cash out.
- johnny22 5y ago
  you only 51% this stuff if the goal isn't to make money, but something else.