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I don't think this clarified it at all. The crux: miners can decide to OMIT transactions, REORDER transactions within a block, or DELAY them for later. All of t

I don't think this clarified it at all. The crux: miners can decide to OMIT transactions, REORDER transactions within a block, or DELAY them for later. All of those actions pass "validation", because they cannot be detected by a validator. Miners do so at the expense of lost transaction fees, or with reordering, for free, or with delaying, with the possibility that some other miner will reap the transaction fee first. There is a lot of money in doing this, called 'miner extractable value' / MEV, which is bigger when you are processing complex smart contracts with funky clauses to exploit. They are not able to INVENT new transactions (as that would be caught by a validator, miners don't know your private keys and couldn't easily forge a transaction). A validator cannot detect a missing, silently dropped transaction. Nobody can detect such a thing except whoever submitted it and doesn't see it in a block. Nobody at all can detect a reordered or delayed transaction; you just have to assume the miners will act according to their own interests as much as possible. The paper goes into this, of course. Miners are not even the only ones who can decide to omit transactions -- submitting a transaction is not secure, so any intermediaries between the transactor and the mining nodes also have a chance to silently drop it or MITM it for delay etc. It could have done more on high-end MEV though.

samatman 4y ago
Which doesn't contradict a word I said. The things you describe are all on the miner side of the contract. Most of the problems you are describing are less relevant on BTC, which doesn't support complex smart contracts in practice, but yes, the miners are the only entity which can generate data of the valid shape, and only when they get lucky. So OMIT/REORDER/DELEY are privileges which a miner has to sweat to earn temporarily. If 80% of the hash rate hates you they can probably keep your transactions out indefinitely, presuming willingness to bear the cost, which y'know, war is hell, it could happen.
- cormacrelf 4y ago
  Yeah, I wasn't saying you were incorrect, your answer just didn't dig much deeper than "miners do whatever they like, validators check it". The matter of centralisation is answered by what miners can get away with, not the mere fact that validators exist. You must examine this because miners are the ones that are subject to centralisation through efficiencies of scale at buying electricity and computing power. So attacks are possible that are plausibly deniable as accidents, software glitches, dropped packets, etc., but in fact involve coordination by majority miners. And further, MEV is a problem even if you ignore % of hash rate and centralisation of the mining market -- any single miner will exploit any opportunity you give them if they can, especially the undetectable/unprovable ones. So much of MEV is not a matter of adversarial voting but literally 100% of miners are incentivised to do it, independently and unanimously. It's just a matter of who figures out how to extract it, who has relevant conflicts of interest, or who has enough cash to snap up opportunities that arise. That's less about centralisation though. And the scope of this discussion was never just bitcoin. TrailOfBits' paper is about the technology generally.

samatman 4y ago

Which doesn't contradict a word I said. The things you describe are all on the miner side of the contract. Most of the problems you are describing are less relevant on BTC, which doesn't support complex smart contracts in practice, but yes, the miners are the only entity which can generate data of the valid shape, and only when they get lucky. So OMIT/REORDER/DELEY are privileges which a miner has to sweat to earn temporarily. If 80% of the hash rate hates you they can probably keep your transactions out indefinitely, presuming willingness to bear the cost, which y'know, war is hell, it could happen.

cormacrelf 4y ago
Yeah, I wasn't saying you were incorrect, your answer just didn't dig much deeper than "miners do whatever they like, validators check it". The matter of centralisation is answered by what miners can get away with, not the mere fact that validators exist. You must examine this because miners are the ones that are subject to centralisation through efficiencies of scale at buying electricity and computing power. So attacks are possible that are plausibly deniable as accidents, software glitches, dropped packets, etc., but in fact involve coordination by majority miners. And further, MEV is a problem even if you ignore % of hash rate and centralisation of the mining market -- any single miner will exploit any opportunity you give them if they can, especially the undetectable/unprovable ones. So much of MEV is not a matter of adversarial voting but literally 100% of miners are incentivised to do it, independently and unanimously. It's just a matter of who figures out how to extract it, who has relevant conflicts of interest, or who has enough cash to snap up opportunities that arise. That's less about centralisation though. And the scope of this discussion was never just bitcoin. TrailOfBits' paper is about the technology generally.