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> - But if the malicious actor owns 2/3 of validators, what does he care what other nodes do ? They effectively control what block is accepted As I understand

by entrep 4y ago

> - But if the malicious actor owns 2/3 of validators, what does he care what other nodes do ? They effectively control what block is accepted As I understand it, anyone who owns that amount of ETH would probably be interested in contributing to the trust of the Ethereum blockchain.

yunohn 4y ago
Sure, but that wasn’t the question. How does the punishment play out, assuming they’re acting in bad faith?
- rglullis 4y ago
  If you have 2/3 of the validators, there is no way that you can be punished. You will effectively be able to produce the blocks and tell the network that they are valid. If you don't have that, the most that you can do is to attack the network by proposing bad blocks to slow down block production. Anytime that a (selected) validator proposes a bad block, the other validators that catch your mistake will snitch on you (through attestations) and the validator will get their stake funds slashed. The more your funds are slashed, the less of a chance you will have to be proposing new blocks in the future.
falcolas 4y ago
What reason would anyone have to believe in their benevolence? It would be safer to believe in and use their greed and self preservation.
- mastazi 4y ago
  If you own a large amount of a currency, you want to ensure that the currency in question is trusted, or otherwise that currency would end up losing its value. It is your greed that is guiding you, not your benevolence.
  - troutwine 4y ago
    Eh, I think it’s naive to believe that greed is sufficient protection. Owning a bunch of ETH so you can set ETH on fire would be a waste of money, only so long as the person setting the fire didn’t value the mischief more than the ETH. I don’t see why nation states wouldn’t attack each other by burning down the crypto assets of citizens, either.
    - mastazi 4y ago
      > I think it’s naive to believe that greed is sufficient protection. I never said that, I actually agree with you. I was just explaining GP's point to parent who in my opinion missed it.
      - troutwine 4y ago
        Ah, apologies. I read you as agreeing with and clarifying GP's argument.
  - falcolas 4y ago
    One problem with this - speculative assets are at least partially valuable because of their volatility - their ability to appreciate quickly. Even if eth is untrusted for long term value, so long as it has the potential to make money for someone in the short term it's going to continue to get transactions. And, as always, sometimes folks just want to watch the world burn. It's a relatively low investment (~$50k) to become a validator, and the fine's only about $7k (.5 eth). Imagine the damage someone with a few million (say, some baby-boomer who just sold their California duplex) could do if they wanted to.
  - dmitriid 4y ago
    > If you own a large amount of a currency, you rug pull, divest into hard cash at peak, <any of the dozens of ways people with large amounts of cryptocurrencies get rid of those>
  - lottin 4y ago
    Google short selling.
- WFHRenaissance 4y ago
  No one would use a network with this level of centralization, or at least, it would be unwise to.
  - cowtools 4y ago
    like a 51% attack on a PoW through pool conspiracy, it will be impossible to tell if (when?) the network is controlled by a single entity. By the time the public has figured out the plot, it's too late: the attacker has already run to the exchanges with double-spent coins.
boosteri 4y ago
Why would it need to be a significant amount of ETH? Could someone coordinate an attack on validator nodes, making themselves 67%+ temporarily?
- stepanhruda 4y ago
  Yes. That’s why diversity of client implementations is important.
ww520 4y ago
Fund can be borrowed. As attested in last the couple months, billions of funds were borrowed to bet on the market one way or the other. Borrowing a billion dollars to subvert the network for a short duration sounds like a feasible strategy.
- stepanhruda 4y ago
  You can’t borrow enough money and immediately take over the network. Those funds need to be staked first in validators with 32 ETH each and you need to control enough validators to control consensus. It’s more difficult than PoW in a way since you can’t just start validating, there is an entry/exit queue.
- lottin 4y ago
  This isn't argument against PoS, because mining rigs can also be borrowed. Anything can be borrowed.
rakoo 4y ago
Call me a pessimist, but I have stopped assuming rationality of all actors acting to secure a long-term future, especially in the world of cryptocurrencies
- pclmulqdq 4y ago
  PoW is magical in that these actors are strongly incentivized to secure the network. PoS is not the same.
  - rakoo 4y ago
    This was the whole point of blockchains. No one trusts anyone, everyone is in it for themselves only. The Adam Smith model. And it works, if you don't loom at the disastrous environmental impact.

by entrep 4y ago

yunohn 4y ago

Sure, but that wasn’t the question. How does the punishment play out, assuming they’re acting in bad faith?

rglullis 4y ago
If you have 2/3 of the validators, there is no way that you can be punished. You will effectively be able to produce the blocks and tell the network that they are valid. If you don't have that, the most that you can do is to attack the network by proposing bad blocks to slow down block production. Anytime that a (selected) validator proposes a bad block, the other validators that catch your mistake will snitch on you (through attestations) and the validator will get their stake funds slashed. The more your funds are slashed, the less of a chance you will have to be proposing new blocks in the future.

falcolas 4y ago

What reason would anyone have to believe in their benevolence? It would be safer to believe in and use their greed and self preservation.

mastazi 4y ago
If you own a large amount of a currency, you want to ensure that the currency in question is trusted, or otherwise that currency would end up losing its value. It is your greed that is guiding you, not your benevolence.
- troutwine 4y ago
  Eh, I think it’s naive to believe that greed is sufficient protection. Owning a bunch of ETH so you can set ETH on fire would be a waste of money, only so long as the person setting the fire didn’t value the mischief more than the ETH. I don’t see why nation states wouldn’t attack each other by burning down the crypto assets of citizens, either.
  - mastazi 4y ago
    > I think it’s naive to believe that greed is sufficient protection. I never said that, I actually agree with you. I was just explaining GP's point to parent who in my opinion missed it.
    - troutwine 4y ago
      Ah, apologies. I read you as agreeing with and clarifying GP's argument.
- falcolas 4y ago
  One problem with this - speculative assets are at least partially valuable because of their volatility - their ability to appreciate quickly. Even if eth is untrusted for long term value, so long as it has the potential to make money for someone in the short term it's going to continue to get transactions. And, as always, sometimes folks just want to watch the world burn. It's a relatively low investment (~$50k) to become a validator, and the fine's only about $7k (.5 eth). Imagine the damage someone with a few million (say, some baby-boomer who just sold their California duplex) could do if they wanted to.
- dmitriid 4y ago
  > If you own a large amount of a currency, you rug pull, divest into hard cash at peak, <any of the dozens of ways people with large amounts of cryptocurrencies get rid of those>
- lottin 4y ago
  Google short selling.
WFHRenaissance 4y ago
No one would use a network with this level of centralization, or at least, it would be unwise to.
- cowtools 4y ago
  like a 51% attack on a PoW through pool conspiracy, it will be impossible to tell if (when?) the network is controlled by a single entity. By the time the public has figured out the plot, it's too late: the attacker has already run to the exchanges with double-spent coins.

boosteri 4y ago

Why would it need to be a significant amount of ETH? Could someone coordinate an attack on validator nodes, making themselves 67%+ temporarily?

stepanhruda 4y ago
Yes. That’s why diversity of client implementations is important.

ww520 4y ago

Fund can be borrowed. As attested in last the couple months, billions of funds were borrowed to bet on the market one way or the other. Borrowing a billion dollars to subvert the network for a short duration sounds like a feasible strategy.

stepanhruda 4y ago
You can’t borrow enough money and immediately take over the network. Those funds need to be staked first in validators with 32 ETH each and you need to control enough validators to control consensus. It’s more difficult than PoW in a way since you can’t just start validating, there is an entry/exit queue.
lottin 4y ago
This isn't argument against PoS, because mining rigs can also be borrowed. Anything can be borrowed.

rakoo 4y ago

Call me a pessimist, but I have stopped assuming rationality of all actors acting to secure a long-term future, especially in the world of cryptocurrencies

pclmulqdq 4y ago
PoW is magical in that these actors are strongly incentivized to secure the network. PoS is not the same.
- rakoo 4y ago
  This was the whole point of blockchains. No one trusts anyone, everyone is in it for themselves only. The Adam Smith model. And it works, if you don't loom at the disastrous environmental impact.