15 ms·

Bitcoin blockchain issue - Mt Gox Bitcoin deposits temporarily suspended

242 points by tlrobinson 14y ago

moocows 14y ago
So the solution from MtGox is to downgrade, wait a bit, then upgrade. What a currency of the future!
- mcantelon 14y ago
  Very little that has ended up replacing the status quo has done so without growing pains.
  - waterlesscloud 14y ago
    Very little that's actually in the status quo doesn't have similar problems. Their problems just don't get widely reported.
- josephagoss 14y ago
  This is for the miners, people with more knowledge about the inner workings of Bitcoin than the average user. The advice for users is wait until we have a definite dominate blockchain and continue on as normal. Users do not need to downgrade, upgrade or do anything else. This is a miner issue.
- Tichy 14y ago
  What exactly is your criticism? Does that procedure sound too complicated to you?
tlrobinson 14y ago
This could be a very bad thing. There was a fork in the blockchain, and the community will have to decide how to resolve it. Some transactions which were "confirmed" could be reverted. IF YOU ARE A MINER READ THIS: http://sourceforge.net/mailarchive/message.php?msg_id=30587976 http://sourceforge.net/mailarchive/message.php?msg_id=305879...
- waterlesscloud 14y ago
  Word on #bitcoin is that transactions should NOT be lost. We'll see how it actually shakes out, but that's good news for bitcoin if it holds up.
nonpme 14y ago
I'm curious how this bug will affect bitcoin price. I'm betting it'll go up even more.
- tlrobinson 14y ago
  It depends how it is resolved. If no one loses money, then yeah, it could go up. Otherwise people could lose confidence in Bitcoin and the price could plummet.
  - deleted 14y ago
    [deleted]
    - achalkley 14y ago
      After all this is "dealt" with if they are still in limbo use something like pywallet to fix the coins in limbo (if there are still no confirmations after hours)
    - deleted 14y ago
      [deleted]
- zyb09 14y ago
  I'd sell while it's still in the $40-ish
  - naz 14y ago
    ...if you can get your coins onto MtGox.
  - atomon 14y ago
    It looks like everyone is halting trading (at least MtGox and CoinBase are), so you probably won't be able to for a while.
- atomon 14y ago
  How could this possibly result in Bitcoins going up? Even if this is handled without any hiccups, this should shake a lot of people's faith (myself included). This should be a wakeup call for anyone that thinks that Bitcoins are totally secure. What if next time the bug in the client is more exploitable? Someone malicious could potentially take out the entire Bitcoin economy in one day by exploiting it.
networked 14y ago
From [1]: >If this is a widespread problem, it is an emergency. We risk having (several) forked chains with smaller blocks, which are accepted by 0.7 nodes. Can people contact pool operators to see which fork they are on? Blockexplorer and blockchain.info seem to be stuck as well. So, what would happen to the coins used in those forked transactions? If the chain does fork what would the best strategy be for performing the merger? And more interestingly: since bitcoin transactions are considered to not be reversible bitcoins are easily converted to and from other currencies with non-reversible transactions. If one were to convert his or her bitcoins to, e.g., Liberty Reserve right now and the chain got reversed that would result in pretty much a perfect scam, wouldn't it? [1] http://sourceforge.net/mailarchive/message.php?msg_id=30587843 http://sourceforge.net/mailarchive/message.php?msg_id=305878...
- yk 14y ago
  The chains do not get merged. It is just, that the longest block chain is the consensus history of all transaction ( and it needs to be consistent). So if the .7 branch overtakes the .8 branch, then legitimate clients will detect that a transaction was not carried out and retransmit it. ( And the scam you are describing is precisely why Mt Gox did stop accepting bitcoins. They are afraid that someone can take advantage of the situation.)
aegiso 14y ago
I wasn't involved at all in the discussions, but the cryptopunk in me wonders if this isn't malice. Running out of DB entries in the client can be predicted with reasonable accuracy. "Accidentally" slip in this bug, and "fix" it in a future version. Then time a major transaction to coincide with the fork you know will happen, and bam! Engineered transaction reversal. That would be one great hack. But my imagination is probably just getting the best of me.
- gizmo686 14y ago
  Not to mention one giant hack that would be recorded in the publicly available block chain. Given how high-profile this bug is, I suspect that many people will check both chains to see how much double spending occured, and if any of them are suspicious.
RoboTeddy 14y ago
From news in #bitcoin-dev, it looks like miners on 0.8 are being instructed to downgrade to 0.7, and that'll be the winning fork of the chain going forward. There shouldn't even be any lost bitcoin transactions.
- URSpider94 14y ago
  There shouldn't even be any lost bitcoin transactions. That can only be true if there are not conflicting transactions in the two chains. That might be the lucky outcome, but it's certainly not guaranteed to be the case. Any transactions that were confirmed on the faulty chain will have to be re-confirmed in the correct chain. How long that will take would depend on just how many transactions need to be processed, and how big their payload is. Until that is completed, the state of the bitcoins involved in those transactions is ambiguous.
blhack 14y ago
Well, then, bitcoin was about due for a HUGE DISASTER to bring the price back down to sane levels, wasn't it? For those not watching, BTC is currently trading at ~$45.
- eurleif 14y ago
  What determines whether a price is sane or insane for a commodity with no intrinsic value?
  - freework 14y ago
    Because "intrinsic value" is not as important than just "value". Bitcoin has a value in the sense that people can use it as a currency that has features that are desirable and useful.
  - blhack 14y ago
    It's more than doubled in the last two months. http://bitcoincharts.com/charts/mtgoxUSD#rg180ztgSzm1g10zm2g25zv http://bitcoincharts.com/charts/mtgoxUSD#rg180ztgSzm1g10zm2g...
    - baddox 14y ago
      That doesn't seem necessarily relevant.
      - sliverstorm 14y ago
        Wild runs are typically- not by requirement, but typically- indicative of a crash in the near future. This is because speculation is usually the main driving force behind very steep ramps.
        icelancer 14y ago
        What determines a "wild run?" As has been shown time and time again in academic and corporate research, the single best predictor of an asset's value is the current market trading price for that asset.
vy8vWJlco 14y ago
Slightly off-topic, but it is well-known that one can embed arbitrary data in the bitcoin block chain, so you pretty much have to expect that at some point someone will inevitably insert one of the many illegal numbers into it, putting everyone running it openly at risk, regardless of the political attitudes towards bitcoin itself. I know anonymity isn't one of bitcoin's purported purposes, but I think it will ultimately be necessary to make it one because of this.
- aneth4 14y ago
  Not sure what an "illegal number" would be. Certainly someone could embed child pornography or political propaganda. Bitcoin seems subject to a vast array of DOS and other attack that could be seriously problematic if it became an important currency.
  - dkulchenko 14y ago
    I think OP is referring to something like an AACS key: http://en.wikipedia.org/wiki/Illegal_number http://en.wikipedia.org/wiki/Illegal_number
  - deleted 14y ago
    [deleted]
- blake8086 14y ago
  It has occurred to people before, but I'm not aware of any active efforts to stop such data from being inserted. https://en.bitcoin.it/wiki/Weaknesses#Illegal_content_in_the_block_chain https://en.bitcoin.it/wiki/Weaknesses#Illegal_content_in_the...
- gizmo686 14y ago
  Anonymity would not necessarily solve this problem. Just because you cannot correlate 2 transactions or a transaction with a person does not mean that you cannot allow people to embed arbitrary data.
  - vy8vWJlco 14y ago
ISL 14y ago
Is there a sensible fashion by which two robust blockchain forks might merge? Widespread use of the currency is troublesome if it's possible for anyone to have reasonable odds of forking the chain. If it's possible for a mass panic to reverse transactions, it's not as reliable. If Asia (4 billion people), banking institution (US federal debt = ~23% of world GDP), or a social group (Catholicism: 63% of the Americas) buys a bunch of stuff then decides, en masse, to revert to an earlier blockchain, it could drive instability. Large groups of people sometimes do unpredictable things (Gangnam Style: 1.4 billion views).
- ewillbefull 14y ago
  > Is there a sensible fashion by which two robust blockchain forks might merge? No, but the "transaction graph" which underlies both chains can (and will) be merged, in some sense. > If [lots of people conspire] to revert to an earlier blockchain, it could drive instability. The blockchain will only ever split inadvertently, or due to probability (the unlikelihood of multiple blocks being orphaned). A majority of miners would have to conspire to begin mining on a chain with less than 50% of the hashrate, which would be a waste of resources if the chain fails (which it will). There's not just an incentive but a probabilistic force preventing forks from occurring.
  - saurik 14y ago
    What if, rather than a client failing blocks that should succeed, a client is designed that accepts things (and generates things) that should fail, and yet becomes the most popular client among a very large subgroup (either by accident, or on purpose). I think that's the question being asked with regards to the "Asia, banks, etc." scenario.
    - gizmo686 14y ago
      Those are equivelent scenerios. If client A generates and accepts coins that client B rejects, it is the same as client B regecting the same coins that client A accepts.
obilgic 14y ago
No matter how much I try, there is always a part of Bitcoin which I don't fully understand, kind of scary actually.
- TomatoTomato 14y ago
  Do you really understand all the inner workings of the current monetary system?
  - niggler 14y ago
    The difference is that enough people accept the current system without understanding it that you can use it for your needs. Not enough people use bitcoins that you can gloss over details.
    - whatshisface 14y ago
      You can use it for your needs until the stock market crashes. ;)
    - harshreality 14y ago
      If the Bitcoin monetary system breaks, only those using Bitcoin for savings or investment get hurt. Those who use BTC as a means of payment (buyers and sellers) have little reason to care, so long as they frequently convert excess BTC into other currencies. That's not so different from the U.S. dollar. You can buy and sell stuff using U.S. dollars, but unless you foresee the value of USD going up (a kind of deflation), you don't want a pile of USD under your mattress. (Also, it's uncomfortable.) Depending on your economic outlook, you want the money in something else: metals, some sort of investment vehicle, or a basket of [foreign] currencies.
- DennisP 14y ago
  What part don't you understand?
Titanous 14y ago
From a Bitcoin core developer[1]: > .7 and older nodes use BDB for storing the blockchain databases. It seems this database has a limit on the size of the modification it can make atomically to the database. With the larger blocks of the past days, it seems to have triggered the limit. The result is that 0.7 (by default, it can be tweaked manually) will not accept "too large" blocks (we don't yet know what exactly causes it, but it is very likely caused by many transactions in the block). Specifically, block 000000000000015c50b165fcdd33556f8b44800c5298943ac70b112df480c023 (height=225430) with >1700 transactions. > However. 0.8 (which uses a different database system) has no such limit, and happily accepts the block. As the majority of the hash power was on 0.8, the longest chain ended up using this block, which is not accepted by older nodes. [1] https://bitcointalk.org/index.php?topic=152030.msg1613200#msg1613200 https://bitcointalk.org/index.php?topic=152030.msg1613200#ms...
- greatreorx 14y ago
  > It seems this database has a limit on the size of the modification it can make atomically to the database. If this were an unlucky edge case, I could understand. But it seems like they allowed larger block sizes without testing them on pre v0.8 miners - which might be 25% of miners and the upgrade to v0.8 was less than 1 month ago. It's nice to think that 100% of people will upgrade within a few weeks, but that's just not how some people work.
  - Statistical 14y ago
    > If this were an unlucky edge case, I could understand. But it seems like they allowed larger block sizes without testing them on pre v0.8 miners That is not entirely correct. Multiple large blocks were tested on v0.7 (and older clients). Blocks up to the 1MB hard limits were validated and relayed by older clients. The "problem block" in particular wasn't rejected due to simply being too large. It was somewhat rare in that it exceeded the number of low level locks available to v0.7 clients. It had a large number of transactions with a large number of inputs and outputs and those happened to have a large number of compressed keys. Without using a high number of compressed keys it wouldn't be possible to have a block with this number of inputs and outputs in the 1MB limit. Granted in hindsight more testing should have been done but it wasn't like nobody said "hey we should test large blocks, nah I am sure it will be fine".
achalkley 14y ago
This can only be positive. Finding out issues like this will only make the software/network better.
- JeremyBanks 14y ago
  This is the first large occurrence of an issue that has always been known to be possible to people who are reasonably familiar with BitCoin, due inherently to it's design. This could be bad for BitCoin because now a much large portion of BitCoin users/investors are also aware of this risk.
  - mrb 14y ago
    No this is not the first large occurence of this issue. A fork this big (dozens of blocks covering multiple hours of transaction history) already happened in August 15, 2010, due to an unrelated bug: https://en.bitcoin.it/wiki/Common_Vulnerabilities_and_Exposures#CVE-2010-5139 https://en.bitcoin.it/wiki/Common_Vulnerabilities_and_Exposu...
    - waterlesscloud 14y ago
      Though to be fair, that's like saying something happened in the precambrian age when talking about the average bitcoiner's awareness.
  - deadairspace 14y ago
    It's not really an inherent design flaw - it's an implementation problem. If everyone was running 0.8 this wouldn't have happened.
discountgenius 14y ago
What is a good way to follow updates on this situation?
- yakiv 14y ago
  This (probably) won't discuss the technical problem, but http://www.bitcoinity.org/markets http://www.bitcoinity.org/markets will let you track Bitcoin prices.
  - discountgenius 14y ago
    thanks for the reply. I always have bitcoinity open. (dark theme FTW). The answer to the question I was trying to ask is https://coinbase.com/network/blocks https://coinbase.com/network/blocks which enables me to check in on how far behind the future legitimate blockchain is (7 blocks at time of writing).
    - DannyBee 14y ago
      This page is out of date by a bunch of blocks. http://blockchain.info/ http://blockchain.info/ is updated live. As you can see, the 0.7 chain has already overtaken the 0.8 chain, and clients are now resubmitting transactions into the 0.7 chain.
jimrandomh 14y ago
Ok, here's what happened and what it means. Bitcoin is built on a chain of blocks, each of which contains a set of transactions, the hash of the previous block, and a cryptographic proof-of-work which takes a lot of computing power to construct. Whichever block-chain is highest (that is, has the most total computing power invested in it) is considered valid, and has more blocks added to it by miners. People "mine" by taking outstanding transactions, writing them into a block together with the hash of the current highest-numbered block, performing cryptographic proof-of-work and publishing their new block. A block was mined (by the Slush mining pool) which is accepted as valid by 0.8 clients, but rejected by 0.7 clients. More than half of the mining power was on 0.8, so the longest chain includes this block - but the 0.7 clients reject it, and have built a side-chain. The developers have asked all miners and mining pools to switch from 0.8 to 0.7, so that the 0.7 chain will grow to be longer than the 0.8 chain; once this happens, all Bitcoin clients will agree that it is the real one. In the meantime, however, merchants running Bitcoin 0.8 may be targeted by double-spend attacks: if they receive money in a transaction that exists only in the 0.8 blockchain, the same money is spent in a different way on the 0.7 blockchain so the transaction can't just be copied over, and they act on the receipt of money by sending goods before the situation is resolved, then they could lose money. This is why MtGox has suspended Bitcoin deposits. (This can only happen if the coins were sent by someone who is using malicious, nonstandard software; transactions made by honest users will be copied to the 0.7 fork and mined without any issue.) The height of the two chains can be monitored at https://coinbase.com/network/blocks https://coinbase.com/network/blocks . Currently the 0.7 chain is 13 blocks behind, which (since the normal mining rate is 6 blocks per hour) sets a lower bound of about two hours on resolution - assuming everyone switches their mining power immediately - but realistically it will probably be more like 6-12 hours.
- rorrr 14y ago
  I don't understand why 0.7 gets the preference though, considering that it's the version with the DB bug in it.
  - waterlesscloud 14y ago
    Because it won't generate blocks that 0.8 won't accept, and 0.8 does generate blocks that 0.7 won't accept. This is a quick fix to get the system back on its feet while they figure out the longer term strategic answer.
GigabyteCoin 14y ago
>Miners are encouraged to downgrade to Bitcoin 0.7.2 - at least temporarily - to push the correct blockchain forward. How does one know who to believe when determining what the "correct" blockchain to forward would be?
- gizmo686 14y ago
  The good thing about this is that there is no major conflict among people regarding which block-chain is correct. Almost everyone agrees that we need to solve the problem of having a huge portion of nodes not being compatible with the current block chain. Only one of the two blockchains meets this criteria.
yk 14y ago
Does this mean, that basically any functional change in the block verification code can be used to leverage the hashing power of all users of one version into a 51% attack? The attack would be essentially to create the current situation artificially by crafting a block that is only valid by one version of bitcoind, therefore splitting the block chain. Then one needs to include two different transactions into the two blockchains. ( In the theoretical scenario, by mining another block for one of the chains. ) For this I do not need to have 51% of the hashing power, but the branch of the blockchain needs to be supported by 50% of the hashing power. EDIT: Thinking a bit more about this, it seems that the probability to suceed with such an attack seems to rely on the attackers abbility to craft a 'splitting block', which should be proportional to the share of the attacker controlled hashing power and the ability of the 'incompatible' clients to outgrow the standard block chain. ( So that a merchant with an 'incompatible' client accepts a payment based on the fork of the blockchain.) This means that the attack is probably impossible, if the one CPU one vote approach is not only used for valid transactions, but also for valid clients.
- phillmv 14y ago
  Ah how awful and awesome that the world is becoming like a William Gibson book.
- makomk 14y ago
  Yes, any change in what blocks are considered valid, even a subtle accidental one, can be used to basically break Bitcoin.
CompelTechnic 14y ago
Guys, it looks like prices are dropping pretty quick now on mtgox. This will be another... interesting couple of weeks for bitcoin.
- nazgulnarsil 14y ago
  down $4, looks like normal price fluctuations from the last couple weeks.
  - CompelTechnic 14y ago
    It was down to $36.50 for a couple seconds/minutes- looks like that got bought back up though. Weird.
yakiv 14y ago
Bitcoin seems to be picking up again. From Mt. Gox: > Last price:$45.00000 > High:$48.46900 > Low:$36.65000 Edit: It could go back down a lot. We'll see what happens.
- btbuildem 14y ago
  Prices have been above $36 for barely a week, 5th/6th rally saw high volumes; the recovery (8th to 11th) was weaker and did not break the high. The volume of both sell-offs was comparable, but the today's low is higher. I reckon it might flatten out around $40 for a bit, then pick up again.
deleted 14y ago
[deleted]
ck2 14y ago
Sometimes I wonder how many extra tons of coal have been burned simply because of the existence of bitcoin.
- pudquick 14y ago
  The same could be asked of most any form of currency and of many different ways of generating wealth and value (and I'm sure many of them generate orders of magnitudes worse pollution). Take, for example, reddit karma - people pay to power their computers and purchase hardware/software to create memes and original content that will reap positive karma. What notion or idea will be "valuable" to the reddit hive mind next is anyone's guess, so your best bet is to keep plugging away at it and generating as much original content as possible. While there's no direct translation of earned karma to a national currency (yet), it can carry a social/fame value. These people paying their internet, hardware, software, and electricity bills provide a basis for an exchange rate of <national currency> to <reddit karma>. The only differences between this and bitcoin are that people can give bitcoin to one another and that there are bitcoin to <national currency> exchanges. I stretched the analogy a bit thin with reddit karma, but I'm sure people can think of other similar electricity->money "pure technology" wealth/value generation methods (high frequency trading hardware/software, for instance).
  - ck2 14y ago
    What you say is true but bitcoin is specifically designed to require massive amounts of computing power, which specifically equates to massive electric power consumption. In other words its purposely designed to be excessively taxing on resources. The other activities you mention have resource consumption as a side effect and not necessarily exhaustive.
    - weavejester 14y ago
      A lot of electricity is used on other forms of security as well, such as SSL or password encryption. Although SSL uses up less resources, it is used by far more servers, which I suspect would exceed the amount of processing power of the Bitcoin network.
nullc 14y ago
The fork is now resolved, sites like mtgox should begin processing deposits again after a couple more blocks.
tudorizer 14y ago
I was asleep when this happend, but waking up to check HN, reddit and my mtgox got me up to speed. For some reason, this doesn't worry me a bit. Mostly because of the steady and strong growth I've see recently.
yuvadam 14y ago
The way the Bitcoin community handled this mornings fork in the bitcoin blockchain is nothing short of incredible. This event significantly increases my confidence in the Bitcoin ecosystem to thrive even when faced with critical issues. If only the global finance institutions had a fraction of bitcoins capacity to resolve crises with the same unconditional transparency and full cooperation with all agents in the ecosystem.
- swhitt 14y ago
  It was great to see in action, but given the way the system is right now it wasn't that incredible. The maintainers of the biggest pools are all very active in the community; it would just take 2-3 of the big mining pools to say "hey, let's go back to 0.7" for this to be resolved automatically.
- skore 14y ago
  I agree. In the past few weeks, Bitcoin has really picked up lots of speed. So much in fact, that I'm wondering whether we're witnessing an exponential adoption where years of people doubting Bitcoin were simply the beginning of the curve. That would also mean that things are going to explode pretty soon. I sincerely hope that the aftermath of said explosion will leave Bitcoin as the strong contender to established monetary systems that it always was - just "proven by reality" now. That would certainly be all I need to finally jump on board.
- betterunix 14y ago
  "This event significantly increases my confidence in the Bitcoin ecosystem to thrive even when faced with critical issues." It does the opposite for me, because it demonstrates that Bitcoin is extremely vulnerable to double spending. Either everyone uses the same version of the software, or you have to deal with the possibility that this event will happen again. Worse still, an attacker might use some kind of malware to modify Bitcoin clients, until they are able to fork the network and double spend. Yes, making cryptosystems that are secure against malicious majorities is difficult, and experts have published tons of papers and several books on the subject. If Bitcoin's developers want people to trust their system for anything non-trivial, they really need to fix this problem. To break David Chaum's digital cash systems, an attacker would have required exponential computing power in a security parameter that could be scaled arbitrarily, while the users only require polynomial computing power in that same parameter; to break Bitcoin, an attacker only requires a little more than half the sum of all the computing power in the Bitcoin network. The Germans learned the hard way that just because an attack seems too pricey for anyone to bother with does not mean that the attack actually is too pricey for anyone to bother with.
tudorizer 14y ago
For a clearer explanation see: http://www.reddit.com/r/Bitcoin/comments/1a51xx/now_that_its_over_the_blockchain_fork_explained/ http://www.reddit.com/r/Bitcoin/comments/1a51xx/now_that_its...
cnp 14y ago
What a stressful 24 hours. Everything has finally been resolved.

242 points by tlrobinson 14y ago

moocows 14y ago

So the solution from MtGox is to downgrade, wait a bit, then upgrade. What a currency of the future!

mcantelon 14y ago
Very little that has ended up replacing the status quo has done so without growing pains.
- waterlesscloud 14y ago
  Very little that's actually in the status quo doesn't have similar problems. Their problems just don't get widely reported.
josephagoss 14y ago
This is for the miners, people with more knowledge about the inner workings of Bitcoin than the average user. The advice for users is wait until we have a definite dominate blockchain and continue on as normal. Users do not need to downgrade, upgrade or do anything else. This is a miner issue.
Tichy 14y ago
What exactly is your criticism? Does that procedure sound too complicated to you?

tlrobinson 14y ago

This could be a very bad thing. There was a fork in the blockchain, and the community will have to decide how to resolve it. Some transactions which were "confirmed" could be reverted. IF YOU ARE A MINER READ THIS: http://sourceforge.net/mailarchive/message.php?msg_id=30587976 http://sourceforge.net/mailarchive/message.php?msg_id=305879...

waterlesscloud 14y ago
Word on #bitcoin is that transactions should NOT be lost. We'll see how it actually shakes out, but that's good news for bitcoin if it holds up.

nonpme 14y ago

I'm curious how this bug will affect bitcoin price. I'm betting it'll go up even more.

tlrobinson 14y ago
It depends how it is resolved. If no one loses money, then yeah, it could go up. Otherwise people could lose confidence in Bitcoin and the price could plummet.
- deleted 14y ago
  [deleted]
  - achalkley 14y ago
    After all this is "dealt" with if they are still in limbo use something like pywallet to fix the coins in limbo (if there are still no confirmations after hours)
  - deleted 14y ago
    [deleted]
zyb09 14y ago
I'd sell while it's still in the $40-ish
- naz 14y ago
  ...if you can get your coins onto MtGox.
- atomon 14y ago
  It looks like everyone is halting trading (at least MtGox and CoinBase are), so you probably won't be able to for a while.
atomon 14y ago
How could this possibly result in Bitcoins going up? Even if this is handled without any hiccups, this should shake a lot of people's faith (myself included). This should be a wakeup call for anyone that thinks that Bitcoins are totally secure. What if next time the bug in the client is more exploitable? Someone malicious could potentially take out the entire Bitcoin economy in one day by exploiting it.

networked 14y ago

From [1]: >If this is a widespread problem, it is an emergency. We risk having (several) forked chains with smaller blocks, which are accepted by 0.7 nodes. Can people contact pool operators to see which fork they are on? Blockexplorer and blockchain.info seem to be stuck as well. So, what would happen to the coins used in those forked transactions? If the chain does fork what would the best strategy be for performing the merger? And more interestingly: since bitcoin transactions are considered to not be reversible bitcoins are easily converted to and from other currencies with non-reversible transactions. If one were to convert his or her bitcoins to, e.g., Liberty Reserve right now and the chain got reversed that would result in pretty much a perfect scam, wouldn't it? [1] http://sourceforge.net/mailarchive/message.php?msg_id=30587843 http://sourceforge.net/mailarchive/message.php?msg_id=305878...

yk 14y ago
The chains do not get merged. It is just, that the longest block chain is the consensus history of all transaction ( and it needs to be consistent). So if the .7 branch overtakes the .8 branch, then legitimate clients will detect that a transaction was not carried out and retransmit it. ( And the scam you are describing is precisely why Mt Gox did stop accepting bitcoins. They are afraid that someone can take advantage of the situation.)

aegiso 14y ago

I wasn't involved at all in the discussions, but the cryptopunk in me wonders if this isn't malice. Running out of DB entries in the client can be predicted with reasonable accuracy. "Accidentally" slip in this bug, and "fix" it in a future version. Then time a major transaction to coincide with the fork you know will happen, and bam! Engineered transaction reversal. That would be one great hack. But my imagination is probably just getting the best of me.

gizmo686 14y ago
Not to mention one giant hack that would be recorded in the publicly available block chain. Given how high-profile this bug is, I suspect that many people will check both chains to see how much double spending occured, and if any of them are suspicious.

RoboTeddy 14y ago

From news in #bitcoin-dev, it looks like miners on 0.8 are being instructed to downgrade to 0.7, and that'll be the winning fork of the chain going forward. There shouldn't even be any lost bitcoin transactions.

URSpider94 14y ago
There shouldn't even be any lost bitcoin transactions. That can only be true if there are not conflicting transactions in the two chains. That might be the lucky outcome, but it's certainly not guaranteed to be the case. Any transactions that were confirmed on the faulty chain will have to be re-confirmed in the correct chain. How long that will take would depend on just how many transactions need to be processed, and how big their payload is. Until that is completed, the state of the bitcoins involved in those transactions is ambiguous.

blhack 14y ago

Well, then, bitcoin was about due for a HUGE DISASTER to bring the price back down to sane levels, wasn't it? For those not watching, BTC is currently trading at ~$45.

eurleif 14y ago
What determines whether a price is sane or insane for a commodity with no intrinsic value?
- freework 14y ago
  Because "intrinsic value" is not as important than just "value". Bitcoin has a value in the sense that people can use it as a currency that has features that are desirable and useful.
- blhack 14y ago
  It's more than doubled in the last two months. http://bitcoincharts.com/charts/mtgoxUSD#rg180ztgSzm1g10zm2g25zv http://bitcoincharts.com/charts/mtgoxUSD#rg180ztgSzm1g10zm2g...
  - baddox 14y ago
    That doesn't seem necessarily relevant.
    - sliverstorm 14y ago
      Wild runs are typically- not by requirement, but typically- indicative of a crash in the near future. This is because speculation is usually the main driving force behind very steep ramps.
      - icelancer 14y ago
        What determines a "wild run?" As has been shown time and time again in academic and corporate research, the single best predictor of an asset's value is the current market trading price for that asset.

vy8vWJlco 14y ago

Slightly off-topic, but it is well-known that one can embed arbitrary data in the bitcoin block chain, so you pretty much have to expect that at some point someone will inevitably insert one of the many illegal numbers into it, putting everyone running it openly at risk, regardless of the political attitudes towards bitcoin itself. I know anonymity isn't one of bitcoin's purported purposes, but I think it will ultimately be necessary to make it one because of this.

aneth4 14y ago
Not sure what an "illegal number" would be. Certainly someone could embed child pornography or political propaganda. Bitcoin seems subject to a vast array of DOS and other attack that could be seriously problematic if it became an important currency.
- dkulchenko 14y ago
  I think OP is referring to something like an AACS key: http://en.wikipedia.org/wiki/Illegal_number http://en.wikipedia.org/wiki/Illegal_number
- deleted 14y ago
  [deleted]
blake8086 14y ago
It has occurred to people before, but I'm not aware of any active efforts to stop such data from being inserted. https://en.bitcoin.it/wiki/Weaknesses#Illegal_content_in_the_block_chain https://en.bitcoin.it/wiki/Weaknesses#Illegal_content_in_the...
gizmo686 14y ago
Anonymity would not necessarily solve this problem. Just because you cannot correlate 2 transactions or a transaction with a person does not mean that you cannot allow people to embed arbitrary data.
- vy8vWJlco 14y ago

ISL 14y ago

Is there a sensible fashion by which two robust blockchain forks might merge? Widespread use of the currency is troublesome if it's possible for anyone to have reasonable odds of forking the chain. If it's possible for a mass panic to reverse transactions, it's not as reliable. If Asia (4 billion people), banking institution (US federal debt = ~23% of world GDP), or a social group (Catholicism: 63% of the Americas) buys a bunch of stuff then decides, en masse, to revert to an earlier blockchain, it could drive instability. Large groups of people sometimes do unpredictable things (Gangnam Style: 1.4 billion views).

ewillbefull 14y ago
> Is there a sensible fashion by which two robust blockchain forks might merge? No, but the "transaction graph" which underlies both chains can (and will) be merged, in some sense. > If [lots of people conspire] to revert to an earlier blockchain, it could drive instability. The blockchain will only ever split inadvertently, or due to probability (the unlikelihood of multiple blocks being orphaned). A majority of miners would have to conspire to begin mining on a chain with less than 50% of the hashrate, which would be a waste of resources if the chain fails (which it will). There's not just an incentive but a probabilistic force preventing forks from occurring.
- saurik 14y ago
  What if, rather than a client failing blocks that should succeed, a client is designed that accepts things (and generates things) that should fail, and yet becomes the most popular client among a very large subgroup (either by accident, or on purpose). I think that's the question being asked with regards to the "Asia, banks, etc." scenario.
  - gizmo686 14y ago
    Those are equivelent scenerios. If client A generates and accepts coins that client B rejects, it is the same as client B regecting the same coins that client A accepts.

obilgic 14y ago

No matter how much I try, there is always a part of Bitcoin which I don't fully understand, kind of scary actually.

TomatoTomato 14y ago
Do you really understand all the inner workings of the current monetary system?
- niggler 14y ago
  The difference is that enough people accept the current system without understanding it that you can use it for your needs. Not enough people use bitcoins that you can gloss over details.
  - whatshisface 14y ago
    You can use it for your needs until the stock market crashes. ;)
  - harshreality 14y ago
    If the Bitcoin monetary system breaks, only those using Bitcoin for savings or investment get hurt. Those who use BTC as a means of payment (buyers and sellers) have little reason to care, so long as they frequently convert excess BTC into other currencies. That's not so different from the U.S. dollar. You can buy and sell stuff using U.S. dollars, but unless you foresee the value of USD going up (a kind of deflation), you don't want a pile of USD under your mattress. (Also, it's uncomfortable.) Depending on your economic outlook, you want the money in something else: metals, some sort of investment vehicle, or a basket of [foreign] currencies.
DennisP 14y ago
What part don't you understand?

Titanous 14y ago

From a Bitcoin core developer[1]: > .7 and older nodes use BDB for storing the blockchain databases. It seems this database has a limit on the size of the modification it can make atomically to the database. With the larger blocks of the past days, it seems to have triggered the limit. The result is that 0.7 (by default, it can be tweaked manually) will not accept "too large" blocks (we don't yet know what exactly causes it, but it is very likely caused by many transactions in the block). Specifically, block 000000000000015c50b165fcdd33556f8b44800c5298943ac70b112df480c023 (height=225430) with >1700 transactions. > However. 0.8 (which uses a different database system) has no such limit, and happily accepts the block. As the majority of the hash power was on 0.8, the longest chain ended up using this block, which is not accepted by older nodes. [1] https://bitcointalk.org/index.php?topic=152030.msg1613200#msg1613200 https://bitcointalk.org/index.php?topic=152030.msg1613200#ms...

greatreorx 14y ago
> It seems this database has a limit on the size of the modification it can make atomically to the database. If this were an unlucky edge case, I could understand. But it seems like they allowed larger block sizes without testing them on pre v0.8 miners - which might be 25% of miners and the upgrade to v0.8 was less than 1 month ago. It's nice to think that 100% of people will upgrade within a few weeks, but that's just not how some people work.
- Statistical 14y ago
  > If this were an unlucky edge case, I could understand. But it seems like they allowed larger block sizes without testing them on pre v0.8 miners That is not entirely correct. Multiple large blocks were tested on v0.7 (and older clients). Blocks up to the 1MB hard limits were validated and relayed by older clients. The "problem block" in particular wasn't rejected due to simply being too large. It was somewhat rare in that it exceeded the number of low level locks available to v0.7 clients. It had a large number of transactions with a large number of inputs and outputs and those happened to have a large number of compressed keys. Without using a high number of compressed keys it wouldn't be possible to have a block with this number of inputs and outputs in the 1MB limit. Granted in hindsight more testing should have been done but it wasn't like nobody said "hey we should test large blocks, nah I am sure it will be fine".

achalkley 14y ago

This can only be positive. Finding out issues like this will only make the software/network better.

JeremyBanks 14y ago
This is the first large occurrence of an issue that has always been known to be possible to people who are reasonably familiar with BitCoin, due inherently to it's design. This could be bad for BitCoin because now a much large portion of BitCoin users/investors are also aware of this risk.
- mrb 14y ago
  No this is not the first large occurence of this issue. A fork this big (dozens of blocks covering multiple hours of transaction history) already happened in August 15, 2010, due to an unrelated bug: https://en.bitcoin.it/wiki/Common_Vulnerabilities_and_Exposures#CVE-2010-5139 https://en.bitcoin.it/wiki/Common_Vulnerabilities_and_Exposu...
  - waterlesscloud 14y ago
    Though to be fair, that's like saying something happened in the precambrian age when talking about the average bitcoiner's awareness.
- deadairspace 14y ago
  It's not really an inherent design flaw - it's an implementation problem. If everyone was running 0.8 this wouldn't have happened.

discountgenius 14y ago

What is a good way to follow updates on this situation?

yakiv 14y ago
This (probably) won't discuss the technical problem, but http://www.bitcoinity.org/markets http://www.bitcoinity.org/markets will let you track Bitcoin prices.
- discountgenius 14y ago
  thanks for the reply. I always have bitcoinity open. (dark theme FTW). The answer to the question I was trying to ask is https://coinbase.com/network/blocks https://coinbase.com/network/blocks which enables me to check in on how far behind the future legitimate blockchain is (7 blocks at time of writing).
  - DannyBee 14y ago
    This page is out of date by a bunch of blocks. http://blockchain.info/ http://blockchain.info/ is updated live. As you can see, the 0.7 chain has already overtaken the 0.8 chain, and clients are now resubmitting transactions into the 0.7 chain.

jimrandomh 14y ago

Ok, here's what happened and what it means. Bitcoin is built on a chain of blocks, each of which contains a set of transactions, the hash of the previous block, and a cryptographic proof-of-work which takes a lot of computing power to construct. Whichever block-chain is highest (that is, has the most total computing power invested in it) is considered valid, and has more blocks added to it by miners. People "mine" by taking outstanding transactions, writing them into a block together with the hash of the current highest-numbered block, performing cryptographic proof-of-work and publishing their new block. A block was mined (by the Slush mining pool) which is accepted as valid by 0.8 clients, but rejected by 0.7 clients. More than half of the mining power was on 0.8, so the longest chain includes this block - but the 0.7 clients reject it, and have built a side-chain. The developers have asked all miners and mining pools to switch from 0.8 to 0.7, so that the 0.7 chain will grow to be longer than the 0.8 chain; once this happens, all Bitcoin clients will agree that it is the real one. In the meantime, however, merchants running Bitcoin 0.8 may be targeted by double-spend attacks: if they receive money in a transaction that exists only in the 0.8 blockchain, the same money is spent in a different way on the 0.7 blockchain so the transaction can't just be copied over, and they act on the receipt of money by sending goods before the situation is resolved, then they could lose money. This is why MtGox has suspended Bitcoin deposits. (This can only happen if the coins were sent by someone who is using malicious, nonstandard software; transactions made by honest users will be copied to the 0.7 fork and mined without any issue.) The height of the two chains can be monitored at https://coinbase.com/network/blocks https://coinbase.com/network/blocks . Currently the 0.7 chain is 13 blocks behind, which (since the normal mining rate is 6 blocks per hour) sets a lower bound of about two hours on resolution - assuming everyone switches their mining power immediately - but realistically it will probably be more like 6-12 hours.

rorrr 14y ago
I don't understand why 0.7 gets the preference though, considering that it's the version with the DB bug in it.
- waterlesscloud 14y ago
  Because it won't generate blocks that 0.8 won't accept, and 0.8 does generate blocks that 0.7 won't accept. This is a quick fix to get the system back on its feet while they figure out the longer term strategic answer.

GigabyteCoin 14y ago

>Miners are encouraged to downgrade to Bitcoin 0.7.2 - at least temporarily - to push the correct blockchain forward. How does one know who to believe when determining what the "correct" blockchain to forward would be?

gizmo686 14y ago
The good thing about this is that there is no major conflict among people regarding which block-chain is correct. Almost everyone agrees that we need to solve the problem of having a huge portion of nodes not being compatible with the current block chain. Only one of the two blockchains meets this criteria.

yk 14y ago

Does this mean, that basically any functional change in the block verification code can be used to leverage the hashing power of all users of one version into a 51% attack? The attack would be essentially to create the current situation artificially by crafting a block that is only valid by one version of bitcoind, therefore splitting the block chain. Then one needs to include two different transactions into the two blockchains. ( In the theoretical scenario, by mining another block for one of the chains. ) For this I do not need to have 51% of the hashing power, but the branch of the blockchain needs to be supported by 50% of the hashing power. EDIT: Thinking a bit more about this, it seems that the probability to suceed with such an attack seems to rely on the attackers abbility to craft a 'splitting block', which should be proportional to the share of the attacker controlled hashing power and the ability of the 'incompatible' clients to outgrow the standard block chain. ( So that a merchant with an 'incompatible' client accepts a payment based on the fork of the blockchain.) This means that the attack is probably impossible, if the one CPU one vote approach is not only used for valid transactions, but also for valid clients.

phillmv 14y ago
Ah how awful and awesome that the world is becoming like a William Gibson book.
makomk 14y ago
Yes, any change in what blocks are considered valid, even a subtle accidental one, can be used to basically break Bitcoin.

CompelTechnic 14y ago

Guys, it looks like prices are dropping pretty quick now on mtgox. This will be another... interesting couple of weeks for bitcoin.

nazgulnarsil 14y ago
down $4, looks like normal price fluctuations from the last couple weeks.
- CompelTechnic 14y ago
  It was down to $36.50 for a couple seconds/minutes- looks like that got bought back up though. Weird.

yakiv 14y ago

Bitcoin seems to be picking up again. From Mt. Gox: > Last price:$45.00000 > High:$48.46900 > Low:$36.65000 Edit: It could go back down a lot. We'll see what happens.

btbuildem 14y ago
Prices have been above $36 for barely a week, 5th/6th rally saw high volumes; the recovery (8th to 11th) was weaker and did not break the high. The volume of both sell-offs was comparable, but the today's low is higher. I reckon it might flatten out around $40 for a bit, then pick up again.

deleted 14y ago

[deleted]

ck2 14y ago

Sometimes I wonder how many extra tons of coal have been burned simply because of the existence of bitcoin.

pudquick 14y ago
The same could be asked of most any form of currency and of many different ways of generating wealth and value (and I'm sure many of them generate orders of magnitudes worse pollution). Take, for example, reddit karma - people pay to power their computers and purchase hardware/software to create memes and original content that will reap positive karma. What notion or idea will be "valuable" to the reddit hive mind next is anyone's guess, so your best bet is to keep plugging away at it and generating as much original content as possible. While there's no direct translation of earned karma to a national currency (yet), it can carry a social/fame value. These people paying their internet, hardware, software, and electricity bills provide a basis for an exchange rate of <national currency> to <reddit karma>. The only differences between this and bitcoin are that people can give bitcoin to one another and that there are bitcoin to <national currency> exchanges. I stretched the analogy a bit thin with reddit karma, but I'm sure people can think of other similar electricity->money "pure technology" wealth/value generation methods (high frequency trading hardware/software, for instance).
- ck2 14y ago
  What you say is true but bitcoin is specifically designed to require massive amounts of computing power, which specifically equates to massive electric power consumption. In other words its purposely designed to be excessively taxing on resources. The other activities you mention have resource consumption as a side effect and not necessarily exhaustive.
  - weavejester 14y ago
    A lot of electricity is used on other forms of security as well, such as SSL or password encryption. Although SSL uses up less resources, it is used by far more servers, which I suspect would exceed the amount of processing power of the Bitcoin network.

nullc 14y ago

The fork is now resolved, sites like mtgox should begin processing deposits again after a couple more blocks.

tudorizer 14y ago

I was asleep when this happend, but waking up to check HN, reddit and my mtgox got me up to speed. For some reason, this doesn't worry me a bit. Mostly because of the steady and strong growth I've see recently.

yuvadam 14y ago

The way the Bitcoin community handled this mornings fork in the bitcoin blockchain is nothing short of incredible. This event significantly increases my confidence in the Bitcoin ecosystem to thrive even when faced with critical issues. If only the global finance institutions had a fraction of bitcoins capacity to resolve crises with the same unconditional transparency and full cooperation with all agents in the ecosystem.

swhitt 14y ago
It was great to see in action, but given the way the system is right now it wasn't that incredible. The maintainers of the biggest pools are all very active in the community; it would just take 2-3 of the big mining pools to say "hey, let's go back to 0.7" for this to be resolved automatically.
skore 14y ago
I agree. In the past few weeks, Bitcoin has really picked up lots of speed. So much in fact, that I'm wondering whether we're witnessing an exponential adoption where years of people doubting Bitcoin were simply the beginning of the curve. That would also mean that things are going to explode pretty soon. I sincerely hope that the aftermath of said explosion will leave Bitcoin as the strong contender to established monetary systems that it always was - just "proven by reality" now. That would certainly be all I need to finally jump on board.
betterunix 14y ago
"This event significantly increases my confidence in the Bitcoin ecosystem to thrive even when faced with critical issues." It does the opposite for me, because it demonstrates that Bitcoin is extremely vulnerable to double spending. Either everyone uses the same version of the software, or you have to deal with the possibility that this event will happen again. Worse still, an attacker might use some kind of malware to modify Bitcoin clients, until they are able to fork the network and double spend. Yes, making cryptosystems that are secure against malicious majorities is difficult, and experts have published tons of papers and several books on the subject. If Bitcoin's developers want people to trust their system for anything non-trivial, they really need to fix this problem. To break David Chaum's digital cash systems, an attacker would have required exponential computing power in a security parameter that could be scaled arbitrarily, while the users only require polynomial computing power in that same parameter; to break Bitcoin, an attacker only requires a little more than half the sum of all the computing power in the Bitcoin network. The Germans learned the hard way that just because an attack seems too pricey for anyone to bother with does not mean that the attack actually is too pricey for anyone to bother with.

tudorizer 14y ago

For a clearer explanation see: http://www.reddit.com/r/Bitcoin/comments/1a51xx/now_that_its_over_the_blockchain_fork_explained/ http://www.reddit.com/r/Bitcoin/comments/1a51xx/now_that_its...

cnp 14y ago

What a stressful 24 hours. Everything has finally been resolved.