5 ms·

Compromise Bitcoin for just $1.2M

29 points by matt2000 13y ago

kalleboo 13y ago
That's assuming you could get your hands on ASIC hardware. None of it has shipped to customers yet, and once it has, the difficulty will skyrocket.
- asdfaoeu 13y ago
  It has but only that first batch. The author also makes the mistake only that first batch sold at they rate the new batch is priced at 75btc. Interesting to know how much it would cost to build your own machines only reasonable solution at this time.
  - jpdoctor 13y ago
    > Interesting to know how much it would cost to build your own machines only reasonable solution at this time. Finger in the air calculation: $3-4M. Assumes knowledgeable designers, and good ops people with decent offshore assembly experience. None of this is particularly difficult from the standpoint of a VLSI. The issue is that profitability is questionable: If you're successful, you pretty much destroy the economic niche that forms your customers.
    - jpdoctor 13y ago
      Whoops: s/VLSI/VLSI designer/
- nwh 13y ago
  Avalon has had units shipped for quite some time. They're up to their second and third batches now.
rheide 13y ago
I'm not sure there's $1.2M worth of ASIC hardware made yet. Also, for that amount of money you could do a lot of malicious things, even to traditional banks.
- deleted 13y ago
  [deleted]
- betterunix 13y ago
  "I'm not sure there's $1.2M worth of ASIC hardware made yet." I am pretty sure a large government could make its own ASICs...
  - joezydeco 13y ago
    You don't think the NSA could free up a few machines and have a couple of Terahash/Sec available in a weekend?
- nwh 13y ago
  ASICminer is a company producing their own, and from what I've read they certainly have the capacity to overwhelm the network if they wanted.
mjn 13y ago
If the bar is that low, this does suggest that, contrary to some conspiracy theories, governments aren't really out to destroy Bitcoin, since they could've done so by now if they had really wanted to.
- betterunix 13y ago
  There is another possibility: governments just want to control Bitcoin. The same attack that allows double spending can be used to deny transaction confirmations, which effectively denies transactions from happening at all.
- DanBC 13y ago
  There's other things they could be doing. Bitcoin isn't intrinsically anonymous, so maybe they're just keeping an eye on anyone not being anonymous. Wait until someone sells polonium or uranium on Silk Road to see if Tor / Bitcoin stand up.
  - polarix 13y ago
    Correction: bitcoin is only "not anonymous" if the transaction history network contains a contact point with the physical world, that is, if some transaction is associated with a physical good shipment or traditional world identity.
    - DanBC 13y ago
      Bitcoin is not inherently anonymous. Users have to do stuff to be anonymous when using Bitcoin. To say otherwise is wrong and dangerous. (http://www.newscientist.com/blogs/onepercent/2011/07/bitcoin-is-not-inherently-anon.html http://www.newscientist.com/blogs/onepercent/2011/07/bitcoin...) (https://news.ycombinator.com/item?id=2800790 https://news.ycombinator.com/item?id=2800790) (https://en.bitcoin.it/wiki/Anonymity https://en.bitcoin.it/wiki/Anonymity) (http://anonymity-in-bitcoin.blogspot.co.uk/2011/07/bitcoin-is-not-anonymous.html http://anonymity-in-bitcoin.blogspot.co.uk/2011/07/bitcoin-i...)
free652 13y ago
And of course you forgot that the difficulty would increase? Who sells ASICS 66GH for $1250? That page is outdated. Avalons are going for 72BTC that's over $9000
- kolinko 13y ago
  Well, the difficulty increase wouldn't stop an attacker having >50% computing power. Only switching the algorithm would (assuming the attacker would use ASICs)
awestroke 13y ago
I think longest blockchain attacks only apply to double-spending, so you still can't "compromise" coins that are not your own
- betterunix 13y ago
  You can also prevent transactions from being confirmed.
- emiliobumachar 13y ago
  If a few agents start double-spending, that creates a strong disincentive for anyone to accept bitcoin at all, which can doom the entire currency.
wladimir 13y ago
I don't expect this to happen, ASICs will be pretty widely distributed before anyone can pull this off. However there is a contingency plan for when this happens: switch the hashing algorithm (for example to scrypt, or something memory hard w/ lots of random flow control). This puts all ASICs out of the game at once. Miners will not like it, but if the other alternative is a non-functioning currency, they will likely cooperate.
- dualogy 13y ago
  > switch the hashing algorithm OH boy now this is interesting -- to an outsider like me, explain who would decide this? Some central committee? The source-code "custodian"? Will BTC fork at that point so every holder can "vote with their (pardon) dollar" but would also need to bet on everyone else's choice?
  - polarix 13y ago
    So it would be a combination of the coders, the miners, and the community. Yes, this would definitely require a hard fork.
  - nightpool 13y ago
    Changes to the Bitcoin protocol can be ratified by a majority of miners, in the same "longest blockchain" method.
    - deepblueocean 13y ago
      This is a common misconception, I think. If you try to model the protocol economically, it's pretty clear that it's a majority of currency holders (what the core developers call an "economic majority"), not a majority of miners that matters in determining whether a protocol change is valid. Exercise for the reader: determine whether these sets are different in a meaningful way.
      - jacquesm 13y ago
        You can model all you want, the majority of miners determines what is the next valid blockchain. Even if they hold 0 currency, and even if there were no more bitcoins to be mined that would still be true.
kaoD 13y ago
This would not disrupt Bitcoin for too long. I'd just move the blockchain to a different algorithm and BOOM your ASICs are worthless and Bitcoin will still go on. $1.2M will shutdown Bitcoin for, at most, a couple days... and then you're left with a bunch of useless ASICs. And all that assuming that nobody else will get ASICs, which will make the attack more expensive. It's just not worth it.
- Drakim 13y ago
  Don't you have to get all other bitcoin users to also migrate over to this new algorithm? And even if it's just down for a couple of days, that's terrible. Bitcoin is still pretty small in the grand scheme of things, but imagine if regular money stopped working for a couple of days.
  - kaoD 13y ago
    Miners WILL switch (for their own benefit). Something like this has happened before[1] (though the mining algorithm didn't change) and the community did cooperate. Some miners will be happy about it, specially the ones with GPUs which will be thrown off the game once ASICs arrive (and will get back in the game once ASICs are killed). Well, if I can get a government to spend $1.2 M just to shutdown a currency for a couple days, I guess we won (specially hardware manufacturers). Also: Bitcoin will never replace regular money, and it isn't meant to. IMHO this attack will not kill Bitcoin, only ASICs. [1] http://bitcoin.org/chainfork.html http://bitcoin.org/chainfork.html
    - swinglock 13y ago
      The algorithm was not replaced, then it wouldn't be BitCoin anymore. https://en.bitcoin.it/wiki/List_of_alternative_cryptocurrencies https://en.bitcoin.it/wiki/List_of_alternative_cryptocurrenc...
      - kaoD 13y ago
        It will still be Bitcoin, with a different algorithm... Bitcoin is not just a protocol and some algorithms behind it. Bitcoin is a community and a currency. Your Bitcoins will still be called Bitcoin, you'll have the same wallet and the same number of BTC in your accounts. The webpage will still be www.bitcoin.org and we'll talk in #bitcoin as we used to do. Changing Bitcoin to scrypt will not magically turn Bitcoin into Litecoin. This scenario has been envisioned before. Nothing new here. Bitcoin will prevail.
narcissus 13y ago
Assuming nobody else buys any of this hardware too. That's how I see this anyway. All of these theories assume that nobody else is going to try and do the same...
drcode 13y ago
Keep in mind that a plan like that would take, at best, half a year to put in place. In that time the amount of ASICs in existence will already be far higher than it is today (I would guess at least three times what it is at the moment.)
- polarix 13y ago
  3x? More like 300x, I'd say. Once the first few roll out of BFL these things will be coming online as fast as you can say "money press".
  - consz 13y ago
    That assumes BFL won't just run off with all the money.
fosap 13y ago
AFAIK you don't need much computing power, you just need to be lucky to be the first one to solve the problem and create a new hash. I case you have lot's of tries even a 0.05% chance every 10 minutes might be enough. Not sure if i make a mistake here, but it seems to be easy. 0,5 < (n choose 1) * (1-0.0005)^n 0,5 < 1 * (1-0.0005)^n log(0,5)/log(1-0.0005) < n 1385.95 < n 13860 minutes < 10 days So a 50% chance in 10 days. If you have a 0.05% of the computing power of the whole network.
jordanbaucke 13y ago
If you wanted to damage/degrade BTC with $1.2 million I think the "smart money" wouldn't be investing in the custom hardware to compromise it - but instead to flood the markets with liquidity. BTC is still so thinly traded that a million dumped in pieces could have a serious destabilizing affect. Not that reducing price was the actual subject of the topic but...
bitcoin-fool 13y ago
See https://news.ycombinator.com/item?id=5585166 https://news.ycombinator.com/item?id=5585166 for information on BFL's hosting program. It's likely that BFL and affiliate datacenter personnel will control > 50% of the bitcoin hash rate at some point. Here's my comment on that thread ... -- BFL has affiliate data centers where those purchasing the more powerful BFL machines can have their systems hosted, for a fee. The default option: "Your hosted units will be added to a mining farm and you will be paid out regularly based on their collective output." Datacenter and BFL personnel will be monitoring the machines for defects and maintaining them. The hosting option makes sense for new untested hardware like this ... So, it's likely the BFL datacenter mining pool will control > 50% of the bitcoin hashrate at some point.
PaperclipTaken 13y ago
This may seem cheap, but there are already many, many orders out there for ASIC, and all of the factories are backed up. Butterfly Labs only recently released models that have been on order for many months (I want to say greater than 6). If you put down $1.2 million, it could be months before you got your machines and by then you would no longer control 50% of the mining. This dollar amount is also particularly low because ASIC technology is new - most people who have put money into ASICs aren't even mining yet. Once the technology is settled in, controlling the block chain will become more expensive. Furthermore, the number of things that you can do while controlling the block chain is actually really limited. You still can't spend other people's money. You can prevent people from spending money, but you can't make them spend money. You can double spend yourself, but if the bitcoin community was aware that someone was manipulating the block chain, they would be much more careful about accepting transactions from new wallets, and would reject all transactions from a wallet they knew was controlled by the double spender. Furthermore, if you did take control of the block chain I personally would dump a few thousand into miners myself, to help regain control of the system. I'm sure that I'm not alone, and the act of bitcoin users simply 'fighting back' may be enough to minimize your control of the market. And finally, as other people have stated, you can always change the hashing algorithm. Most people use 1 bitcoin client. In fact, this client once had an update that caused an error and forked the block chain and allowed at least one person to double spend $10,000. In the event of a major crisis, there would most be enough bitcoin users willing to fork the block chain that you could indeed get a new hashing algorithm designed to be incompatible with the attackers hardware. The choice is between that and watch your 'distributed' currency fall under the control of a tyrant. Someone taking control of the mining process IS a risk, and there are some powerful things you can do with that (like mine 100% of all the new bitcoins, taking control of the supply, and double spending, and rejecting transactions by others), but it would probably take a lot more than $1.2 million dollars because people would fight back, and you are still at risk of the rest of the community forking away from your control. That said, you could still do terrible damage and the price would probably plunge, and you may be able to double spend millions of dollars before enough people noticed to start rejecting your transactions. (are there even millions of dollars worth of things you can buy? and would you have to worry about a government getting involved because you committed financial crimes?) And even if you manage to maintain control, all that will happen is people will stop using bitcoin until you let up. It's much like a DDOS. It takes power (electricity) to maintain that much computation, and the longer you maintain control, the less bitcoin will be worth. Edit: I want to add that the scariest attacks only happen at 50% control. At 40%, you can only double spend -sometimes-, and I don't think that you would be able to block transactions at all. Furthermore an organized network (and there is much debate about how organized bitcoin could get, after all it is designed to be distributed) could undo any double spending and you would be limited to slowing bitcoin down. At 20% market power, the probability of you achieving a double spend or undoing some transactions is very small.
NamTaf 13y ago
In comparison, Amazon EC2 offers GPU clusters for $2.10000/hr [1]. Each cluster contains 2x M2050 Fermi cores [2] which each put out ~80MHash/sec [3]. To get the requisite 64686 GHash/sec, you'd need to spin up 404287 of these things, which costs you $849000/hr. This is of course assuming Amazon has 400000 instances of the GPU compute clusters. The cheaper alternative is to utilise spot GPU instances, costing only $0.346/hr [4]. At that price, i's $139900/hr or so. I am willing to bet that they do not just have 400000 spare GPU instances laying around unused, however. All this was purely academic, but it kind of amuses me that for a theoretical $140000/hr, you could hyjack bitcoin as it is currently. [1] http://aws.amazon.com/ec2/pricing/ http://aws.amazon.com/ec2/pricing/ [2] http://aws.amazon.com/ec2/instance-types/ http://aws.amazon.com/ec2/instance-types/ [3] https://en.bitcoin.it/wiki/Mining_hardware_comparison https://en.bitcoin.it/wiki/Mining_hardware_comparison [4] http://aws.amazon.com/ec2/pricing/#spot http://aws.amazon.com/ec2/pricing/#spot
- raverbashing 13y ago
  "To get the requisite 64686 GHash/sec, you'd need to spin up 404287 of these things, which costs you $849000/hr." Really, I don't think even Amazon has enough of this hardware. And AFAIK these (GPU clusters) are not virtualized. Makes me wonder what happens if you have a cost advantage in taking the cheapest PC hardware and plugging high-end GPU cards (beyond ASICs)
bayesianhorse 13y ago
There is probably no business case for such an operation. To benefit from an extreme price crash you either have to short bitcoin or buy a ton of stuff with it. In the latter case it is hard to imagine a merchant honoring such orders if he is not convinced the blockchain is sound. As for shorting bitcoin... It's certainly not impossible. But shorting a few Million of Dollars of Bitcoin? If this is done in any kind of trading account (without the money being physically in the hand of the attacker), the trading institution would probably be out of business because of the price drop anyway, before paying the profits to the attacker... For everyone else... You shouldn't have more than 20 BTC on hand anyway. Preferably a lot less, depending on the rest of your portfolio. In these cases any price drop isn't going to wipe you out and the network resumes normal operation.

29 points by matt2000 13y ago

That's assuming you could get your hands on ASIC hardware. None of it has shipped to customers yet, and once it has, the difficulty will skyrocket.

asdfaoeu 13y ago
It has but only that first batch. The author also makes the mistake only that first batch sold at they rate the new batch is priced at 75btc. Interesting to know how much it would cost to build your own machines only reasonable solution at this time.
- jpdoctor 13y ago
  > Interesting to know how much it would cost to build your own machines only reasonable solution at this time. Finger in the air calculation: $3-4M. Assumes knowledgeable designers, and good ops people with decent offshore assembly experience. None of this is particularly difficult from the standpoint of a VLSI. The issue is that profitability is questionable: If you're successful, you pretty much destroy the economic niche that forms your customers.
  - jpdoctor 13y ago
    Whoops: s/VLSI/VLSI designer/
nwh 13y ago
Avalon has had units shipped for quite some time. They're up to their second and third batches now.

rheide 13y ago

I'm not sure there's $1.2M worth of ASIC hardware made yet. Also, for that amount of money you could do a lot of malicious things, even to traditional banks.

deleted 13y ago
[deleted]
betterunix 13y ago
"I'm not sure there's $1.2M worth of ASIC hardware made yet." I am pretty sure a large government could make its own ASICs...
- joezydeco 13y ago
  You don't think the NSA could free up a few machines and have a couple of Terahash/Sec available in a weekend?
nwh 13y ago
ASICminer is a company producing their own, and from what I've read they certainly have the capacity to overwhelm the network if they wanted.

mjn 13y ago

If the bar is that low, this does suggest that, contrary to some conspiracy theories, governments aren't really out to destroy Bitcoin, since they could've done so by now if they had really wanted to.

betterunix 13y ago
There is another possibility: governments just want to control Bitcoin. The same attack that allows double spending can be used to deny transaction confirmations, which effectively denies transactions from happening at all.
DanBC 13y ago
There's other things they could be doing. Bitcoin isn't intrinsically anonymous, so maybe they're just keeping an eye on anyone not being anonymous. Wait until someone sells polonium or uranium on Silk Road to see if Tor / Bitcoin stand up.
- polarix 13y ago
  Correction: bitcoin is only "not anonymous" if the transaction history network contains a contact point with the physical world, that is, if some transaction is associated with a physical good shipment or traditional world identity.
  - DanBC 13y ago
    Bitcoin is not inherently anonymous. Users have to do stuff to be anonymous when using Bitcoin. To say otherwise is wrong and dangerous. (http://www.newscientist.com/blogs/onepercent/2011/07/bitcoin-is-not-inherently-anon.html http://www.newscientist.com/blogs/onepercent/2011/07/bitcoin...) (https://news.ycombinator.com/item?id=2800790 https://news.ycombinator.com/item?id=2800790) (https://en.bitcoin.it/wiki/Anonymity https://en.bitcoin.it/wiki/Anonymity) (http://anonymity-in-bitcoin.blogspot.co.uk/2011/07/bitcoin-is-not-anonymous.html http://anonymity-in-bitcoin.blogspot.co.uk/2011/07/bitcoin-i...)

free652 13y ago

And of course you forgot that the difficulty would increase? Who sells ASICS 66GH for $1250? That page is outdated. Avalons are going for 72BTC that's over $9000

kolinko 13y ago
Well, the difficulty increase wouldn't stop an attacker having >50% computing power. Only switching the algorithm would (assuming the attacker would use ASICs)

awestroke 13y ago

I think longest blockchain attacks only apply to double-spending, so you still can't "compromise" coins that are not your own

betterunix 13y ago
You can also prevent transactions from being confirmed.
emiliobumachar 13y ago
If a few agents start double-spending, that creates a strong disincentive for anyone to accept bitcoin at all, which can doom the entire currency.

wladimir 13y ago

I don't expect this to happen, ASICs will be pretty widely distributed before anyone can pull this off. However there is a contingency plan for when this happens: switch the hashing algorithm (for example to scrypt, or something memory hard w/ lots of random flow control). This puts all ASICs out of the game at once. Miners will not like it, but if the other alternative is a non-functioning currency, they will likely cooperate.

dualogy 13y ago
> switch the hashing algorithm OH boy now this is interesting -- to an outsider like me, explain who would decide this? Some central committee? The source-code "custodian"? Will BTC fork at that point so every holder can "vote with their (pardon) dollar" but would also need to bet on everyone else's choice?
- polarix 13y ago
  So it would be a combination of the coders, the miners, and the community. Yes, this would definitely require a hard fork.
- nightpool 13y ago
  Changes to the Bitcoin protocol can be ratified by a majority of miners, in the same "longest blockchain" method.
  - deepblueocean 13y ago
    This is a common misconception, I think. If you try to model the protocol economically, it's pretty clear that it's a majority of currency holders (what the core developers call an "economic majority"), not a majority of miners that matters in determining whether a protocol change is valid. Exercise for the reader: determine whether these sets are different in a meaningful way.
    - jacquesm 13y ago
      You can model all you want, the majority of miners determines what is the next valid blockchain. Even if they hold 0 currency, and even if there were no more bitcoins to be mined that would still be true.

kaoD 13y ago

This would not disrupt Bitcoin for too long. I'd just move the blockchain to a different algorithm and BOOM your ASICs are worthless and Bitcoin will still go on. $1.2M will shutdown Bitcoin for, at most, a couple days... and then you're left with a bunch of useless ASICs. And all that assuming that nobody else will get ASICs, which will make the attack more expensive. It's just not worth it.

Drakim 13y ago
Don't you have to get all other bitcoin users to also migrate over to this new algorithm? And even if it's just down for a couple of days, that's terrible. Bitcoin is still pretty small in the grand scheme of things, but imagine if regular money stopped working for a couple of days.
- kaoD 13y ago
  Miners WILL switch (for their own benefit). Something like this has happened before[1] (though the mining algorithm didn't change) and the community did cooperate. Some miners will be happy about it, specially the ones with GPUs which will be thrown off the game once ASICs arrive (and will get back in the game once ASICs are killed). Well, if I can get a government to spend $1.2 M just to shutdown a currency for a couple days, I guess we won (specially hardware manufacturers). Also: Bitcoin will never replace regular money, and it isn't meant to. IMHO this attack will not kill Bitcoin, only ASICs. [1] http://bitcoin.org/chainfork.html http://bitcoin.org/chainfork.html
  - swinglock 13y ago
    The algorithm was not replaced, then it wouldn't be BitCoin anymore. https://en.bitcoin.it/wiki/List_of_alternative_cryptocurrencies https://en.bitcoin.it/wiki/List_of_alternative_cryptocurrenc...
    - kaoD 13y ago
      It will still be Bitcoin, with a different algorithm... Bitcoin is not just a protocol and some algorithms behind it. Bitcoin is a community and a currency. Your Bitcoins will still be called Bitcoin, you'll have the same wallet and the same number of BTC in your accounts. The webpage will still be www.bitcoin.org and we'll talk in #bitcoin as we used to do. Changing Bitcoin to scrypt will not magically turn Bitcoin into Litecoin. This scenario has been envisioned before. Nothing new here. Bitcoin will prevail.

narcissus 13y ago

Assuming nobody else buys any of this hardware too. That's how I see this anyway. All of these theories assume that nobody else is going to try and do the same...

drcode 13y ago

Keep in mind that a plan like that would take, at best, half a year to put in place. In that time the amount of ASICs in existence will already be far higher than it is today (I would guess at least three times what it is at the moment.)

polarix 13y ago
3x? More like 300x, I'd say. Once the first few roll out of BFL these things will be coming online as fast as you can say "money press".
- consz 13y ago
  That assumes BFL won't just run off with all the money.

fosap 13y ago

AFAIK you don't need much computing power, you just need to be lucky to be the first one to solve the problem and create a new hash. I case you have lot's of tries even a 0.05% chance every 10 minutes might be enough. Not sure if i make a mistake here, but it seems to be easy. 0,5 < (n choose 1) * (1-0.0005)^n 0,5 < 1 * (1-0.0005)^n log(0,5)/log(1-0.0005) < n 1385.95 < n 13860 minutes < 10 days So a 50% chance in 10 days. If you have a 0.05% of the computing power of the whole network.

jordanbaucke 13y ago

If you wanted to damage/degrade BTC with $1.2 million I think the "smart money" wouldn't be investing in the custom hardware to compromise it - but instead to flood the markets with liquidity. BTC is still so thinly traded that a million dumped in pieces could have a serious destabilizing affect. Not that reducing price was the actual subject of the topic but...

bitcoin-fool 13y ago

See https://news.ycombinator.com/item?id=5585166 https://news.ycombinator.com/item?id=5585166 for information on BFL's hosting program. It's likely that BFL and affiliate datacenter personnel will control > 50% of the bitcoin hash rate at some point. Here's my comment on that thread ... -- BFL has affiliate data centers where those purchasing the more powerful BFL machines can have their systems hosted, for a fee. The default option: "Your hosted units will be added to a mining farm and you will be paid out regularly based on their collective output." Datacenter and BFL personnel will be monitoring the machines for defects and maintaining them. The hosting option makes sense for new untested hardware like this ... So, it's likely the BFL datacenter mining pool will control > 50% of the bitcoin hashrate at some point.

PaperclipTaken 13y ago

This may seem cheap, but there are already many, many orders out there for ASIC, and all of the factories are backed up. Butterfly Labs only recently released models that have been on order for many months (I want to say greater than 6). If you put down $1.2 million, it could be months before you got your machines and by then you would no longer control 50% of the mining. This dollar amount is also particularly low because ASIC technology is new - most people who have put money into ASICs aren't even mining yet. Once the technology is settled in, controlling the block chain will become more expensive. Furthermore, the number of things that you can do while controlling the block chain is actually really limited. You still can't spend other people's money. You can prevent people from spending money, but you can't make them spend money. You can double spend yourself, but if the bitcoin community was aware that someone was manipulating the block chain, they would be much more careful about accepting transactions from new wallets, and would reject all transactions from a wallet they knew was controlled by the double spender. Furthermore, if you did take control of the block chain I personally would dump a few thousand into miners myself, to help regain control of the system. I'm sure that I'm not alone, and the act of bitcoin users simply 'fighting back' may be enough to minimize your control of the market. And finally, as other people have stated, you can always change the hashing algorithm. Most people use 1 bitcoin client. In fact, this client once had an update that caused an error and forked the block chain and allowed at least one person to double spend $10,000. In the event of a major crisis, there would most be enough bitcoin users willing to fork the block chain that you could indeed get a new hashing algorithm designed to be incompatible with the attackers hardware. The choice is between that and watch your 'distributed' currency fall under the control of a tyrant. Someone taking control of the mining process IS a risk, and there are some powerful things you can do with that (like mine 100% of all the new bitcoins, taking control of the supply, and double spending, and rejecting transactions by others), but it would probably take a lot more than $1.2 million dollars because people would fight back, and you are still at risk of the rest of the community forking away from your control. That said, you could still do terrible damage and the price would probably plunge, and you may be able to double spend millions of dollars before enough people noticed to start rejecting your transactions. (are there even millions of dollars worth of things you can buy? and would you have to worry about a government getting involved because you committed financial crimes?) And even if you manage to maintain control, all that will happen is people will stop using bitcoin until you let up. It's much like a DDOS. It takes power (electricity) to maintain that much computation, and the longer you maintain control, the less bitcoin will be worth. Edit: I want to add that the scariest attacks only happen at 50% control. At 40%, you can only double spend -sometimes-, and I don't think that you would be able to block transactions at all. Furthermore an organized network (and there is much debate about how organized bitcoin could get, after all it is designed to be distributed) could undo any double spending and you would be limited to slowing bitcoin down. At 20% market power, the probability of you achieving a double spend or undoing some transactions is very small.

NamTaf 13y ago

In comparison, Amazon EC2 offers GPU clusters for $2.10000/hr [1]. Each cluster contains 2x M2050 Fermi cores [2] which each put out ~80MHash/sec [3]. To get the requisite 64686 GHash/sec, you'd need to spin up 404287 of these things, which costs you $849000/hr. This is of course assuming Amazon has 400000 instances of the GPU compute clusters. The cheaper alternative is to utilise spot GPU instances, costing only $0.346/hr [4]. At that price, i's $139900/hr or so. I am willing to bet that they do not just have 400000 spare GPU instances laying around unused, however. All this was purely academic, but it kind of amuses me that for a theoretical $140000/hr, you could hyjack bitcoin as it is currently. [1] http://aws.amazon.com/ec2/pricing/ http://aws.amazon.com/ec2/pricing/ [2] http://aws.amazon.com/ec2/instance-types/ http://aws.amazon.com/ec2/instance-types/ [3] https://en.bitcoin.it/wiki/Mining_hardware_comparison https://en.bitcoin.it/wiki/Mining_hardware_comparison [4] http://aws.amazon.com/ec2/pricing/#spot http://aws.amazon.com/ec2/pricing/#spot

raverbashing 13y ago
"To get the requisite 64686 GHash/sec, you'd need to spin up 404287 of these things, which costs you $849000/hr." Really, I don't think even Amazon has enough of this hardware. And AFAIK these (GPU clusters) are not virtualized. Makes me wonder what happens if you have a cost advantage in taking the cheapest PC hardware and plugging high-end GPU cards (beyond ASICs)

bayesianhorse 13y ago

There is probably no business case for such an operation. To benefit from an extreme price crash you either have to short bitcoin or buy a ton of stuff with it. In the latter case it is hard to imagine a merchant honoring such orders if he is not convinced the blockchain is sound. As for shorting bitcoin... It's certainly not impossible. But shorting a few Million of Dollars of Bitcoin? If this is done in any kind of trading account (without the money being physically in the hand of the attacker), the trading institution would probably be out of business because of the price drop anyway, before paying the profits to the attacker... For everyone else... You shouldn't have more than 20 BTC on hand anyway. Preferably a lot less, depending on the rest of your portfolio. In these cases any price drop isn't going to wipe you out and the network resumes normal operation.