12 ms·

Is Bitcoin Broken?

61 points by imd23 13y ago

afshin 13y ago
So basically: "I do not have a comment at this time." That's fine and all. But not very newsworthy.
- gnerd 13y ago
  Except he did make a comment, although not a concrete one: > However, it is good to note that in my initial review, I believe the paper’s assertion of a fundamental flaw is based on some over-simplified assumptions about how the bitcoin mining market works.
  - hvidgaard 13y ago
    Not playing by the rules as stated in the paper, can result in greater than expected return. It can also return less than expected, and on average you gain the most by being a well behaved mining node.
  - afshin 13y ago
    Yeah, fair enough. I just went into the post expecting less boilerplate.
deleted 13y ago
[deleted]
cs702 13y ago
"...it is unfortunate (but entirely predictable) that the release of a not-yet-peer-reviewed paper generated so many sensationalistic headlines. Peer review works best when everybody involved is given time for conversation and debate without being contacted by reporters on deadline." Translation: next time, please send us the paper in advance and get it peer reviewed before you start talking to reporters. "I’m not going to write about the specific claims in the paper... However, it is good to note that in my initial review, I believe the paper’s assertion of a fundamental flaw is based on some over-simplified assumptions about how the bitcoin mining market works." Translation: the paper's claims are probably wrong.
- sillysaurus2 13y ago
  Why do they pander so much? It's hard to imagine pg ever writing something that tiptoes around like that, yet pg has been in dozens of situations requiring a public response to a perceived problem. He's never pandered, yet he's never suffered for it either. So is pg just a better writer than Gavin, or is this an academic tradition, or...? Just curious.
  - celticninja 13y ago
    no need to be combatative, he actually wants to encourage researchers to undertake this sort of work, it may lead to improvments in the protocol and could save the developers some time too. If he tore into them then other researchers may feel less inclined to look at the network/protocol and undertake their own research.
  - CompelTechnic 13y ago
    I would say that it is probably because a large portion of the mainstream media/ general population thinks bitcoin is for complete loonies. If Gavin's tone were confrontational, it would likely make people think he's getting defensive over his obviously ridiculous magic internet money. He has to err on the side of caution to avoid people making that assumption.
  - jnbiche 13y ago
    They're trying hard not to discourage academic research into Bitcoin, or to scare off security researchers. They desperately want more security researchers. I actually think Gavin is handling this very well, and the response seems well-measured. That said, the way this whole paper has been released smacks of sensationalism. I'll take the Eyal at his word that he's concerned with Bitcoin's future, but failing to adhere to the standards of responsible disclosure and entitling a blog post "Bitcoin is Broken" really make me wonder about what they're trying to do, other than self-promote. Besides, this basic attack is something that has been discussed since 2010. There may be a few subtle differences in the paper, but based on my reading of the blog post, this is an attack that mining pools have even accused each other of doing a year or two ago. It's a potential problem, but definitely not a "Bitcoin is fundamentally broken" problem as the blog post claims.
3pt14159 13y ago
The way bitcoin is broken is that there are people with VAST wallets that could be state actors. If the CIA truly did invent bitcoin then they have immense power on it and it's stability. The hard part about this risk is that there is no way to mitigate it.
- nwh 13y ago
  There's absolutely nothing to suggest that any state actor created Bitcoin.
  - 3pt14159 13y ago
    Actually there is quite a bit to suggest that a state actor created bitcoin. Satoshi is probably three people and the CIA and NSA don't really screw around when it comes to this type of thing. Even if they didn't create it, they had the man/computer power to control large chunks of bitcoin.
    - gwern 13y ago
      > Actually there is quite a bit to suggest that a state actor created bitcoin. Not really. Most of the arguments are based on false premises, like the claim that the codebase is of high quality or has never had serious breaks. I've looked pretty deeply into Satoshi, and nothing makes me think it's not exactly what it looks like: one guy.
      - nwh 13y ago
        Every claim like this that says the code base is high quality has me rolling with laughter. The core developers at still trying to fix some of the crazy oversights that Satoshi left in the core code.
        GeneralMayhem 13y ago
        And even if it were, in what world does high-quality code imply state actor?
mcherm 13y ago
Gavin Andresen writes: > Peer review works best when everybody involved is given time for conversation and debate without being contacted by reporters on deadline. In other words, the entire institution of science (computer science in this case) is better off if the individual researchers are careful about presenting things to the press and make sure to review things carefully before publishing. But the incentive for individual researchers may not be aligned with this. An individual researcher might be able to advance their career by going to the press (particularly about a hot-in-the-news-right-now topic like Bitcoin) and by making sensational claims ("Bitcoin is 'Broken'!") even if the overall scientific enterprise suffers. After all, had you ever heard of Ittay Eyal or Emin Sirer before this? Given these skewed incentives, at least a few people will "cheat" the system by going to the press, and those people will profit by it. Rather like Eyal and Sirer's claim for Bitcoin miners. - - - - - - - - - - To discuss the merits of the paper itself (rather than Gavin's response), if a mining pool were to utilize the strategy described in the paper it would result in that pool repeatedly releasing new chains that are longer than the existing blockchain but which fork one OR MORE of the previously released chains. While this is allowed under the Bitcoin protocol (this is the way that forks in the chain get "healed"), it is also rather obviously visible. So if certain miners were following this protocol then it would quickly become obvious that they were doing so. The community would then be able to take actions to redress the problem.
- celticninja 13y ago
  I thunk it misses a fundamental point which is that this would be detrimental to the network. the assumption is that miners would join the dishonest/unethical miner to increase their block rewards, however it would be at the cst of bitcoins overall value and succcess. So you may get 25% more coins but you have coins that are worth less.
  - deepblueocean 13y ago
    I think it's interesting to calculate how much less the BTC/USD exchange rate would have to be as a function of how much power the ES-adversary has. It's substantial! One could even imagine creating "poison pill" derivative instruments where someone agrees to sell a lot of BTC if some predicate over the blockchain becomes true (such as a predicate that's only true if ES-mining is happening).
tptacek 13y ago
This is pure innuendo. The Bitcoin paper at least presented a thorough argument. Andresen, who did not seem (in his Bitcoin Reddit post) to have grasped that argument, is obviously unhappy that "Bitcoin" didn't get a preprint or approve its presentation to the press. But the authors of the paper signed their name to it; the lead author is a lecturer at a serious university. Instead of rebutting any technical point the paper makes, Andresen casts aspersions, alludes to a "peer review" process that would not have prevented the paper's publication, and then suggests the paper is flawed technically. Well, how? Here, instead, is a vastly superior critical response by Ed Felten: https://freedom-to-tinker.com/blog/felten/bitcoin-isnt-so-broken-after-all/ https://freedom-to-tinker.com/blog/felten/bitcoin-isnt-so-br...
- deepblueocean 13y ago
  Hi, Author of the referenced blog post [2] here (and one of Felten's grad students). Let me lay out the argument from our post in a more technical way: the biggest problem with the Eyal/Sirer paper is that they don't think about the problem as an equilibrium problem, but rather argue about what's best from the perspective of a particular player. This leads them to propose a strategy which is not even optimal for any player (we prefer to think of Bitcoin as a kind of consensus game, in the game theoretic sense. See our earlier paper on the topic [1]). They argue that Bitcoin is not incentive-compatible by virtue of the strategy they demonstrate. I think this question needs to be the crux of any Bitcoin research paper. I'll define "incentive compatible" to mean one of two things (1) (weakly incentive compatible) If people follow their incentives, rather than the rules of Bitcoin as written down and understood by the community, then there exists an equilibrium in which all players follow the rules. (2) (strongly incentive compatible) The above equilibrium is the only equilibrium in Bitcoin. The question of whether the current Bitcoin ruleset is incentive compatible strikes me as the most important Bitcoin research question: it answers whether Bitcoin, as a system, will continue to be stable over the long term. A secondary question is to ask "what rule sets could exist which would be incentive compatible?" Obviously, if the answer to the first question is "no" then the second question is more important. [1] https://news.ycombinator.com/item?id=5874786 https://news.ycombinator.com/item?id=5874786 [2] https://news.ycombinator.com/item?id=6689254 https://news.ycombinator.com/item?id=6689254

Is Bitcoin Broken?

61 points by imd23 13y ago

afshin 13y ago

So basically: "I do not have a comment at this time." That's fine and all. But not very newsworthy.

gnerd 13y ago
Except he did make a comment, although not a concrete one: > However, it is good to note that in my initial review, I believe the paper’s assertion of a fundamental flaw is based on some over-simplified assumptions about how the bitcoin mining market works.
- hvidgaard 13y ago
  Not playing by the rules as stated in the paper, can result in greater than expected return. It can also return less than expected, and on average you gain the most by being a well behaved mining node.
- afshin 13y ago
  Yeah, fair enough. I just went into the post expecting less boilerplate.

deleted 13y ago

[deleted]

cs702 13y ago

"...it is unfortunate (but entirely predictable) that the release of a not-yet-peer-reviewed paper generated so many sensationalistic headlines. Peer review works best when everybody involved is given time for conversation and debate without being contacted by reporters on deadline." Translation: next time, please send us the paper in advance and get it peer reviewed before you start talking to reporters. "I’m not going to write about the specific claims in the paper... However, it is good to note that in my initial review, I believe the paper’s assertion of a fundamental flaw is based on some over-simplified assumptions about how the bitcoin mining market works." Translation: the paper's claims are probably wrong.

sillysaurus2 13y ago
Why do they pander so much? It's hard to imagine pg ever writing something that tiptoes around like that, yet pg has been in dozens of situations requiring a public response to a perceived problem. He's never pandered, yet he's never suffered for it either. So is pg just a better writer than Gavin, or is this an academic tradition, or...? Just curious.
- celticninja 13y ago
  no need to be combatative, he actually wants to encourage researchers to undertake this sort of work, it may lead to improvments in the protocol and could save the developers some time too. If he tore into them then other researchers may feel less inclined to look at the network/protocol and undertake their own research.
- CompelTechnic 13y ago
  I would say that it is probably because a large portion of the mainstream media/ general population thinks bitcoin is for complete loonies. If Gavin's tone were confrontational, it would likely make people think he's getting defensive over his obviously ridiculous magic internet money. He has to err on the side of caution to avoid people making that assumption.
- jnbiche 13y ago
  They're trying hard not to discourage academic research into Bitcoin, or to scare off security researchers. They desperately want more security researchers. I actually think Gavin is handling this very well, and the response seems well-measured. That said, the way this whole paper has been released smacks of sensationalism. I'll take the Eyal at his word that he's concerned with Bitcoin's future, but failing to adhere to the standards of responsible disclosure and entitling a blog post "Bitcoin is Broken" really make me wonder about what they're trying to do, other than self-promote. Besides, this basic attack is something that has been discussed since 2010. There may be a few subtle differences in the paper, but based on my reading of the blog post, this is an attack that mining pools have even accused each other of doing a year or two ago. It's a potential problem, but definitely not a "Bitcoin is fundamentally broken" problem as the blog post claims.

3pt14159 13y ago

The way bitcoin is broken is that there are people with VAST wallets that could be state actors. If the CIA truly did invent bitcoin then they have immense power on it and it's stability. The hard part about this risk is that there is no way to mitigate it.

nwh 13y ago
There's absolutely nothing to suggest that any state actor created Bitcoin.
- 3pt14159 13y ago
  Actually there is quite a bit to suggest that a state actor created bitcoin. Satoshi is probably three people and the CIA and NSA don't really screw around when it comes to this type of thing. Even if they didn't create it, they had the man/computer power to control large chunks of bitcoin.
  - gwern 13y ago
    > Actually there is quite a bit to suggest that a state actor created bitcoin. Not really. Most of the arguments are based on false premises, like the claim that the codebase is of high quality or has never had serious breaks. I've looked pretty deeply into Satoshi, and nothing makes me think it's not exactly what it looks like: one guy.
    - nwh 13y ago
      Every claim like this that says the code base is high quality has me rolling with laughter. The core developers at still trying to fix some of the crazy oversights that Satoshi left in the core code.
      - GeneralMayhem 13y ago
        And even if it were, in what world does high-quality code imply state actor?

mcherm 13y ago

Gavin Andresen writes: > Peer review works best when everybody involved is given time for conversation and debate without being contacted by reporters on deadline. In other words, the entire institution of science (computer science in this case) is better off if the individual researchers are careful about presenting things to the press and make sure to review things carefully before publishing. But the incentive for individual researchers may not be aligned with this. An individual researcher might be able to advance their career by going to the press (particularly about a hot-in-the-news-right-now topic like Bitcoin) and by making sensational claims ("Bitcoin is 'Broken'!") even if the overall scientific enterprise suffers. After all, had you ever heard of Ittay Eyal or Emin Sirer before this? Given these skewed incentives, at least a few people will "cheat" the system by going to the press, and those people will profit by it. Rather like Eyal and Sirer's claim for Bitcoin miners. - - - - - - - - - - To discuss the merits of the paper itself (rather than Gavin's response), if a mining pool were to utilize the strategy described in the paper it would result in that pool repeatedly releasing new chains that are longer than the existing blockchain but which fork one OR MORE of the previously released chains. While this is allowed under the Bitcoin protocol (this is the way that forks in the chain get "healed"), it is also rather obviously visible. So if certain miners were following this protocol then it would quickly become obvious that they were doing so. The community would then be able to take actions to redress the problem.

celticninja 13y ago
I thunk it misses a fundamental point which is that this would be detrimental to the network. the assumption is that miners would join the dishonest/unethical miner to increase their block rewards, however it would be at the cst of bitcoins overall value and succcess. So you may get 25% more coins but you have coins that are worth less.
- deepblueocean 13y ago
  I think it's interesting to calculate how much less the BTC/USD exchange rate would have to be as a function of how much power the ES-adversary has. It's substantial! One could even imagine creating "poison pill" derivative instruments where someone agrees to sell a lot of BTC if some predicate over the blockchain becomes true (such as a predicate that's only true if ES-mining is happening).

tptacek 13y ago

This is pure innuendo. The Bitcoin paper at least presented a thorough argument. Andresen, who did not seem (in his Bitcoin Reddit post) to have grasped that argument, is obviously unhappy that "Bitcoin" didn't get a preprint or approve its presentation to the press. But the authors of the paper signed their name to it; the lead author is a lecturer at a serious university. Instead of rebutting any technical point the paper makes, Andresen casts aspersions, alludes to a "peer review" process that would not have prevented the paper's publication, and then suggests the paper is flawed technically. Well, how? Here, instead, is a vastly superior critical response by Ed Felten: https://freedom-to-tinker.com/blog/felten/bitcoin-isnt-so-broken-after-all/ https://freedom-to-tinker.com/blog/felten/bitcoin-isnt-so-br...

deepblueocean 13y ago
Hi, Author of the referenced blog post [2] here (and one of Felten's grad students). Let me lay out the argument from our post in a more technical way: the biggest problem with the Eyal/Sirer paper is that they don't think about the problem as an equilibrium problem, but rather argue about what's best from the perspective of a particular player. This leads them to propose a strategy which is not even optimal for any player (we prefer to think of Bitcoin as a kind of consensus game, in the game theoretic sense. See our earlier paper on the topic [1]). They argue that Bitcoin is not incentive-compatible by virtue of the strategy they demonstrate. I think this question needs to be the crux of any Bitcoin research paper. I'll define "incentive compatible" to mean one of two things (1) (weakly incentive compatible) If people follow their incentives, rather than the rules of Bitcoin as written down and understood by the community, then there exists an equilibrium in which all players follow the rules. (2) (strongly incentive compatible) The above equilibrium is the only equilibrium in Bitcoin. The question of whether the current Bitcoin ruleset is incentive compatible strikes me as the most important Bitcoin research question: it answers whether Bitcoin, as a system, will continue to be stable over the long term. A secondary question is to ask "what rule sets could exist which would be incentive compatible?" Obviously, if the answer to the first question is "no" then the second question is more important. [1] https://news.ycombinator.com/item?id=5874786 https://news.ycombinator.com/item?id=5874786 [2] https://news.ycombinator.com/item?id=6689254 https://news.ycombinator.com/item?id=6689254