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This is as good a place as any to ask this question. Do we actually know how many large mining groups we need to make up 51% of the processing power of the blo

This is as good a place as any to ask this question. Do we actually know how many large mining groups we need to make up 51% of the processing power of the block chain (hopefully that make sense, from my understanding of bitcoin). There has been a number of changes to the bitcoin protocol, which have been made in a short amount of time and unanimously, from what I can see. That implies to me that bitcoin is in practice much more centralised than we are sometimes lead to believe, and that moving to bitcoin is just switching from one shadowy control group to another. I would be happy to hear evidence that I am vastly overestimating this problem.

nwh 13y ago
> Do we actually know how many large mining groups we need to make up 51% of the processing power of the block chain Two. GHash.io and BTCguild make up 27% each, for a total of 54%. https://blockchain.info/pools https://blockchain.info/pools GHash.io had actually been acting maliciously according to some users on Bitcointalk, but the operator claims that was a rogue actor inside that has been dealt with. Double spends against betting sites in particular were involved with this one.
- salient 13y ago
  We need digital currencies that can only ever be mined efficiently with a CPU, and there need to be many more blocks with lower rewards so that people don't need to join pools if they don't want to. They need to be able to earn "something" (not zero) even with a low-end CPU or when the difficulty gets too great, and close to the point of reaching the maximum number of coins. I think there weren't even 10 percent Bitcoins on the market, and CPU's already became obsolete. Yes, I know about the scrypt-based ones, but unfortunately they can still be mined 10x faster with a GPU, and I don't think that's much more preferable either. It needs to be CPU-only, because most people get as fast CPU's as they can, usually, but they don't really care about the GPU performance, other than needing it to support HD playback, which is a very low standard for a GPU these days. I'm not sure how it can be done, but some of the ones that claim to be CPU-only are using multiple hashing algorithms and ciphers at once, presumably to ensure that the task is too complex for anything less "general purpose" than a CPU (at least until they start making chips with accelerators for each and every one of those hashing algorithms?! Maybe something to prevent that could be built-in). The point is to make mining as decentralized as possible. I realize the danger of botnets, too, but I think the trade-off is worth it. I'd rather have that, than a few groups of people or governments owning a ton of ASIC's, or perhaps a few very expensive quantum computers in the future, that they can use to manipulate the currencies. At least if it's CPU only, everyone can have a say in it, in aggregate, which is really the whole point of decentralization, and empowering the individual in the Internet world.
  - nwh 13y ago
    A cryptocurrency based on CPUs is just fodder for Botnet herders, like Bitcoin was for quite a period. Amusingly, that was Litecoins original call to action, "GPUs are too centralised, we can only be CPU mined!", except that they implemented scrypt very badly. > I'd rather have that, than a few groups of people or governments owning a ton of ASIC's, or perhaps a few very expensive quantum computers in the future, that they can use to manipulate the currencies. Any government worth it's salt has server farms with more CPUs and a bigger budget than you can imagine. It's not really a defence at all. Back when it was profitable, the operators at CERN used to mine to keep the cost of their servers down to a minimum, filling the spare cycles between computations. I imagine their systems are nothing compared with that of someone like the NSA. > I'm not sure how it can be done, but some of the ones that claim to be CPU-only are using multiple hashing algorithms and ciphers at one, presumably to ensure that the task is too complex for anything less "general purpose" than a CPU (at least until they start making chips with accelerators for each and every one of those hashing algorithms?!). Won't stop them being GPU or FPGA accelerated. I doubt anybody will ever care enough to do a custom silicon chip for any of the "altcoins".
    - salient 13y ago
      Yes, I realize everyone with huge datacenters are a huge threat, too, but I still don't think it's as big of a threat as the alternative. Can the NSA own more than half of the world's CPU performance? I don't think so. Could they own 10-100 quantum computers that can mine at say 1 PH/s each? Definitely. It would be much more cost-effective for them, while prohibitively expensive for everyone else (a D-WAVE goes for $10 million a pop right now) Granted, that's not actually viable yet, but if the world is going to move to a digital currency like Bitcoin, that implies it will be here for decades or centuries, and I think such a threat needs to be considered before it replaces most of the world's financial systems. Even with ASIC's they could easily buy 1-10 million of them. It would only be a fraction of their annual budget, which will no doubt increase in the future, if nothing is done to rein in on their power. Normal people aren't going to buy ASIC's just to keep NSA in check. Also, botnets would be there with or without Bitcoins. If they mine, at least they aren't doing something even more dangerous with the botnets, and keep them busy mining. Plus, it should be relatively easy to figure out you have a virus in your computer if your CPU is 100 percent 24/7 and the fans are spinning like crazy.
Alex3917 13y ago
Right now the largest pool is 29%. And you actually only need 33% to trigger the 51% problem if the controlling pool withholds blocks for a couple seconds after solving them to give themselves a headstart on the next block. So in theory the currency is only days or weeks away from collapsing. I do think bitcoin solves a legitimate problem. But I don't think bitcoin itself will become the winner. Litecoin is vastly better than bitcoin because it solves the 51% problem and several other issues, but odds are litecoin will eventually be replaced by something better also.
- berberous 13y ago
  Curious, how does Litecoin solve the 51% problem? Is this related to its 2.5 minute confirmation time, vs. Bitcoin's 10 minutes?
  - nwh 13y ago
    Litecoin does not solve any problem, just the proof of work algorithm is changed. The block time has nothing to do with it really, it just makes people believe one confirmation is as strong as any other (Litecoin's are actually just 4 times weaker).
    - Dylan16807 13y ago
      4 times weaker? When you're talking about statistical attacks that depends on getting a very small number of random events ahead of your opponent, I would expect quadrupling the numbers to provide significant additional security in the medium term of 10 to 100 minutes. Clearly a litecoin confirmation is weaker than a bitcoin confirmation, but 4 or 12 litecoin confirmations should be much stronger than 1 or 3 bitcoin confirmations.
      - nwh 13y ago
        Confirmations are just a measure of computing power essentially. By saying a transaction needs 3 confirmations you are saying that you require 30 minutes of network hashing time before you call a transaction secure. For the same 30 minutes you'd need 12 Litecoin confirmations. The chance of me solving 4 litecoim blocks is the same as me solving 1 bit coin block, assuming the same hash power and difficulty. In reality Litecoin is quite low in both, so is substantially easier to abuse in the real world.

nwh 13y ago

> Do we actually know how many large mining groups we need to make up 51% of the processing power of the block chain Two. GHash.io and BTCguild make up 27% each, for a total of 54%. https://blockchain.info/pools https://blockchain.info/pools GHash.io had actually been acting maliciously according to some users on Bitcointalk, but the operator claims that was a rogue actor inside that has been dealt with. Double spends against betting sites in particular were involved with this one.

salient 13y ago
We need digital currencies that can only ever be mined efficiently with a CPU, and there need to be many more blocks with lower rewards so that people don't need to join pools if they don't want to. They need to be able to earn "something" (not zero) even with a low-end CPU or when the difficulty gets too great, and close to the point of reaching the maximum number of coins. I think there weren't even 10 percent Bitcoins on the market, and CPU's already became obsolete. Yes, I know about the scrypt-based ones, but unfortunately they can still be mined 10x faster with a GPU, and I don't think that's much more preferable either. It needs to be CPU-only, because most people get as fast CPU's as they can, usually, but they don't really care about the GPU performance, other than needing it to support HD playback, which is a very low standard for a GPU these days. I'm not sure how it can be done, but some of the ones that claim to be CPU-only are using multiple hashing algorithms and ciphers at once, presumably to ensure that the task is too complex for anything less "general purpose" than a CPU (at least until they start making chips with accelerators for each and every one of those hashing algorithms?! Maybe something to prevent that could be built-in). The point is to make mining as decentralized as possible. I realize the danger of botnets, too, but I think the trade-off is worth it. I'd rather have that, than a few groups of people or governments owning a ton of ASIC's, or perhaps a few very expensive quantum computers in the future, that they can use to manipulate the currencies. At least if it's CPU only, everyone can have a say in it, in aggregate, which is really the whole point of decentralization, and empowering the individual in the Internet world.
- nwh 13y ago
  A cryptocurrency based on CPUs is just fodder for Botnet herders, like Bitcoin was for quite a period. Amusingly, that was Litecoins original call to action, "GPUs are too centralised, we can only be CPU mined!", except that they implemented scrypt very badly. > I'd rather have that, than a few groups of people or governments owning a ton of ASIC's, or perhaps a few very expensive quantum computers in the future, that they can use to manipulate the currencies. Any government worth it's salt has server farms with more CPUs and a bigger budget than you can imagine. It's not really a defence at all. Back when it was profitable, the operators at CERN used to mine to keep the cost of their servers down to a minimum, filling the spare cycles between computations. I imagine their systems are nothing compared with that of someone like the NSA. > I'm not sure how it can be done, but some of the ones that claim to be CPU-only are using multiple hashing algorithms and ciphers at one, presumably to ensure that the task is too complex for anything less "general purpose" than a CPU (at least until they start making chips with accelerators for each and every one of those hashing algorithms?!). Won't stop them being GPU or FPGA accelerated. I doubt anybody will ever care enough to do a custom silicon chip for any of the "altcoins".
  - salient 13y ago
    Yes, I realize everyone with huge datacenters are a huge threat, too, but I still don't think it's as big of a threat as the alternative. Can the NSA own more than half of the world's CPU performance? I don't think so. Could they own 10-100 quantum computers that can mine at say 1 PH/s each? Definitely. It would be much more cost-effective for them, while prohibitively expensive for everyone else (a D-WAVE goes for $10 million a pop right now) Granted, that's not actually viable yet, but if the world is going to move to a digital currency like Bitcoin, that implies it will be here for decades or centuries, and I think such a threat needs to be considered before it replaces most of the world's financial systems. Even with ASIC's they could easily buy 1-10 million of them. It would only be a fraction of their annual budget, which will no doubt increase in the future, if nothing is done to rein in on their power. Normal people aren't going to buy ASIC's just to keep NSA in check. Also, botnets would be there with or without Bitcoins. If they mine, at least they aren't doing something even more dangerous with the botnets, and keep them busy mining. Plus, it should be relatively easy to figure out you have a virus in your computer if your CPU is 100 percent 24/7 and the fans are spinning like crazy.

Alex3917 13y ago

Right now the largest pool is 29%. And you actually only need 33% to trigger the 51% problem if the controlling pool withholds blocks for a couple seconds after solving them to give themselves a headstart on the next block. So in theory the currency is only days or weeks away from collapsing. I do think bitcoin solves a legitimate problem. But I don't think bitcoin itself will become the winner. Litecoin is vastly better than bitcoin because it solves the 51% problem and several other issues, but odds are litecoin will eventually be replaced by something better also.

berberous 13y ago
Curious, how does Litecoin solve the 51% problem? Is this related to its 2.5 minute confirmation time, vs. Bitcoin's 10 minutes?
- nwh 13y ago
  Litecoin does not solve any problem, just the proof of work algorithm is changed. The block time has nothing to do with it really, it just makes people believe one confirmation is as strong as any other (Litecoin's are actually just 4 times weaker).
  - Dylan16807 13y ago
    4 times weaker? When you're talking about statistical attacks that depends on getting a very small number of random events ahead of your opponent, I would expect quadrupling the numbers to provide significant additional security in the medium term of 10 to 100 minutes. Clearly a litecoin confirmation is weaker than a bitcoin confirmation, but 4 or 12 litecoin confirmations should be much stronger than 1 or 3 bitcoin confirmations.
    - nwh 13y ago
      Confirmations are just a measure of computing power essentially. By saying a transaction needs 3 confirmations you are saying that you require 30 minutes of network hashing time before you call a transaction secure. For the same 30 minutes you'd need 12 Litecoin confirmations. The chance of me solving 4 litecoim blocks is the same as me solving 1 bit coin block, assuming the same hash power and difficulty. In reality Litecoin is quite low in both, so is substantially easier to abuse in the real world.