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At least the claims about Bitcoin sound like bullshit "Security difficult to quantify — depends on extrinsic factors" Nope, the security is very easy to quant

At least the claims about Bitcoin sound like bullshit "Security difficult to quantify — depends on extrinsic factors" Nope, the security is very easy to quantify in Bitcoin - you know that there is certain amount of processing power behind a single block. As your transaction goes into the blockchain, you can be pretty damn sure that won't be reversed, once enough computing power is behind it. "Blockchain forks often — difficult to build applications upon" Nope, bitcoin blockchain forks very rarely. Where is this claim pulled from?

wmf 12y ago
in Bitcoin you know that there is certain amount of processing power behind a single block But how much did that processing cost in BTC? People come up with widely varying estimates. Cost of security matters because ultimately you want to denominate risk in the same currency that you're transacting. Blockchain forks often There are minor forks (usually called orphans) every few days: https://blockchain.info/charts/n-orphaned-blocks?timespan=30days https://blockchain.info/charts/n-orphaned-blocks?timespan=30... Orphaning requires Bitcoin software to include complex chain reorganization code; a blockchain where orphans are very rare could omit such code.
jaekwon 12y ago
I have to admit that the "difficult to build applications upon" is not the best selling point to put up there. But I stand by the security being difficult to quantify in Bitcoin because the mining reward (plus fees) is necessarily small in comparison to the transactions that are being moved (e.g. 25 bitcoins today vs potentially millions of bitcoins moved per block). The problem is that with a bit of coordination from the miners, forking is easy and easily profitable.
vbuterin 12y ago
> As your transaction goes into the blockchain, you can be pretty damn sure that won't be reversed, once enough computing power is behind it. So, this by itself is not an argument. That amount of computing power was produced once, so you can be pretty damn sure that if the incentives line up it will be produced again just on a different history. I have a few slides detailing the rather scary game theory behind PoW here: http://vitalik.ca/files/stanford_presentation.pdf http://vitalik.ca/files/stanford_presentation.pdf Particularly note the "Low incentive to protect against hacks". If the major Bitcoin mining farms get hacked, raided by men wearing ski masks and black suits, etc in order to double spend, large 51% attacks become possible, and a coordinated global attack could earn >$10-50m via double spends, and even more with shorting at 10x leverage. But from the point of view of each individual mining farm, they only lose at most 10-50 blocks' worth of rewards multiplied by their hashpower - a total private incentive of ~$100,000. In fact, if everyone else gets attacked, it's in your interest to ensure that you get attacked too! Also, the "bribe attack" variants all theoretically cost under $100,000. In fact, the largest countervailing incentive factor against all of those is the idea that each mining farm has a decently sized percentage of mining power and thus captures a substantial portion of the "public-good" incentive of the network not failing. Now, you can argue that Bitcoin has not succumbed to these and works fine in practice, but (i) right now, Bitcoin is still tiny, and (ii) if that's true, then naive proof of stake, with its supposedly fatal nothing-at-stake problems, will also work fine in practice. > Nope, bitcoin blockchain forks very rarely. Where is this claim pulled from? It forks back one block ~1-2% of the time and two blocks ~0.01-0.04% of the time. You can determine this from simple math plus network latency statistics, or check blockchain.info: https://blockchain.info/charts/n-orphaned-blocks?showDataPoints=false&timespan=&show_header=true&daysAverageString=7&scale=0&address= https://blockchain.info/charts/n-orphaned-blocks?showDataPoi... This might not seem like much, but if you are looking at the blockchain as an application platform then users are really not used to the idea of finality suddenly becoming non-final 1% of the time.

wmf 12y ago

in Bitcoin you know that there is certain amount of processing power behind a single block But how much did that processing cost in BTC? People come up with widely varying estimates. Cost of security matters because ultimately you want to denominate risk in the same currency that you're transacting. Blockchain forks often There are minor forks (usually called orphans) every few days: https://blockchain.info/charts/n-orphaned-blocks?timespan=30days https://blockchain.info/charts/n-orphaned-blocks?timespan=30... Orphaning requires Bitcoin software to include complex chain reorganization code; a blockchain where orphans are very rare could omit such code.

jaekwon 12y ago

I have to admit that the "difficult to build applications upon" is not the best selling point to put up there. But I stand by the security being difficult to quantify in Bitcoin because the mining reward (plus fees) is necessarily small in comparison to the transactions that are being moved (e.g. 25 bitcoins today vs potentially millions of bitcoins moved per block). The problem is that with a bit of coordination from the miners, forking is easy and easily profitable.

vbuterin 12y ago

> As your transaction goes into the blockchain, you can be pretty damn sure that won't be reversed, once enough computing power is behind it. So, this by itself is not an argument. That amount of computing power was produced once, so you can be pretty damn sure that if the incentives line up it will be produced again just on a different history. I have a few slides detailing the rather scary game theory behind PoW here: http://vitalik.ca/files/stanford_presentation.pdf http://vitalik.ca/files/stanford_presentation.pdf Particularly note the "Low incentive to protect against hacks". If the major Bitcoin mining farms get hacked, raided by men wearing ski masks and black suits, etc in order to double spend, large 51% attacks become possible, and a coordinated global attack could earn >$10-50m via double spends, and even more with shorting at 10x leverage. But from the point of view of each individual mining farm, they only lose at most 10-50 blocks' worth of rewards multiplied by their hashpower - a total private incentive of ~$100,000. In fact, if everyone else gets attacked, it's in your interest to ensure that you get attacked too! Also, the "bribe attack" variants all theoretically cost under $100,000. In fact, the largest countervailing incentive factor against all of those is the idea that each mining farm has a decently sized percentage of mining power and thus captures a substantial portion of the "public-good" incentive of the network not failing. Now, you can argue that Bitcoin has not succumbed to these and works fine in practice, but (i) right now, Bitcoin is still tiny, and (ii) if that's true, then naive proof of stake, with its supposedly fatal nothing-at-stake problems, will also work fine in practice. > Nope, bitcoin blockchain forks very rarely. Where is this claim pulled from? It forks back one block ~1-2% of the time and two blocks ~0.01-0.04% of the time. You can determine this from simple math plus network latency statistics, or check blockchain.info: https://blockchain.info/charts/n-orphaned-blocks?showDataPoints=false&timespan=&show_header=true&daysAverageString=7&scale=0&address= https://blockchain.info/charts/n-orphaned-blocks?showDataPoi... This might not seem like much, but if you are looking at the blockchain as an application platform then users are really not used to the idea of finality suddenly becoming non-final 1% of the time.