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Nasdaq is (apparently) using the Bitcoin Blockchain, so the same people who mine bitcoins will be adding Nasdaq's transactions to the Blockchain. Anyone with a

Nasdaq is (apparently) using the Bitcoin Blockchain, so the same people who mine bitcoins will be adding Nasdaq's transactions to the Blockchain. Anyone with a large amount of Bitcoin mining capacity is implicitly incentivised to not mount an attack on the integrity of the Blockchain because doing so would probably dent confidence in Bitcoin, causing the price to drop. That would reduce the "net present value" that the miner can expect to receive going forward, likely by more than the short-term "win" they could achieve through a successful attack. However, if the Blockchain is being used for other purposes (e.g. recording ownership of high-value assets) and the potential gain to someone with a large amount of mining power of attacking/rewriting the Blockchain is large enough that it significantly outweighs the "net present value" that can be realised from normal mining operations, then the incentive to not attack the Blockchain is somewhat diminished.

this_user 11y ago
> Anyone with a large amount of Bitcoin mining capacity is implicitly incentivised to not mount an attack on the integrity of the Blockchain because doing so would probably dent confidence in Bitcoin, causing the price to drop. That would reduce the "net present value" that the miner can expect to receive going forward, likely by more than the short-term "win" they could achieve through a successful attack. That's the argument Bitcoin advocates always use, but it oversimplifies the problem. The assumption is that no one would do this, because it is not in their long-term best interest. What it leaves out that mounting one attack of a series of attacks in quick succession may actually make it worth the costs in the short-term. This is especially true when we talk about large amounts of real assets. Furthermore, there may be malicious entities that are prepared to pay the costs just for the sake of wreaking havoc. The argument that 51% attacks cannot happen has, in fact, already been disproven since there is evidence that the GHash mining pool did perform such an attack [1]. All it takes for something like this to happen is one rogue employee in an organisation that controls enough hashing power. [1] https://bitcointalk.org/index.php?topic=327767.0 https://bitcointalk.org/index.php?topic=327767.0
kens 11y ago
Not to be paranoid, but there's always the possibility that some government agency has built >>50% of the mining capacity, just in case they want to take control. And if they're mining with it now (split among pools), this capacity would partially pay for itself. You'd never know they have control until it's too late.

this_user 11y ago

> Anyone with a large amount of Bitcoin mining capacity is implicitly incentivised to not mount an attack on the integrity of the Blockchain because doing so would probably dent confidence in Bitcoin, causing the price to drop. That would reduce the "net present value" that the miner can expect to receive going forward, likely by more than the short-term "win" they could achieve through a successful attack. That's the argument Bitcoin advocates always use, but it oversimplifies the problem. The assumption is that no one would do this, because it is not in their long-term best interest. What it leaves out that mounting one attack of a series of attacks in quick succession may actually make it worth the costs in the short-term. This is especially true when we talk about large amounts of real assets. Furthermore, there may be malicious entities that are prepared to pay the costs just for the sake of wreaking havoc. The argument that 51% attacks cannot happen has, in fact, already been disproven since there is evidence that the GHash mining pool did perform such an attack [1]. All it takes for something like this to happen is one rogue employee in an organisation that controls enough hashing power. [1] https://bitcointalk.org/index.php?topic=327767.0 https://bitcointalk.org/index.php?topic=327767.0

kens 11y ago

Not to be paranoid, but there's always the possibility that some government agency has built >>50% of the mining capacity, just in case they want to take control. And if they're mining with it now (split among pools), this capacity would partially pay for itself. You'd never know they have control until it's too late.