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All the discussed attacks (51%, selfish mining etc) are working under assumption of a relatively short time preference of a miner (how long he is willing to wai

All the discussed attacks (51%, selfish mining etc) are working under assumption of a relatively short time preference of a miner (how long he is willing to wait for ROI). In practice, though, there is no stable condition when you have miners of varying time preferences. Miners with longer time preference are willing to tolerate greater difficulty increases and invest more in mining and generally will go out of business later than miners with shorter outlook. This creates a feedback loop which quickly leaves in business only the most hardcore investors doing mining. This provides a foundation for "rational behaviour", that is decision-making for long-term value of Bitcoin. In other words, economics of mining leave among miners only the biggest believers in bitcoin driving out lesser believers. That's why in practice all miners are "honest" - all of them have dug the deepest hole possible, none is interested in short-term "profit" from double spending that would not return even a fraction of their investment.

davidgerard 11y ago
> In other words, economics of mining leave among miners only the biggest believers in bitcoin driving out lesser believers. That's why in practice all miners are "honest" - all of them have dug the deepest hole possible, none is interested in short-term "profit" from double spending that would not return even a fraction of their investment. GHash already conducted a 49% attack against a gambling site. https://bitcointalk.org/index.php?topic=327767.0 https://bitcointalk.org/index.php?topic=327767.0 They blamed a rogue employee - but then the claim is no longer "miners would never do that, it wouldn't be in their self-interest" but "no single person at any mining concern would do that, it wouldn't be in the mining concern's self-interest even if it it was in their own". Which of course isn't true. (It isn't true in the wider financial system either, which is why regulations exist.)

davidgerard 11y ago

> In other words, economics of mining leave among miners only the biggest believers in bitcoin driving out lesser believers. That's why in practice all miners are "honest" - all of them have dug the deepest hole possible, none is interested in short-term "profit" from double spending that would not return even a fraction of their investment. GHash already conducted a 49% attack against a gambling site. https://bitcointalk.org/index.php?topic=327767.0 https://bitcointalk.org/index.php?topic=327767.0 They blamed a rogue employee - but then the claim is no longer "miners would never do that, it wouldn't be in their self-interest" but "no single person at any mining concern would do that, it wouldn't be in the mining concern's self-interest even if it it was in their own". Which of course isn't true. (It isn't true in the wider financial system either, which is why regulations exist.)