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Can someone tell me where my decentralized/blockchain theory breaks?

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Re: Can someone tell me where my decentralized/blockchain theory breaks?

#41

Post by posterboy »

valleyer wrote: post #37
TallGuyShort wrote: post #33

>> Isn't cooperation key to a decentralized system? Slightly off-topic, but cooperation is key to traditional currencies, too. If a majority of the United States determines that I suck and tries to stick it to me and anybody who does business with me, all of my US Dollars would have substantially less purchasing power.

I'll be off-topic with you. Your scenario seems a little different, because I could still shop with dollars at the 49% of stores that still like me. Whereas if bitcoin replaced dollars, even those 49% of stores that liked me couldn't take my money, because the 51% can veto the transaction.

Imagine its an industry at the top of the food chain and middle man are forbidden, so you can go shop at the neutral 49% of stores, but they may not provision you with something essential and monopolised. Although in those cases the law is layed out to mandate certain types of business take contracts.

Re: Can someone tell me where my decentralized/blockchain theory breaks?

#43

Post by samsonradu »

majormajor wrote: post #25
cantrip wrote: post #18

Earlier quoted context omitted.

The term "hacker" depends on your viewpoint. Put another way, a user executed a function on a decentralized smart contract platform that transferred $150 million to the possession of the function's caller. If the value of smart contracts is that they will execute as written with no possibility of third party interference then Ethereum is not a smart contract platform. It is a very inefficiently designed public ledger…

> If the value of smart contracts is that they will execute as written with no possibility of third party interference then Ethereum is not a smart contract platform. Why would there be such value in a dumb contract platform like that? Historically, what societies have chosen to adopt such a set of values?

I see real value in smart contracts despite the mentioned flaws above. The smart contracts can automate A lot of transactions that use intermediaries, see notaries, lawyers, judges that do a ton of bulk work to validate paperwork authenticity, all sorts of agents and middle-men that charge fees etcetera.

Ok, people say it’s not secure, contracts can be hacked, but why not back these smart contracts by law? And when issues/breaches happen have a judge decide. These tools should be complementary and should not eliminate each other. We can and probably will have smart contracts alongside the day-to-day bureaucracy to help us with the simple stuff at first. Like when I need to pay a couple thousand to a notary for changing ownership of an estate only because of trust issues. If that is not ripe for disruption then I don’t know what is.

It’s like trying to jump from manual driving to fully automated driving and complaining it’s not safe and it won’t work.

Re: Can someone tell me where my decentralized/blockchain theory breaks?

#44

Post by kbenson »

dsr_ wrote: post #40
kbenson wrote: post #36

Earlier quoted context omitted.

That was one of the events, I think. There was another one. Perhaps that's the one being described here. I seem to recall that one had a bunch of whitehats who figured out the bug and rushed to exploit everyone just to prevent the bad actors, and so they could return the funds later.

This all happened less than a year ago and there was a lot of discussion of it, here and elsewhere. We have google and duck-duck-go, not to mention a search bar on most HN pages. Perhaps we could point to facts rather than vague remembrances?

Feel free to look it up and confirm or deny my recollection. That's more work than I was willing to put into it at the time I wrote that.

I don't think there's any problem relating vague recollections as long as they are presented as such and attempt to expand the conversation.

Re: Can someone tell me where my decentralized/blockchain theory breaks?

#45

Post by andrewla »

mrep wrote: post #16

With greater than 50% of capacity, you can do a lot of bad things. For ASIC blockchains like bitcoin, a few companies in china dominate the network so they could easily collude and do just this. For non-ASIC blockchains, you can do it through the cloud. Here is some math i did on it the other day: digiconomist [0] estimates that current etherum mining cost is 1.3 billion a year, or 3.6 million a day, or 151,000 an ho…

The reality is that even for Bitcoin, the attack, as described, is infeasible. It is possible for miners to collude to censor transactions, but not to create fake transactions, or to somehow steal money from a person and deliver it to others. An attack on that scale would require rewriting the block validity criteria, and no existing nodes or other miners would accept the new criteria, which would result in the chain forking, and the main chain simply losing a lot of hash power, which would be working on the fork that contained the change the validity criteria.

Re: Can someone tell me where my decentralized/blockchain theory breaks?

#46

Post by andrewla »

The particular attack you describe is infeasible in Bitcoin for sure, and almost certainly for any other cryptocurrency. The problem is that the miners certify that a given chain is valid, but nodes and other miners will apply block validity criteria on top of that. Block validity includes things like "transactions are properly signed" and "miner rewards are correctly calculated".

This effectively means that creating a "fake" transaction that would empty someone's account and credit it to the thieves would require a valid signature from the original account. Otherwise nobody would accept the new block. Changing the block validity criteria is possible, but requires cooperation on a much more grand scale, especially for Bitcoin where there are many implementations of the protocol that would have to change to match the new block validity criteria (which, suspiciously, will contain a new criteria saying "oh, and the signature check criteria don't apply to transactions from this address").

Without some form of consensus, this would amount to "theftcoin" simply being a hard fork of Bitcoin, with the main chain continuing, potentially with less hash power.

Re: Can someone tell me where my decentralized/blockchain theory breaks?

#47

Post by tfha »

smokeyj wrote: post #21
tfha wrote: post #12

> the cost to get enough shared ledgers to agree that user x has 0$ (previously had $5M) is less than or equal to the amount of money that could be divided amongst the thieves That's the trick. In some cases, you'd be correct and the thieves can get away with theft. In most cases though you are incorrect, the cost of getting that many ledgers to agree with the thieves is prohibitively high. This theory underscores th…

> Large block supporters tend to think you only need a few full nodes to get immunity from these types of attacks How exactly do you see an attack on full nodes going down? I imagine the attack would occur on the mining side.. Also, if the mempool becomes more expensive to host than blocks on disk - would you still think small blocks are safer?

Hack the full nodes to modify their database. Or cut a business deal with the biggest full nodes (Coinbase, Bitmain, Shapeshift, But go, etc.) and decide to implement a rule much of the network opposes, like raising the block size (which consequentially makes a repeat attack easier in the future because fewer users will have the resources to run full nodes themselves)

Re: Can someone tell me where my decentralized/blockchain theory breaks?

#48

Post by samsonradu »

kbenson wrote: post #31
majormajor wrote: post #25

Earlier quoted context omitted.

> If the value of smart contracts is that they will execute as written with no possibility of third party interference then Ethereum is not a smart contract platform. Why would there be such value in a dumb contract platform like that? Historically, what societies have chosen to adopt such a set of values?

I think the perceived value comes from the assumption that contracts can be written perfectly. Apparently, some people believe that the problems encountered so far are just a matter of weeding out the problems and eventually contracts will be much less likely to have loopholes like this. I don't really agree with that worldview, but not strongly enough to bet that it won't reach some fairly safe equilibrium at some p…

This is a rather perfectionist point of view, implying that our current day-to-day contracts are perfect and don’t have loopholes. Why do smart contracts have to be written perfectly to be usable by people.

In the end, what’s perfect in the world around us? Big banks fail and lose people’s savings, cars break and cause deaths and it has’t stopped people from adopting these on a large scale and keep on improving them.

Re: Can someone tell me where my decentralized/blockchain theory breaks?

#49

Post by DennisP »

apetresc wrote: post #35
EthanHeilman wrote: post #23

Earlier quoted context omitted.

>The term "hacker" depends on your viewpoint. Put another way, a user executed a function on a decentralized smart contract platform that transferred $150 million to the possession of the function's caller. I think if you view the action as criminal or if you view it as just a clever use of the smart contract, the person who did this is a hacker. They understood and controlled the software in a way the designers did…

My memory of the event may be confused with another one, but I believe the guy who did this did it accidentally. He was as confused by the result as everyone else - in fact, he froze the account on his own, so that he wouldn't have access to it.

That's the recent Parity multisig wallet freeze. So far it doesn't look like there will be a fork for that.

The event I described happened in the summer of 2016, and was a fairly sophisticated attack.

Re: Can someone tell me where my decentralized/blockchain theory breaks?

#50

Post by kbenson »

samsonradu wrote: post #48
kbenson wrote: post #31

Earlier quoted context omitted.

I think the perceived value comes from the assumption that contracts can be written perfectly. Apparently, some people believe that the problems encountered so far are just a matter of weeding out the problems and eventually contracts will be much less likely to have loopholes like this. I don't really agree with that worldview, but not strongly enough to bet that it won't reach some fairly safe equilibrium at some p…

This is a rather perfectionist point of view, implying that our current day-to-day contracts are perfect and don’t have loopholes. Why do smart contracts have to be written perfectly to be usable by people. In the end, what’s perfect in the world around us? Big banks fail and lose people’s savings, cars break and cause deaths and it has’t stopped people from adopting these on a large scale and keep on improving them.

Wanting all contracts and actions performed by them to be immutable is an odd point of view in my eyes, but I'm not sure I would call it perfectionist because the perfection depends on whether you think a perfect system fulfills the contracts to the letter or the spirit.

In the physical world, we arbitrate contracts with authorities vested with the power to make decisions over them, such as courts, governments, mediators, etc that both parties have agreed has the final say, because the alternative is unworkable.

In a consensus system such as a blockchain, that consensus is based on a majority of the participants. Wanting them to have no say on the outcome of actions is like wanting the courts to have no jurisdiction over your contracts.

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