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Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

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Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#51

Post by rwcarlsen »

SurrealSoul wrote: post #2

Knee jerk reaction: Good. However since it is a 'Bitcoin cash' type coin this will ultimately hurt bitcoin and the community as a whole. I can already see the buzz "Bitcoin double spending attack!" articles

Bitcoin gold uses a different hashing algorithm than bitcoin and bitcoin cash. Because of this, this fork was not able to take advantage of the enormous resources invested in the original bitcoin mining community like bitcoin cash was able to. There is still orders of magnitude more cost involved in attacking bitcoin cash (and bitcoin) than it was to attack bitcoin gold.

[edit] Also - bitcoin gold uses GPU mining - so one does not need to acquire specialized hardware to mine/attack it - and the hardware involved can be resold for other uses recovering a significant part of the capital cost. Or you could just rent it from the cloud.

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#52

Post by api »

jacquesc wrote: post #17
drexlspivey wrote: post #14

Earlier quoted context omitted.

Maybe all that energy spent to secure the chain is not so bad after all.

So it's not a complete waste of natural resources because it helps secure "the chain"?

How much energy is spent securing conventional financial systems? You have to include everything: banks, minting, enforcement, physical security, even military and intelligence action.

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#53

Post by [deleted] »

gowld wrote: post #32
georgemcbay wrote: post #27

Earlier quoted context omitted.

Does wherever the exchange is recognize Bitcoin Gold as legal tender? The issue seems a lot more complex than either "of course this is illegal" or "of course this isn't illegal". I'm certainly not arguing in favor of either of those positions.

It's obviously not legal tender (you can't pay taxes in BTG), but that's irrelevant. If can be bought and sold, it's property that can be stolen.

[deleted]

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#54

Post by barbegal »

Havoc wrote: post #33

>Obtaining this much hashpower is incredibly expensive Is it? Presumably you only need to maintain it for a short amount of time. Sounds like something one could smash with google cloud preemptible GPUs or similar. Especially since such an attacker is presumably not above using a stolen CC or three.

Under normal free market assumptions, the cost of double spending is simply the expected reward of each block multiplied by the number of blocks that need to be mined. For bitcoin, where the reward for finding a block is currently ~$100,000, that means you should be able to double spend by mining 6 blocks at a cost of less than a million dollars.

The question is: are bitcoin miners subject to the usual free market assumptions? If someone offered you double the market rate to hire a bitcoin miner for an hour would you accept that offer or not?

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#55

Post by amluto »

mike-cardwell wrote: post #12

Crypto currencies are worthless unless they have an enormous amount of hashing power behind them. We could really do with a webpage with a list of crypto currencies, the hashing power currently behind them, and how much it would cost somebody to take over 50% of the network. Or does that already exist?

> Crypto currencies are worthless unless they have an enormous amount of hashing power behind them.

Why would you think an enormous amount of hashing power helps? Even with Bitcoin, the actual marginal cost of a 51% attack is quite low. The difficulty is the capital expense of actually connecting to a couple GW of power and finding enough rentable ASICs.

I think this is fundamental. In a proof-of-work scheme, if the mining rewards in whatever time frame is considered a full confirmation are less than the amount of gain available using a 51% attack, then a 51% attack is economical.

ASIC mining during boom time helps mitigate the issue a bit, since the ASICs are worth more if the currency isn’t devalued by 51% attacks, but even Bitcoin will be vulnerable of older, less efficient ASICs start flooding the market, which seems inevitable if the price of BTC stagnates enough.

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#56

Post by gascan »

ggg9990 wrote: post #30
mike-cardwell wrote: post #12

Crypto currencies are worthless unless they have an enormous amount of hashing power behind them. We could really do with a webpage with a list of crypto currencies, the hashing power currently behind them, and how much it would cost somebody to take over 50% of the network. Or does that already exist?

Interesting point. The cryptocurrency energy consumption problem will never be solved, since if it is, it will be economically feasible to attack. So cryptocurrency adoption in the mainstream will require massive electricity consumption.

You might even say it will ultimately require at least 51% of worldwide electricity production, to ensure no actor (including nation-states) can suddenly on-line additional capacity to seize control.

And then if that's true, one might dream of a power plant arms race, where two competing nations build additional power plants as fast as possible to prevent the other from gaining enough electrical capacity to attack the network...

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#57

Post by gamblor956 »

drb91 wrote: post #36
Smaug123 wrote: post #24

Earlier quoted context omitted.

Those are both activities which use up trivial quantities of those natural resources. Bitcoin uses up nontrivial quantities of electricity.

There's a hidden cost of trust there, though, which vanishes with bitcoin (or at least reduces its cost). Maybe the value of bitcoin is more apparent from the perspective of venezuela at the moment, where the risk involved with traditional banks, currency, and security is more apparent. I am emphatically not taking a stance on which I prefer here, I might add, just pointing out that there are more variables here than…

Bitcoin and other cryptocurrencies require even more trust than normal currency. With a normal currency transaction, you need only trust at most 2 other entities entities: your counterpart to the transaction and the government issuing the currency.

With a blockchain, you still need to trust the counterparty, but now you also need to trust that the coders have properly designed and programmed the system, and that the miners either don't have the power to corrupt the system or aren't corrupt, and you need to trust whatever exchange you use to get into and out of the cryptocurrency.

Plus, you've added in a significant amount of time--at a minimum 20x the time with Bitcoin and significant transaction fees that as a practical matter have exceeded card interchange fees by 2x or more for the past 3 years straight.

Your right about their being more variables...with cryptocurrency.

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#58

Post by baddox »

49bc wrote: post #8

Satoshi really downplayed 51% attacks in his/her original whitepaper[1]: > The incentive may help encourage nodes to stay honest. If a greedy attacker is able to assemble more CPU power than all the honest nodes, he would have to choose between using it to defraud people by stealing back his payments, or using it to generate new coins. He ought to find it more profitable to play by the rules, such rules that favour h…

But wouldn't the long-term honest mining be more profitable than a single hit and run? Kinda the same reason that when you go to a restaurant the restaurant owners almost always exchange food for money rather than rob you and leave town forever. If you own a restaurant it's generally more profitable to run it honestly than run away with a one-time dishonest payoff.

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#59

Post by mrep »

Havoc wrote: post #33

>Obtaining this much hashpower is incredibly expensive Is it? Presumably you only need to maintain it for a short amount of time. Sounds like something one could smash with google cloud preemptible GPUs or similar. Especially since such an attacker is presumably not above using a stolen CC or three.

Totally, i even predicted this would happen 5 months ago (Not the crash yet though): https://news.ycombinator.com/item?id=15836819

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#60

Post by spookthesunset »

mike-cardwell wrote: post #15
ada1981 wrote: post #7

Curious if this is illegal in anyway? I suppose there will be increasing incentive to do the numbers on the hash cost to take over a coin and to execute these attacks. Neat.

I think stealing is illegal, yes.

> I think stealing is illegal, yes.

Code is law, bro. These fine chaps simply gathered enough resources to execute a slightly different code-path than before.

The folks whose value was stored in Bitcoin Gold should have read the source code before committing any funds to the blockchain. Had they done so, it would have been very clear that this feature was baked right into the source code.

And yes, this is sarcasm.... but only kinda sorta--bitcoiners wanna live in a Truly Free Unregulated Market, free from statist jack booted thugs stealing their wealth at gunpoint... guess what, double spend attacks where everybody loses is the end result. Sorry for their loss....

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