Live data from Hacker News

Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

ccn.com

61–70 of 555 posts

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

#61
post #30

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.

Not necessarily, non-hashing consensus seems to be where most blockchain projects are going. So these would require a stake of assets or similar, instead of wasting computing cycles.

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

#62
post #39
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.

Also they only need to hold 51% for as long as they can complete the double-spend attack.

The article says they reversed some transactions up to 22 blocks later, which is 220 minutes, or 3 hours 40 minutes. So they would only need 51% for that time, but they didn't just add 51% of hashing power or that would be noticeable on the charts. From the looks of it [0] the hashrate has been falling slowly since BTG was created, so the miner may have just become the one with 51% by virtue of keeping mining with the same setup and then watching others stop mining, increasing his share of the network with no extra effort on their behalf. I would assume this miner also realises that BTG is dead/dying and is trying to extract as much as possible from it before they move their equipment to a new chain. If this attack method proves sufficiently profitable perhaps the miner will look at dying chains he can easily overpower instead of trying to mine a more profitable chain with a higher hash rate.

[0] https://bitinfocharts.com/comparison/bitcoin%20gold-hashrate...

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

#63

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?

it exists

https://bitinfocharts.com/comparison/bitcoin%20gold-hashrate...

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

#64

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?

So, that's an interesting pair of ideas, in that it gets me thinking that any Bitcoin-style cryptocurrency might ultimately be doomed by its own design.

Shooting from the hip:

They've go this 51% vulnerability that is well known and hypothetically cannot be truly closed. Instead, we rely on the idea that mounting such an attack would be "too expensive". But at the same time, the cost/benefit of mounting such an attack is fairly easy to estimate using public data - all you really need to know is the cost to get to 51% and stay there for a given amount of time, which you can infer by monitoring mining activity, and the current price of the currency you'd want to attack. And you have to assume that whenever the cost of mounting such an attack dips below the benefit, such a thing _will_ happen.

So then, I think that implies that the only other feature you'd need to throw into the mix to ensure a cryptocurrency is ultimately doomed is to make the rate at which new coin can be mined asymptotically approach zero. Such a feature would mean that, in the long term, miners' revenue would ultimately be dominated by transaction fees, which, this being a supremely commodity service, market forces will presumably tend to keep relatively low. That would, in turn, limit the number of miners the economy can support, which would serve to limit the cost of mounting a 51% attack.

Meanwhile, what with a money supply that can't grow being inherently deflationary, the benefit of mounting such an attack would be constantly growing, for as long as said cryptocurrency remains in use.

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

#65
post #52

Earlier quoted context omitted.

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.

If/when cryptocurrencies reach the same size as conventional financial systems, they will require all of the same.

Bitcoin is relevant for the US economy and a rogue state tries to have 51% of hashing power? Military and intelligence to the rescue.

Someone is very rich in Bitcoins? Bunker services for offline storage, physical/computer security, etc.

Too many scams with altcoins? Legal enforcement, more bureaucracy, education, etc.

One could say that, somehow, the cryptocurrencies won't require as much of any of that, but I don't see this point being made as often (and not with any realistic estimations).

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

#66
post #22

Earlier quoted context omitted.

Is it a complete waste of natural resources to lock a bank vault door, or run a network firewall?

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

You forgot to calculate how much (in resources) it costed to build all those banks and vaults and how much it costs to run and maintain, globally.

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

#67
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 as…

The math doesn't work that way because honest miners amortize the capital cost of their specialized equipment over long periods of time. An attacker undermines the network's value and so must operate on shorter timescales. The capital costs of an attack could perhaps be partially recovered via resale, but getting order ~50% of the existing network's specialized hardware might prove prohibitively difficult even given sufficient capital.

[edit] And renting existing miners' equipment would be difficult because you would have to: figure out who they are, convince them to point their equipment to your pool, run your own dark pool servers to handle data from tons of miners, run infrastructure to make payouts to these miners, hope that exchanges don't have reorg procedures that prevent you from accomplishing your double spend, hope your chain reorg doesn't panic the market for long enough for you to double spend exchange to another coin that won't be tanking (due to the reorg).

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

#68
post #61
post #30

Earlier quoted context omitted.

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.

Not necessarily, non-hashing consensus seems to be where most blockchain projects are going. So these would require a stake of assets or similar, instead of wasting computing cycles.

Creating a proof-of-stake algorithm that doesn't degenerate to proof-of-work and that doesn't require a central authority (checkpoints, etc) is still an open problem.

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

#69
post #61
post #30

Earlier quoted context omitted.

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.

Not necessarily, non-hashing consensus seems to be where most blockchain projects are going. So these would require a stake of assets or similar, instead of wasting computing cycles.

Proof-of-Stake(POS) is still theoretical at this stage, there is no working solution or proof-of-concept. It is a nice(ish) idea to reduce the energy consumption of blockchains but isnt really a solution to decentralisation.

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

#70
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.

Well, under the standard assumptions of blockchains like Bitcoin, yes it's incredibly expensive to obtain enough hashing power to do a 51% attack. There's a lot of nuance to it though.

In this case, Bitcoin Gold chose to have an "ASIC Resistant" algorithm, Equihash, and likely was only protected by GPUs mining the network. Bitmain has recently released an ASIC for Equihash that is substantially cheaper and more energy efficient than using GPUs, meaning that some pool which was able to buy a large number of the ASICs would have had a pretty easy time gaining enough hashrate to launch a 51% attack.

This is one of the big risks of attempting ASIC resistance. In the event that someone produces an ASIC, your coin is a complete sitting duck.

Post reply on HN