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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

#181

Post by chemmail »

Taek wrote: post #118
jhpriestley wrote: post #83

When Bitcoin was running up to $20,000, I tried to analyze the system and come to a personal conclusion about its equilibrium value, because I didn't want to miss out if it really was the currency of the future. I ended up not investing, because of the possibility of a double-spend attack. I think that cryptocurrency enthusiasts are seriously underestimating the importance of double-spending attacks to the economics…

In the bitcoin system, miners make literally billions of dollars a year protecting the network. Any successful attack on the bitcoin network is going to massively erode confidence, reduce the price, reduce the usage, and therefore reduce the value of all that single-purpose, bitcoin-only hardware. Large miners don't want to see Bitcoin get attacked because it destroys their income and de-values their incredibly expen…

Logical and sound arguments. However you underestimate human greed, human stupidity. Not everyone is operating on a Nash Equilibrium.

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

#182

Post by mrep »

onecooldev24 wrote: post #138
Taek wrote: post #118

Earlier quoted context omitted.

In the bitcoin system, miners make literally billions of dollars a year protecting the network. Any successful attack on the bitcoin network is going to massively erode confidence, reduce the price, reduce the usage, and therefore reduce the value of all that single-purpose, bitcoin-only hardware. Large miners don't want to see Bitcoin get attacked because it destroys their income and de-values their incredibly expen…

Top miners can short twice as many BTC futures to create one last profitable destruction.

All the while raking in boatloads from the double spending.

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

#183

Post by ryanlol »

jhpriestley wrote: post #83

When Bitcoin was running up to $20,000, I tried to analyze the system and come to a personal conclusion about its equilibrium value, because I didn't want to miss out if it really was the currency of the future. I ended up not investing, because of the possibility of a double-spend attack. I think that cryptocurrency enthusiasts are seriously underestimating the importance of double-spending attacks to the economics…

>Attacking a huge network like bitcoin would be an audacious and expensive act, but there are certainly organizations with the resources to do it, e.g. intelligence agencies, organized

How do you propose they would go about doing this? Would they jam up the whole worlds chip production to source the ASICs at above market rates? How could this be profitable?

Perhaps by taking over existing mining operations, but then you’d need to somehow perform the attack before you’re detected.

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

#184

Post by CydeWeys »

thaumasiotes wrote: post #169
CydeWeys wrote: post #157

Earlier quoted context omitted.

It's still trustless, decentralized, yadda yadda.

In what sense is a system where you hold all your bitcoins in a "bitcoin bank" decentralized or trustless?

The second layer solutions such as Lightning Network don't require you letting other people hold your Bitcoin. They're still decentralized and trustless.

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

#185

Post by rjkennedy98 »

jhpriestley wrote: post #83

When Bitcoin was running up to $20,000, I tried to analyze the system and come to a personal conclusion about its equilibrium value, because I didn't want to miss out if it really was the currency of the future. I ended up not investing, because of the possibility of a double-spend attack. I think that cryptocurrency enthusiasts are seriously underestimating the importance of double-spending attacks to the economics…

The numbers I've seen quoted for a double spend attach on Bitcoin Cash (assuming guaranteed block space) are that it would cost about 50K to double spend on a 0-conf transaction. So really, you can confidently accept 0-conf for <1K reasonably. More that that you can accept 1-conf or more which can take a minute or two. BTC rejects 0-conf transactions, but they are already in use around the world and are successful as far as I know.

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

#186

Post by cocoablazing »

tlarkworthy wrote: post #92
jhpriestley wrote: post #83

When Bitcoin was running up to $20,000, I tried to analyze the system and come to a personal conclusion about its equilibrium value, because I didn't want to miss out if it really was the currency of the future. I ended up not investing, because of the possibility of a double-spend attack. I think that cryptocurrency enthusiasts are seriously underestimating the importance of double-spending attacks to the economics…

I think the argument is that by doing a 51% attack you undermine the market value so you never get the rewards. This makes sense, but only for the leading crypto coin. As we see here today, you can 51% attack smaller coins, which should imply an increase in the value of Bitcoin from consolidation.

You can profit from undermining the market. Futures volumes may currently be too low to find enough liquidity to use them for financing a major attack but this could change when BB’s start selling them in earnest to clients.

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

#187

Post by hackinthebochs »

dbt00 wrote: post #111
nemo1618 wrote: post #97

Earlier quoted context omitted.

On the other hand, there will be people who have a vested interest in preventing such attacks. If you own a lot of BTC, a successful attack can drastically lower the value of your assets, so it makes sense to deploy some of that capital to secure the network. And of course this goes even more so for business in the crypto space that rely on BTC remaining secure. One example of this sort of behavior is in mining. We t…

Spending capital to build hash capacity to protect an existing holding in BTC is inherently deflationary. Instead of "you need to spend money to make money" aka inflation/interest/growth, you have to spend money to keep money, which always reduces your holdings over time and turns the entire network over to companies that produce hashing capacity (hardware manufacturers, power companies).

But the initial assumption was that of an efficient market for hash power, which means the cost to hash is equal to the block rewards. And so deploying some capital to secure the network is nets zero loss.

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

#189

Post by oceanman888 »

I met the founder of Bitcoin Gold a few month before, I can not tell if there is any other reason he forked bitcoin than mere profit. He said he was going to fork ether as well. Given the speculative nature of the people involved in this network. could this be a inside job?

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

#190

Post by slededit »

gamblor956 wrote: post #136
bufferoverflow wrote: post #66

Earlier quoted context omitted.

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.

It probably cost a few billion dollars to build all those banks globally. It costs a few hundred million to maintain all those banks and vaults. However, these banks and vaults can handle more than 2000x the transactions of Bitcoin in a single day (Visa on its own is 750x the capacity of Bitcoin, and Mastercard handles about twice the number of transactions as Visa), so Bitcoin would need to be at least 1/2000th the…

Fort Knox has an entire military base to secure it. That alone would use up a good chunk of your few hundred million dollar budget. I think you are vastly underestimating the cost in supporting our current financial system.
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