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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

#281

Post by duxup »

JumpCrisscross wrote: post #265
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…

> there are certainly organizations with the resources to do it, e.g. intelligence agencies, organized crime Nation states. Don't forget the large number of sanctioned regimes who would (a) have the resources to execute such an attack and (b) find great profit in doing so.

Plenty of legit and rouge nations (or departments within them) who would find that tempting I think. Currency politics and all aside that is a tempting way to make money.

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

#283

Post by IncRnd »

rjkennedy98 wrote: post #185
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…

> it would cost about 50K to double spend on a 0-conf transaction

That makes no sense. If there are no confirmations, there is no cost, because nothing happened. This comment is a 0-conf transaction on BTC...

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

#284

Post by slededit »

JumpCrisscross wrote: post #271
slededit wrote: post #190

Earlier quoted context omitted.

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.

> Fort Knox has an entire military base to secure it Fort Knox has basically nothing to do with the modern U.S. dollar financial system.

You don't consider a country's reserve assets to be a factor in their monetary system? An interesting way to see the world.

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

#285

Post by IncRnd »

DennisP wrote: post #228
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…

Interesting points. A defense against this type of attack is to use at least the hybrid proof-of-stake design that Ethereum is rolling out in about three months; blocks are proposed by proof of work, but proof of stake periodically adds a layer of "economic finality." Here's a paper: https://arxiv.org/abs/1710.09437

Just a cautionary note - you are describing the future in the present tense.

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

#286

Post by Jommi »

busterarm wrote: post #229
vntok wrote: post #140

Earlier quoted context omitted.

No it would not. Finding a BTC double spend attack vector would be like finding a 0-day: good and maybe even profitable up until fixed, which would take hours, days at most. Have 0-days destroyed Microsoft, Android, Firefox, Electron or Chrome?

Microsoft, Android, Firefox, Electron and Chrome aren't currencies. They have an underlying value/utility. People have a real, tangible need _outside of the use of those products_ to get them fixed. Can you say the same for a cryptocurrency?

yes?

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

#288

Post by JumpCrisscross »

slededit wrote: post #284
JumpCrisscross wrote: post #271

Earlier quoted context omitted.

> Fort Knox has an entire military base to secure it Fort Knox has basically nothing to do with the modern U.S. dollar financial system.

You don't consider a country's reserve assets to be a factor in their monetary system? An interesting way to see the world.

> You don't consider a country's reserve assets to be a factor in their monetary system?

The U.S. dollar isn't backed by gold. The total value of the gold at Fort Knox, about $100 billion, is negligible [1] and does not appear on the Federal Reserve's balance sheet [2]. It is mostly an anachronism from the eras of the gold standard.

[1] https://en.wikipedia.org/wiki/United_States_Bullion_Deposito...

[2] https://www.federalreserve.gov/monetarypolicy/bst_fedsbalanc...

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

#289

Post by josephagoss »

Every POW coin should either switch to POS or if they are going to stick with POW they need to focus on a different algorithm and let ASIC development happen. The key to being a weaker chain is to encourage the community to build an ASIC just for your coin. I don't understand this push by many POW coins on sticking with commodity hardware, except for a few giants (zcash, eth, monero) you're going to get destroyed.

Dedicated ASIC only for your chain = good. Commodity hardware = bad.

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

#290

Post by lawn »

duxup wrote: post #279

Is there a laymans explination for this attack? "but the attacker was able to reverse transactions since they had majority control of the network." I thought these crypto currencies didn't allow for reversing a transaction? Or is this "reversing" such as just deposit and then withdraw?

I can try.

The purpose of mining is to solve a puzzle. In Bitcoin one solution is expected every 10 min on average. This can then be used store transactions on the blockchain in one block. To add to that block you need to solve a new puzzle and so on.

You can reverse transactions if you recalculate the puzzle solutions. This can take time but if you have more mining power than the rest of the network you can win this race. This is called a 51% attack.

So for example you deposit to an exchange and wait for that to confirm, in maybe 6 blocks. Meanwhile you create 7 blocks in secret yourself where you did not send to the exchange and release them to the world. The blockchain works by always considering the longest chain as the correct one, therefore overwriting or reversing the old transactions.

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