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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

#331

Post by duxup »

arconis987 wrote: post #302
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?

Someone please correct me, but here's my best explanation. When you first connect to the Bitcoin network, how do you find out what the true blockchain is? You connect to other nodes and ask them. They may tell you anything. However, it's easy to verify whether a blockchain given in a response is valid. That is, it's easy to tell if a given blockchain is following all of the rules. But what if you receive a few valid…

Thank you!

I'm not well versed in the block chain tech but it is surprising that there is an inherent big ass monopoly type manipulation you can run ... inherent to the system.

That seems very much not what Bitcoin would "intend" and yet there it is, very available.

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

#332

Post by Animats »

This puzzles me. Although a miner with enough hash power can do a double spend, it's obvious from the blockchain that they did so. To bring this off, you have to have huge hash power and be anonymous. That limits the number of possible attackers.

Bitmain could do this to Bitcoin, but everybody knows where Bitmain is.

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

#333

Post by DmenshunlAnlsis »

stale2002 wrote: post #324
DmenshunlAnlsis wrote: post #275

Earlier quoted context omitted.

Or you know, they love the idea of an immutable record that’s far from anonymous. Cash is hard to trace, a Bitcoin is easy to trace for something like the NSA. It’s a giant digital paper trail by design! Besides, Bitcoin is as likely to become a dominant currency as shells or promises. No one outside or BTC fanatics honestly entertain that idea, and only a few who do espouse it do so because they really think it’s li…

Well, a couple of the cryptocirrencies out there have privacy baked in, such Monero. I don't see any of these privacy coins being banned yet, so..... But anyways that is besides the point. The argument that the OP was making was that governments are areal threat to crypto. And MY point was that these governments are NOT actually attacking cryoptocurrencies so I guess things are going to work out fine for cryptocurren…

And MY point is that extrapolating too much from minimal data is unwise. If you’d like it put in historical terms, “...Let a hundred flowers bloom and a hundred schools of thought contend...”

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

#334

Post by duxup »

Jommi wrote: post #295
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?

It's not reversing per se, it's like the transaction never happened. They send the money from their address to the exchange, the exchange credits that money. Then they release their chain (that they have been building privately). This chain is taken as the consensus and accepted. Why? Because it is the longest chain. Why? Because it has had more than 50% of hashpower behind it, allowing it to add blocks faster than t…

Thank you!

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

#335

Post by seanmcdirmid »

JumpCrisscross wrote: post #277
seanmcdirmid wrote: post #270

Earlier quoted context omitted.

The RMB is not even fully convertible, it is the opposite of liquid. The US dollar is useful to countries like china is because the US government acts as a debtor of last resort, allowing them to park surpluses in treasuries.

> The US dollar is useful to countries like china is because the US government acts as a debtor of last resort Which ultimately derives from our mammoth consumption. If Chinese consumption eclipses America's and their economy rebalances, they will have lots of Chinese consumers buying goods with renmimbi, leaving sellers offshore with boatloads of the currency to find investments for. (I consider this to be a moderat…

Parking money in cash isn’t feasible, which is why much of the USD’s worth is in treasuries, the dollar is just incredibly liquid and easy to borrow/lend.

The Chinese government is not interested in filling this same role, even if now anemic Chinese consumption somehow picks up, they will probably still want to maintain absolute control over the exchange rate.

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

#336

Post by Arbalest »

hndamien wrote: post #256
Arbalest wrote: post #227

Earlier quoted context omitted.

Sort of. It does create an opportunity cost, in diverting electricity away from other, arguably more useful causes. The whole matter there is complicated by economies of scale and baseload demand etc though. It could also be seen in terms of finiteness of the source of energy.

The measure of usefulness is determined by how much money people are willing to allocate towards it. Given that the money is allocated there, it indicates that for those actors, they see some utility regardless of what other people think. Hence, the only way to modify the unwanted behaviour is to correctly account for those producing the externalities, such that this market signal reverberates all the way through the…

I agree with all of that except the definition of usefulness. As you eluded to with your use of regardless, rationality is not assured. It is expected (or more likely, hope) usefulness, aka speculation. Even funding the status quo is still speculation, because something could suddenly become not useful in the future. I suppose only time will tell what was actually useful, and I'm betting bitcoin is not among them. Maybe if proof of stake comes along, I'll consider that as more potentially useful.

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

#337

Post by duxup »

lawn wrote: post #290
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…

Thank you!

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

#338

Post by JumpCrisscross »

seanmcdirmid wrote: post #335
JumpCrisscross wrote: post #277

Earlier quoted context omitted.

> The US dollar is useful to countries like china is because the US government acts as a debtor of last resort Which ultimately derives from our mammoth consumption. If Chinese consumption eclipses America's and their economy rebalances, they will have lots of Chinese consumers buying goods with renmimbi, leaving sellers offshore with boatloads of the currency to find investments for. (I consider this to be a moderat…

Parking money in cash isn’t feasible, which is why much of the USD’s worth is in treasuries, the dollar is just incredibly liquid and easy to borrow/lend. The Chinese government is not interested in filling this same role, even if now anemic Chinese consumption somehow picks up, they will probably still want to maintain absolute control over the exchange rate.

I agree that the renminbi is not presently a threat. Just that it has the potential of becoming one. That potential flows from the potential of China's consumers. A native base of consumers Bitcoin lacks. My point is that if the renminbi is a long shot for challenging the dollar's hegemony, Bitcoin is out past Pluto.

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

#339

Post by gbhn »

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.

My conclusion is that since this is true, the real thing maintaining the system is mutual cooperation of sufficient mining interest. When you look at the theoretical division of hashpower in btc, it looks too stable over generations of hardware. Any non-colluding ecosystem should have centralized. I conclude btc is a collusion system.

So why the pow? Is this stabilizing the actors somehow? It seems like an explicitly managed network would be no less centralized, way more efficient, and way more user friendly.

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