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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

#351

Post by bb88 »

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.

> I think the argument is that by doing a 51% attack you undermine the market value so you never get the rewards.

Only if you make it public. A 51% attack works at a poker table too, but only if the marks don't know the game is rigged.

A successful double spend makes it public, as well as announcing your intentions to get to 51%. If you're quiet and can pull off a successful 51%, you can create the double spend before anyone knows.

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

#352

Post by brokensegue »

apo wrote: post #216

Oddly enough, one of the selling points of Bitcoin Gold (a hard fork of Bitcoin) was its use of Equihash instead of SHA-256. The idea was that a memory-hard proof-of-work function would inoculate Bitcoin Gold from miner centralization. The problem with mining centralization is that sufficiently powerful miners can attack the network by rewriting blocks. This opens the door to double spending. This was exactly the att…

the verge attack was different

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

#353

Post by hndamien »

Arbalest wrote: post #336
hndamien wrote: post #256

Earlier quoted context omitted.

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. Ma…

Obviously capital allocation of individuals is not a perfect measure of utility, but it is the best/ fairest metric we have. Conveniently it provides a clear mechanism to sort out this mess. Price carbon pollution at the source and see the rest of the actors seeking profit fall in line. Miners will chose green energy, green energy will get more demand, their economies of scale will increase, pollution will decrease. Bitcoin energy use is no longer a problem and can provide whatever utility it is valued at without externalities.

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

#354

Post by Ygg2 »

Jommi wrote: post #317
Ygg2 wrote: post #309

Earlier quoted context omitted.

What is the value of currency you can legally print on any printer? Zero. Edit: any crypto-currency you can exploit gives you option to print yourself money.

You're over reducing things to the point where they don't make sense anymore lol First of all, the value of a currency that could be printer on any printer might not actually be even 0. Secondly, cryptocurrencies do not operate in vacuum. Its not as simple as "printing yourself money".

Right, it could possibly be negative.

Second, if I went to a store spent 199 dollars and those 199 dollars magically reappeared in my hand, didn't I create money out of nothing and reduce dollar value? Yes I did. Even if I never cloned any money I reduce the expectations of future stores that their money won't magically disappear.

And yes, I am aware banks do this, but they are regulated and when they abuse it, you get a financial crisis.

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

#355

Post by facetube »

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…

One of the many practical vulnerabilities.

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

#356

Post by facetube »

Taek wrote: post #247
onecooldev24 wrote: post #138

Earlier quoted context omitted.

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

If a large miner comes to you asks for a multi billion dollar short position, you should be suspicious.

Yep. totally safe, someone on the internet said we should.

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

#357

Post by Intermernet »

rspeer wrote: post #219
DINKDINK wrote: post #203

Earlier quoted context omitted.

This attacked occurred on BTG a clone of Bitcoin, appropriating the name “Bitcoin” Gold. It has nothing to do with Bitcoin.

REG: Right. You're in. Listen. The only people we hate more than the Romans are the fucking Judean People's Front. P.F.J.: Yeah... JUDITH: Splitters. P.F.J.: Splitters... FRANCIS: And the Judean Popular People's Front. P.F.J.: Yeah. Oh, yeah. Splitters. Splitters... LORETTA: And the People's Front of Judea. P.F.J.: Yeah. Splitters. Splitters... REG: What? LORETTA: The People's Front of Judea. Splitters. REG: We're th…

Someone should just fork Bitcoin and call it Splitcoin.

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

#358

Post by IkmoIkmo »

thedailymail wrote: post #340

If all that is required to reverse transactions is 51% control, cannot the transactions that occurred during the double spend attack also be reversed by a 51% coalition once the attacker loses its majority?

Sure but it doesn't solve anything. Remember that people do not trade token A for token A. You don't buy dollars with dollars. You use dollars to buy something else, like euros.

So you may reverse one token, but you won't be able to reverse the other.

i.e. suppose you have $100 and I have 100 tokens (e.g. bitcoin gold coins). You pay me $100 and I give you the coins. I now double-spend and sell the coins to someone else. You now have no coins and no money. I then double-spend that and give the coins to myself.

You could at some point fix this and get the coins back, technically. But you're not going to get your $100 back. Nor is the other person. And the other person never got his coins. So both of you are out of money, and only one has the token. Theft occurred.

Moreover, even if you somehow both had the coins, they ought to be worthless because the entire system is completely useless. If a system can be compromised like this, the tokens have no value. Just like a dollar bill has no value if it can be printed, or can magically be transferred to a thief at the click of a button.

I used dollars in this example, but the more likely avenue of attack is for the attacker to sell his bitcoin gold for other cryptocurrencies like bitcoin over and over. Like selling an expensive bicycle to a customer but keeping the key to the lock, stealing it at night and selling it to someone else, a dozen times in the span of a few hours.

All of this is a major issue without even getting into the political discussion on forming a coalition and deciding which transactions were fair, genuine, worthy to keep, and which weren't. That's virtually impossible, particularly when there's one set of double-triple-quadruple-spent coins out there to distribute with many people making equal claims that they were scammed.

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

#359

Post by dnomad »

gbhn wrote: post #339
tlarkworthy wrote: post #92

Earlier quoted context omitted.

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…

It's important to understand that a "51% attack" isn't an attack at all. No algorithm or protocol has been compromised. The system is working exactly as it should. This is a fundamental aspect of all distributed systems: if the majority of the network elects that the state of A is X then that's the state of A. There is no mechanism by which one peer can disagree and override the majority -- unless the majority have also deigned to follow that peer and recognize it as a "leader."

> Any non-colluding ecosystem should have centralized.

Not exactly. There's real laws and borders and market realities that prevent the ultimate centralization of hashpower but what's clear is that centralization is works, centralization is extremely profitable, it's happening and it will continue [1]. Centralization, I would suggest, is the true goal of bitcoin and is the inevitable conclusion.

> So why the pow?

I see what you're getting at but it should be obvious. The miners are paid very, very handsomely not to collude. Bitcoin miners charge fees that are effectively far greater than any centralized authority. They reap billions in profit each year [2] for turning on a bunch of computers and plugging them in. A cynic might say the "proof of work" is a marketing tool to disguise what is really just the mass transfer of wealth to the miners. Certainly, bitcoin holders believe that miners have somehow "earned" these outrageous profits.

[1] https://blockchain.info/pools

[2] http://fortune.com/2018/02/24/bitcoin-mining-bitmain-profits...

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

#360

Post by zeven7 »

Jommi wrote: post #287
IncRnd wrote: post #267

Earlier quoted context omitted.

You don't think what has? There have been double spend attacks against BTC.

source?

Not exactly a double spend, but billions BTC being printed out of thin air: https://bitcointalk.org/index.php?topic=822.0
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