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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

#361

Post by snissn »

cdetrio wrote: post #294
drexlspivey wrote: post #98

Earlier quoted context omitted.

What a lot of people in the thread seem to be missing is that when you receive a huge payment you can require a higher amount of confirmations to accept it. High enough that it would make the 51% attack unprofitable.

Requiring more confirmations decreases the probability that a transaction will be reverted, under the assumption that an attacker has < 49% of the hashpower. If you attempt an attack with 49%, then you have a fair chance of mining, say, 6 blocks before the rest of the network. If you get unlucky then you sacrifice those rewards. But if you mine with 51% then your attack chain is (probabilistically) guaranteed to even…

There's a question that you're missing or ignoring about how long the 51% attack is sustained. Sustaining a 51% attack for one day is very difficult, doing it for one week or one month is proportionally that much more expensive.

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

#362

Post by josu »

zaroth wrote: post #221
josu wrote: post #163

Earlier quoted context omitted.

Many people use exchanges for arbitrage. Exchanges benefit from arbitrage since they take a fee out of every trade and because they want their prices to be close to the international price of the asset. This trade would look exactly the same as an arbitrage move.

I still maintain that letting the assets come in and leave on a different blockchain within 24 hours is akin to a “RTFM” level mistake. If exchanges are enticing arbitrage through insanely quick setttlement and clearance times on the order of 2 hours after closing a position, they are just playing with fire. If there wasn’t an actual trade, just transfering in and out, not chaining the transactions is similarly RTFM.…

Exchanges are definitely playing with fire. Most crypto exchanges have probably more attack vectors than employees. Mitigating them is usually a tradeoff between security and UX. The most trustworthy exchanges don't even list shitcoins like Bitcoin Gold.

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

#363

Post by IkmoIkmo »

CamelCaseName wrote: post #193
guiomie wrote: post #153

How is the price not crashing? It's down 10%, which is pretty much like the rest of the market.

My understanding from a cursory read is that this happened a week ago, so perhaps the dump has already been priced in.

Well for one, the price is down by 10% from last week. Whatever was priced in from those 'in the know' a week ago wasn't that big of a deal.

Secondly, the theoretical expectation was always that the value should go to 0. i.e., if parties can steal money whenever they want then the system is worthless.

Obviously there are parties who together form 100% of the mining power, same with 51% of the mining power. They need only come together and decide in order to steal. The only thing preventing this was a bit of game theory about how their coins and mining equipment would become worthless the moment they do this.

The fact that hasn't at all happened means they profited hard. And it means virtually any coin that has a set of investors with similar levels of disinterest is susceptible to these attacks.

My prediction is this: the first attack has little influence, even on bitcoin. It'll be cast aside as some mysterious accident, the theft won't be large and it'll be seen as insignificant, people will remain hopeful. When these attacks happen with some frequency, like once a month and at a large scale, then we'll see trust completely plummet and prices with it.

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

#364

Post by bb88 »

bo1024 wrote: post #151
onecooldev24 wrote: post #133

Earlier quoted context omitted.

can you explain this in better words: "then it would always make sense to rent 51% of the capacity at market rates, earn the transaction fees, and also perform a double-spending attack."

I think what jhpriestly is saying is: As the market gets efficient, the price of renting mining capacity will approach the profits earned from transaction fees. So renting mining capacity will almost pay for itself, i.e. is almost free. But then you might as well rent a lot of it, like 51%, because it's allowing you to attack the chain almost for free.

I think a good question is, is there a market for renting asic mining gear?

Yes, but only if mining the coins via renting is cheaper than buying them outright.

If you're a miner, it makes sense to rent out your gear, because you get a guaranteed payment higher than you could make via mining.

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

#366

Post by hndamien »

TeMPOraL wrote: post #329
hndamien wrote: post #220

Earlier quoted context omitted.

Funny you are arguing about the lack of value of security in a thread of a coin that just had its security broken.

It's a perfect place to argue about it, because it only shows that pissing away all that electricity still doesn't help, because someone else can piss away more of it to take your money.

To be fair BTG was pissing it away, BTC seems to be using it for security.

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

#368

Post by hapnin »

wpietri wrote: post #346
hapnin wrote: post #321

Earlier quoted context omitted.

Bitcoin averages something on the order of 200,000 transactions per day. It's useful to someone.

That's definitely not proof of real economic utility. How many bets happen in Las Vegas every day? But economically, they're negative-sum events exploiting cognitive weaknesses.

Use as a currency was the point I was addressing. Bitcoin has been a working network for 9 years with 300,000,000 plus transactions.

It's a useful currency.

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

#369

Post by erikpukinskis »

beager wrote: post #301
tehsauce wrote: post #110

Earlier quoted context omitted.

The spooky thing that this made me realize, is that if anyone did find a vulnerability in bitcoin (or any cryptocurrency) is that they would have a greater incentive to only slowly leech off the system, because they will be able to siphon out much more over time than if everyone panics over security. The weapon is no good unless it's secret.

My assessment is that the greatest vulnerability in Bitcoin is its breathless supporters, who will look past the dynamics of Bitcoin in adoration of the mechanics of Bitcoin. To that end, larger, more sophisticated enterprises (banks, hedge funds, etc) are likely leeching slowly off the system, propping the price up and inflating it when they can, so they can extract as much value as possible out of its correction to…

What’s the difference between dynamics and mechanics?

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

#370

Post by AlexCoventry »

49bc wrote: post #8

Satoshi really downplayed 51% attacks in his/her original whitepaper[1]: > The incentive may help encourage nodes to stay honest. If a greedy attacker is able to assemble more CPU power than all the honest nodes, he would have to choose between using it to defraud people by stealing back his payments, or using it to generate new coins. He ought to find it more profitable to play by the rules, such rules that favour h…

The notion that there would be other cryptocurrencies was just not part of the worldview, back then.
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