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BTC Endgame

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Re: BTC Endgame

#61

Post by fanciestManimal »

WJW wrote: post #15
paulgb wrote: post #2

The linked Medium posts have a bit more content https://joekelly100.medium.com/how-to-kill-bitcoin-part-1-is... Note that this is from last July, when the price of BTC was significantly lower and thus the price of the attack is likely higher now. That said, this becomes more feasible in the long-run when mining is purely funded by transaction fees. Something I don’t see talked about much is the fact that, although Bi…

I always wondered about that and perhaps someone here can explain. After bitcoin reaches its "full" volume, mining rewards will go away and the only way miner income can stay the same is if transaction fees rise to match. Since the competition of miners basically converges to "block reward is equal to electricity cost equivalent", this would mean transaction costs increase to an insanely huge amount. Not paying the l…

It's an unsolved problem, and all solutions would require a majority of the mining pool to get on board.

You could periodically increase the block size, splitting the transaction fee among more transactions. Although larger blocks make it more difficult to produce hashes, so more power would be consumed, thus increasing the transaction fees further.

You could change the block reward such that there's a larger block reward or even some kind of sustained rate of inflation. The cap of 21 million bitcoin isn't a fundamental unit, it can be changed if a majority of the mining pool decides to.

You could switch to Proof of Work, which doesn't use nearly as much electricity. Given how long this has taken Ethereum, this would probably be a multi year effort.

If the Lightning network were to take off, it might also help with this for day to day users. I'm not super confident about that though. I don't think a Layman is going to deal with the Lightning network, personally. Especially with the current narrative of bitcoin being a "store of value" rather than a currency. Bitcoin proponents don't seem to be advocating using it as a day to day payment tool.

Of course, there could also just never be any consensus on the direction to take, the network could be attacked, people could bail on bitcoin for other cryptocurrencies or just abandon cryptocurrencies all together and it could become a relic of history.

Re: BTC Endgame

#62

Post by muttantt »

My prediction is that Bitcoin will crash 50-80% in the next 12 months due to insider/rogue employee hack at Coinbase, and/or some other event that will render wallets irrecoverable or the company insolvent.

Re: BTC Endgame

#63

Post by thatfrenchguy »

nostrademons wrote: post #17

You don't need a DoS attack under the assumptions of this project. It's already assumed that you control ~80% of hash rate, so you execute a 51% attack that mass double-spends coins and destroy all confidence in the integrity of the currency. Poof, nobody uses it. Note that China already controls ~65% of Bitcoin hash rate, so if they wanted to execute this right now, they probably could. That they haven't is one reas…

> China gains no benefit from destroying Bitcoin; they can just continue to let it exist and tax all the Bitcoin miners in China, generating revenue for themselves and their citizens and continuing to be a thorn in the side of dollar hegemony

CO2 emissions is probably why I'd do it if I were the Chinese government frankly.

Re: BTC Endgame

#64

Post by thatfrenchguy »

tshaddox wrote: post #42
WJW wrote: post #36

Earlier quoted context omitted.

> China gains no benefit from destroying Bitcoin; Citation needed on this one I'm afraid. If nothing else, a currency that the Party cannot control would be A Problem. China did not have much economic benefit in halting the ANT IPO, yet it did not go through all the same. There _might_ be a benefit in allowing bitcoin to continue to exist of course, if they think it advances their cause more than it hurts it. But as…

Why haven’t they destroyed it then?

Better stuff to do ?

Re: BTC Endgame

#65

Post by dingus9 »

AffableSpatula wrote: post #59
dingus9 wrote: post #50

Earlier quoted context omitted.

Right. The protections against this are already baked into the protocol. 51% attacks don't make sense because you're hurting yourself 51% and hurting everyone else 49%. And for this theoretical attack you'd probably need to sustain 90%+ hash power for a long time. Your first hurdle will be producing enough ASICs to surpass current hashrate by nearly 10x. Solve that problem and you'll need a massive amount of energy a…

The protections aren't baked into the protocol because they don't account for external real world motives of nations states which could incent them to act in a "non-economic" way according to the internal rules of the Bitcoin game.

It's baked into the incentivization structure, if you prefer it worded that way. Investing hundreds of billions of dollars and years of work to place a temporary speed bump in front of Bitcoin's growth doesn't make sense.

Re: BTC Endgame

#66

Post by Fnoord »

nine_k wrote: post #49
pvarangot wrote: post #37

Earlier quoted context omitted.

> Note that China already controls ~65% of Bitcoin hash rate, so if they wanted to execute this right now, they probably could. When you say "China" do you mean like an actor that can make coordinated decisions? Or just a geographic region? I'm asking out of curiosity because yeah there's a lot of miners in China across many geographic regions but I never saw any evidence that they even talking to each other, even le…

The question is whether CCP has sufficient control over them. If it does not yet, it might consider working on that. OTOH I like the game-theoretic argument: they don't need to.

A better question to ask is: 'is the effort worth the gain?'

Re: BTC Endgame

#67

Post by pjfin123 »

yrral wrote: post #6

I think under these circumstances, the economic majority of bitcoin users will fork to use, eg a new hash algorithm, rendering the seized mining farms useless. Remember, bitcoin is a collective trusted network based on agreement between users, miners and developers. If the miners turn, just switch to a set of new miners. You mention that this wouldn't work in your article. Can you explain why?

Yeah it seems like the real defense of an obvious attack is "This Ethereum proof of stake chain with all of the wallets from right before the attack is the new Bitcoin".

Re: BTC Endgame

#68

Post by AffableSpatula »

janandonly wrote: post #40
AffableSpatula wrote: post #5

Earlier quoted context omitted.

Hey, author here - I think you're absolutely right that there is a risk that demand for blockspace doens't generate sufficient block reward to provide useful security guarantees. If that is the case, it could cause the price of BTC to fall which could create a negative feedback loop. This would, at best, create an end of the 21m cap and at worst trigger a collapse of the game entirely.

A very simple way to increase block rewards is making blocks SMALLER. It is game theory: If you really want your transaction to be on-chain, you pay for it. And smaller blocks means less transactions will fit in one block. So fees will need to go up.

In theory... but demand has elasticity. If the market has no way to equilibrate at a state that produces sufficient returns, there's no constraining of supply that can produce the returns needed. And that is the risk/unknown.

Re: BTC Endgame

#69

Post by DSMan195276 »

AffableSpatula wrote: post #33
nostrademons wrote: post #17

You don't need a DoS attack under the assumptions of this project. It's already assumed that you control ~80% of hash rate, so you execute a 51% attack that mass double-spends coins and destroy all confidence in the integrity of the currency. Poof, nobody uses it. Note that China already controls ~65% of Bitcoin hash rate, so if they wanted to execute this right now, they probably could. That they haven't is one reas…

I'm not so sure. If you don't need proof of work to secure a blockchain, then why is the free market of Bitcoin consensus continuing to expend huge amounts of capital to stick with it as its sybil resistance mechanism? If it wasn't considered a value destroying move, the transition away from PoW would've happened already no?

> If it wasn't considered a value destroying move, the transition away from PoW would've happened already no?

I think there's a conflict of interest issue here that would prevent such a move even if it would be worth it - the miners clearly have an incentive to keep the current PoW mechanism, as without it they're left holding a bunch of expensive useless tech. And without the miners willing to go along with a move from PoW to PoS, at best you're going to get a split between the PoW and PoS chains rather than a clean shift from one to the other and just create a mess, which isn't ideal for anyone.

Re: BTC Endgame

#70

Post by justicezyx »

pvarangot wrote: post #37
nostrademons wrote: post #17

You don't need a DoS attack under the assumptions of this project. It's already assumed that you control ~80% of hash rate, so you execute a 51% attack that mass double-spends coins and destroy all confidence in the integrity of the currency. Poof, nobody uses it. Note that China already controls ~65% of Bitcoin hash rate, so if they wanted to execute this right now, they probably could. That they haven't is one reas…

> Note that China already controls ~65% of Bitcoin hash rate, so if they wanted to execute this right now, they probably could. When you say "China" do you mean like an actor that can make coordinated decisions? Or just a geographic region? I'm asking out of curiosity because yeah there's a lot of miners in China across many geographic regions but I never saw any evidence that they even talking to each other, even le…

Same thing that a lot Chinese people thinking of the West. Like anything is coordinated behind thing, led by US, and followed up by the developed countries.

Thanks for calling out this mental bias.

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