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Ghash.io very close to 51% of bitcoin pool

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Re: Ghash.io very close to 51% of bitcoin pool

#81

Post by pron »

notdrunkatall wrote: post #77
pron wrote: post #41

I don't know much about the particulars of BitCoin mechanics, but the general spirit of this story seems like a natural evolvement of any unregulated organization. People who favor unregulated markets/societies dislike the concentration of power in the hands of a central authority, but the reality is that in any social system there will always be concentration of power in the hands of the few. I've read a hypothesis[…

...except you're wrong. Bitcoin participants have developed a solution to the 51% problem, without any regulation, without any government stepping in and telling anyone to do anything. https://en.bitcoin.it/wiki/Getblocktemplate Your post is a poorly argued attempt to inject politics into a technical discussion. It reads like the top comment at /r/politics, not HN.

The invention of a new currency is a highly political act; claiming it isn't is a political statement in itself. The discussion of any disruptive technology should quickly focus on politics and ethics, or risk being abused. You can't both claim to invent technology that seriously affects society, and at the same time dismiss talk of politics as irrelevant. A technology can either be irrelevant or be political (if you ever wish to understand technology, I suggest you read some of the many discussions of the politics of the washing machine; or the fork).

What I find most fascinating about some of the less ideological BTC discussions is the belief that a neutral technology (a cryptographic algorithm) can replace social contracts. I'm not claiming it necessarily can't, I'm just saying that this belief shows not only disdain for government, but an Aspergerish rejection of social structures. It's like saying, I don't want to put people in charge because I don't trust them, and I don't want even to talk to others in order to resolve disagreement; instead, I choose to take all decision-making agency out the hands of humans and place it in the hands of an algorithm that can provably never be swayed, because that is the only thing I can trust.

Regardless, there is nothing technical about a story of a small group attaining concentrated power over a decentralized currency.

Re: Ghash.io very close to 51% of bitcoin pool

#82

Post by jobeirne »

jre wrote: post #76
jobeirne wrote: post #71

Folks are missing an important point here about the incentives of a pool majority (that I recall Satoshi mentions in the original whitepaper[0]): even if a particular agent has a majority in the mining network, it isn't in their interest to upset trust in a system that they have such a large investment in. Where would the sense be in taking the risk to undermine public trust in BTC for a short-term gain like modifyin…

Here is a thought experiment : Say the pool operator is also the owner of Bank A (which has nothing to do with BTC). Now, a competitor of Bank A, Bank B, just announced that they will support BTC. The pool operator can now decide to "destroy" bitcoin and therefore cause severe financial loss for Bank B, leading to bankruptcy. If putting Bank B out of business results in gains (in USD), for the pool operator, that are…

Thanks for the concrete counterexample. I still find it dubious that the owner of Bank A would be willing to destroy a stream of income as considerable as a 51% stake in BTC just to preempt a competitor in another market. That seems too self-sacrificial to be practical.

Also, you're missing the point that Bank B's successful adoption of BTC would also benefit Bank A's owner, since that adoption would be a boon for BTC, which Bank A owner has a very large stake in.

Re: Ghash.io very close to 51% of bitcoin pool

#83

Post by iterationx »

jobeirne wrote: post #71

Folks are missing an important point here about the incentives of a pool majority (that I recall Satoshi mentions in the original whitepaper[0]): even if a particular agent has a majority in the mining network, it isn't in their interest to upset trust in a system that they have such a large investment in. Where would the sense be in taking the risk to undermine public trust in BTC for a short-term gain like modifyin…

What if somebody incentives the pool operator with a rubber hose?

Re: Ghash.io very close to 51% of bitcoin pool

#84

Post by jobeirne »

wikwocket wrote: post #80
jobeirne wrote: post #71

Folks are missing an important point here about the incentives of a pool majority (that I recall Satoshi mentions in the original whitepaper[0]): even if a particular agent has a majority in the mining network, it isn't in their interest to upset trust in a system that they have such a large investment in. Where would the sense be in taking the risk to undermine public trust in BTC for a short-term gain like modifyin…

This is like asking why a counterfeiter would undermine trust in the U.S. $100 dollar bill in order to get a big short-term gain. I know there is a big spirit of brotherhood about doing what's best for BTC, but if your prototcol is to survive the real world, you have to anticipate people more interested in their short-term gains than global harmony. Particularly if the protocol will involve money. Particularly if the…

A counterfeiter sees far less benefit from the continuation of the USD than does someone who owns 51% of the BTC mining infrastructure.

Re: Ghash.io very close to 51% of bitcoin pool

#85

Post by monochr »

notdrunkatall wrote: post #77
pron wrote: post #41

I don't know much about the particulars of BitCoin mechanics, but the general spirit of this story seems like a natural evolvement of any unregulated organization. People who favor unregulated markets/societies dislike the concentration of power in the hands of a central authority, but the reality is that in any social system there will always be concentration of power in the hands of the few. I've read a hypothesis[…

...except you're wrong. Bitcoin participants have developed a solution to the 51% problem, without any regulation, without any government stepping in and telling anyone to do anything. https://en.bitcoin.it/wiki/Getblocktemplate Your post is a poorly argued attempt to inject politics into a technical discussion. It reads like the top comment at /r/politics, not HN.

Correct me if I'm wrong but this only solves the problem if the miners aren't purposefully coordinating the take over of the system. It is merely that a pool of otherwise benign miners can't be used by the pool operator to rewrite the transaction history.

This doesn't stop an organized attack of someone who has rented lets say half of amazon's cloud infrastructure for a 10 minute attack to take over the transaction history. Something that becomes more and more profitable with the reduction of bitcoin income from mining and increase of the total number and price of bitcoins.

Re: Ghash.io very close to 51% of bitcoin pool

#86

Post by josu »

btown wrote: post #74
TomGullen wrote: post #27

If a pool has control of >50% of the hashing power, it means that they could do damaging things to the Bitcoin network as far as I understand. People will explain that it's not in the pools interest to do this, but it's missing the point. The pool is now a potential weapon, with a very small number of people in control. This means they are now a potential weapon against Bitcoin, and if someone external wanted to hurt…

With Bitcoin as popular as it is, it would be an increasingly lucrative strategy to short BTC, damage the network, re-buy low, and undo the damage. Sure, this is sort of a one-time use weapon, but there's no reason to believe that GHash.io's operators are in this for the long haul - perhaps, in the words of that amazingly catchy television commercial, they "need cash now."

It is currently pretty much impossible to short large quantities of bitcoins. Besides, such an attack would probably crash the whole system which could render the potential shorts useless. Too much uncertainty for anything that big.

I really can't see the way for anybody to benefit from a 51 attack. However, a potential attack will probably be a black swan, which will make it "impossible" to foresee for 99% of us, so the fact that there isn't any clear way to benefit from it, doesn't actually mean that there isn't a way.

Re: Ghash.io very close to 51% of bitcoin pool

#87

Post by josu »

nhaehnle wrote: post #61
andyjohnson0 wrote: post #5

Could someone with knowledge of Bitcoin explain what happens when a share of the pool hits 51%? Is this dangerous in some way? Edit: Thanks to those who took the time to explain. Very interesting.

Despite the good responses, there are two points that I believe are important that haven't been pointed out yet. 1. While a 51% pool operator could double spend, none of the participants can do that. The social incentives against a pool operator exploiting this power are very strong, however, because double spends are basically impossible to hide and would destroy the value Bitcoin - which is pretty much against the…

I hadn't heard of the second possible attack that you mention until now. Could you please point me to an article or somewhere that develops the idea. I'm intrigued about what people predict that the miners of such pool would do in that scenario.

Re: Ghash.io very close to 51% of bitcoin pool

#89

Post by nwh »

mrfusion wrote: post #88

With all the concern over double spending, I'm wondering doesn't double spending happen frequently? It seems like all you'd have to do is make two transactions within a short time period like < 1 second. Doesn't this happen from time to time?

That's why nobody should be accepting transactions with no confirmations.

Re: Ghash.io very close to 51% of bitcoin pool

#90

Post by waterlesscloud »

masklinn wrote: post #64
theboywho wrote: post #62

Earlier quoted context omitted.

> but the reality is that in any social system there will always be concentration of power in the hands of the few. Actually in this particular case, it's not in the hands of the few, it's in the hands of the majority.

No, it's in the hand of the pool operator not in the hand of the pool's miners.

Watch how fast the miners leave the operator if they disagree with his actions.

It's the hands of the miners.

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