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It's Time For a Hard Bitcoin Fork

hackingdistributed.com

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Re: It's Time For a Hard Bitcoin Fork

#111

Post by gwern »

emin-gun-sirer wrote: post #42
gojomo wrote: post #32

This is the same panic-prone author (@el33th4xor) who, in early November 2013 with Bitcoin at about $220, wrote "@el33th4xor: You heard it here first: now is a good time to sell your Bitcoins" ( https://twitter.com/el33th4xor/status/397219415025934336 ) This was just before releasing some research that he thought would cause a confidence collapse. (That is, his prediction was almost self-consciously attempting market…

Nice ad hominems you've got there. >In fact, the paper just formalized some concerns discussed in the mining community for years. This is false. Discussed here: http://hackingdistributed.com/2013/11/09/no-you-dint/ >the "Bitcoin lunatic fringe" this author mocks has been right about the pool(s) having such power refraining from destructive (and self-bankrupting) next steps. No. The Bitcoin lunatic fringe was adamant…

> Nice ad hominems you've got there.

That's seriously rich coming from the dude who just wrote

> The main ringleader of this brigade was a failed academic from Singapore, someone who had a superficial knowledge of game theory and sufficient familiarity with Latex to create the look & feel of research papers, but someone whose own academic work never went beyond repackaging well-known results in game theory.

Re: It's Time For a Hard Bitcoin Fork

#112

Post by eric_bullington »

Aqueous wrote: post #82

Take a deep breath. Stop hyperventilating. Bitcoin has died a violent, crashy, gory death dozens of times at this point. It's in Bitcoin community's, and GHash's, economic interest that no miner exceeds 50%. That's all you need to know to know that this is just another exasperated hand-wringer proclaiming the premature death of BitCoin. BitCoin, RIP 2008 - 2009, 2010, 2011, 2012, 2013, 2014, ?

Yeah, but this time it's different, and many early Bitcoiners are alarmed. A long-held, fundamental social contract has been broken.

We've long known this is a weakness of the system, but most early adopters assumed that our strong decentralized culture would prevail.

Clearly, we were wrong. So we either have to find a technological solution ASAP, or we may as well just let GHash operate servers -- it'd be much cheaper for them and easier on the environment, and the end result is the same.

Centralization.

Re: It's Time For a Hard Bitcoin Fork

#113

Post by bunderbunder »

Aqueous wrote: post #98
josu wrote: post #84

Earlier quoted context omitted.

>It's in Bitcoin community's, and GHash's, economic interest that no miner exceeds 50%. Are Bitcoin community's interests and individual miners' interests aligned? I understand why the bitcoin community wouldn't want a mining pool with more than 50% of the share, but why should "selfish" individual miners care?

If the blockchain is dominated by a single interest, and that player starts abusing their market position, BitCoin's exchange rate will plummet and the economic interest in question will lose millions. So yes, it is in the community's interest and individual miners' interest to keep the hashrate distributed enough to prevent that from happening. What happens when people lose faith in the system? The 2008 financial cr…

This reasoning is based on the assumption that a 51% player must also be long on Bitcoin, and that they interpret the nature and value of the Bitcoin market in a similar manner to most members of the Bitcoin community.

In other words, assuming that they don't know anything you don't. Considering we're talking about an entity that's managed to become a 51%er, that assumption sounds downright Pollyannaish to me. The same line of reasoning also supposedly implies that nobody should want to get even close to this point. Counterfactually, as it turns out.

That said, I can see the attraction of that line of reasoning, too. When you've got a tiger by the tail, it probably is best not to contemplate too carefully what's at the other end.

Re: It's Time For a Hard Bitcoin Fork

#114

Post by qq66 »

scythe wrote: post #94
nullc wrote: post #37

Earlier quoted context omitted.

It's pretty easy to break delegation, but the cure is worse than the illness— to reduce mining variance there you must use hosted mining, where miners have even less control (absent more fixes…). GHash.IO is substantially hosted mining in any case. Really the more important point to note is that pooling for variance reduction has absolutely nothing to do with delegating control. Running a outbound only bitcoin full n…

>to reduce mining variance there you must use hosted mining Why should people [miners] be able to reduce variance at all? That's not a necessary feature of the system, and it doesn't seem like a goal worth pursuing. Security is paramount; mining variance is "first-world-problems". >say if GHash.io decides to steal a bunch of coins from their miners It seems far more likely that GHash would try to be sneaky about thef…

Reducing variance of a return allows the entry of smaller-scale and more risk-averse participants into the market.

Re: It's Time For a Hard Bitcoin Fork

#115

Post by sexmonad »

bobbygoodlatte wrote: post #105

A hard fork would be just as devastating as a 51% attack. The author is way over-reacting here. In fact, it looks like GHash is down to 45% and dropping — BitFury just left, and Petamine is considering leaving too: http://www.coindesk.com/bitfury-pulls-power-ghash-community-...

Why do BitFury and Petamine use a pool at all? At their scale, wouldn't they have low enough variance through solo mining? Or perhaps P2Pool?

Re: It's Time For a Hard Bitcoin Fork

#116

Post by eric_bullington »

bredren wrote: post #87
josu wrote: post #84

Earlier quoted context omitted.

>It's in Bitcoin community's, and GHash's, economic interest that no miner exceeds 50%. Are Bitcoin community's interests and individual miners' interests aligned? I understand why the bitcoin community wouldn't want a mining pool with more than 50% of the share, but why should "selfish" individual miners care?

Miners occupy a powerful and yet somewhat isolated portion of rapidly evolving bitcoin ecosystem. For many people in the Bitcoin ecosystem, making the technology successful is about more than personal enrichment. A lot of folks see Bitcoin specifically (because of its present success) holding the potential for big changes in a shorter period of time. The people I've spoken with don't mince words: in general serious m…

>The people I've spoken with don't mince words: in general serious miners compete against others to make money, not societal change.

Fine, but in their ignorance and greed, they're going to lose their ability to make money.

Re: It's Time For a Hard Bitcoin Fork

#117

Post by joaorj »

bunderbunder wrote: post #113
Aqueous wrote: post #98

Earlier quoted context omitted.

If the blockchain is dominated by a single interest, and that player starts abusing their market position, BitCoin's exchange rate will plummet and the economic interest in question will lose millions. So yes, it is in the community's interest and individual miners' interest to keep the hashrate distributed enough to prevent that from happening. What happens when people lose faith in the system? The 2008 financial cr…

This reasoning is based on the assumption that a 51% player must also be long on Bitcoin, and that they interpret the nature and value of the Bitcoin market in a similar manner to most members of the Bitcoin community. In other words, assuming that they don't know anything you don't. Considering we're talking about an entity that's managed to become a 51%er, that assumption sounds downright Pollyannaish to me. The sa…

When they bought the mining machines they were entering bitcoin as long weren't they?

They can't even sell their future winnings as they don't have them yet, so they are really long!

Re: It's Time For a Hard Bitcoin Fork

#118

Post by eric_bullington »

gus_massa wrote: post #80
Tuna-Fish wrote: post #71

Earlier quoted context omitted.

> The pool would notice that certain participants contributions are conflicting with other discoveries, and ban such participants? How? Or, you ban me, I sign up again under a different alias.

The pool can use a 2% fee for old accounts and a 20% fee for new accounts (for example, with less than 1 month or less than 10^x hashes calculated.)

And so few new miners would sign up. Which would be good.

Re: It's Time For a Hard Bitcoin Fork

#119

Post by flatline »

Lerc wrote: post #52
tinkerrr wrote: post #40

Earlier quoted context omitted.

No, 51% is vastly more powerful than 49%. With 51%, you essentially control the entire Blockchain because you can always create a new Blockchain that would be accepted by the network, given enough time. Always. With 49%, you can only get away with it a few times, and it's less likely you will mine the next 6 blocks. Essentially, as time progresses, with 49% you lose out, with 51%, you keep winning.

I think I understand now. That would still be a bit of a tricky position because it isn't so much 51% when you commit the fraud that is important it is the period following the fraud. How detectable would such an action be? Wouldn't other systems be able look at the block and say "it's verified, but it don't look right to me"

You pretty. Much have to detect the fraud before/as it occurs - the dominant miner being silent for a while is a good indication they are building an alternate chain in private, for example. At least, that would be an indicator for a double-spend.

Re: It's Time For a Hard Bitcoin Fork

#120

Post by moe »

In less sensational terms: The biggest pool got too big. Members (BitFury) react by shrinking it back. Community is aware of the problem, solution will probably be coming soon.

Anyway, stay tuned and don't miss the next iteration of 'We are all doomed!!1' by the two muppet academics. To be published shortly after a solution gets deployed. Or earlier.

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