The Verge Hack, Explained

Well on point, PoW dint work on Bitcoin as well. The only reason it dint become a problem was that Bitcoin wasn't famous at that time. From Digital Gold by Nathaniel Popper:

Laszlo’s CPU had been winning, at most, one block of 50 Bitcoins each day, of the approximately 140 blocks that were released daily. Once Laszlo got his GPU card hooked in he began winning one or two blocks an hour, and occasionally more. On May 17 he won twenty-eight blocks; these wins gave him fourteen hundred new coins that day.

Satoshi knew someone would eventually spot this opportunity as Bitcoin became more successful and was not surprised when Laszlo e-mailed him about his project. But in responding to Laszlo, Satoshi was clearly torn. If one person was taking all the coins, there would be less of an incentive for new people to join in.

“I don’t mean to sound like a socialist,” Satoshi wrote back. “I don’t care if wealth is concentrated, but for now, we get more growth by giving that money to 100% of the people than giving it to 20%.”

As a result, Satoshi asked Laszlo to go easy with the “high powered hashing,” the term coined to refer to the process of plugging an input into a hash function and seeing what it spit out.

But Satoshi also recognized that having more computing power on the network made the network stronger as long as the people with the power, like Laszlo, wanted to see Bitcoin succeed.”

One can imagine the outrage it will cause if it happened today.

"Exactly how the largest protocol-level hack of a cryptocurrency in recent memory could preceed said cryptocurrency increasing in price and then announcing a partnership with the most trafficked porn-site on the internet is a question I’m forced to leave open-ended; my personal pet-theory is that it has something to do with the fact that the world makes no sense and human beings are all completely out of their goddamn minds."

No. Relativity is actually a special case if this general principle.

For a large and complex network, events A and B which are very far apart cannot be compared in any canonical way. The larger the network the less they can be compared.

However, A can come before B relative to some reference point C.

That’s enough to achieve most things. The point is that you shouldn’t have a global and continuous sense of time in distributed systems. Leslie Lamport has developed many things including vector clock over the years to address this.

Our PTN is just the latest in a long line of examples.

When you say that you have “no need” for C once you have synchronized clocks, not only are you ignoring relativity but you are also ignoring the byzantine generals problem. If Han Solo can benefit from claiming he shot first, why would I trust his clock? If you’re implementing a video game or cryptocurrency in a byzantine resilient way, how exactly would you have a continuous global sense of time? Go ahead the floor is yours.

This hack results from a basic design error: for difficulty adjustment to work properly, the window of recent blocks it considers must be relatively immune to time stamp manipulation. In other words, the allowed timestamp drift must be much smaller than the adjustment time window. Bitcoin allows a 2 hour drift, but has an adjustment window of 2 weeks.

In verge's case, both are identical, at 2 hours. This is an open invitation to difficulty adjustment abuse.

You are mixing two things up - figuring out the time an event happened and trusting a timestamp that someone attached to an event. Within a single inertial reference frame there is a canonical way to order events, namely by the time coordinate in that reference frame which is the same everywhere. And for all practical purposes of building a distributed system on Earth, Earth is an internal reference frame. Ensuring that nobody cheats when assigning time stamps to events is an entirely different problem. As said, hand an atomic clock to everyone and you can know the order of any two events, relativity plays no role. Making sure that nobody can or will cheat will require some more effort, but again relativity plays no role.