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BTC Endgame

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Re: BTC Endgame

#11

Post by AffableSpatula »

esotericn wrote: post #8

In the general case I don't think that majority miner attacks can be defended against without changing the hash algorithm. Specific cases like "empty blocks" could be addressed via a hard fork. But there's nothing stopping miners from faking transactions in blocks, sending amounts to themselves, filling the block with OP_RETURNs, or just doing the minimum possible to get around your "fix". PoW absolutely relies on >5…

The purpose of this project is to challenge people to be specific about the details of that hard fork. Currently there are no theoretical proposals, or concrete BIPs to address.

Re: BTC Endgame

#12

Post by flixic »

flyGuyOnTheSly wrote: post #3

>There is currently no defense for this attack in Bitcoin, as the simulation demonstrates. The entire Bitcoin miner reward model is the defense for this attack. Nation states have powerful computers... but nowhere near as powerful as the decentralized Bitcoin mining network combined. Even if they did currently, the endgame for Bitcoin as envisioned by Satoshi Nakamoto was for everyone on the planet to be mining Bitco…

Nation state wouldn't need to become more powerful than all miners if most miners (more accurately, vast majority of hash power) were located in one, authoritarian country with a penchant of controlling "private" businesses.

Re: BTC Endgame

#13

Post by AffableSpatula »

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?

In order for change in hash function to work, it would require remonitising to a significant hash rate. Why would anyone invest in mining equipment on that new hash function if they already know how the game ends? (ie. their equipment being written off)

Re: BTC Endgame

#14

Post by xur17 »

flyGuyOnTheSly wrote: post #3

>There is currently no defense for this attack in Bitcoin, as the simulation demonstrates. The entire Bitcoin miner reward model is the defense for this attack. Nation states have powerful computers... but nowhere near as powerful as the decentralized Bitcoin mining network combined. Even if they did currently, the endgame for Bitcoin as envisioned by Satoshi Nakamoto was for everyone on the planet to be mining Bitco…

I also imagine that after a few days of the network being jammed up, getting social consensus to fork the network to use a different hashing function would be fairly viable.

Re: BTC Endgame

#15

Post by WJW »

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 larger transaction costs would lead to the less efficient miners being squeezed out of the pool of miners, leading to less hashing power overall and thus an increased vulnerability to attack.

How does the system intend to keep up miner income after all bitcoins have been mined?

Re: BTC Endgame

#16

Post by safog »

esotericn wrote: post #8

In the general case I don't think that majority miner attacks can be defended against without changing the hash algorithm. Specific cases like "empty blocks" could be addressed via a hard fork. But there's nothing stopping miners from faking transactions in blocks, sending amounts to themselves, filling the block with OP_RETURNs, or just doing the minimum possible to get around your "fix". PoW absolutely relies on >5…

Can't you do worse things if you have >50% hash power? It seems like DoS is pretty mild all things considered.

Re: BTC Endgame

#17

Post by nostrademons »

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 reason I'm bullish on cryptocurrency, and specifically Ethereum and Stellar, and it's entirely separate from why many other Bitcoin bulls are bullish on cryptocurrency. You don't need proof-of-work to secure a blockchain. You only need game theory: as long as each participant has more to gain from allowing Bitcoin's continued existence than destroying it (and they can't subvert or destroy it in a way that will be invisible to other market participants), it will continue to exist. 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.

This also implies that proof-of-stake (if done right) is just as good as proof-of-work, which'll solve the energy issues associated with Bitcoin. And it means that cryptocurrency adoption, if it happens, isn't going to be because it's particularly good: rather, it'll be because the U.S. has destroyed the dollar. There's value in cryptocurrency simply in it being an alternative that's readily available, so that civilization doesn't stop if the U.S. does end up miscalculating and hyperinflating the dollar.

Re: BTC Endgame

#18

Post by rspeele »

treve wrote: post #7
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…

You probably mean deflation, right? In inflation the cost of goods and services are higher, because the currency is losing value.

The reward paid to miners is mostly newly minted BTC.

Presently 6.25 BTC newly created with each block, about 1-2 BTC in fees. Mining has been paid for by increasing the BTC supply, for all of Bitcoin's history so far. Eventually that will have to change as the reward keeps halving. At some point there is no block reward and it's all fees. Will people pay enough in fees to sustain mining at a rate that's impossible for a large actor to 51%?

Re: BTC Endgame

#19

Post by WJW »

treve wrote: post #7
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…

You probably mean deflation, right? In inflation the cost of goods and services are higher, because the currency is losing value.

No he means inflation. New coins are being mined all the time, causing existing coins to lose value. This does not really matter yet since total demand for bitcoins has been increasing faster than the total supply, leading to an increase in price.

Re: BTC Endgame

#20

Post by paulgb »

treve wrote: post #7
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…

You probably mean deflation, right? In inflation the cost of goods and services are higher, because the currency is losing value.

Thanks, but I mean inflation: miners were paid a subsidy in new Bitcoin for their contribution to the network. This has an inflationary effect on Bitcoin, although it was overshadowed by increased demand over the same period.
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