Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Sabotaging Bitcoin

blog.dshr.org

Post reply on HN
Print view View original

161–170 of 224 posts

Re: Sabotaging Bitcoin

#161

Post by _heimdall »

rcxdude wrote: post #128
mrb wrote: post #105

Earlier quoted context omitted.

Tx fees make up a bigger and bigger fraction of miner rewards over time.

Is a store of value that requires a significant fraction of it be eaten up by transaction fees to maintain security going to be actually useful in the long term?

With regards to transaction fees, bitcoin is already not particularly useful today. It can make sense to be used as an alternative to wire transfers where you only occasionally send a transaction, but it isn't useful as a currency and any day to day transactions have to happen off chain and not use bitcoin at all.

Re: Sabotaging Bitcoin

#162

Post by _heimdall »

phonicwheel wrote: post #98
onion2k wrote: post #95

Earlier quoted context omitted.

Why would you expect the scale of the derivatives to be related to the scale of the spot market, especially if the derivatives are cash-settled futures? One is basically gambling on the price of BTC going up or down, and the other is trading the actual BTC, right?

How is trading the actual BTC not also gambling on the price of BTC going up or down?

Its hard for me to consider owning the underlying asset as gambling compared to owning paper bets on the future value. In the former you are owning it today, in the later you are betting only on what it will cost to own later.

Re: Sabotaging Bitcoin

#163

Post by palata »

copirate wrote: post #157
palata wrote: post #145

Earlier quoted context omitted.

It is precisely what this discussion is about. From the article: > The key idea behind this strategy, called Selfish Mining, is for a pool to keep its discovered blocks private, thereby intentionally forking the chain. The honest nodes continue to mine on the public chain, while the pool mines on its own private branch. If the pool discovers more blocks, it develops a longer lead on the public chain, and continues to…

> The key idea behind this strategy, called Selfish Mining, is for a pool to keep its discovered blocks private, thereby intentionally forking the chain. The honest nodes continue to mine on the public chain, while the pool mines on its own private branch. If the pool discovers more blocks, it develops a longer lead on the public chain, and continues to keep these new blocks private. When the public branch approaches…

> Yes, if there are blocks that are found at almost the same time. But that's not the situation discussed here.

It VERY MUCH is.

Of course if you take another scenario that doesn't make sense, then it doesn't make sense :-).

> They don't know in advance that they will be that lucky.

Whenever you find a block, you know you are one of the first to find it. It's obvious because nobody else has published a block. So you know you are lucky right now. You can decide to wait 1, 2, 5, X seconds before you reveal your block and start mining the new block in the meantime.

Maybe you just mine for 5 seconds before revealing the block, and that's the winning strategy. Maybe you wait until someone else publishes their block and you immediately reveal yours, ending up with two competing chains but knowing that you had a headstart with yours.

The detail of whether or not this is profitable, and how exactly you should do it (Wait X seconds? Wait until someone publishes a block?) is statistics and game theory ("What if the others are also withholding their blocks now? What is their strategy?"). The whole question is whether or not there is a practical, profitable strategy doing that.

Re: Sabotaging Bitcoin

#164

Post by svara »

copirate wrote: post #117
emil-lp wrote: post #110

Earlier quoted context omitted.

If you mine a block without revealing it, not only are you the only one that can mine the next block after that, but everyone is mining on the "wrong head". There's of course the risk that someone finds a different head in the meantime, but otherwise, you waste competitors' resources, while you get an advantage on the next block.

They are not mining on the wrong head. They are mining on the current head. If they find a block it will be accepted as the new head and the withheld block will be rejected, so it's not wasted mining time at all.

You can determine statistically whether you have found a block relatively early, and conversely whether other miners are unlikely to find one soon.

So you can get a head start on the next block from the likely new head block you've found.

It only works on average of course, you might be the one wasting resources if someone else published a block while you're withholding yours, but the trick is for you to gain an edge on average.

Now what happens if everyone is doing that calculation? That's where you need to do the game theory analysis (which I haven't and don't claim to understand).

Re: Sabotaging Bitcoin

#165

Post by palata »

copirate wrote: post #150
palata wrote: post #138

Earlier quoted context omitted.

When you reveal a block, it's not accepted instantaneously. When two competing blocks are revealed "roughly at the same time", it ends up in two competing chains. If B finds a block between minute 1 and 2, they start working on their competing chain, but A is already working on theirs. And A had a headstart because it started working on it somewhere between minute 1. So it's more likely that A's fork wins the race in…

But the head start doesn't change anything. At this point A is mining on their block, B is mining on theirs. There's no advantage. I'd even say that B is slightly more likely to keep their reward because they started propagating their block earlier, so it's more likely other miners are mining on this block. If A finds a second block between minute 1 and 2, then they win, but it would be the same if the didn't withhol…

> I fail to see how withholding is profitable.

Because you keep ignoring the part where it is profitable :-).

> If A finds a second block between minute 1 and 2, then they win, but it would be the same if the didn't withhold their block.

Except that by withholding their block, they got a headstart so they are more likely to find the second block. So it's not the same.

And you keep ignoring the fact that they don't necessarily have to wait until someone else finds a competing block. Maybe a winning strategy is to always withhold the block for 5 seconds. If you slightly increase your likelihood to find the winning block, you increase your profit, and that's the whole point.

With the interesting consequence (and that's the game theory part) where if everybody starts withholding their block for 5 seconds, then it changes the winning strategy.

Re: Sabotaging Bitcoin

#166

Post by copirate »

svara wrote: post #164
copirate wrote: post #117

Earlier quoted context omitted.

They are not mining on the wrong head. They are mining on the current head. If they find a block it will be accepted as the new head and the withheld block will be rejected, so it's not wasted mining time at all.

You can determine statistically whether you have found a block relatively early, and conversely whether other miners are unlikely to find one soon. So you can get a head start on the next block from the likely new head block you've found. It only works on average of course, you might be the one wasting resources if someone else published a block while you're withholding yours, but the trick is for you to gain an edge…

> You can determine statistically whether you have found a block relatively early, and conversely whether other miners are unlikely to find one soon.

Finding a block relatively early doesn't affect the odds of others finding a block soon. The odds are always the same, each hash is an independent event.

I don't see why withholding would get you an edge on average. If the others find a block while you're withholding, you lose your reward. If you find another block before them, you get the rewards of 2 blocks, exactly like if the same happened but you didn't withhold.

The only way for you to have an advantage is if you find a 2nd block at the same time as another one finds one on the other chain. You can then publish a height of 2 vs a height of 1, so you win. But to do that you have to first put your first block reward at high risk by withholding it. I don't think the odds are in your favor here.

Re: Sabotaging Bitcoin

#167

Post by spectralista »

onion2k wrote: post #95
w10-1 wrote: post #62

TIL the scale of bitcoin derivatives in 2020 (hence volatility): ~2T on 2B market activity. Jeepers! --- Starting in late 2020, as shown in The Economist's graphic, the spot market in Bitcoin became dwarfed by the derivatives markets. In the last month $1.7T of Bitcoin futures traded on unregulated exchanges, and $6.4B on regulated exchanges. Compare this with the $1.8B of the spot market in the same month. ---

Why would you expect the scale of the derivatives to be related to the scale of the spot market, especially if the derivatives are cash-settled futures? One is basically gambling on the price of BTC going up or down, and the other is trading the actual BTC, right?

Because at that scale, the tail is wagging the dog and it is not even close.

Re: Sabotaging Bitcoin

#168

Post by gosub100 »

nradov wrote: post #56
krupan wrote: post #48

Earlier quoted context omitted.

Same with all money. Please research more before parroting this argument. You are not the first person to think of it.

It's always hilarious when people who are unclear on the basics themselves tell other to "research more". I suppose it's the Dunning-Kruger Effect.

I don't see it that way. I see the person saying "stop making tired arguments" or "don't ask questions that have been answered hundreds of times".

Re: Sabotaging Bitcoin

#169

Post by copirate »

palata wrote: post #165
copirate wrote: post #150

Earlier quoted context omitted.

But the head start doesn't change anything. At this point A is mining on their block, B is mining on theirs. There's no advantage. I'd even say that B is slightly more likely to keep their reward because they started propagating their block earlier, so it's more likely other miners are mining on this block. If A finds a second block between minute 1 and 2, then they win, but it would be the same if the didn't withhol…

> I fail to see how withholding is profitable. Because you keep ignoring the part where it is profitable :-). > If A finds a second block between minute 1 and 2, then they win, but it would be the same if the didn't withhold their block. Except that by withholding their block, they got a headstart so they are more likely to find the second block. So it's not the same. And you keep ignoring the fact that they don't ne…

> Except that by withholding their block, they got a headstart so they are more likely to find the second block. So it's not the same.

Withholding their block (5s or whatever) doesn't make them more likely to find the second block. The probability of finding a block is always the same, given a hashrate.

They are the only ones mining on this particular chain, but that's not an advantage either. How mining on a hidden chain is an advantage?

On the other hand, withholding certainly makes them more likely to lose the reward of the block.

Re: Sabotaging Bitcoin

#170

Post by tatersolid »

SiempreViernes wrote: post #99
phonicwheel wrote: post #98

Earlier quoted context omitted.

How is trading the actual BTC not also gambling on the price of BTC going up or down?

You might buy BTC to actually spend it, say on paying a ransomware vendor.

We’re calling these organized criminals vendors now?
Post reply on HN