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Sabotaging Bitcoin

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Re: Sabotaging Bitcoin

#171

Post by gosub100 »

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?

Derivatives can be structured in a time-constrained manner that requires them to go up/down in a specific time window, thus amplifying the gains/losses. Also there's generally no way to short an asset without borrowing them with a contract to pay them back (which requires timing the market move and paying rent on the asset). This is something that options contracts solved.

Re: Sabotaging Bitcoin

#172

Post by svara »

copirate wrote: post #166
svara wrote: post #164

Earlier quoted context omitted.

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, y…

Yeah, I was thinking about this wrong. I don't think it works.

Edit: I think the strategy does work, but a little differently: if you withhold a block and someone else finds one while you do so, you can still publish yours and win a race with a certain probability, i.e. the expected loss is not as high as one might think.

Then, if you do that and if you have enough hash power, you can end up mining a private chain ahead of the public one often enough, so that the loss you take is less than the loss others take through the hash power they are wasting because of you doing this.

Re: Sabotaging Bitcoin

#173

Post by coldcity_again »

nathias wrote: post #118
sebbyBinx wrote: post #93

Part of this post addresses the economics of creating a 6 block re-org. This makes sense as 6-confimations is the standard for Bitcoin finality today . However, as Bitcoin's security inevitably weakens over the coming years due to diminishing miner rewards (denominated in BTC), I believe this "6-confimation" acceptance policy will change to include not only the number of confirmations, but the timing of those confirm…

you can accept bitcoin at any confirmation you want, it isn't a policy

in bitcoin terminology it is actually called policy rather than consensus, meaning you can choose your own config and still meet consensus rules.

Re: Sabotaging Bitcoin

#174

Post by utopiah »

tenuousemphasis wrote: post #103
utopiah wrote: post #97

Earlier quoted context omitted.

Well what's arguably even more horrifying is according to "Estimated average energy efficiency of bitcoin mining hardware" no significant changed happened since 2014. I imagine we went from CPU to GPU to ASIC in couple of years and now for more than a decade, no change, just more.

I'm not sure what data you looking at but we went from 8300 J/TH in 2014 to 33.4 J/TH in 2023. So... what are you talking about?

They have a graph at the bottom with the name I provided "Estimated average energy efficiency of bitcoin mining hardware"

Re: Sabotaging Bitcoin

#175

Post by adgjlsfhk1 »

RealityVoid wrote: post #107
copirate wrote: post #100

Earlier quoted context omitted.

> If a pool can set up a situation where they mine a block and wait X seconds to reveal it, they can force other miners to waste X seconds of has power and gain an advantage. How is it wasted if they work on the current chain? If they find a block during those X seconds, they'll propagate it before the waiting pool does. The waiting pool will then just lose the revenue from the block they put on hold. They're the one…

Right, but the odds of this happening is small(ish) - I'm certain there is a sweet spot for witholding time. If they don't find a block within the time interval, then effectively all the work for that time is "wasted" by the other participants since it could not have been put on the chain anyway AND the witholder has a headstart of a couple of seconds searching for a new block.

the odds depend on how much hash power you have. if you're at 5% of the network you can wait longer than if you're at 1%. the other really big problem here is it creates incentives for miners to work together to be able to delay longer

Re: Sabotaging Bitcoin

#176

Post by adgjlsfhk1 »

copirate wrote: post #169
palata wrote: post #165

Earlier quoted context omitted.

> 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…

the key to realize is that this strategy only makes sense if you have a considerable fraction of total hashrate. If you have 10% hashrate, delaying for 1 block period gives you a 10% chance of finding another block on top (that no one else can search for because you haven't published the first one).

Re: Sabotaging Bitcoin

#177

Post by copirate »

adgjlsfhk1 wrote: post #176
copirate wrote: post #169

Earlier quoted context omitted.

> 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…

the key to realize is that this strategy only makes sense if you have a considerable fraction of total hashrate. If you have 10% hashrate, delaying for 1 block period gives you a 10% chance of finding another block on top (that no one else can search for because you haven't published the first one).

But by withholding you also increase the risk that your first block will never end up in the main chain (if the remaining 90% find a block while you're withholding).

And you would sill have 10% chance of mining another block if you don't withhold.

What advantage does withholding give you?

Re: Sabotaging Bitcoin

#178

Post by sanskritical »

pcthrowaway wrote: post #92
ravenstine wrote: post #89

Earlier quoted context omitted.

That's like saying cars have negative value because of how much oil it takes to run them.

Cars have the benefit of transporting humans and goods around. It's more like saying a hypothetical car which moves itself by using gasoline as a propellant rather than fuel for its combustion engine would have negative value. Sure, using fuel (of all things) for propulsion would be one way to move a vehicle, but it would be inefficient by design. Bitcoin, at least, was created during a time where there was no altern…

Bitcoin has the benefit of being the first way in human history of being able to transfer value between two countries in a way that a corrupt bureaucrat, judge, or customs official can't freeze, reverse, or steal it. That's the benefit Bitcoin brings humanity, and to me, I prefer it to having a car.

Proof of Stake is an absurd security proposition. Stakeholders are immediately centralized. In every single PoS coin, the governance immediately becomes the exchanges because they always hold the most coins. They can and have used this to guide PoS coins towards governance unfavorable to the users, like as happened with Steem.

Re: Sabotaging Bitcoin

#179

Post by Majromax »

copirate wrote: post #169
palata wrote: post #165

Earlier quoted context omitted.

> 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…

> 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?

It's easier to see the argument if you have a head start. Imagine you've somehow created a private chain that's 10 blocks ahead of the public chain. You could publish that now and earn 10 blocks of reward, or you could continue mining until the lead diminishes to 0 blocks, earning the same 10 blocks of reward plus however many blocks you've mined in the meantime.

If you have 50%+ε of the hash rate on the network, this argument would have you bully other miners out by almost always stranding their blocks, since in expectation you'll mine blocks faster than your competitors.

The insight is that this same situation can happen probabilistically with a finite but non-majority fraction of the hash rate on the network. With 49% of the hash rate you'll still be able to build a private chain some fraction of the time, so waiting a little bit to see if this occurs might have positive expected value.

Re: Sabotaging Bitcoin

#180

Post by Majromax »

copirate wrote: post #106
sebbyBinx wrote: post #93

Part of this post addresses the economics of creating a 6 block re-org. This makes sense as 6-confimations is the standard for Bitcoin finality today . However, as Bitcoin's security inevitably weakens over the coming years due to diminishing miner rewards (denominated in BTC), I believe this "6-confimation" acceptance policy will change to include not only the number of confirmations, but the timing of those confirm…

If the attacker is waiting for a lucky event to occur (finding more blocks than others while having less than 51% of the mining power) it means that they are constantly wasting mining time. That in itself is a huge cost (operational cost and block rewards thrown away), but it also means that they can't predict when it will happen. A double spend attack must be planned in advance because the first transaction must occ…

> I'm not sure how they could constantly try double spends without risking losing the money each time the attack doesn't happen.

If you're not trying to profit from the double spend itself but rather from a collapse following a proven double-spend, you can double-spend the bitcoins to yourself.

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