For a very good (if long) explanation about Bitcoin in general and why this information is potentially relevant to the progress of Bitcoin - http://www.michaelnielsen.org/ddi/how-the-bitcoin-protocol-a...
Ghash.io very close to 51% of bitcoin pool
21–30 of 130 posts
Re: Ghash.io very close to 51% of bitcoin pool
#22Earlier quoted context omitted.
My understanding is that if one entity controls 51% of the network, they can push arbitrary modifications into the block chain. In effect, they can do whatever they want.
> ...they can push arbitrary modifications into the block chain. In effect, they can do whatever they want. No, since who holds what coin is defined by consensus, which has to stretch out of the mining pool. If they arbitrarily gave themselves coin, for example, then no other client would accept that they hold that. See smtddr's reply for details of what they can and cannot do.
"If they arbitrarily gave themselves coin, for example, then no other client would accept that they hold that."
Would this be detectable in practice?
Re: Ghash.io very close to 51% of bitcoin pool
#23Earlier quoted context omitted.
Can you explain what the threat is please?
http://www.cryptocoinsnews.com/2014/01/09/warning-ghash-io-n... ---The attacker can----: Reverse transactions that he sends while he’s in control Prevent some or all transactions from gaining any confirmations Prevent some or all other generators from getting any generations Double spend Bitcoins ---The attacker cannot---: Reverse other people’s transactions Prevent transactions from being sent at all (they’ll show a…
Is there really a practical difference between double spending and generating coins out of thin air? I can just duplicate coins by sending to two wallets I control. Or is there something that would prevent me from later spending some of those coins?
Re: Ghash.io very close to 51% of bitcoin pool
#24In 2011, Jed McCaleb pointed out that bitcoin mining pools can collude. So in fact, Bitcoin is based on trust ... it is based on trust that mining pools are not colluding against you. His idea was to make this trust explicit. And that's the birth of Ripple. Ripple's consensus process is predicated on trust that other entities are not colluding against you. The Ripple protocol is not subject to the 51% attack that Bit…
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Re: Ghash.io very close to 51% of bitcoin pool
#25Earlier quoted context omitted.
http://www.cryptocoinsnews.com/2014/01/09/warning-ghash-io-n... ---The attacker can----: Reverse transactions that he sends while he’s in control Prevent some or all transactions from gaining any confirmations Prevent some or all other generators from getting any generations Double spend Bitcoins ---The attacker cannot---: Reverse other people’s transactions Prevent transactions from being sent at all (they’ll show a…
Is there really a practical difference between double spending and generating coins out of thin air? I can just duplicate coins by sending to two wallets I control. Or is there something that would prevent me from later spending some of those coins?
You can spend the same coins twice, but you do not end up with 2x as many if you don't spend them at all. So you can end up with 1x worth of goods and 1x in your wallet like you never spent them but you can't end up with 2x in your wallet.
Re: Ghash.io very close to 51% of bitcoin pool
#26Ghash.io is "just" a pool. For them to do anything scary, all the members would need to collude, right? Or can the pool "direct" the mining in such a way that eg. double-spending can happen without the consent of individual miners? Obviously, the second there's evidence of double spending or similar, any value of Bitcoin will disappear as dew on a summer morning and the value of all the ASIC gear with it - so there i…
None of their miners have to collude in any way; scary stuff is entirely up to the pool operator to execute and the miners won't even know that they're helping until it has happened. At this point it's tempting to consider just mining for this pool as collusion, however. GHash.io have been known to abuse their mining power to double-spend already. Miners are not showing much will to leave for other pools, however. It…
> It's a dire situation.
Hoards of people dump insane amounts of money into a new, unproven and unstable currency technology. What could go wrong?
Re: Ghash.io very close to 51% of bitcoin pool
#27If a pool has control of >50% of the hashing power, it means that they could do damaging things to the Bitcoin network as far as I understand.
People will explain that it's not in the pools interest to do this, but it's missing the point. The pool is now a potential weapon, with a very small number of people in control. This means they are now a potential weapon against Bitcoin, and if someone external wanted to hurt Bitcoin GHash.io might be a good starting point to do this of which there are many ways to potentially realise this goal (blackmail, hacking, bribery, covert seizing of control etc)
The more pools there are, and the more evenly the hashing power is ditributed amongst these pools the safer it is for everyone who has interests in Bitcoin.
Peer-to-peer decentralised pools to me sound like an excellent way to mitigate this sort of risk, and I think it's important. Consolodation of pool hashing power I beleive is a natural inevitable market force. One pool has to be objectively the best and will attract the most miners. From what I gather, p2p pools are a fairly large technical challenge and the question still remains as if they can still compete with centralised pools with regards to efficiency and reliability (profitability).
Re: Ghash.io very close to 51% of bitcoin pool
#28Earlier quoted context omitted.
http://www.cryptocoinsnews.com/2014/01/09/warning-ghash-io-n... ---The attacker can----: Reverse transactions that he sends while he’s in control Prevent some or all transactions from gaining any confirmations Prevent some or all other generators from getting any generations Double spend Bitcoins ---The attacker cannot---: Reverse other people’s transactions Prevent transactions from being sent at all (they’ll show a…
Is there really a practical difference between double spending and generating coins out of thin air? I can just duplicate coins by sending to two wallets I control. Or is there something that would prevent me from later spending some of those coins?
Given 1 BTC sent to two different addresses, there is maximum only one of them that is valid at one point in time.
However after some time, the other coin could be valid and the first coin could be invalid.
The timing attack gets harder the longer time has gone since the coin was sent.
Re: Ghash.io very close to 51% of bitcoin pool
#29Earlier quoted context omitted.
> ...they can push arbitrary modifications into the block chain. In effect, they can do whatever they want. No, since who holds what coin is defined by consensus, which has to stretch out of the mining pool. If they arbitrarily gave themselves coin, for example, then no other client would accept that they hold that. See smtddr's reply for details of what they can and cannot do.
"If they arbitrarily gave themselves coin, for example, then no other client would accept that they hold that." Would this be detectable in practice?
yes, ever other Bitcoin client would refuse the blocks because they don't follow the transaction spec
The purpose of Bitcoin mining is to establish an ordered sequence of transactions
Re: Ghash.io very close to 51% of bitcoin pool
#30Earlier quoted context omitted.
http://www.cryptocoinsnews.com/2014/01/09/warning-ghash-io-n... ---The attacker can----: Reverse transactions that he sends while he’s in control Prevent some or all transactions from gaining any confirmations Prevent some or all other generators from getting any generations Double spend Bitcoins ---The attacker cannot---: Reverse other people’s transactions Prevent transactions from being sent at all (they’ll show a…
Is there really a practical difference between double spending and generating coins out of thin air? I can just duplicate coins by sending to two wallets I control. Or is there something that would prevent me from later spending some of those coins?
I think that they would not be able to do that: only one of the two transactions could be in the longest correct block-chain. That's because it is easy for the clients to detect and reject a block-chain that contains double spending.
What they can do is pay for goods or services and revert the transaction after the goods or services have been delivered.