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Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

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Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#401

Post by viach »

jhpriestley wrote: post #83

When Bitcoin was running up to $20,000, I tried to analyze the system and come to a personal conclusion about its equilibrium value, because I didn't want to miss out if it really was the currency of the future. I ended up not investing, because of the possibility of a double-spend attack. I think that cryptocurrency enthusiasts are seriously underestimating the importance of double-spending attacks to the economics…

You have used technical analysis for making an investment decision. Scientific method, skeptical approach, great. And the assumption is "the tech is broken, the price will fall because of it, won't buy".

But, if we take on step further and continue our experiment, lets compare the actual facts with the assumption.

And what we see? Two cryptocurrencies (Bitcoin Gold and Verge) which were successfully attacked this week, didn't lose in market cap.

How comes? What conclusion should we take from this assumption/fact, if continue being scientific? Do we need a new assumption?

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#402

Post by mihaifm »

xur17 wrote: post #168
XR0CSWV3h3kZWg wrote: post #6

more details here: https://forum.bitcoingold.org/t/double-spend-attack-on-excha... Bitcoin gold was a fork to try and decentralize mining. It changed to a proof of work that is supposed to be ASIC resistant. It looks like the typical situation is mining by GPU for equihash (BTG PoW). BTG hashrate is at ~30MH/s at the moment, where Zcash's hashrate is at ~486MH/s. I don't have the numbers off hand, but it'd be interes…

You can rent hashing power on Nicehash, which currently has ~77MSol/s available for rent. I'm not 100% familiar with how the auction process works, but it looks like I could purchase 26MSol/s via a fixed contract for 1 hour for ~1BTC. Am I misunderstanding something here, or can I maintain a 51% attack right now for ~$8k an hour. This can't be right.

It should come lower than that...rental price seems to be around 0.5 BTC/MSol/day, so the price for one hour would be 0.5 * 26 / 24 = 0.54 BTC, roughly $4k

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#403

Post by jpttsn »

oh_sigh wrote: post #130
tehsauce wrote: post #110

Earlier quoted context omitted.

The spooky thing that this made me realize, is that if anyone did find a vulnerability in bitcoin (or any cryptocurrency) is that they would have a greater incentive to only slowly leech off the system, because they will be able to siphon out much more over time than if everyone panics over security. The weapon is no good unless it's secret.

Even finding a single double spend attack that only double-spends 1 satoshi would be enough to destroy bitcoin.

Would even a single counterfeiter be enough to destroy a new fiat currency, or is your thesis specific to crypto?

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#405

Post by tobiaswk »

Well it was scamish to begin with. 100,000 coins were premined when it forked. With a lot less mining competition a double spend attack was just waiting to happen. It is possible to also do a double spend attack on Bitcoin and Bitcoin Cash. It's just not very feasible because you would need A LOT of hashing power. So this comes as no surprise to me at least.

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#406

Post by joosters »

hndamien wrote: post #256
Arbalest wrote: post #227

Earlier quoted context omitted.

Sort of. It does create an opportunity cost, in diverting electricity away from other, arguably more useful causes. The whole matter there is complicated by economies of scale and baseload demand etc though. It could also be seen in terms of finiteness of the source of energy.

The measure of usefulness is determined by how much money people are willing to allocate towards it. Given that the money is allocated there, it indicates that for those actors, they see some utility regardless of what other people think. Hence, the only way to modify the unwanted behaviour is to correctly account for those producing the externalities, such that this market signal reverberates all the way through the…

By that flawed reasoning, BitConnect must have been extremely useful...

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#407

Post by kjhnwasdkn »

brownbat wrote: post #318
jjeaff wrote: post #266

Earlier quoted context omitted.

That's not buying anything with Bitcoin. You are converting your Bitcoin to USD and then purchasing using the traditional, centrally controlled financial system. And that's not even considering the transactions fees it costs to get the Bitcoin to your account. Then there are the transaction fees for using the card, which coinbase says is free "for now".

That's like saying you can't buy anything with a VISA. Sure, transactions are intermediated through some consensus denomination for exchange. So? He still lost bitcoin and gained tacos. Just as someone else might lose a portion of a credit balance and gain tacos. You get just as full either way.

Sure you could also pay your groceries with lead dispensed from a gun. But that's currently nowhere near broad addoption. It just doesn't meet the definition of "currency", though it will virtually always be current.

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#409

Post by bobbrown »

viach wrote: post #401
jhpriestley wrote: post #83

When Bitcoin was running up to $20,000, I tried to analyze the system and come to a personal conclusion about its equilibrium value, because I didn't want to miss out if it really was the currency of the future. I ended up not investing, because of the possibility of a double-spend attack. I think that cryptocurrency enthusiasts are seriously underestimating the importance of double-spending attacks to the economics…

You have used technical analysis for making an investment decision. Scientific method, skeptical approach, great. And the assumption is "the tech is broken, the price will fall because of it, won't buy". But, if we take on step further and continue our experiment, lets compare the actual facts with the assumption. And what we see? Two cryptocurrencies (Bitcoin Gold and Verge) which were successfully attacked this wee…

In the long term the market behaves rational. It might take some time, but - if he is right - odds are on his side.

A mid-term (3-7 years) of irrational behaviour in a market in not unusual. Some will benefit from it.

Re: Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

#410

Post by nopinsight »

hvidgaard wrote: post #392
jhpriestley wrote: post #83

When Bitcoin was running up to $20,000, I tried to analyze the system and come to a personal conclusion about its equilibrium value, because I didn't want to miss out if it really was the currency of the future. I ended up not investing, because of the possibility of a double-spend attack. I think that cryptocurrency enthusiasts are seriously underestimating the importance of double-spending attacks to the economics…

> If hash capacity were traded on a perfectly competitive market, then it would always make sense to rent 51% of the capacity at market rates, earn the transaction fees, and also perform a double-spending attack. There is no equilibrium point for transaction fees where this attack becomes uneconomical. The only defense is that the market for hash capacity is imperfect. At this point in time the current hashrate of th…

It is far from clear that Bitcoin will likely ever reach $70,000. That implies an approx market cap of $1,200,000,000,000 or more. Would Bitcoin ever be useful enough or generate more value than Google or several Big Energy companies combined to justify and sustain that valuation?
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