Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions • Hacker News Board

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

#421

Post by bufferoverflow » Thu, May 24, 2018, 8:50 AM UTC

gamblor956 wrote: post #136

bufferoverflow wrote: post #66

Earlier quoted context omitted.

You forgot to calculate how much (in resources) it costed to build all those banks and vaults and how much it costs to run and maintain, globally.

It probably cost a few billion dollars to build all those banks globally. It costs a few hundred million to maintain all those banks and vaults. However, these banks and vaults can handle more than 2000x the transactions of Bitcoin in a single day (Visa on its own is 750x the capacity of Bitcoin, and Mastercard handles about twice the number of transactions as Visa), so Bitcoin would need to be at least 1/2000th the…

> It costs a few hundred million to maintain all those banks and vaults.

There are ~8000 banks in the US alone, around 15K around the world.

According to your made up number, it costs $6K/year to run a bank. That's not even remotely close. That would pay maybe a month of the desk clerk's salary + overhead.

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

#422

Post by cheschire » Thu, May 24, 2018, 8:51 AM UTC

dnautics wrote: post #387

wpietri wrote: post #343

Earlier quoted context omitted.

I think the split you draw between people looking at Bitcoin-the-real-thing and people adoring the machinery is an excellent one. If you look at the original paper, it's pretty clear that Bitcoin was meant to be peer-to-peer electronic cash: https://bitcoin.org/bitcoin.pdf In practice, it has failed at this aim. I don't think that was necessarily so; plenty of things start out rough and become more useful over time.…

In practice, Airbnb has failed at its aim of providing airbed style accommodations for conference goers.

Airbnb is a service, where bitcoin is a commodity. I don't mean to imply you are wrong. I simply mean that there may be an even more interesting parallel out there where a commodity is no longer being used in its originally intended way which may support bitcoin's evolution of purpose.

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

#423

Post by brownbat » Thu, May 24, 2018, 8:51 AM UTC

wpietri wrote: post #347

brownbat wrote: post #318

Earlier quoted context omitted.

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.

It's more like saying you can't buy anything with gold. Credit and debit cards are just a way of shifting dollars around. Bitcoin is more a commodity than a currency. Yes, you can convert gold or oil to dollars and buy things, but you can't walk into a store and give them some gold flake or a quart of Texas crude in exchange for a candy bar.

> Credit and debit cards are just a way of shifting dollars around

A credit card is shifting a line of credit, an intangible promise to pay, a form of trust, that happens to be denominated in dollars.

We can pretend it's just a balance of dollars, even though it technically isn't, because it makes conversations easier, and in practical fact that's how it appears to work. But that's just a shorthand.

We can use the same shorthand to say someone bought something with bitcoin.

There's no reason to demand perfect technical precision with bitcoin and no similar pedantic precision with lines of credit.

> you can't walk into a store and give them some gold flake or a quart of Texas crude in exchange for a candy bar

I think this is the best test. Here the guy has done that. He walked in with bitcoin and walked out with tacos. When you say that's not really what happened, it feels like a no true scotsman response.

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

#424

Post by simias » Thu, May 24, 2018, 8:57 AM UTC

apo wrote: post #216

Oddly enough, one of the selling points of Bitcoin Gold (a hard fork of Bitcoin) was its use of Equihash instead of SHA-256. The idea was that a memory-hard proof-of-work function would inoculate Bitcoin Gold from miner centralization. The problem with mining centralization is that sufficiently powerful miners can attack the network by rewriting blocks. This opens the door to double spending. This was exactly the att…

I guess the conclusion is that if you're attempting to create a new PoW cryptocurrency you better make sure to tweak your PoW algorithm enough to make sure that existing miners cannot easily convert their special purpose mining rigs to sink you for fun and/or profit.

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

#425

Post by brandonsometig » Thu, May 24, 2018, 8:57 AM UTC

bb88 wrote: post #351

tlarkworthy wrote: post #92

Earlier quoted context omitted.

I think the argument is that by doing a 51% attack you undermine the market value so you never get the rewards. This makes sense, but only for the leading crypto coin. As we see here today, you can 51% attack smaller coins, which should imply an increase in the value of Bitcoin from consolidation.

> I think the argument is that by doing a 51% attack you undermine the market value so you never get the rewards. Only if you make it public. A 51% attack works at a poker table too, but only if the marks don't know the game is rigged. A successful double spend makes it public, as well as announcing your intentions to get to 51%. If you're quiet and can pull off a successful 51%, you can create the double spend befor…

To be in the position of being able to do a bitcoin 51% attack however you would have had to sunk enormous costs into buying ASIC miners. The minute everyone finds out that a 51% attack occurs you will have pressure to change the mining algorithm and suddenly all your miners are worthless.

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

#426

Post by simias » Thu, May 24, 2018, 9:04 AM UTC

hapnin wrote: post #368

wpietri wrote: post #346

Earlier quoted context omitted.

That's definitely not proof of real economic utility. How many bets happen in Las Vegas every day? But economically, they're negative-sum events exploiting cognitive weaknesses.

Use as a currency was the point I was addressing. Bitcoin has been a working network for 9 years with 300,000,000 plus transactions. It's a useful currency.

300 million transactions in 9 years is ridiculously low compared to any "fiat" currency. Googling around I find a post that gives a lower bound for number of debit card transactions in the USA alone as 47 billions for 2012 alone[1]. That's not counting the rest of the world and the other exchange media like cash or bank transfers. 300 million transactions is nothing. I mean thing about it, it's one single transaction for every person in the USA over the course of 9 years. Alternatively it's less one transaction per year for the entire population of Canada.

Amazon alone probably handles more transactions over the course of a couple of weeks.

[1] https://www.quora.com/How-many-credit-and-debit-card-transac...

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

#427

Post by atlih » Thu, May 24, 2018, 9:04 AM UTC

zygimantasdev wrote: post #373

I wonder if the idea for this attack came from Silicon Valley tv series

Nope, this has been happening every year for the last 7 years. Great series though :)

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

#428

Post by swift532 » Thu, May 24, 2018, 9:13 AM UTC

B-Con wrote: post #417

> Ordinarily, the blockchain would resolve this by including only the first transaction in the block, but the attacker was able to reverse transactions since they had majority control of the network. Not a very precise explanation, just checking, what exactly does this mean? I always thought the way a 51% double-spend attack worked was by broadcasting a transaction for human consumption (eg, I'll give you Y coins for…

You are correct. The longest chain is accepted as the correct one, so if you have 51% hashpower and secretly mine while maintaining majority hashpower the whole time, your chain will be longer and you can publish it at any time, and effectively rewrite recent history.

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

#429

Post by viach » Thu, May 24, 2018, 9:18 AM UTC

bobbrown wrote: post #409

viach wrote: post #401

Earlier quoted context omitted.

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.

> In the long term the market behaves rational.

How do you know the current behavior is irrational? We probably just don't know what kind of rationality is behind this.

What if it is not drive by the technical merits of blockchain, but still based on some rationality, we reject to agree with?

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

#430

Post by stordoff » Thu, May 24, 2018, 9:29 AM UTC

dpiers wrote: post #101

baddox wrote: post #58

Earlier quoted context omitted.

But wouldn't the long-term honest mining be more profitable than a single hit and run? Kinda the same reason that when you go to a restaurant the restaurant owners almost always exchange food for money rather than rob you and leave town forever. If you own a restaurant it's generally more profitable to run it honestly than run away with a one-time dishonest payoff.

Not if it destroys the credibility of a rival coin, which I suspect could be the case here. Many in the "real Bitcoin" community call Bitcoin Cash a fraud because its existence reveals the specious value of their "real" cryptocurrency. Executing a double spend attack on Bitcoin Cash would be a massive success for Bitcoin owners. Same goes for Bitcoin Gold. You could even create a mining pool/network - let's call it C…

I'm not sure in this specific case it would make sense for Bitcoin users. Unless you are already involved in cryptocurrencies, I'm not sure the average person is going to differentiate between "Bitcoin" and "Bitcoin Gold" -- the negative impression of "Bitcoin Gold hit by attack" is going to reflect on the original Bitcoin.