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Ghash.io very close to 51% of bitcoin pool

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Re: Ghash.io very close to 51% of bitcoin pool

#71

Post by jobeirne »

Folks are missing an important point here about the incentives of a pool majority (that I recall Satoshi mentions in the original whitepaper[0]): even if a particular agent has a majority in the mining network, it isn't in their interest to upset trust in a system that they have such a large investment in.

Where would the sense be in taking the risk to undermine public trust in BTC for a short-term gain like modifying a few transactions when you have such a large stake in the system?

[0]: http://bitcoin.org/bitcoin.pdf

Re: Ghash.io very close to 51% of bitcoin pool

#73

Post by simbyotic »

pron wrote: post #41

I don't know much about the particulars of BitCoin mechanics, but the general spirit of this story seems like a natural evolvement of any unregulated organization. People who favor unregulated markets/societies dislike the concentration of power in the hands of a central authority, but the reality is that in any social system there will always be concentration of power in the hands of the few. I've read a hypothesis[…

"In that period of unprecedented (and largely unregulated) growth, much of the US population became quickly enslaved by a few members of an elite group, later called the robber barons (Rockefeller, Frick, JP Morgan, Vanderbilt, Carnegie, Mellon et al.)"

You ought to rethink what you define as "enslavement". As far as I am aware, neither Rockefeller, nor JP Morgan, nor Carnegie "enslaved" the US population when they helped transform the by then agrarian nation into the industrial and economic powerhouse it later became. They didn't use force, as far as I am aware, in their dealings and the wealth of their achievements certainly wasn't created at the expense of those who didn't.

Re: Ghash.io very close to 51% of bitcoin pool

#74

Post by btown »

TomGullen wrote: post #27

If 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…

With Bitcoin as popular as it is, it would be an increasingly lucrative strategy to short BTC, damage the network, re-buy low, and undo the damage. Sure, this is sort of a one-time use weapon, but there's no reason to believe that GHash.io's operators are in this for the long haul - perhaps, in the words of that amazingly catchy television commercial, they "need cash now."

Re: Ghash.io very close to 51% of bitcoin pool

#76

Post by jre »

jobeirne wrote: post #71

Folks are missing an important point here about the incentives of a pool majority (that I recall Satoshi mentions in the original whitepaper[0]): even if a particular agent has a majority in the mining network, it isn't in their interest to upset trust in a system that they have such a large investment in. Where would the sense be in taking the risk to undermine public trust in BTC for a short-term gain like modifyin…

Here is a thought experiment :

Say the pool operator is also the owner of Bank A (which has nothing to do with BTC). Now, a competitor of Bank A, Bank B, just announced that they will support BTC. The pool operator can now decide to "destroy" bitcoin and therefore cause severe financial loss for Bank B, leading to bankruptcy. If putting Bank B out of business results in gains (in USD), for the pool operator, that are greater than what he just lost in bitcoins, then it might be worth it.

Of course, this is very hypothetical, but it's not hard to come up with similar situations where Bank A is "State A" and Bank B is "State B".

Re: Ghash.io very close to 51% of bitcoin pool

#77

Post by notdrunkatall »

pron wrote: post #41

I don't know much about the particulars of BitCoin mechanics, but the general spirit of this story seems like a natural evolvement of any unregulated organization. People who favor unregulated markets/societies dislike the concentration of power in the hands of a central authority, but the reality is that in any social system there will always be concentration of power in the hands of the few. I've read a hypothesis[…

...except you're wrong. Bitcoin participants have developed a solution to the 51% problem, without any regulation, without any government stepping in and telling anyone to do anything.

https://en.bitcoin.it/wiki/Getblocktemplate

Your post is a poorly argued attempt to inject politics into a technical discussion. It reads like the top comment at /r/politics, not HN.

Re: Ghash.io very close to 51% of bitcoin pool

#78

Post by bigdubs »

darkFunction wrote: post #48
blazespin wrote: post #46

1. Buy millions of alt crypto coins (e.g., PPC which is less vulnerable to 51 attack), 2. destroy BTC by getting 51% control of hash pool, 3. profit.

What?

i think what is implied there is a potential plan to make tons of money by destroying bitcoin in favor of an alternative coin you've heavily invested in.

Re: Ghash.io very close to 51% of bitcoin pool

#79

Post by monochr »

simbyotic wrote: post #73
pron wrote: post #41

I don't know much about the particulars of BitCoin mechanics, but the general spirit of this story seems like a natural evolvement of any unregulated organization. People who favor unregulated markets/societies dislike the concentration of power in the hands of a central authority, but the reality is that in any social system there will always be concentration of power in the hands of the few. I've read a hypothesis[…

"In that period of unprecedented (and largely unregulated) growth, much of the US population became quickly enslaved by a few members of an elite group, later called the robber barons (Rockefeller, Frick, JP Morgan, Vanderbilt, Carnegie, Mellon et al.)" You ought to rethink what you define as "enslavement". As far as I am aware, neither Rockefeller, nor JP Morgan, nor Carnegie "enslaved" the US population when they h…

>They didn't use force, as far as I am aware

Then you're not very aware.

During the Gilded Age there were hundreds of strikes a large minority of which ended with the murder of the organizers and arrest of the leadership, an incomplete list thanks to wikipedia:

http://en.wikipedia.org/wiki/List_of_strikes#1850.E2.80.9318...

Re: Ghash.io very close to 51% of bitcoin pool

#80

Post by wikwocket »

jobeirne wrote: post #71

Folks are missing an important point here about the incentives of a pool majority (that I recall Satoshi mentions in the original whitepaper[0]): even if a particular agent has a majority in the mining network, it isn't in their interest to upset trust in a system that they have such a large investment in. Where would the sense be in taking the risk to undermine public trust in BTC for a short-term gain like modifyin…

This is like asking why a counterfeiter would undermine trust in the U.S. $100 dollar bill in order to get a big short-term gain.

I know there is a big spirit of brotherhood about doing what's best for BTC, but if your prototcol is to survive the real world, you have to anticipate people more interested in their short-term gains than global harmony. Particularly if the protocol will involve money. Particularly if the protocol is trying to be money.

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