Bitcoin Forum

These recent stress tests have made it clear that if they want to, groups can attack bitcoin. Which brings up who in the future would have an incentive to do this.  There could be many groups with an incentive to continue these attacks:

1. Established payment systems.

2. People who want to highlight a weakness in btc and force a change (i.e., larger block sizes).

3. The supporters/investors of a competing alt coin.

4. Bitcoin shorters.

5. Bored billionaires.

6. Exchanges. Any volatility increases the income for exchanges.

So, IMO without a change in the system, it seems like these attacks will continue.

Such attacks cost money, and while they may disrupt the network temporarily, it does not hurt the network for long. I doubt they will keep it up because it serves no ones interest. Even an entity that wants to crush bitcoin can only suppress it a bit as long as they keep paying. What can they do? Pay forever?

They could make money doing it, even with the transaction fees (or in collusion with miners), so if they did it intermittently they could keep it up indefinitely. They can short bitcoin or make money from the volatility, etc.

For a wealthy individual with an agenda the ongoing attack is chump change. We need to strengthen the network before a disgrace happens. They could keep the attack going for as long as they want, whoever is doing this is definitely a millonaire with money to waste.

An attach may also lead to bad press, "bad business" as they say for the company, industry, or political/business figure that launched it. It would demonstrate an establishment attack on what could be characterized as "the people's system"...giving Bitcoin more credibility, if only in an activist sense.

Ask yourself which entities are considered "too big to fail" and can get a tax bailout if they lose too much money and you'll probably have your answer.

It may have a inadvertent positive effect as well as it apears usage has exploded as were over 190,000 tx per day now.

It isn't real usage. That is just the spammer spamming the blockchain incessantly, causing it to seem like usage has gone up when in fact it has not. Most of those extra transactions are just dust transactions between the attacker's own addresses.

I agree with Rodeo. Eventually the attacker(s) will get board and start running low on funds. Once they realize the large impact they are trying to make is actually very small and is not worth the effort.

Great points. Bitcoin's network is resilient and robust, which is proved by the stress test!

I cannot understand why the points you made is an incetive to continue these attacks. By spamming the network, their transactions wouldn't get confirmed without meeting the required criteria, such as the minimum fees, lowest input and output amount. It will really affect their business's operation.

couldn't these attacks have more to do with some bad actors working to exploit the activity of the stress tests? I dont understand the tech at a dev level so I cant say, but it seems plausible, maybe. It also means it wont last, after the stress test bru-ha-ha settles down the opportunity to game the system will end.

does what I say make any sense? Like I say, I'm not tech enough to know for sure, but these things happening concurrently sure seems a little iffy to me.

I came to this idea because I also wondered who might be behind the whole thing and couldn't find a good reason why anyone would spend so much BTC on such a silly game.

but if it is a bad group, its probably the guys who want the block limit increased, and they\re mostly devs who have shitloads of coin from mining way back when it was super simple to get 1000s of BTC easy.

other than that, who could be bothered to spend that kinda coin??

Hmm altcoin value depends on bitcoin too. This attack needs many people and huge cost to do this. And the electricity cost. So just wait for them. They will stop it in several days

...

Make these kinds of attacks hurt the perps.

Raise the miner's fee to, say, BTC0.0001 or BTC0.0002.  I did two small transactions and paid BTC0.0006 just to see if they would go through.  BOTH were confirmed on the next block.  One of these was on July 6 (first day of latest eruption), the other one today.

I already hear the fans of micropayments and ZERO miner's fees though.  

I would rather have a system that WORKS even if I have to pay 5 cents or even 13 cents for an important transaction to go through.

Me Too~~ :P :P :P

it's obvious that we are talking about point 2, there is no other starting reason for what happened, but i believe that some spammers have seen the opportunity of doing a sneaky attack, because of the strong possibility of being ignored at first, while the other are testing fairly

but they are are only rewairding miners in this way, they are securing more the network

I think this ongoing attack is really bad press. I mean they still go on spamming and the unconfirmed transactions don't get worked up. And what happens? Numerous question threads on bitcointalk about what happens, exchanges and services get accused of scamming their customers and so on.

The people attacking the network might show a problem but they attack many businesses and bitcoin adoption might be hurt too on the way because of bad experience.

I hope they lost all of their coins soon.

bitcoin.conf

minrelaytxfee=0.0002

 :D

You need capital and knowledge to pull such a sustained attack and/or you have to coordinate multiple groups to act at the same time.

I doubt that e.g. competing altcoins would do something similar, mainly as they probably don't have the necessary funds to do it. Also, it wouldn't do much good for them as they would know that they cannot bring down the network, in the best best case simply cripple it for the time being. Hence if they wanted to make their coin come out as a winner they would need to sustain an attack indefinitely. Which is probably not economical for them, not even to pull a pump & dump on their coin.

Established payment systems probably don't yet view bitcoin as a high threat as it has only a fraction of their business. Also, their analysts would probably also tell that the network cannot be stopped, only slowed by an ongoing, indefinite attack.

I'd say the most likely is a group trying to pinpoint or find weaknesses in the system and does a temporary force demonstration.

And I'd say it's probably the same group that was running the stress tests.
It makes sense considering their messed up schedule (running the test on different dates/times than announced).

from what i gathered so far i find the second option the most probable one.
there are groups of people trying to force some change in bitcoin (the larger block size) so they are doing these attacks.

So, we don't know who is doing this stress test, so we just guess, it is the same guys, that did the other stress test, which identity we also don't know. That thinking brings us forward a lot ::)

Well, OK, I know about 1 stress test that I read:
(http://www.coindesk.com/bitcoin-network-survives-stress-test/ (http://www.coindesk.com/bitcoin-network-survives-stress-test/))

However 100 blocks were supposed to last ~16 hours, right? All this for 20 BTC, 5000$ at the time. Now this was a few weeks ago, however the network is still under stress. Am I missing some newer news about stress tests?Or is it that they have flooded the network with so much junk transaction that it still hasn't been flushed? (unlikely)
Or is it that now everybody is "testing" the network for their own research that is causing the problem in the end?

We also don't really know, who this CoinWallet.eu-guys are. It may just be a cover, so people don't get suspicious.
My guess is, that a lot of people are "testing", so, a lot of copycats are going about, with different agendas. I am still wondering, since even if it is more than one entity, there must be some players in there, who have a lot of BTC to burn.

True, you can easily set up a site and then operate under that name. Still, I am also not sure about their endgame. Putting so much money into this, there must be a plan.

I was thinking perhaps it is some large mining operators trying to force users to pay bigger fees. If you think about it and say they own 30% of the mining power (whatever big Chinese farm) then 30% of the expenses flow back to them (if those transactions go through at all) and they get even more revenue from increased block fees, since users are forced due to the large network activity.

More like bored person with a few thousand to waste, the way it's set up currently

^^^
They should start accepting BTC instead of attacking it. If they can attack BTC they can also be attacked. BTC wasn't developed by farmers or street beggers. If people can develop such a system and maintain it, they can protect it, too (through aggression if it will be needed).
Other Altcoins can be a challenge.

 

My vote for bored billionaires.
Somebody is burning money to cause this attack.

But I wonder how the math works out?  Would they really make enough to cover the cost of the attacks?  The tx fees are really small, and to get your tx priority does not take very much increase.  So I wonder even if they did make money on it, would it be enough money to make it worth while?

Narrowed down to four options:
(1) Chinese Miners, attempting to get the fee/zero limits rasied.
(2) Chinese LTC Pumpers, attempting to get Bitcoin users to transfer to LTC.
(3) OKCoin Exchange, attempting manipulation to prevent their bankruptcy.
(4) All the above working together in some form or another.  ;)

Anyone thinking this is a bank or billionaires doing this for shits is on the wrong path.
This was purposefully done, to facilitate some sort of manipulated realized gain.

you can hurt Bitcoin for a short period of time, but you have to attack Litecoin too  8)

I have no problem with LTC, in general.

What I was referring to, was the Chinese LTC Pumpers, who recently pumped it with the intention of dumping on people.
See here: https://blog.bitmex.com/chinese-promoter-pumping-litecoin-via-ponzi-scheme/ (https://blog.bitmex.com/chinese-promoter-pumping-litecoin-via-ponzi-scheme/)

By messing with the Bitcoin Network, some BTC Users may have bought into LTC at that time, increasing their profits in their dump.

It is estimated that the Chinese Pumpers made $1.8 Million USD or 6980+ BTC.

Maybe on the long run, down the road it is worth somehow. I haven't done the maths in depth, but they would be probably making pennies compared to their expenses...It was just a thought. If I'll get some free time and come up with a justification for myself, I might go dig a bit into the numbers and miner farms.

I just can't believe that a developed business would do something like this. Businesses worth of over 100 Billion $ wouldn't need to do such things to a "negligible" competitor. Also, if this was found out, it would be bad media and publicity for them. I think such businesses would have more to lose than win with such a move. All they could possibly win is a "proof" that the network is not as fee-free as advertised and can take long(er) for transactions to go through. (not longer than banks in general, but longer than "advertised" again)

I think 1 is unlikely because miners already can decide what transactions they want to include. They can even create empty blocks or accept only transactions with a minimum fee of 0.1 Bitcoin, when they want. And since china has the biggest miners, they likely could sit together and work out a plan. Then only accept high fee transactions. All other transactions would wait considerably longer then. At the end the fees most probably would rise.

I dont see that, litecoin price dropped, shortly later bitcoin too. Doesnt look correlated to me.

3? OKCoin is bankrupt? Guess i missed some news. And i dont see how spamming could help. Exchanges surely use high enough Transaction fees.

Exchanges do benefit greatly from any induced volatility (i.e., volume increase) from an attack with increased trading fee income. It's very unlikely they would do such a plan but I'd think OKcoin is making a lot more than the cost of the attack from the increased btc and ltc volume.  Price stability is the enemy of the exchanges.

Number of bitcoin transaction is not really adequate factor to build assumptions of network growth. It is the most overhyped property of bitcoin imo.
Dust transaction under some limit shouldn't be counted towards total number of BTC transactions. Especially now, when network is flooded with fake tx.

If miners all raise their fees, without outside influence on the network (the spam attack), then it would be seen as corrupt/bad by the community.
The spam attack gives the miners a reason to raise fee much earlier in advance of block rewards lowering.
Miners fees went up 2000% at minimum during backlog.
What you outlined above is exactly what happened. So why do you think it is unlikely?


Your observation should be viewed earlier in the timeline. The recent attack started July 7, 2015. LTC pump started from there.
Due to network problems, some users decided to "invest" into LTC to diversify their holdings, before the price dropped.
One of the reasons LTC rose was because BTC users did so and did so since old LTC Dev (now at coinbase) stated that LTC has spam protections and faster confirms.
People trading altcoins know what I'm talking about.


They are on verge potentially. Fractional reserve trading has cost them greatly.
They also trade LTC, just FYI.

This.It is a good excuse to push the fees higher. If users get used to it and simply keep adding this out of fear that their transactions won't confirm in time, then by investing a few thousand dollars they made an extra surplus income for a long time. Maybe it is worth on the long run. Also, it is not just the minimum fee that is increased I guess, but high priority payments have to pay even more now. Those are the good transactions miners want.

The real question is:How much capital do(es) the attacker(s), stress tester(s) have? Can they sustain the spamming when the blocksize will be increased? ::)
Or in shorter time frame, how long can they keep going? Hate to admit, but if it goes like this on the long run it won't be a good thing for bitcoin.

In another thread i read that the attack already cost $50k now. The additional fee coming from raising the fees would need a long time to reach that. Especially since only a couple or only a single minercorporation might be behind it.

It would be simpler to simply raise the minimum fee. Since china has the majority of the hashpower it would delay transactions and it would consequently lead to higher fees, without costs. It would look natural.


If thats true then i will keep an eye on the next spam attack. ::) Might be able to make some bucks on litecoin then.


Yes, they had a problem some time ago but the fractional reserve was a solution they suggested. When this reserve isnt enough then they would simply screw traders again.

Though you might be right... exchanges might have really other ways to "make" money.

attack ?

We have milliards of SPAM email per day ...
Bitcoin will be no exception.

That's why, Fees algorythm in 0.11 Bitcoin Core can do the job.
But ... noobs ... don't want to pay fees.

They will learn.

Increased activity of coin transaction will just make coin less available in circulation, thus raise its value. The more you attack the network, the stronger it grows, it absorbs all the energy that fed into it

govt, nsa, etc. .. big banks. Almost anyone 'big' has an incentive to take down bitcoin

I would consider the reduced speed of the network and the increased fees as a negative effect. Its kind of like saying that the frozen bank accounts in Greece have higher value because there is less money in circulation. I don't think this is the way to increase the value of a currency/asset. Not by a attack by any means.

Also the price hasn't sky-rocketed either due to the spam. Its a bit higher yes, but
1. Is the slight increase in price actually due to the spam?
2. Will it last?
3. Is it worth it to have it at the cost of increased fees and longer transaction times?

I would be happier without people spamming the network.

they will end up losing more money than anything else, it's better for them to welcome bitcoin and embrace its technology, if they can regualte it and tax the shit out of it like some GOV are already doing, it would be a win win for everyone, maybe not for die hard bitcoin fan who want freedom...

There isnt only the Bitcoin Core. And besides, why should we raise fees because someone spams the network? Spam should be charged with fees and they spam by creating huge transactions. Should be easily chargeable. I dont feel well when someone can go and force all bitcoinusers to pay higher fees. I mean will miners build a group in some time and connect in order to force bitcoins to pay higher fees in order to earn more?

Everyone alive has an incentive to attack the bitcoin network (wealth), and everyone alive also has a much more compelling incentive not to attack the network, because it's much more profitable to direct that same energy towards mining for the network.

It's basic game theory at work.

I see no reason why this would always be the case. For example, how would every established payment system (1) have "a much more compelling incentive" to mine bitcoins? Maybe they'd have an incentive not to attack because they could be found out and get bad PR, but I don't know why they'd support the network by mining. It would seem they have a lot more to gain from attacks.

This attack is easier carried out than building mining equipment that get's you anything from mining.
There are also people who just want Bitcoin destroyed, since it is a thread to them(banks).

Sooner or later their choices will be reduced to capitulation or bankruptcy, that's how.

Directing one's energy toward mining will not be profitable unless one has a low cost source of electricity or one has early access to much more efficient mining hardware than the bulk of miners.

Die hard bitcoin fans who define freedom as financial privacy and perfect fungible will find other solutions such as Monero.

Of course Monero allows compliance with all government rules as well by optionally sharing your view key.

Best of both worlds.

Bitcoin is resilient and will survive long term. There will be other leaders that emerge to serve the niches bitcoin cannot.

Smart early BTC adopters will hedge accordingly

How about setting a limit to the miningsize of each operation. For example by geographical location.

Something has to be done to avoid economies of scale here.... it is in noones interest to see a mining monopoly develop.

One possible offender that wasn't mentioned are sidechain operators. A group like Blockstream is more than a likely offender of the current spam attack.

i agree that this tests (attacks) on bitcoin showed that it is susceptible to these kinds of attacks and it leaves it open for more groups to attack it.

1. Established payment systems.
not for now, since bitcoin is not big enough to be any kind of threat to their systems. and still everybody uses their system or at least the big majority of people.

2. People who want to highlight a weakness in btc and force a change (i.e., larger block sizes).
actually i think this is the most probable group of people who are doing the attack right now and will be the motivated group in the future too.

3. The supporters/investors of a competing alt coin.
not likely. because no altcoin is big enough to compete with bitcoin and also nobody would leave bitcoin for an altcoin. also nobody trusts altcoin market as much as they trust bitcoin (both are volatile but altcoin price has much higher risk)

4. Bitcoin shorters.
doesn't seem likely but possible.

5. Bored billionaires.
if they are sadistic yes :D

6. Exchanges. Any volatility increases the income for exchanges.
i don't see how they can profit prom these attacks.

#7. miners
it is possible that miners are doing this to force increasing the fees in order to have more income especially since the block halving is near,

there is always profit behind illegit things not suprised at all

but there is a simply solution, stop feeding them with larger fees, wait more for your confirmation, they will end this scam eventually

i can't think of something else at the moment

This is absolutely ridicilous. No one would like to wait for days just to get the transaction confirmed ( I assumed you dont as well if it is an important transaction ) and thus this spam will keep on encouraging people to increase the miners fee or else they would wait for days, It cant be avoided at this stages and the miners fee will keep be increased to ensure transaction gets confirmed faster. The golden ratio attack may sounds like a conspiracy theories however it is possible to do so if you read it thoroughly

P.S : waiting for the complete math for the golden ratio attack

until now i didn't faced any delay with any TX that i've done in the past few days, and i'm using the standard fee, many are using the customizable fee of 1k or less and many other are using the automatic fee, which is not good for now

there are some cases with high fee and long delay but they are the minority, isolated cases, one could thing that the reason behind those cases is not only this scam attack, but it could be related to misfortune about the average time for resolving a block

I definitely agree with you.

I chose BTC over fiat money since I believed (I was wrong) that it can't be controlled. But, as far as I can see it can be controlled by something or someone who has enough power to control it.

It's like being against banks again.

This is such pity my friends.

My #1 guess would be the big banks. Although not many will talk openly about it, they all know that bitcoin threatens their entire industry, which rakes in billions of dollars by investing OPM (Other People's Money). The only reason banks have so much money and power is because they are the financial "gatekeepers" so to speak. They control everyone's savings, loans, investments, etc. and exploit this for huge profits. No central gatekeeping, no money for banks. They are also corrupt as heck and will not bat an eyelash at buying off governments, bribing people, etc. to keep the big bucks flowing. Some of this got exposed in the 2008 crash, but big players like Goldman Sachs, BofA, CitiBank, JP Morgan Chase, etc. are still around. An attack on the bitcoin network would be trivial for them, and well worth their investments.

I don't think anybody that profits from bitcoin, such as Chinese miners, would conduct an ongoing attack. The short term gains are not worth the long term bad publicity, lack of adoption, etc. They need more people to use bitcoin, not less.

The only other possibility is a government, perhaps US (NSA) or China. Bitcoin also threatens fiat, which is the source of any government's power. They can simply print money to execute their programs when people use fiat.

Always follow the money and look at what big interests are threatened.

Why are they so aggressive? If bitcoin harms their benefit, it can also have the power to bring them benefits.

If the banks should ever decide to attack bitcoin they would to it proberly. Not making a small spam attack...

How i would do it:

1 - Get eough hashing power to do a 51% attack
2 - When the attack is complete you change payout to miners to 25K
3 - Change difficulty to new blocks ever minute
4 - Open the traders on a big screen
5 - Sit back with a glass of cognac and see the bitcoins flowing the market

i think the main difference is that it can not be controlled by one person, when you do a comparison with a bank

but many people controlling it is not the same, because it's based on consensus, the problem here are miners that can exploit the network for profit


they want more profit, everything is done for this reason, chinese does not care about bitcoin

after all they started with bitcoin after it has gained some traction with doge, they weren't interested before, one should wonder why

If the banks really wanted to control bitcoin they could simply purchase the 2-3-4-x largest mining farms that would give them 51% of the hashing power and voilà. So theoretically it could be still controlled by a single person. However, as for now I agree it is probably a coalition of miners who control the network, which is also different from a truly distributed network.

Let's be honest guys: decentralization, right now, is only theoretical.

No one can assure us that the BTC network will be free from this miners monopoly because this is what it is now.
Maybe before 2013 it was true: when we were mining with no more than gpu it was widely distributed among several people.
But now?

If you have dirty cheap electricity rates and good amount of money you can decide to start ruling in here. And last days prove this.

There's no math needed to understand it.

they want to see how far away they can go with abusing the network, without putting a strong dent on bitcoin itself, and causing people to abandon it, because miners aren't stupdi they know that if bitcoin die or fade away they will lose a big opportunity to make profit

for returning to gpu era, bitcoin would have to change its algo repeatedly, like they have done with vertcoin, maybe we should have adopt this solution...

there is still a chance that a bitcoin like this will be adopted in the future, if this Bitcoin will fail

That's not how Bitcoin work, that is not how any of this work.
You can't change the rules with a 51% attack.

Educate yourself before posting BS.

We are not talking about 51% if a bank attack. They would go 100%. Then the fork they controll win.

When banks froze Greece bank accounts, they definitely raise the value of euro in the eyes of Greece people, and Greece parliament passed an even more strict austerity proposal to get those euros  ;D

And since majority of the bitcoins are being used as long term storage, the raised fee will not affect most of the users, only exchanges and payment processors. Long term savers with more than 10 bitcoins does not care if they should pay 0.01 or even 0.1 bitcoins for a 10 bitcoin transaction

None of these would do much except bleed you of your money. If a bank wanted to launch a 51% attack consider how many millions of dollars it would cost to get that hash power. But let's say they do it anyway. A 51% attack would create temporary chaos on the network but it would be detected right away and would not last long. Within hours you would likely be broke and we would be back.

If they create a fork, then no one will use their fork, which will be a billion dollar waste of money. Bitcoin in its essential are a consensus reached among its users, voluntarily participating. You can not force people to use certain fork of bitcoin. Large mining pools can indeed modify transactions and even do double spending if they control majority of the hash power, but they can not affect the existing coins, which is the major usage of bitcoin right now: Long term store of value. Constant turbulence in transaction space will just drive the demand to long term saving area

I hope you're right. And I actually I hope they'll do this billion dollar waste of money: they deserve it. So that we can start mining again and keep this technology decentralized

Good addition. The thought of miners being able to gather enough of the fees from their own attack to keep it going (to drive up fees) had occurred to me.  Although I wasn't capable of doing the math to see if it was feasible. Cryddit worked it out the math in his "Golden ratio attack" thread, and it seemed doable but he's since deleted his post so I'm not sure if it was after all.

As for (6), many exchanges seem to have shady trading accounts on their own exchange, probably with an enormous bankroll, so if they thought they could drop the price with an attack, they could benefit from shorting (admittedly unlikely). I think a more likely scenario would be just using an attack to induce volatility. If there was a period of great stability in the price of bitcoin, this could hurt exchanges because volume would likely decrease. I haven't checked the stats, but I'd guess increased volatility is correlated strongly with increased volume. And, increased volume means more income for the exchanges from trading fees. Price swings are what keep the exchanges in business. I guess it would come down to how much price volatility an attack could induce.

It would be pretty crazy to have the government come out in public and declare the war on bitcoin or crypto currencies, with the possible encryption ban in the U.k could that be the begining, from the war on drugs now to the war on encryption and bitcoin.

I see the threat coming more from banks rather than other established payment systems. When you have the ability and to power to print an infinite amount of money, you can always use that as a tool to manipulate the market and crash bitcoin prices. It's amazing how the fiat system works. On the other hand, the rest are just presenting a miniscule threat, as you need funds, and lots of them, to actually manipulate the market. 

This encryption ban is funny. I read first about it, then I read they made a U-turn and won't ban anything then again "no U-turn" and still planning to ban. Funny what are they doing, probably some media blinding tactics.

Banks are of course against cryptocurrencies, but I don't believe they pose enough threat yet. Better said, I don't think bitcoin poses enough threat for them to take such drastic actions.

It would definitely be crazy if it happened, and an encryption ban might give them cover to do it. I also think if a government saw significant tax revenue being lost to anonymous cryptocurrency transactions, it is not beyond the realm of possibility that they might attack the network directly.

I don't know how significant can be cryptocurrency transactions within a single country when on a global scale the bitcoin has a 4Billion USD market. Is the encryption ban directed towards cryptocurrencies? It sounds to me more like the government wants to listen to peoples internet calls, read emails and more. If banks wanted to bring down bitcoin, I don't think they would need such measures. Why not just ban cryptocurrencies then? Cheaper than attacking it.

I seriously never understood why people take the market cap as a measurement. You could send the "same Bitcoin" every day from address to address and suddently there are 4*356 Billion USD floating around in a year.