Bitcoin Forum

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A system created by people needs people to coolaborate. It doesnt just grow like a plant.

Who's asking for artificial regulations? We are asking for self-regulation.

You don't eat 3 pizzas, 2 fried chickens, and 4 pounds of bacon a day because you can, do you? That would be insanely bad for your health.

Bitcoin is not perfect. Nothing is. It's damn good though.

People who care about the security of the network will choose to regulate themselves to promote a healthy network.

No one is calling for imposed artificial regulations. And if they were, I would argue with them the same as I do with people who mine on deepbit.

I'm trying to let people know that there is a better way and hoping they will choose correctly.

Bitcoin is decentralized by design. If the users chose to centralize the network into a single point of failure, there's nothing the concept can do about it. It's like democracy. Every one is free to vote for whoever they want, but somehow a majority of the voters are misguided and vote for the guy who takes you to war for 10 years over a pissing contest. What you are experiencing here is not design failure, it's PEBKAC.


As usual, easily said from someone who doesn't understand the internal mechanics and weaknesses of a decentralized network relying on public contributors. You're saying tires can't guarantee 100% control of your vehicle on a road, so instead of teaching people how to drive properly, we should work on anti-grav cars.

And if you want to make money with Bitcoin, you are hurting yourself by ignoring network health, if something happens partially because of your ignorance.

As I said, Bitcoin isn't perfect. Mining was originally done on CPUs by individuals. Then GPU mining came about because it was faster. Then pooled mining came about because it reduced variance. And here we are today.

The flaw in the system is that someone with enough dishonest hashing power can disrupt the system. The network can ignore the dishonest fork and continue on. The system won't break. But people may consider Bitcoin to be untrustworthy if such a disruption is easy to achieve. Condensing a majority of the mining power into one pool is a step in the direction of making that easier. The fix is voluntary: don't condense honest mining power.

Until someone creates an impenetrable system (good luck) we use the best we have. We can either make the system more impenetrable or less impenetrable, it's up to the users. I'm suggesting the users work towards making the system more impenetrable. If you want to ignore that, or wait for a perfect system, that is your choice.

They are indeed centralizing the network. They should be allowed and they are allowed to mine wherever they want. Why are you so argumentative?

We aren't suggesting rules! We are suggesting people promote a healthy network for their own good.

Ignore it if you want. If something bad happens because of the centralization of the Bitcoin network and investors stop buying, don't complain that there was nothing that could be done.

Oh my... I never said anyone was doing anything out of the goodness of their heart. I said "if you want to make money", I don't know why you are intentionally misinterpreting what I say.

I'm not telling anyone to do anything. I'm pointing out what I see as a problem. You can ignore it if you want.

That's kinda funny. You didn't read enough into the centralized Bitcoin argument and too much into the tire one.

The argument goes like this: Bitcoin is designed around decentralization because it is a needed feature for a proper store of value/currency. As such, security has been built around it while keeping in mind that the users will maintain it decentralized, since their motive for using Bitcoin is that it satisfies the needs of a proper store of value/currency.

You thus have a simple premise: Everyone can contribute data to the block chain. This identifies 2 groups: honest users and attackers. You then need to establish a set of rules that allows you to identify data emitted by honest nodes as valid data, whereas data contributed by attackers is corrupt and should be dismissed. Bitcoin uses proof of work rewarded by coins. Meaning valid work is identified as the most powerful contribution (difficulty and chain length), and it provides more profit than using the same power to cheat the network.

You should understand from this premise that if honest nodes contribute corrupt data, then that data is considered valid. This is the situation DeepBit is creating. The system is built to ward against attackers. If honest nodes partake into a behavior that is corrupt, then there is no difference between honest nodes and attackers, and the system it breached.

This is why DeepBit is a problem, because it concentrates the power of the network into one point, effectively centralizing it. Whoever takes control of that point can inject corrupt data into the block chain at will. Whoever takes that one point down can overpower the network with much less resources than needed otherwise.

No one is claiming for regulations over mining. We are simply warning DeepBit users that for no valid reasons they are centralizing the power of the network, and that harms the security of this network by offering the very tools to attack it to whoever damn pleases. No one here is forbidding you from mining at DeepBit, we are simply telling you that if you don't walk away from that pool, you are artificially creating a great point of failure, all this at the cost of high fees and bad statistics.

Whichever way you look at it, if you purposefully drive yourself into a wall, you can't blame the car.

tl,dr: Bitcoin is built to ward against attackers. If users start behaving like attackers need them to, the security is moot.


Yes, that attack can hurt the block chain beyond repair, and right now there is no need to spend a ton of resources over it, since honest users are willingly creating that situation.

Let's say you want to attack the Bitcoin network. You have 2 solutions: Waste millions upon millions of dollars to turn a 10 stories high building into a gigantic barbecue, or take control of DeepBit. What do you do?

You really don't think there are some powerful people out there that might have a motive to destroy a decentralized currency? I would say that's a bit naive. The larger Bitcoin grows, the more motive these people have.

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The banksters are freaking out behind the scene because they know their dollars are about to become worthless in 10 years or less.  Bitcoin will be much stronger in 10 years.  Hell, right now it's almost the value of silver.  That's going to be a BIG DEAL when silver and bitcoins are worth the same amount.

Yes.

It is bitcoin's known, well documented weakness:  > 50% hash power

Why?

This thread is an example of another bitcoin weakness:

9 post forum trolls getting peoples goats with same rehashed topics.

Coming soon.. 0 USD. Thanx deepbit.

We're asking, not forcing.

That's not true. There's more than 1.6 TRILLION dollars worth of silver. We have 180 million dollars worth of bitcoins. We'll only have a market capital similar to silver when it's 260 000 $ / btc.

It is my personal opinion, after talking to [Tycho] multiple times, that he does not appear to want to use his "power" for disruption of the bitcoin network, which is a good thing.  He seems to want the best for bitcoin users, and I applaud that.

But it has nothing to do with [Tycho] or deepbit specifically:  anything any pool gets close to 50%, that is a major problem for bitcoin.  It creates either a single point of failure, or a single point of evil.

Therefore, when deepbit was close to 50%, I was recommending that users avoid deepbit.  Now that deepbit are pulling back from the 50% mark, I am pulling back from my anti-recommendations.

Avoiding 50% control is critical for bitcoin's survival long term.  It does not matter if the pool operator is benevolent or not.  Bitcoin does not need such centralization.

It's like an anarchist group that votes in a leader.

No. If I meant Tycho, I would have said Tycho. I think Tycho is OK (besides the fact that he doesn't limit his pool size on his own). I said powerful people. Governments. Central bankers. People that run the world and like it that way. Why bother building a bunch of computers to harm Bitcoin when the work has already been done for you and all you need to do is use force to take control of it.

Mine where you want. You've already made up your mind, no amount of information is going to change that.

There doesn't need to be a motive. Even an honest node can send money to an invalid address in the event of a hardware failure. Are the DeepBit servers using more expensive ECC memory to guard against such corruption? Is the DeepBit server a mainframe that does every calculation twice; checking for errors?

The decentralized design means that honest nodes check each other's numbers. This can not happen if more than half the hashing power is turned over to a single entity, honest or not.

What point is there in getting mad at the pool operators? They don't control anything their miners do. If you should be upset about anyone it would be the miners that participate in said pool.

I think we've been pretty clear about asking miners to balance the network. That said, a pool operator could voluntarily limit their size. Both have their parts to play in centralizing the network.

It doesn't matter how nice a guy Tyco is, what matters is what is he gonna do when his lawyer turns to him and says, "You better do what the FBI/SS is asking and not let any of your Bitcoin friends know about it or you're going to jail for a very long time."

If you guys think that governments have to "play nice" and warn us what they are doing when their currency is being threatened you're insane. They're going to run their own mining pool without letting us know, they are going to call in Japanese parliamentary favors to get MtGox raided and cut off payments to Dwolla. You're going to lose a LOT of money if you've continued irrational accumulation, just deal with it.

Tycho and his unknown business partner(s) are in Russia, AFAIK.

The government is even more, um, aggressive there.

There's no real worry. Bitcoin is a pretty liquid market, with good information flows.

Someone with alot of bitcoins is going to spend some of them to analyse the risk. If its truly a risk, he'll spend some more and hire some blackhats to DOS deepbit to ensure his investment is protected. The fact that it hasn't happened yet indicates that those with the most to lose (those doing those top 100 xfers of 200,000 BTCs' at once, not you guys and your original + extra GPU you're using to steal power from your parents with) havent seen it as a major risk.

Or only stupid people mine and hold bitcoin.

It's one or the other.

You're only going to lose the $ for power bills and capital you spent on your rigs. Right now the margins are (ridiculously, unsustainably) high ($30USD/btc vs 567k difficulty @ 6.3TH/s market today), that capital and power is a minor investment. Once it starts being a 30% margin business, it'll matter alot more what's 'losable'. Losing something you never had is losing the psychological game. Losing something you really paid money for is losing the financial game.

Help strengthen network security, give Bitcoin a better name, AND save the planet by joining the pool in my sig :)

Awesome. The best way to legitimize bitcoin is to give them away. I'd say its worth a 5% tithe -> to charity!

It is not deepbit or Tycho fault that his pool is so successful. But in the long term it is in the best interest of Tycho and the community to not congregate 50% of the Bitcoin mining power into one central hub. It leaves the system vulnerable. Some people aren't aware of the weakness and some people don't feel like switching because they only believe in hindsight.

Example:

If deepbit ends up with 50%+ of all hashing power and suppose he gets shut down or the server crashes or something happens. Although people can move to other pools if ONE pool gets big enough and other pools potentially can't handle the diaspora of such a large number of people influxing in. There becomes a great likelihood of a economic crash. So while it hasn't happened now it if it continues to grow it might be in Tycho favor to limit the size of his pool so that the potential risk he himself and everyone else is taking on doesn't outweighs the money he makes.

See, most of us DO trust [Tycho], so we have nothing to fear if he controls bitcoin for a few hours, as he has. However, once you start talking longer than a day, it's no longer [Tycho] that we have to worry about. At that point I would be starting a bounty thread, if there wasn't one already, to DDoS deepbit. And I know that I'm not alone.

I hope to god that we never have to do it, though.

You may need to read more about this kind of attack.

There is no such defined threshold as 50.000% that you may cross for a few hours or days. It may work even if you have only 30% of the network power, but with lower chance, or may fail at 70% too. It's just more probable to sustain longer when over the half, but not strictly "impossible if less" or "possible when more".

I dont think everyone is fully informed of the risk of centralizing, and I dont think that for everyone it is a situation of "made up my mind, im staying". Half the time it is most likely because they found deepbit first, it was easy to connect, and had command line help right there. I used it first,it was and is a good service. I dont
bitch about fees and stuff because it isnt the only option, but it was quick and easy.

"Absolute power corrupts absolutely"

"All it takes for the triumph of bad men is for good men to do nothing" .

We must be active, in the future of bitcoin. If we are passive and have a laid back attitude we could risk ruining this great thing we have going as opposed to hitting bumps along the way and developing as we go.

I am all for no regulation...in theory... but bitcoin is highly regulated and that is what makes it so great. It is an automated regulation but it is regulated in a lot of ways.
Difficulty~Hash Rate
Cant print at will
capped at 21mil
deflationary spiral regulates fluctuations
I dont know, but I think what we are used too when it comes to legal regulation is not the same as the mathematical regulation of >50% HASH
It is humans letting you know you shouldnt do this, but its just because the program cant tell you itself, not because of a human influenced regulation.
Bottom line is it is always bad to have all your eggs in one basket.
Also  Tycho has a point that you can try to send bad data with even 1% but it is extremely unlikely it will take but the point is you dont need the magic number 50% or anything to attempt it and succeed.
This will take some speculation, but I think the community needs to address security threats to an extent and not ignore them.
It is not a civilization where ignoring all regulations and anarchy and all that will lead back to tribal and etc. (but we are still around to live)
If we Screw this up it is over (or our money is "dead" for above analogy).
We have to start over from scratch most likely with a different thing all together, not just mend and continue. At least that is my perception of it, correct me if im wrong please as I am still learning too.
It is our job to nurse this thing until it is too big to feasibly control a large portion of it, IMO.

the problem is not with deepbit, it is with all the pools as I see it.
we dont have a real p2p decentralized network even if it is made up out of even 5 pools that have 20% each. it would still be way too easy for somebody to bring most of it under his control.

pools have to change how they work.
I think in the end the only solution will be to adapt to somthing like what they discuss here
http://forum.bitcoin.org/index.php?topic=9137.0;all

I agree with you 100%.

And it might even work with just 1%. I'm not worried about an attack that happens with only a few blocks. It's the sustained attack that I'm worried about, and the longer that goes, the more likely that the portion of blocks created by the pool will approach their percent of the network. Someone with over 50% of the hashing power WILL eventually be able to overtake the network. The same isn't guaranteed for amounts under 50%.

I keep citing Governments and Bankers as a corrupting influence. Except Governments and Bankers would never compromise the security of the network. Only they will profit from it. Err.. wait.

Yes, I understand. Who would want to disrupt and damage the network? People who stand to lose money because of Bitcoin. I.e. people that benefit from other systems.

Any system that Bitcoin disrupts. Central banks. Governments that run off of central banks. Any kind of government that doesn't want people easily transferring money across borders. And the list can go on for days.

I'm not talking about people who profit from Bitcoin. I'm talking about people who stand to lose profit because of Bitcoin. And I'm talking about them taking control, by force, of the person who has >50%.