Bitcoin Forum

If a 51% attack actually happens, could one lose  bitcoins in cold storage or in hot wallet..

what can a normal non technical user do to save himself from this danger?

Always expect the worst case scenario, so yes, it could happen.

Maybe you could wait to see how we are going to pass this issue, as it's for the first time ever to happen.

If 51% attack happens, noone will steal your BTC. They will just be worth 0$....so no...you can not protect em...noone can except miners turning away their mining machines away from ghash. I hope devs are watching this and planning how to stop this from happening again.

As far as i understand, no one can take your bitcoins without the private keys. So you are safe with cold storage.

Why could happen is double spending.

No!!

A 51% could theoretically allow the attacker to double-spend coins that *they* already have.

YOUR coins are safe. No one can sign transactions for your coins, unless you've given them your private keys.

No, this cannot happen. Only he who has the private key can initiate transactions.
What *can* happen is that a past transaction gets reversed. E.g. if you put your coins
on your cold wallet just yesterday and there is someone with almost 100% hashing power
and seriously determined to do so, he could fork and orphane all blocks from this transaction on.
Then the coins will be there where they used to be before they ended up in your cold wallet.

I'd say this is a purely theoretical threat, though. If you are the only one who has the private key,
you are the only one who has control over your coins.

No! See my post above.




Also no. Deepbit had around 50% a couple years ago. Miners switched pools. It passed.

Take a deep breath, your money is safer in crypto cold storage than anywhere else in this solar system.

You guys should have a look at the wiki. The information is out there for you to access. Coming here to ask won't help much.

Why is it so hard to solve this issue?

What issue? Nothing needs to be resolved here.. Everything is fine. We should be happy about this opportunity
to grab some cheap coins :)

Are you sure about this ?

Yep, unless they reverse the Tx from where u got your coins ;)

You just have to read how bitcoin works.. In order to initiate a new transaction, you need the
private key. Otherwise you cannot sign that transaction. Technically you could build on
blocks containing wrongly signed transactions if you own the majority of the hashing speed, but then
it's no longer Bitcoin but someones private coin^^

You can fork and thus reverse transactions without knowing a private key. This would be bad news
for someone of course, but it has nothing to do with collecting coins belonging to someone else.

yes, in a worst case scenario a 51% attack can erase all transactions since the last checkpoint, unless you got your bitcoins before that then you will lose them.
nothing can be done against this except hoping that ghash.io will stop controlling most of the hashing power in the network.

Huh? When was the last checkpoint?

the last checkpoint in the source code is of block #279000 (https://github.com/bitcoin/bitcoin/blob/master/src/checkpoints.cpp) which was mined on 7th of January 2014.
so any bitcoins anyone got after that date are in danger in a worst case scenario.

Not strictly true.

If the attacker *ever* owned your coins in the past, they can start their attack from before they sold them and rewrite history from that point forward.  Then you never bought them and your cold wallet is empty.

I doubt if this repository has much authority. If someone with say almost 100% hashing power would
initiate a fork building on a block mined back in 2013, I don't see how a reversed bitcoin from jan. 8 is safer than
a reversed one from Jan. 6...

So what your telling me is I need to divest and gamble all my coins away? :)

I would never suggest such a thing.

But yes.  That would be best.  ;)

no fork originating from a block older than 7th of jan 2014 will be accepted by the client.
no matter how much hashing power who ever computed it has.

A fork from before the most recent checkpoint isn't really a fork, since all the Bitcoin core clients won't even acknowledge it.  That's what checkpoints are for.

Most of the SPV Android clients presumably talk to Bitcoin core servers which won't see the fork either.  And those that don't will be connecting to a server which will be fixed to know about the checkpoint if they don't already.

You are saying that if github went offline, all bitcoin clients stop working? I have problems
believing that..

Thanks for confirming and it's for sure mission impossible to reverse the Tx, right?

the file i posted from github is part of the bitcoin client source code.
it shows the checkpoints hard coded into the client.

Ow ok, I didn't knew about that. makes sense..

wrong.
as long as ghash.io got over 50% of the network's hashing power they can reverse every transaction since 7th of jan 2014.

No, that's not the case at all. The checkpoints are hardcoded in the program. Rather, current clients will reject any chain that does not have a block with hash 0000000000000001ae8c72a0b0c301f67e3afca10e819efa9041e458e9bd7e40 at height 279000. You can view this fact via github since that's where the source code is hosted, or (with sufficient effort) by inspecting the compiled .exe that is used by standard clients. Everything after that is (theoretically) up for grabs to anyone who can maintain >50% of the hash power while going rogue (hint: Ghash.IO cannot do this, because people will leave the pool and cut off CEX.IO money influx if they try).

no one knows for sure what part of their hashing power is made of mining hardware under their control.
who is to say they don't have enough hardware to maintain a majority of hashing power without the help of any external miners.

Well lets keep the hyperbole to a realistic level shall we.

1) With 51% of the hashrate the main chain will continue to grow at a rate of 71 blocks per day and the attackers chain would grow at a rate of 73 blocks per day.  So to reverse a t x which is 279,000 blocks deep in the chain with a 2 block per day advantage would require about 35 years.

2) While the attacker is building the attack chain they won't be mining on the public chain. Usually an attacker would keep this a secret until it the attack is complete because it ensures there is no warning but what this means for a public pool is that the number of blocks on the main chain produced by "ghash.io" would be 0.  Miners would receive 0 BTC in compensation.  GHASH.IO share of new blocks would drop to zero and their share of the network hashrate as charted by various sites would also plummet to zero (because those sites are based on detected blocks on the primary chain).

So putting these two things together ...ghash.io would need to attack the network for 35 years and not have any miners leave despite not getting paid and the fact that it would be very obvious what is going on (i.e. if you have x PH/s and are producing no blocks on the main chain then what are you doing).  It isn't good for any entity to have that much hashing power but there are practical limits on what can be achieved by a pool.

that's correct assuming they stop growing and don't go into 70-80% territory.
one of the biggest problems is that they have alot of mining hardware under their direct control.
what happens when they have enough hardware to be 70% of the hashing power without anyone's help.
the more hardware they control the more transactions they can reverse if they go rouge.

It also means the more capital they have at risk which becomes worthless when they attack the Bitcoin network.  There isn't that much that you could double spend that would be worth more than a days revenue at 50% of the miner reward.  I mean the exchanges are really the only entities with that kind of volume and you don't really think you are going to be able to deposit, trade, and withdraw tens of millions of dollars overnight do you? 

The idea that a 51% attack will be economical is doubtful.  The larger threat comes from a non-economic attack.  An entity well funded seeking to destroy the network and accepting like in any war the cost to do so will never be directly recovered.  There is no magic bullet but if the network continues to grow is value then the cost to perform that kind of attack will also grow.  Crypto currencies are out of the bag now and if the NSA or some other deep pocketed entity wasted tens of millions today or potentially billions of dollars in the future to kill Bitcoin it wouldn't be more effective than killing Napster was at ending file sharing.   The ecosystem would adapt.  Necessity is the mother of all invention.

killing bitcoin would be alot more effective than killing Napster.
file sharing survived because of the superior implementation of peer to peer networking of its successors.
proof of work coins are the best solution we got to the double spending problem.
and unfortunately we don't have a solution to stop entities from getting a majority of computing power and being able to destroy the system.
as it stands today any successor to bitcoin will be based on the same technology and will be attacked in the same way as bitcoin.

This is the best argument against worrying that ghash will execute an attack on the network once they get 51%. Ghash is a entity that is financially motivated.

One other point is that even with them having 40% of the network they could still execute double spend attacks with a roughly 80% success rate. If they were to execute an attack why wait to get 51%? Why not at 35% or 40%, such attack could still earn a substantial amount of BTC. As far as I know no attacks like this have been executed and there have been no reports as such.

Thank you for posting this. I just bought my first coins this week and put them into cold storage. These threads were kind of spooking me about my investment.