If I was a malicious attacker with 51%, I'd prevent everyone's transactions from happening and ask for a significant ransom. Once the ransom is paid, then I'd resume normal activity. And maybe rinse and repeat a little while later.
That's the only way I can see that I'd be potentially profitable without being traceable. I can't imagine a double-spend actually working. I'd probably end up getting caught and going to jail. It'd be hard to buy ANY physical good without leaving some sort of trail. And asking for higher transaction fees might work, but it'd be the lower-profit option, I believe.
Now, if I was a reasonable person with 51%, I'd just mine the heck out of Bitcoins and have a nice pile of them to do whatever I want with. Seriously, if you're money-motivated, and have 51%, THAT is the best option. It won't reduce confidence in Bitcoin (and thus your Bitcoin net worth), and it would continue to be profitable long into the future (whereas a double-spend or ransom attack would only be profitable in the short term).
Basically, I would completely eliminate the possibility of a 51% attack happening. I don't see why any reasonable person would do it. It would make them less money than simply mining with that hashing power.
I see it pretty much the way you do. That does still leave us with an entity that is not motivated by money and simply wanted to destroy bitcoin. This is true. I should have concluded my post with "I would completely eliminate the possibility of a 51% attack happening by any profit-motivated malicious attacker." |
|
|
|
|
I honestly don't think anything will pop. I think USD and perhaps the Euro will enter some seriously high inflation in the near future, but people will still use them, and life will go on. Eventually, inflation will calm, and hopefully lessons will be learned from this whole experience.
Right now, many people are concentrating on paying only for necessities and paying off debt more than anything else. Consumers using debt to make purchases is good for boosting economic growth in the short term, but that debt always has to be paid back one way or the other. Hard times only cause people to remember that debt is bad, and makes them focus on paying it off instead of gaining more of it. In that way, a recession continually compounds on itself until debt is paid back down to reasonable levels, at which point the economy turns around. And because the FR has been printing so much money to keep the economy afloat in the meantime, once the economy finally does turn around, it'll swing wildly the other direction, into the realm of very high inflation, and eventually settle back into the less extreme 7 year boom/bust cycle.
Just my opinions on the matter.
|
|
|
|
And? If either one of them didn't account for that possibility, they only have themselves to blame.
So you admit that wasn't, in fact, my only point. No purchaser of BFL products today knows which ASIC is going to be run first, that's pretty imperative for preordering without the chance for a refund. A cursory glance at the forums seems to show that they clearly don't think they are the only ones to blame. Let me ask you this question to show how silly your argument is: Why was the allinvain hack bad for Bitcoin? After all, it wasn't an underlying security issue with the blockchain. Plus, if he should have stored most of his Bitcoin in an offline wallet or multiple offline wallets, right? Duh, everyone should know that by now and should have known by then, too. If you think new Bitcoin miners "screwing themselves" over because of a lack of understanding on difficulty adjustment isn't a big deal for Bitcoin, I guess you're just an ass. I'm all for survival of the fittest here, but to not see even a need to educate people on this? That's asinine. I never said there wasn't a need to educate people about the potential for long-term ROI's on these ASIC investments. I just think it's silly to highlight the fact that there is risk involved, when that should be common sense for just about anyone entering any sort of investment to start with. |
|
|
|
|
If I was a malicious attacker with 51%, I'd prevent everyone's transactions from happening and ask for a significant ransom. Once the ransom is paid, then I'd resume normal activity. And maybe rinse and repeat a little while later.
That's the only way I can see that I'd be potentially profitable without being traceable. I can't imagine a double-spend actually working. I'd probably end up getting caught and going to jail. It'd be hard to buy ANY physical good without leaving some sort of trail. And asking for higher transaction fees might work, but it'd be the lower-profit option, I believe.
Now, if I was a reasonable person with 51%, I'd just mine the heck out of Bitcoins and have a nice pile of them to do whatever I want with. Seriously, if you're money-motivated, and have 51%, THAT is the best option. It won't reduce confidence in Bitcoin (and thus your Bitcoin net worth), and it would continue to be profitable long into the future (whereas a double-spend or ransom attack would only be profitable in the short term).
Basically, I would completely eliminate the possibility of a 51% attack happening. I don't see why any reasonable person would do it. It would make them less money than simply mining with that hashing power.
|
|
|
|
So your ONLY point is that people who buy later than the first adopters will get a lower return?
One person bought a SC Jalepeno, one person bought an SC Bitforce Single, both yesterday. What is your bet that both receive product on the same date? That's not an "early adopter advantage" that's a vast difference in ROI. And? If either one of them didn't account for that possibility, they only have themselves to blame. |
|
|
|
Besides the fact that a higher difficulty will make a 51% attack that much harder, yeah. No really.
A 51% attack happens when blocks are being found way faster than the difficulty allows. Raise the difficulty, and bang - 51% is out of commission, at least until he can get his speed up again.
Huh? A 51% attack could also be called a 51% takeover, and happens when 1 person owns 51% of the hashing power, and takes control of the entire network (rewrites the blockchain). The larger the network is, the harder for 1 person to own 51%. It's a LOT harder to gain 51% of a 200TH/s network than it is a 2TH/s network, for example. A larger network is inherently more resilient to a 51% takeover, you see? A larger difficulty is just a side effect of that larger network. The difficulty of that 200TH/s network will be 100x that of the 2TH/s network, right? The difficulty itself doesn't actually protect against an attack (or takeover), but the factors that caused the difficulty to raise are what protect us. Exactly, that's what I was saying. no, its not what you were saying. what i said is completely true. difficulty has nothing to do with the 51% takeover. raising or lowering the difficulty would have 0 effect on the 51% takeover. bottom line is that you need 51% of the network's total hashing power. The difficulty directly affects how much power you need to have in order to achieve 51%, correct? Therefore, for a network speed of (say) 12Th/s, you would need just over 12 MORE Th/s in order to be 51% of the network. However, if the difficulty was set for a network speed of 120Th/s, you would then need to have more than 120Th/s of hash power in order to be 51%. The difference between a 12Th/s network and a 120Th/s network is directly related to the difficulty. If the difficulty were set for a 12Th/s network, and someone showed up with 120Th/s, he would have far more than 51% and the difficulty would rise to meet the hash power he is bringing online. In contrast, if someone threw 12Th/s at a network that was running at 120Th/s, he would be unable to do anything more than get a lot of coins, because he cannot overcome the difficulty to achieve 51%. I'm not sure where the misunderstanding is. The network becomes more difficult to attack, directly as a result of how much power gets put up against it. No, not at all. If the difficulty was set to match a hashing power of 12 TH/s, then suddenly tomorrow, 50% of the hashing power dropped off the face of the earth, it would require only slightly more than 6 TH/s of hashing power to overcome the rest of the network. What matters is the hashing power NOW. The difficulty attempts to retroactively match the hashing power, but even that only happens every 2 weeks. It is basically the most accurate indicator of total hashing power, second only to looking at how often blocks are being found, but still isn't a perfect indicator by any means. And it doesn't mean that anyone who has hashing power greater than the difficulty could stage a 51% attack - it is a lot more involved than that. |
|
|
|
So again, I ask the question, why is a years-long ROI a bad thing? And I'll make it more specific: Why is it bad to Bitcoin?
I think you're missing the point of concern here. People buy a product like a BFL device and expect it to: 1. Be delivered by X date, 2. Pay itself off within Y months, and 3. Hash at Z rate. BFL has over-delivered on point #3, but their horrible performance on #1 and #2 means people are setting up for disaster. Case in point: which is shipping first, the SC Jalepenos or SC Singles? How are two different ASIC devices going to ship simultaneously? So why is a "years-long" ROI bad? Well, because the first people to get them aren't going to have that "years-long" ROI, they are going to pay off their BFL device within weeks. It's all the other fools that get their devices last that are going to have "years-long" ROI, and if you think that isn't going to be bad to see that kind of divergence, you're just being silly. However on the very narrow point you mention, is it bad for Bitcoin? Absolutely not. Now's the time to buy, IMHO, time to take advantage of all the suckers that just wrapped up a quarter of a million USD in non-refundable deposits! ... So your ONLY point is that people who buy later than the first adopters will get a lower return? Well, duh, they're coming to the party later! And anyone who doesn't do the math before buying DESERVES to have a lower/longer ROI than they expected. People are making a huge deal out of nothing, IMO. It's the end of the world because some people might make bad investments that take a while to recoup? Big freaking deal... |
|
|
|
No offense, but I could probably make more on SatoshiDice.  Also, I have a grand total of 0.00615448 BTC at the moment, so it would be a donation.  Or you could lose more on SatoshiDice too. This is a positive-sum game, and satoshidice takes a fee. So technically, the payout from this is higher than the payout from SD. Just sayin'. Also, I can't win. So if you bet your 0.006 BTC, and that's the only bet I receive, then you win it all. |
|
|
|
It "should" be easier
That's the problem with BFL. Yes it should be easier, but they don't respond to emails for days/weeks. This causes me to be placed at the end of the ASIC waiting list, even though I placed the order 2 hours after pre-orders went live. It has gotten to the point where I might just cancel my ~$5k worth of orders from BFL. Their customer service is absolute shit. Your $5k is an insignificant drop in the ocean for them, there are people investing $100k each, and BFL spent atleast $1.5mil designing the ASIC, just because $5k is big for you doesn't mean it is big for them. Like I said, if it's not about the money. Why don't they just hire somebody that could help them with the customer support?I just find this all very shady. They are trying to... http://www.butterflylabs.com/jobs/ |
|
|
|
|
At least you're honest about it.
|
|
|
|
I don't see this advantage, 'you' have the option of completely withdrawing your order, 'we' MUST pay more or lose the initial investment. Remembering that the profitability of this additional investment is by no means assured. Lucky?  The message posted from Jody indicates anyone that paid with BTC cannot cancel their order. You've got hardware. You can sell it in 3 months for $599, but can earn coins on it right now. The people waiting on old orders can also sell in 3 months for $599, but they don't have the luxury of mining on it. So if they sell, they've essentially been out of their money for 3-6 months and have nothing to show for it. This was later clarified to the fact that you will receive a USD equivalent number of Bitcoins in the event of a refund. If you paid 125 Bitcoins for a single, and wanted a refund, you might only get 90 today, but you'll still get a refund. |
|
|
|
The end is drawing near... A free 10 bitcents to anyone with some balls. |
|
|
|
They have allocated 1/3 of the quota to upgrades like us, so we will fall under that category.
To people who have orders in for the prior-gens? Hmmmm.... I suppose that could work out alright. |
|
|
|
- Why is a years-long ROI a bad thing?
Risk. On top of that, remember that bitcoin mining is perfectly competitive - the longer this time period gets the closer you'll be getting to the magical long-term point where you are no longer profitable. You have only answered the question as to why years-long ROI is bad for miners. But miners are self-balancing. If years-long ROI's are too risky, then miners won't continue to invest to the point where years-long ROI's are the norm, thus keeping it down into the months. If miners are willing to risk buying even with years-long ROI's, then they might be called stupid or crazy, but they're still helping to give Bitcoin more hashing power to protect it. It's just like ANY other business out there. The more people invest into a particular market, the less room there is for competitors. The less room there is for competitors, the less attractive it is for investing, and the less people will invest. Those who already invested in the market have sunk costs, and might choose to ride it out or sell out and take the hit. Those who sell out will help increase the profit of those who don't, and the ROI would eventually sink back to months instead of years again. It's like you guys are complaining that gas stations open up near each other and compete, and it makes it more risky because it'll take longer for gas stations to recoup their investments, and some of them might not be profitable. Ok... so?? So again, I ask the question, why is a years-long ROI a bad thing? And I'll make it more specific: Why is it bad to Bitcoin? |
|
|
|
Sgt, don't misinterpret my words as disgust regarding Bitcoin as a whole. I just think there are a LOT of miners that are not thinking things through and don't understand just how difficult mining is going to be getting, and that they could still become miners again after second-gen ASIC blows first gen out of the water.
I'm really worried about these sorts of things, because I get the impression that a lot of miners will be under the impression they are owed something for the work they do, and they aren't going to be very pleased with the reward halving for sure. It could be this translates into a hoarding of Bitcoin at some unspecific point around the beginning of the difficulty adjustments, but given that so many people will have already wrapped up funds in ASIC hardware, it could be these folks that miss out the most...
Ok, so your post is more of a warning to miners than anything else? Fair enough, I can agree that that isn't a bad thing to do. Plus, it disincentivises mining, thereby increasing your own mining profits in the meantime. |
|
|
|
|
I'd just like to make a few points.
- It is likely that, as faith in Bitcoins increases, and price stability increases, more professional companies who are willing to look at ROI in terms of years instead of months, and who already get excellent incentives on electricity, will start making larger investments in mining equipment.
- There will always be an aspect of volatility.
- There will always be an aspect of the "average joe" being able to mine and make a profit. If it is profitable for a company, it can be profitable for an average joe. The break-even only has to do with electric rates, and the ROI will settle around a certain number of years of break even compared to electric rates.
- The ROI won't increase to years until we either have more faith in Bitcoin, or a significant price decrease in BTC.
- Why is a years-long ROI a bad thing?
- Why are large scale mining operations a bad thing?
- Why can't we push the merits of Bitcoin as a transactional system instead of a magic money making machine?
If ROI really is pushed out to years-long, then that means Bitcoin will be better secured than if ROI is months long, because it means more people and companies are mining. Isn't that a very GOOD thing? It means it is that much more difficult for someone to stage an attack on the network, does it not?
If large scale mining operations are put into place, isn't that also a very GOOD thing? Again, more hashing power protecting Bitcoin, and more people taking it seriously (as evidenced by people making large-scale investments). It also means that those mining companies would work hard to keep the price of Bitcoin stable - they want to have consistent returns, not returns where they might be losing money one day, and making twice as much the next. If mining companies are holding back on the sale of coins to help stabilize the price, is that not a good thing?
On top of all of this, it will NOT be centralized mining. It will be a variety of companies or business groups making a variety of investments in a variety of sizes of mining operations. Just because you can't profitably mine at residential electric rates doesn't mean it is centralized. It just means that mining has moved from a hobby to the real business world.
Centralized is the buzzword around here, but everyone is using it wrong. If there was only one person or company in the world mining Bitcoin, then I would call that centralized. But a group of businesses competing with each other is the opposite of centralization.
This is not the end of Bitcoin - this is just the beginning. Sorry you don't like the way it is going, but deal with it.
|
|
|
|
Sorry - results will be shared soon! I didn't have any way to show the results automatically at the end of the survey though. And I need to clean up the entries too. But when I have time, I will share. |
|
|
|
Exactly my thoughts.
Automobiles should never have been allowed, because their success caused the demise of livery stables, horse whip manufacturers and horse buggy manufacturers.
Or maybe automobiles should have be allowed after all, but the ordinance that a man with a warning bell walks in front of them should never have been rescinded.
I would say we should ask a different question that accurately describes what some of the ASIC detractor's more serious claims. I would propose the question would be: "How many cars would be on the road and in service if to have Cars (read: ASIC) on the road meant we had to shoot 98% of the horses" I say it in this extreme manner because the effect of the ASIC technology is effectively doing that. Sure, just like with the horses analogy, we still have horses around that are used for transportation. But all in all, cars or some variant of them is used for ground transportation that doesn't involve walking. I consider this the credible and serious question being asked of this transition. This is a point that I believe we are not fully evaluating. I am not dismissive to this question. Thoughts? Dalkore I still say, does it matter? ASIC is happening. No matter what you say in this thread, ASICs will still happen. |
|
|
|
|
So far, 46 people have started the survey, and 32 have finished. Keep 'em coming!
|
|
|
|
What about those who made multiple orders? Your survey doesn't cover this, and will throw off results. Some made multiple orders, with one order paid in BTC and one order paid by wire transfer.
Good point. Probably easiest to just take the survey again if you ordered via both methods. Some later questions are not correct according to the answers you give.
If you fill in you didn't order yet it will still ask what day you orderd and what payment method you used for example.
Filled it in anyways. When will we see any results?
I'll take that into account, thanks for the concern. There's no way to make a "path" of questions with this particular survey tool. |
|
|
|
|
Show Posts
