Sorry I still am the first person to write about this attack, unless someone cites for me a specific written prior art.
I'm not that interested in proving it, so you can keep your false pride. As I understnad it, the thoery is that a greedy mining pool could choose to withhold fee-paying transactions that it has received, and retain them until it has solved it's own block; with the implication of boosting it's pool payouts relative to other pools. In turn attracting pool miners away from other pools, until such point that the first pool controls more than 50% of the total mining power, functionally owning the Bitcon network.
No that is not the attack described in the OP. You've entirely missed the point of what makes pools different from a cartel of retailers such as Amazon et al (all the small shops that sell through Amazon). What makes it different is the customer never interfaces with a pool and a pool interfaces with the actual miners. That's not different. Customers don't interface with a pool or miners now. I am writing about the customer interfacing directly with the miner at the miner's website or POS terminal, i.e. Amazon could have its own mining farm of computers.
Granted. The point is then Amazon can start to delay the transactions of those who are not in its cartel (also starving the rest of the mining network of transaction fees). This can eventually force customers away from non-cartel stores and to cartel stores (where store means website and/or POS terminal). Which thus increases the cartel's relative mining power over time, thus increasing the delay for the non-cartel stores. Thus it spirals until the cartel has 100%.
Your conclusion is dependent upon this premise highlighted, but this premise has no basis. Even if Amazon could prevent it's vendors from issuing their own transactions to the greater bitcoin network, by what mechanism can Amazon prevent transactions on the main network from propogating? The. core is that they can't.
Sorry your rebuttal failed. Your pool and miner game theory points make no sense in my described attack.
You're sticking with that, I see. Third, one unstated premise with this kind of attack vector theory is that the fees and block rewards are the only way that professional mining operations can make money. This has never been the intended result of a mature bitcoin network. Since mining profits are desinged to trend towards zero, the protocol permits 'out-of-band' methods of paying for transactions. For example (and this is where we get to my Walmart verus Target theory from two years ago), it's expected that as Bitcoin matures, major retail outfits will not only start accepting bitcoins for meatspace purchases, they will also start supporting mining themselves. Likewise, one such advantage that Walmart could offer over it's competitors is free transactions accepted at the counters.
Indeed! That is why the attack I described happens. The cartels will take over the mining. I mentioned the 0% transaction fee aspect of this attack upthread. Slow down and re-read the thread more slowly and reflect it on it for a while before you post again. Don't make noise here please. I will get angry. Be professional. I don't care if you get angry. I'm not going to read all this noise. You can link back to whatever proof you have offered others, but I don't need to disprove your theory, you need to defend it. Anger is a sign of your failure. I'm not a professional. |
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It doesn't matter how many times you say it, AnonyMint. Just because you can say it, or even that you have a link to someone else saying it, doesn't make it so. You are welcome to your opinion, but I've read over the theory of that mining cartel attack, and I think it's just FUD. There is more to Bitcoin than either you or him understand. More than I understand, and I'm one of the people who actually understands how it works at the protocol level. Read the linked thread on the Transactions Withholding Attack. I am the one who discovered the attack, and I have defended against everyone who has tried to refute it. No one can refute it. Read the thread and try to refute it (post over there in the thread). You can't. I just did. And you're not the first, either. |
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I've decided to respond to this theory in as much detail as I can muster, since it seems to be a perversion of my 'Walmart versus Target mining cartels' concept from two years ago....
Once Bitcoin's coin rewards decline to less than can pay for the miner's costs, e.g. <1% per annum debasement by 2033 and <0.2% by 2040, then transaction fees are supposed to fund miners. The following attack applies whether transactions are voluntary, variable, fixed, or mandatory-- it makes no difference.
Indeed, it does make no difference. I makes no difference now, however the miners are funded. Mining has always been intended to be a competitive function that tends towards a zero markup. I'll get there soon.... But a cartel (e.g. Amazon.com) could for example harvest transactions from its vast network and keep them without forwarding them to other miners. Then put them on the blocks found by its own mining servers. This would starve the rest of the network of funding and eventually the cartel would be doing all the mining. They could even offer 0% transaction fees (even refund mandatory tx fees) to entice more of the masses to process through their servers.
That is the same as turning Bitcoin into a centralized currency, and thus eventually controlled by the government and thus back to fiat again.
Note this postulated attack wouldn't be possible for 20 years or so,
No, we could do it sooner than than that, and I expect it will happen within the next two years. However, I don't consider it an attack, I consider it a feature. I'll explain why shortly.... I believe I am the first person to raise that in my Bitcoin : The Digital Kill Switch article? I am naming it the "transactions withholding attack" since it means not forwarding transactions in order to monopolize transaction fees, as coin rewards diminish.
Not even close to being the first. This is one of the set of memes that pops up repeatedly under the many " I'm a noob, but I alone am so smart that I have discovered the Great Bitcoin Flaw!" posts. Let me summerize the root of this (assumed) attack vector, for clarity. If I miss a fine point, I'm sure that you will point it out, and we can adress it then. As I understnad it, the thoery is that a greedy mining pool could choose to withhold fee-paying transactions that it has received, and retain them until it has solved it's own block; with the implication of boosting it's pool payouts relative to other pools. In turn attracting pool miners away from other pools, until such point that the first pool controls more than 50% of the total mining power, functionally owning the Bitcon network. There are many counter-economic effects that would contradict the leverage that such a mining pool could gain over the network, so I'll only go over a few of the most significant. First and foremost; the mining pools, nor any other miner, are not significant contributers to the fee paying transactions on the bitcoin netowrk. Said another way, it's not in the interest of merchants to only submit their transactions to one mining pool, even if it's the largest. It's in the interest of merchants to spread any transactions intended for themselves as far and wide across the bitcoin network as possible, as that reduces the risks involved in a well timed double-spend attack. And being a p2p netowrk, there is no way for a mining pool to prevent any valid transaction from spreading regardless of whether or not that particular mining pool forwards said traansaction to it's competitiors or not. Second, the largest miners have an economic incentive to cooperate with one another with regard to the bandwidth and information flow across the network, since working together they have a small, but notable, speed advantage over small mining outfits that must rely on slower Internet connections. The more and faster peer connections major miners have to one another, the faster that they (as a group) can include those fee paying transactions into their own queues. The faster they can do that, the more likely that whichever miner (among themselves) to solve the next block will have all of the fee paying transactions available at the moment. Any effort to corner the market on transactions would be regarded as not playing square with the rest of the major players, and will end up getting that pool cut out of the core of the network, and edge connected miners have a slightly higher rate of orphaned blocks as well. Third, one unstated premise with this kind of attack vector theory is that the fees and block rewards are the only way that professional mining operations can make money. This has never been the intended result of a mature bitcoin network. Since mining profits are desinged to trend towards zero, the protocol permits 'out-of-band' methods of paying for transactions. For example (and this is where we get to my Walmart verus Target theory from two years ago), it's expected that as Bitcoin matures, major retail outfits will not only start accepting bitcoins for meatspace purchases, they will also start supporting mining themselves. Likewise, one such advantage that Walmart could offer over it's competitors is free transactions accepted at the counters. Since it's not safe to accept such transactions without confirmations, it then becomes highly in Walmart's own interest to sponsor a mining outfit that will process free transactions intended for Walmart's own wallet of addresses as quickly as possible. Said another way, it's in Walmart's interest to pay a mining out fit (be it a mining pool, a seperate company, or an internal group to Walmart corporate) to process transactions at a loss. Of course, it's also not in Walmart's interest to process a competitors' free transactions (i.e. Target) in the same way, so Walmart is also paying to keep Target's free transactions out of their own mining pools. This sets up competing cartels, that each serve different players in each industry. Say, as an example, that BTC Guild took contracts to mine for Walmart, McDonalds & Sears; while Eglius took contracts to mine for Target, Burger King & JCPenny's. While this certainly is consolidation of the market for mining services, and consistant with the dirve towards driving the profit margin for mining to zero (or perhaps lower, under certain conditions) it's also impossible for there to be only one, because if any single mining pool were to gain more market share over the others, the others would suddenly be able to offer these out-of-band services for much cheaper to unrepresented merchants. The cartels are, thus, self limiting in scope with regard to the bitcoin network itself, which is all that we really care about on the macro scale. And fourth, there will always be a minority of small and sigular miners that mine at less than zero profit for various reasons. One such reason is simply that mining produces heat in the winter, and thus a mining rig, once you already own it, is nothing more than an elector-resistive heater. If you live in a area with both a high heat demand & relatively chaep electricty (i.e. Iceland) any actual coins your mining rigs produce become secondary profit. No mining pool will ever be able to compete with that, if for no other reason than bandwidth consumptionbecomes a greater burden than solo mining in this context. Questoins? Objections? |
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It doesn't matter how many times you say it, AnonyMint. Just because you can say it, or even that you have a link to someone else saying it, doesn't make it so. You are welcome to your opinion, but I've read over the theory of that mining cartel attack, and I think it's just FUD. There is more to Bitcoin than either you or him understand. More than I understand, and I'm one of the people who actually understands how it works at the protocol level. |
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My point is that when the legacy financial system goes tits-up (which I envision will most certainly be through hyperinflation), shares of companies and (e.g.) productive farmland will still have value. Maybe less so for the stocks, as commerce will be difficult for some time. But merely destroying the system's currency will not make land and capital equipment vaporize.
This is a fundamental truth that often gets lost in the noise. No currency is, itself, wealth. Nor is any currency, itself, capital. If & when the common currency is discarded, the standard of measuring wealth and capital simply changes. The wealth and capital are still there the whole time, but for an internim period it may become difficult to quantify the value in such a way as to be able to accuractly compare the values of different forms of capital. Nor is gold, itself, wealth. As was so well stated in the Cryptocromicon, gold is the corpse of wealth. |
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Crypto-currencies could be used to give gold some of the modern day transmission advantages without even going through a medium with counter-party risk such as an ETF or whatever.
Care to explain how? |
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Does this mean we crash tomorrow?
This overoptimism reminds me of the days before the last big crash, so that may very well happen... But I'm not selling, just in case it doesn't crash  (and becase I've promised myself not to get "sellers remorse" again) Well, the last time we had a huge run up, I thought that "this has to be a bubble, and it has to pop soon." So I 'shorted' a small fortune in bitcoins, and lost the majority of what I had when the price surged further and hit my stop-loss limit. And by "a small fortune" I meand that literally. I could have retired by now if I had just ignored the temptation to gamble. |
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I figured as much. So what's the difference between new and old school Austrian economists? Is new school just a term for Keynsians posing as Austrians? Oh, definately not. Peter is no keynsian, although me might be a bit of a moneterist. |
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they're in hands of u.s gov now
n Not yet. They have the encrypted wallet, but not the passcode. Maybe they never will, because I'm not convinced that this guy is DPR at all. He certainly is at least an employee, but then even he won't have access to the company funds. |
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People have tried, and are still trying to bruteforce an address with funds in it. To my knowledge no one has done it yet
Nor is that likely to occur unless and until either the breakers aquire a 150+ qbit quantum computer or a serious flaw is discovered in the address algo. Even if both were to occur, the odds of succes aren't particularly high. "Inventions have long since reached their limit, and I see no hope for future improvements." -- Julius Frontenus, 10 A.D. True enough, but bitcoin also has methods for upgrading both the address algo and the blockchain algos while maintaining backward compatibility and without a need to even pause the running network. If there is even a credible threat, bitcoin can change to address that threat, whether or not most people desire to remain with their old address style/algo. |
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Well threshold would imply some sort of cental block planning agency. Various miners have various different block parameters. Tx volume is higher than the block size being created by the various parameters currently used by various miners. Some miners target larger blocks, some target smaller ones, a couple seem to include nothing but the coinbase tx. Collectively all miners have a certain tx throughput which is less than the tx volume and the limit imposed by the 1MB cap.
Miners can either expand the # of tx they include in blocks
OR
Users can collectively reduce tx volume
OR
The backlog will grow
For the time being a way to put yourself at the front of the line is to pay a tx fee but that won't reduce/eliminate the backlog it will just ensure your tx has a higher chance of going first.
I really hope this will never happen , but let's say that in case number of transactions grows and it starts putting pressure on the limit of the block IF , the miners don't agree to raising the limits of the block but to raise the fee in order to discourage micropayments .....wouldn't we end up with something like... banks? Some people will prefer banking institutions anyway, althouth they wouldn't function quite the same. But no, we don't need to go there. Another solution is overlay networks, online wallet sites that agree to delayed settlement, mass transactions, blockchain contracts, etc. There are a lot of ways to move the burden of transactions off of the main network (that the protocol supports) than the obvious general rule today that all transactions are recorded on the blockchain individually and in a near term. Many to many transactions is one method of reducing the absolute number of transactions, for example. |
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People have tried, and are still trying to bruteforce an address with funds in it. To my knowledge no one has done it yet
Nor is that likely to occur unless and until either the breakers aquire a 150+ qbit quantum computer or a serious flaw is discovered in the address algo. Even if both were to occur, the odds of succes aren't particularly high. Yes, there is a chance. |
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I saved this one for last because it is so humiliating. The really funny part is where you argued that users have more than one coin account, then used that to argue that the coin distribution would skew from the chart I showed towards better than worse. Math is not your strong suite (nor is reading comprehension). You got the ratio direction reversed  Let's see if you can figure that out. The lack of comprehension, probably willful, is palatable. It's also bitter. |
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Can't think of a witty response, Mr. President? Or have you finally decided you have better things to do than attend class?
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People have tried, and are still trying to bruteforce an address with funds in it. To my knowledge no one has done it yet
Nor is that likely to occur unless and until either the breakers aquire a 150+ qbit quantum computer or a serious flaw is discovered in the address algo. Even if both were to occur, the odds of succes aren't particularly high. |
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I guess you can't do blockchain math either.
1/2 of coins were minted in the first 4 years. 350,000 users. 7 billion people in the world.
Go figure.
I don't see an argument here. You do realise that those people who don't own any bitcoins at all cannot rationally be considered in the wealth distribution, right? Or do you consider all your British compatriots to be tragicly poor due to the fact that incrediblely few of them own any US $ denominated account balances? You do realize that Bitcoin can never become the single global currency without having a very skewed ratio of have and have nots. The math is unarguable. Why do you assume that bitcoin will, or must, become "the single global currency"? That would be quite a victory, but is far from necessary or predictable. Why do you assume that any wealth distribution is abnormal? The US $ denominated wealth distribution in the US is far worsh than what you presume to state for bitcoin. Why do you assume that you have structured your math problem correctly? The math may be inarguable, but the application of same is not. You presume a lot, I notice. Additionally I hope you know how to divide 10.5 million by 350,000. So that means an average Bitcoin wealth of very roughly $100,000.
Why? Where do you get such numbers from? I've already shown that neither the absolute number of bitcoiners, nor the precise wealth of any particular bitcoiner, is knowable. So your application of simple division is bullshit. And we assume Bitcoin will rise at least another 10X in price, so make that $1 million each.
And why do we assume this? I don't. Even if I were to take such a presumption as a given, that does not imply that the curernt distribution, whatever it may be, will remain constant. There is no reaons that it would. So where does that place them on the distribution of world wealth?
Who cares? The answer to your bullshit ssumptive questions are still bullshit assumptions. Garbage in, garbage out. And that is if Bitcoin was uniformly distributed, which we both know it isn't even close to being uniformly distributed.
Again, so what? There is no example of any currency, in the history of mankind, that has ever been evenly distributed. Why must bitcoin be different in this regard? Now I shouldn't have had to teach a professor that. That is a very basic level of research.
I'll concede that your level of research is very basic. You still don't understand what's happening here, do you? |
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Lets see if you can do basic division. Apparently not.
Believe it or not, I'm doing more than just sitting here waiting for your responses. I will have to concede one thing however, as it's become apparent that there is no way you're actually old enough to have attended Cambridge. |
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I guess you can't do blockchain math either.
1/2 of coins were minted in the first 4 years. 350,000 users. 7 billion people in the world.
Go figure.
I don't see an argument here. You do realise that those people who don't own any bitcoins at all cannot rationally be considered in the wealth distribution, right? Or do you consider all your British compatriots to be tragicly poor due to the fact that incrediblely few of them own any US $ denominated account balances? |
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What happened professor? Did the cat get your tongue? hahaha. Idiot.
Wait, I thought you didn't have time to educate me? I'm starting to have fun with this. |
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Professor MoonShadow, read this and weep. 98% of humanity won't have any bitcoins when it enters a bubble and this is a problem, since these are already the laggards, and by buying at the bubble, they make their situation worse, not better. Any thoughts?
Have you seen dukong's bitcoin ranking search? http://btc.ondn.net/searchThe current blockchain holdings by address yield this distribution .... Balance Rank
1 BTC 195,629
10 BTC 91,885
100 BTC 10,128
1,000 BTC 1,127
10,000 BTC 95
100,000 BTC 3
Total 2,062,380
Bitcoin fucked up both aspects of the design.
1. It puts 98% of the coins in 2% of the hands.
Again, proving that you don't understand how bitcoin works. While this does show (roughly) 98% of coins are kept in 2% of addresses, I never contested that. I contested the claim that 98% of coins were "in 2% of the hands". There is no provable corrolary from the number of addresses with balances to the number of actual people who own bitcoins. To demonstrate, I have a client that has 1000+ addresses, and maintains a distribution of funds. Nor am I unusual in this regard. Furthermore, MtGox uses four distinct wallets for it's internal user wallets. Some addresses could have tens of thousands of bitcoins pooled from several users, others can have next to nothing at any given time. It's actually unusuall for an online wallet service to use individiual addresses linked to individual users; because it's cheaper and easier to account for member to member transfers internally without using the blockchain. While it's still possible that every address with a balance is realtive to the number of users who own those coins, that is almost certainly not the case. Even the mainline client makes no effort to consolidate funds into single addresses, so the most obvious 'guess' regarding the distribution your data represents is that that is the distribution of the size of individual transactions, not the distributions of individual users' wealth. The later is deliberately unkowable, by design. BTW, for a long time the top address was the coin mixer pool for The Silk Road. The Silk Road had tens of thousands of registered users, many thousands of which were regularly active. That little factiod alone shatteres your presumptive wealth distribution. Epic Fail. |
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