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1  Bitcoin / Development & Technical Discussion / Re: Resurrecting the Champ: PoW to become Bitmain/Buterin resistant on: April 23, 2018, 10:18:11 PM
Any real solution that makes a cryptocurrency's Sybil resistance closer to democratic (1 person ≈ 1 vote) rather than plutocratic ($1 ≈ 1 vote) is fine by me.

That said, I still have doubts that a good solution exists within traditional PoW.

(this paragraph edited after the fact; I reread and got a better idea of what you were talking about)
The first reason is that, even if specialized hardware doesn't make sense for a pure mining operation, it will always make sense for an entity trying to execute a double-spend. Such an entity isn't bound by the traditional mining payoff chart; provided they have the start-up capital, all they need to do is reverse some high-profile transactions (or extort "insurance payments" from those trying to transact) to make their money back. For them, only the fixed cost of the hardware - and not the marginal cost of electricity - matters, because they only need to mine when they have someone's kneecaps to break.

But for the sake of argument, let's say you figure it out. Let's say you actually come up with a proof of work scheme that can't benefit meaningfully from custom hardware.

In this situation, the attacker's optimal strategy just shifts from "build a huge fuck server farm" to "build a huge fuck botnet". This is something organized crime groups do today anyway, to great success and populations in the millions. How many Bitcoin full nodes are there today? Something like 10,000? They would be drowned out like a sprinkler in a hurricane. Even if you assume that most BTC users, in a world where they could mine, were to install their own full node, that's maybe 30 million users if you make optimistic assumptions - Bredolab could still have outvoted them, or credibly threatened to do so.

What's your plan for mitigating such a strategy?
2  Alternate cryptocurrencies / Altcoin Discussion / Re: Can make specific people only can mine to some coin? on: March 30, 2018, 01:59:31 AM
If you have a trusted identity source with crypto keys inside (e.g. a biometric passport or an Estonian e-citizenship card), you could require that blocks be signed by such a key.

Then, for Alice to resell her mining equipment to Bob, she'd also have to give Bob a copy of her passport/Estonia card/etc., which presumably she'd be reluctant to do (since it'd also let him impersonate her in other matters).

But again: if you have this sort of system, you are really just selling "membership in the miner whitelist". So the mining "hardware" doesn't even need to be GPU, just some simple thing that can periodically check the user's passport key & write a block based on that. It could be a Raspberry PI, it'd still do the same job.
3  Alternate cryptocurrencies / Altcoin Discussion / Re: Can make specific people only can mine to some coin? on: March 29, 2018, 12:33:16 AM
Can I make specific people who buy mining hardware only can mine that coin?
Long story made short: if you're able to maintain a list of specific people, then you don't need mining at all.

The purpose of mining is to prevent "sybil attacks" - where one person pretends to be many people in order to outvote the honest users.

Mining defeats that kind of attack this because, even though I can effortlessly make a million BitcoinTalk accounts, I can't effortlessly make a million GPUs.

But if you have a closed list of "authorized miners", then that already prevents one person from pretending to be many people.

You can just say, "OK, everyone who's authorized each gets one vote", and enforce that via public key signatures or something, and the network obeys the outcome of that vote.

(Of course, it's up for debate whether this kind of design - with a voter whitelist etc - is a good idea. Smiley It's certainly not decentralized, which many people here care about. But it might make sense for some use cases.)
4  Bitcoin / Development & Technical Discussion / Re: Tracking down stolen Bitcoins on: March 28, 2018, 04:54:18 PM
It's interesting how quickly history disappears in cryptocurrency land Smiley

See, this was actually tried on a significant scale back in the old days. A popular margin trading site - Bitcoinica - was hacked, and as a result, MtGOX (the #1 exchange at the time) instituted a policy that they wouldn't accept deposits of the "tainted" coins stolen by the hacker - and would put a temporary AML freeze on any account that tried - under the theory that such a person might have been responsible (or know who's responsible) for the hack.

Example of a thread about this.

People quickly realized, within a few weeks, that this was not a tenable way forward, b/c overwhelmingly the people affected by the policy were randos who had nothing to do with the hack - they'd just been paid coins that, at some point in the past, had been spent by the hacker.

When the founder of Bitcoinica asked MtGOX to stop this policy, they did, and since then nobody has seriously tried it again.
5  Bitcoin / Development & Technical Discussion / Re: Question about computation power for purposeful modification of blockchain data on: March 22, 2018, 04:43:58 PM
Imagine that there is a famous book.  Imagine that someone discovered that if you:

  • Take the first letter of every sentence
  • Swap the positions of every 2 letters
  • Sort the middle 10 characters in the following order 3, 7, 2, 5, 9, 6, 10, 4, 1, 5, 8
  • Convert the letters to a binary representation using ASCII encoding
  • Perform an XOR of every binary digit with the binary exactly 9 positions to the right
  • Convert the resulting data into a bitmap encoding with 100 rows

Then the result can be opened with an image viewing program, and some objectionable image will result.

Since a process of manipulating the book data can result in an objectionable image, should the book be banned?

If you feel that it should, then we should probably ban every book that has ever existed.  Because, given a small enough image and any book of reasonable length, it is possible to invent an algorithm that will convert the text of that book into that image.  The algorithm will be specific to that one book and that image, but the same is true of each of the images in the blockchain.  The algorithm for converting a subset of blockchain data into an image is specific to the bitcoin blockchain and the reported image.
I've seen this argument before, but frankly I find it a little specious - it ignores the distinction between the ciphertext and the key.

The rule you give as an example has... maybe 40 or 50 bits of entropy. That's not enough to store an "objectionable" image, or even one image out of a giant collection of such images; we're talking about 10KB, 20KB images here, even at maximum compression. Thus, the actual carrier mechanism for the data must have been (at least in a large part) the book itself, and so holding the book responsible for distributing the content makes sense.

In contrast, a reverse-engineered algorithm like you propose is going to be much more complex, because info-theoretically, the book is no better than a PRNG that's skewed in a way you can't control. Even the length of the book doesn't matter for more than 20 bits or so (War and Peace is "only" 3.2MB, so "turn to page 100" only gives you 22 bits of entropy). So instead, you need enough moving parts in the "instructions to decode" to carry the signal; those instructions must - as a matter of pure math - be several thousand words long if written in plain English. At which point, it should be clear that it's the instructions - not the book they reference - which carry the objectionable signal.
6  Bitcoin / Development & Technical Discussion / Re: Question about computation power for purposeful modification of blockchain data on: March 21, 2018, 02:53:06 AM
A better solution would be a client-side update with some zero-knowledge proof algorithm.

Basic idea: client X downloads the blockchain from client Y. When the "problem data" appears, instead of providing it, client Y says "here's a ZK-SNARK proving that some valid data exists, which hashes to what you expected."

So long as it's not your transaction, you don't need to know exactly what the data is.

And if it is your transaction, you can still spend it so long as you provide the preimage (the original data) to prove that your spend is valid. In which case... welp, you just revealed that you're the one who put it on the blockchain in the first place, which the person you submitted the txn to may be very interested to find out/tell a friendly FBI agent. Smiley
7  Bitcoin / Development & Technical Discussion / Re: is this encryption any good (nullius is welcome) on: March 15, 2018, 04:45:50 PM
Distributing apps with Dll's is a pain in the bum and I like just a single .exe these days.

Bit of a pain programming this way in visual studio but i just use project folders these days to separate the sections of the project.
If you want everything to be packaged in a single executable file, you can use the .lib OpenSSL binaries instead of .dlls. Or https://stackoverflow.com/questions/18486243/how-do-i-build-openssl-statically-linked-against-windows-runtimecompile them from OpenSSL source yourself, if you don't trust whoever posted these.
8  Bitcoin / Development & Technical Discussion / Re: is this encryption any good (nullius is welcome) on: March 12, 2018, 09:06:48 PM
If you're worried about Windows's crypto APIs stealing your encryption keys, why not just link against OpenSSL? It's got DLLs available for Windows apps, and then you know you've got a decent algorithm at least.
9  Economy / Speculation / Re: 2018 Cryptocurrency Crash (Elliott Wave) on: January 09, 2018, 11:47:13 PM
when the price was  $2000 [...] even the marketcap was very low
You do realize that the market cap is just the price times the number of coins in existence, right? Of course the market cap will be lower when the price was lower.

Wow, are there still people who believe in that bitcoin will crash at some point?
I mean, it's happened before.

After the 2011 bubble (peak ~$30/BTC), we spent quite a few months in the single digits.
After the 2013 bubble (peak ~$1000/BTC), we spent over a year in the $250 neighborhood.
I would call those "crashes".

So why is a crash now unbelievable? Even a crash to $5000/BTC or so?
Doesn't mean that "Bitcoin is finished" or whatever. Just that the price is lower (comparatively) for a while.

if bitcoin crashes, another altcoin will replace it.
This much is probably true, even if only temporarily. The Ethereum price, f'rex, is growing pretty rapidly right now, even with other coins taking a bath. Bitcoin isn't the only game in town anymore, so even people getting out of one cryptocurrency can just move to another.
10  Economy / Economics / One Interesting Consequence of the Bitcoin Price on: December 08, 2017, 02:20:54 AM
The mining reward is designed to automatically adjust so that blocks will be found - and BTC issued - at a predictable rate.

A side effect is that miners can choose to mine, or not, at any given moment, purely based on whether mining at that moment would be profitable.

And thus, mining will generally cost exactly as much as the block reward (because it gets easier/harder until that's true).

In other words, any particular BTC spot price carries with it an assumption about how much it costs to mine a block. And mining happens in the real world, using real infrastructure.



Large scale power plants these days generally costs between 5-10/kWh. That includes both clean energy and dirty.

If one bitcoin is worth $100,000... the implication is that 72GW are being generated, somewhere, to run mining hardware.
If one bitcoin is worth $1 million... the implication is that 720GW are being expended.

Let's assume this is mostly "clean energy", so that we don't stay up at night worrying about greenhouse gas emissions.

72GW requires about 2700 square miles of land devoted to solar farms - about the size of Luxemborg.
720GW requires about 27,000 square miles - about the size of Panama.

Naturally, this would not all be in one place. It'd be spread out, integrated into the places where mining rigs happen to be. But that's still an incredible amount of infrastructure - of physical stuff - all dedicated simply to outvoting an adversary.



For a Proof of Work based system to reach these heights, then, means that it is not simply a thing that exists ephemerally, on networks and in ledgers.

Rather, it must exist, physically, among us, all over the real world.
11  Economy / Speculation / Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion on: November 27, 2017, 05:07:10 PM
pro tip: don't forget to create your own charity where you can donate to!
I mean, that's not a bad idea, so long as you steer clear of self-dealing.
12  Economy / Speculation / Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion on: November 27, 2017, 04:52:24 PM
amazing you said that...  I've been having 100% of my paycheck taken out in taxes since september in order to cover capital gains taxes this year Sad  
Hot tip: consider making an in-kind donation of BTC to your favorite charity.

In-kind donations give you the usual deduction, but also don't count as a capital gain (b/c you never sold or traded it - just gave it away).

This means if you have, say, 10BTC you want to liquidate, you can sell 5BTC and donate 5BTC, and the deductions from the donated part will cancel out the tax burden of the sold part.

(Of course it's a little more complicated than that due to the IRS's reporting requirements for in-kind donations of weird stuff. IANACPA, talk to yours, etc.)
13  Economy / Speculation / Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion on: November 17, 2017, 12:06:39 AM
Is that LTC just pumping - or are people using it for ways to transfer money cheaply between exchanges?
I don't know about anyone else, but I definitely used it for this purpose during the BitcoinCash fork.
14  Economy / Exchanges / Re: KRAKEN not executing my orders nor let me cancel !?! on: November 14, 2017, 02:08:17 AM
Another thing I forgot to mention. In a very honest implementation of a trading platform (as it should be):
   All stop loss orders will be executed exactly at the stop price - not one bit lower or higher.
Uh, isn't that impossible in a lot of cases? The exchange can't control when and where market makers decide to place - or cancel - a limit order. How could they possibly guarantee that a stop loss order will find someone else willing to buy, at exactly that price, in the middle of a crash?

Or are you suggesting that exchanges should be the counterparty themselves? That seems like a recipe for disaster.
15  Economy / Speculation / Re: What happens when the "Greens" object to bitcoin on: November 10, 2017, 06:04:17 PM
Why only focus on Proof of Stake? There are other interesting technologies that could be used.

I admit that I lack a deep technological understanding, but for me, Bram Cohen's (Bittorrent creator) "Proof of Space" could be an interesting alternative. It's more similar to standard PoW mining because everybody can start mining "from zero" using external resources. But it wastes less electricity, because the "attack price" is not based primarily on the electricity price used to carry out the attack. (There is already an experimental altcoin called "Burst" using a similar algorithm).

In the case it's proven secure, I see no problem in Bitcoin adopting that technology.
Good point. Proof of Space and Proof of Liveness are definitely possibilities too, at least in terms of moving off "electricity" (with all its baggage) as the scarce resource of choice.

As for "mining with only external resources"... well, there's pros and cons to that. The fact that (with proof of work/space/etc) people can enter the system without establishing a link to "someone who bought the coins" is a powerful property for a cryptocurrency to have... but so is being able to "self-host", without consuming any physically scarce resource at all.
16  Economy / Speculation / Re: What happens when the "Greens" object to bitcoin on: November 09, 2017, 09:28:39 PM
We still might see PoW being the go-to algorithm for coins that wants to get the highest level of security possible for their utilization like bitcoin.
I'm not sure PoW is actually higher-security than second-generation (N@S-resistant) PoS. One big advantage of Proof of Stake is that a 51% attacker can only double-spend once (since executing the attack destroys their stake), whereas a PoW 51% attacker can attack again and again (they still have their mining hardware to give it another go).
17  Economy / Speculation / Re: What happens when the "Greens" object to bitcoin on: November 09, 2017, 08:15:51 PM
I mean, they're already objecting. I've seen a lot of Twitter chatter on the topic lately.

Long-term, I figure the most likely outcomes are:
  • Wind/solar become so cheap/plentiful that they outcompete even (e.g.) coal plants in Inner Mongolia for pure BTC/kWh.
  • A Bitcoin proof-of-stake fork gets broad community adoption.
  • A non-Bitcoin proof-of-stake coin (Casper Ethereum, f'rex) ends up becoming the dominant cryptocoin for everyday users.

It's also possible that the BTC ecosystem just soldiers on, not caring about its externalities on the literal ecosystem, and its network effects (first mover advantage etc) let it get away with that. But IMO that's a bad outcome, and probably not as likely as the above.
18  Economy / Speculation / Re: Investing in BTC, ETH , BCH or XRP on: November 07, 2017, 12:22:50 AM
Here's how I see it:
  • An investment in BTC is (right now) a bet that transaction scaling can be solved mostly off-chain, and/or a bet on the power of network effects (more likely to be adopted?) and mature code (less buggy?).
  • An investment in BCH, by comparison, is a bet that transaction scaling can be solved mostly on-chain, but that Segwit2x will fail.
  • An investment in ETH is a bet on Proof of Stake (by way of Casper), and/or on smart contracts.
  • An investment in XRP is a bet that major stakeholders can be prevented from flagrantly misbehaving by social - rather than technical - pressures. (Ripple's double-spend protection works based on individually-curated "these stakeholders wouldn't collaborate to defraud me" whitelists.)
   
I think energy scarcity and global warming mean the coin of the future will have to be Proof of Stake, one way or another, and smart contracts have always excited me. So I like ETH as a long-term bet.

But I also like BTC's first-mover advantage.

Your priorities, and your beliefs about the outcome of those "bets", may be different from my own. Smiley

is it good to wait until bitcoin fork ( 15 november ) or not ?
If you are going to buy into BTC, I would recommend getting in before the fork, mainly so that you don't have to guess whether Segwit2x will be adopted or not; you'll get your coins' value either way.
19  Economy / Speculation / Re: What if: an old hand dumps all their coins right now? on: November 05, 2017, 11:15:36 PM
Thanks for the replies, all.

To be clear, this really is a "What If" scenario more than anything else. I agree that in most cases, such a person probably wouldn't try to dump all their coins all at once. With current order books, it'd be better to do the job in small batches; even if you're worried about people noticing a huge, old coin stockpile moving on the blockchain, and trying to front-run it onto the exchanges, there's ways to cover your butt - those cash-settled BTC futures that CBOE is going to launch soon, for instance.

I think if a huge holder like this did just do a market sell, the price would recover almost instantly. That kind of thing actually happens already from time to time, when someone with deep pockets fat-fingers a trade (see, for example, June 23rd 2016 on Bitstamp, or June 22nd 2017 on GDAX). The price almost always recovers instantly, because the order books on one exchange only represent a tiny fraction of the actual demand.

But a slow sell-off could also work out okay. About 10,000 BTC are traded daily on any major exchange, so 2-3kBTC daily might fly under the radar without tripping dedicated traders' "big money is cashing out for some reason" alarms. It does mean that you have to wait a few months to get all your money, but with withdrawl limits at most major exchanges (as @dothebeats mentioned), that was probably true already.

This seems all like science fiction-conspiracy theory. First of all, show me the actual proof. Where did the guy that made this research come up with these entities from?

Show me the evidence (with links to a blockchain explorer) of 2,886,650 BTC belonging to the same entity.

Supposedly, Satoshi was the highest stakeholder with near 1 million BTC. This is easy to find, you just need to sum all the early mined BTC. And I heard some people say it was never anywhere close to 1 million anyway.

So who could this entity A be and where is the proof of 78,251 addresses pointing to entity A?
Paper is here, including methodology. The appendix includes transaction graphs, with amounts and datestamps included.
20  Economy / Speculation / What if: an old hand dumps all their coins right now? on: November 04, 2017, 03:23:06 PM
First, a little bit of background.

In 2012, Dorit Ron and Adi Shamir published a paper analyzing the Bitcoin transaction graph, in an attempt to understand how much could be determined about the largest BTC holders, just from the publicly available info.

They concluded, among other things, that there were a dozen or so "entities" who - even in 2012 - were holding several hundred thousand BTC each:

Entity ID
Address Count
Total Incoming BTC
Transaction Count
A
78,251
2,886,650
246,012
B (Mt.Gox)
156,722
2,206,170
477,526
C
13,289
941,013
77,525
D
12,520
867,996
48,347
E
191
692,864
1,353
F
12
660,000
23
G (Instawallet)
23,649
633,606
92,593
H
9
580,000
59
I
10,561
514,066
49,550
J
4
500,021
6
K
134
479,254
1,039
L (Deepbit)
2
452,929
814,044
M
9
442,000
10
N
128
432,161
137
O
10
432,286
14
P
1
432,078
3
Q
14
430,490
23
R
2,124
321,866
300,486



Last night, I dreamt that I checked BitcoinCharts on my phone, only to see that someone had dumped a huge number of BTC onto the exchanges, causing the price to crash to about $2.

As you can see from the above chart, this is not an impossible situation. The whole order book of the big exchanges is "only" about 200,000 BTC deep. If one of these Entities were to rediscover a lost wallet... or if the price were to reach their "exit price" that they'd decided upon long ago... it's easy to imagine that "get all of my money out before anyone can react" would become more important for them than getting the absolute best price for it.

So my question here is... if this were to happen, what would happen next? Would the price bounce back, bolstered by confidence that this sort of holder was less likely to still be lurking around? Or would people get scared, and try to sell off their own BTC too? How would miners act? How would exchanges act? Et cetera.
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