Bitcoin even more broken than previously thought

[revans]

The cognitive dissonance here is astounding. I have the utmost faith in virtual currencies as a technology and Bitcoin as the best example of that technology, but why is it that any attack on Bitcoin is 'trolling'; technologies survive by mending their flaws. The fact that this level of theorization is going on around the protocol means it's getting somewhere.

It's an interesting article and brings up an important question to consider; whether it's implementable in practice is another question. I'll definitely respect a Cornell professor to know what he's talking about. The arrogant dismissiveness on these forums is stunning.

Agreed.  It's rather shocking that such comments are dismissed outright.  Have you all even looked at the credentials of the person who wrote the article linked to by revan?  It's a professor who works at Cornell.  Not quite some no name guy with no credentials just randomly making comments about Bitcoin.

They have not been dismissed outright.  They have been argued against and shown not to be a major issue.

The attack in the article is a block withholding attack. It is well argued but ignores the COST of block withholding. When you factor in the cost the attack is much less profitable. When you further factor in the possible backlash against a pool operator it rules out pools doing it.  Basically you would need a lone miner with more than 20% or so of the network.

Now anyone with 20% of the network and therefore a substantial investment in Bitcoin would be ON CRACK to do this.  They could potentially devalue Bitcoin more than the extra profit they make. In summary... The attack is not worth it for the people who could actually do it.  

The writer of the article ignores these points.

You rule out nefarious intent (state actors for example, established corporations with business interests hurt by Bitcoin) and you also ignore the fact that just like the forger creating dollars does not consider himself to be damaging the viability of the dollar, so the selfish miner would not necessarily deem their actions as harming Bitcoin.

I do not rule out nefarious intent.   The attack is silly for nefarious intent.  If you want to hurt Bitcoin, set up a similar amount of power AND DON'T INCLUDE ANY TRANSACTIONS.  An attacker would not hurt Bitcoin all that much by taking other miners rewards, maybe just a slight hit in price.  In many ways if it was know it was an attacker was doing selfish mining it would instill MORE confidence in Bitcoin as transactions would work as normal.

The selfish miner IS BEING PAID IN BITCOINS so even a slight hit in price causes the attack to be not worth it.  It is quite simple, and that paper works only if you ignore that reality.  

Going right back to ancient Rome, the best way to destroy a currency is to undermine confidence in it. Selfish mining incentives malign behaviour, it puts fair players at a disadvantage, and a dynamic like that always ends the same way: Rome burns.

[Littleshop]

The cognitive dissonance here is astounding. I have the utmost faith in virtual currencies as a technology and Bitcoin as the best example of that technology, but why is it that any attack on Bitcoin is 'trolling'; technologies survive by mending their flaws. The fact that this level of theorization is going on around the protocol means it's getting somewhere.

It's an interesting article and brings up an important question to consider; whether it's implementable in practice is another question. I'll definitely respect a Cornell professor to know what he's talking about. The arrogant dismissiveness on these forums is stunning.

Agreed.  It's rather shocking that such comments are dismissed outright.  Have you all even looked at the credentials of the person who wrote the article linked to by revan?  It's a professor who works at Cornell.  Not quite some no name guy with no credentials just randomly making comments about Bitcoin.

They have not been dismissed outright.  They have been argued against and shown not to be a major issue.

The attack in the article is a block withholding attack. It is well argued but ignores the COST of block withholding. When you factor in the cost the attack is much less profitable. When you further factor in the possible backlash against a pool operator it rules out pools doing it.  Basically you would need a lone miner with more than 20% or so of the network.

Now anyone with 20% of the network and therefore a substantial investment in Bitcoin would be ON CRACK to do this.  They could potentially devalue Bitcoin more than the extra profit they make. In summary... The attack is not worth it for the people who could actually do it.  

The writer of the article ignores these points.

You rule out nefarious intent (state actors for example, established corporations with business interests hurt by Bitcoin) and you also ignore the fact that just like the forger creating dollars does not consider himself to be damaging the viability of the dollar, so the selfish miner would not necessarily deem their actions as harming Bitcoin.

I do not rule out nefarious intent.   The attack is silly for nefarious intent.  If you want to hurt Bitcoin, set up a similar amount of power AND DON'T INCLUDE ANY TRANSACTIONS.  An attacker would not hurt Bitcoin all that much by taking other miners rewards, maybe just a slight hit in price.  In many ways if it was know it was an attacker was doing selfish mining it would instill MORE confidence in Bitcoin as transactions would work as normal.

The selfish miner IS BEING PAID IN BITCOINS so even a slight hit in price causes the attack to be not worth it.  It is quite simple, and that paper works only if you ignore that reality.  

Going right back to ancient Rome, the best way to destroy a currency is to undermine confidence in it. Selfish mining incentives malign behaviour, it puts fair players at a disadvantage, and a dynamic like that always ends the same way: Rome burns.

You have not countered my argument at all. 

The incentives are not there for real world miners, and for nefarious miners (trying to break the network itself) the effects on the network are not great enough for the effort. 

[revans]

The cognitive dissonance here is astounding. I have the utmost faith in virtual currencies as a technology and Bitcoin as the best example of that technology, but why is it that any attack on Bitcoin is 'trolling'; technologies survive by mending their flaws. The fact that this level of theorization is going on around the protocol means it's getting somewhere.

It's an interesting article and brings up an important question to consider; whether it's implementable in practice is another question. I'll definitely respect a Cornell professor to know what he's talking about. The arrogant dismissiveness on these forums is stunning.

Agreed.  It's rather shocking that such comments are dismissed outright.  Have you all even looked at the credentials of the person who wrote the article linked to by revan?  It's a professor who works at Cornell.  Not quite some no name guy with no credentials just randomly making comments about Bitcoin.

They have not been dismissed outright.  They have been argued against and shown not to be a major issue.

The attack in the article is a block withholding attack. It is well argued but ignores the COST of block withholding. When you factor in the cost the attack is much less profitable. When you further factor in the possible backlash against a pool operator it rules out pools doing it.  Basically you would need a lone miner with more than 20% or so of the network.

Now anyone with 20% of the network and therefore a substantial investment in Bitcoin would be ON CRACK to do this.  They could potentially devalue Bitcoin more than the extra profit they make. In summary... The attack is not worth it for the people who could actually do it.  

The writer of the article ignores these points.

You rule out nefarious intent (state actors for example, established corporations with business interests hurt by Bitcoin) and you also ignore the fact that just like the forger creating dollars does not consider himself to be damaging the viability of the dollar, so the selfish miner would not necessarily deem their actions as harming Bitcoin.

I do not rule out nefarious intent.   The attack is silly for nefarious intent.  If you want to hurt Bitcoin, set up a similar amount of power AND DON'T INCLUDE ANY TRANSACTIONS.  An attacker would not hurt Bitcoin all that much by taking other miners rewards, maybe just a slight hit in price.  In many ways if it was know it was an attacker was doing selfish mining it would instill MORE confidence in Bitcoin as transactions would work as normal.

The selfish miner IS BEING PAID IN BITCOINS so even a slight hit in price causes the attack to be not worth it.  It is quite simple, and that paper works only if you ignore that reality.  

Going right back to ancient Rome, the best way to destroy a currency is to undermine confidence in it. Selfish mining incentives malign behaviour, it puts fair players at a disadvantage, and a dynamic like that always ends the same way: Rome burns.

You have not countered my argument at all.  

The incentives are not there for real world miners, and for nefarious miners (trying to break the network itself) the effects on the network are not great enough for the effort.  

I have countered on both points.

The forger never believes their forgeries will diminish the value of that which they forge. Selfish miners would behave likewise. As to the latter, prove it. Prove that altering the mining dynamic such that rewards are no longer proportional would not cause havok.

[Littleshop]

I have counted on both points.

The forger never believes their forgeries will diminish the value of that which their forge.

Not at all the same.  A forger (of money, art etc) gains 95% + so they do not care if they devalue what they forge.  They take paper worth pennies and turn it into hundreds.

A selfish miner would not have such a profit by the attack AND they have a vested position in Bitcoin.   Blocks are NOT being forged in any of these attacks.  The selfish miner only makes a SMALL gain.  That is the difference and why in the real world this does not play out. 

[revans]

I have counted on both points.

The forger never believes their forgeries will diminish the value of that which their forge.

Not at all the same.  A forger (of money, art etc) gains 95% + so they do not care if they devalue what they forge.  They take paper worth pennies and turn it into hundreds.

A selfish miner would not have such a profit by the attack AND they have a vested position in Bitcoin.   Blocks are NOT being forged in any of these attacks.  The selfish miner only makes a SMALL gain.  That is the difference and why in the real world this does not play out. 

Who said it was a small gain?

[Littleshop]

I have counted on both points.

The forger never believes their forgeries will diminish the value of that which their forge.

Not at all the same.  A forger (of money, art etc) gains 95% + so they do not care if they devalue what they forge.  They take paper worth pennies and turn it into hundreds.

A selfish miner would not have such a profit by the attack AND they have a vested position in Bitcoin.   Blocks are NOT being forged in any of these attacks.  The selfish miner only makes a SMALL gain.  That is the difference and why in the real world this does not play out. 

Who said it was a small gain?

You will have to figure this one out for yourself.  It seems like you know how to respond to something quickly with a response that looks right but contains no real information and adds nothing to the conversation.   You don't get it, just like the 'professor' who wrote that article. 

[EntropyExtropy]

Going right back to ancient Rome, the best way to destroy a currency is to undermine confidence in it. Selfish mining incentives malign behaviour, it puts fair players at a disadvantage, and a dynamic like that always ends the same way: Rome burns.

Absolutely this. It's possible to see why, because bitcoin is such a disruptive technology, there are certain actors who would be willing to absorb great cost to damage the credibility of the technology.

[DoomDumas]

I hate popular thread based on crapy argument, I just ignore him, next time, I'll pass by !