Network Redundancy

[Spaceman_Spiff]

The market's best estimate of expected future price is current price. Exchange rates could go up or down. However, the effects of exchange rate movements on attack probability are ambiguous.

I agree that the best estimate of expected future price is current price, but I think BTC price will go up in the case it doesn't go to zero (or very low) because the project fails for some reason.  So the current price takes into account the possibility of failure. Absence of failure over a prolonged period provides reassurance, and should have positive impact on price.

There are two elements: 1) How much does it cost to attack? 2) What is the expected gain from attacking?
The exchange rate would increase both simultaneously.

That would be completely true if the objective was to steal BTC value, but in case of rival companies, the expected gain is the retention of current profits, so it would not have a linear correlation with BTC value.

[1714889711]

1714889711

[cunicula]

That page is pretty embarrassing.   There is absolutely no mention of the fundamental flaw in PoS consensus which none of your proposals have addressed: ...  If someone is PoS mining it is in their best interest to attempt to concurrently build an honest chain as well as all possible attack forks just in case one of them happens to win. ...

I'm not going to respond to this right now because (a) I don't think it is really a problem (b) it has been discussed extensively elsewhere and most importantly (c) Gmaxwell is being deliberately dishonest. Gmaxwell claims that "none of my proposals have addressed this". Of course, this is false. This is not the first time he has spread such false claims. He cannot support his false claims and he knows this.

I made one other proposal. It was on the wiki until a couple days ago when I replaced it. It had been there, unedited, since I created the wiki.

Recall the rule I proposed:

Hash Difficulty >= Difficulty Target / (Coin-age used to sign block)^( p / (1-p)), where 0 < p < 1.

To make this more secure against periodic double-spends, you can have two block types, A and B, each with their own difficulty target. For A, p=0.2. For B, p=0.8.
The blocks are mined in a deterministic sequence: ABABABAB.... [note: this is an elaboration I introduced later]

Okay Gmaxwell. Explain how your issue occurs in the above system. Otherwise, admit to being a shameless liar. If you want to have a real discussion, don't start off with a shameless lie.

If someone else is interested in this issue, then feel free to post in the thread on my proposal: https://bitcointalk.org/index.php?topic=127314.0
If you don't start off with slander, then I will respond in detail.

[niko]

I think you ask an important question Yogi, but I agree with Niko's approach.  Looking at it in dollar terms makes more sense and will remain correct in the future.

Thanks for the calculations, Niko, I was looking for something similar.
10-50 million is a lot of money for small-timers, but if paypal or visa or... would feel really threatened by bitcoin, it seems to me that they could quite easily spend this kind of money.
Not sure just how devastating a 51% attack would be to the bitcoin project though.  Would it be lights out, or just a (big) bump in the road?

Also, how easy would it be to perform a 51% attack anonymously?  Would it be possible to pinpoint the origin of the attack, and follow the money to the culprit?  I have absolutely no idea about these things .  

It doesn't mater if you want to measure it in dollars or terraFLOPS. To get the relative strength you still need to compare it to something. In this case we would have to ask, what is the maximum amount of money a single entity is prepared to spend in order to attack the network. This might be a harder value to determine.

To get an idea about what it takes to build a house, I don't need to compare it to building a yacht. I'd say a useful metric is money in that case, and doubly so in case of Bitcoin. Ten to fifty million USD to outcompete honest miners. One of great things about Bitcoin is that the price of a "51%" disruption is directly related to the size of Bitcoin economy, which in turn is related to the level,  of disruption it causes to old-school banks and governments.

Therefore, I am only concerned as much as these old-school entities are forward-thinking. Even then, 51% attack would really not be that big of a deal. While payments may be temporarilly disrupted, coins would remain safe.

[yogi]

@niko. So how much money does a potential attacker have available to them? How many times stronger is the network than it needs to be?

[niko]

@niko. So how much money does a potential attacker have available to them? How many times stronger is the network than it needs to be?

I see your point. As I said above, the incentive to disrupt the network depends on how disruptive the network is to the establishment. At the same time, network security (in terms of total mining investment) also increases as the Bitcoin economy grows, and presumably becomes more disruptive for potential attackers. Historically, smart people - those in the establishment included - are more likely to embrace disruptive yet promising technologies than to try to supress them.
Therefore, I don't think we should try to spend time quantifying the factors you brought up. If Bitcoin is truly useful, it will continue to grow strong. Another important question is - what would you do with the "network security index" (or whatever we call it), even if we managed to define it and calculate it? What if you felt it was too low? 

[yogi]

I was thinking about the ways of reducing the cost of running a full node. The only solutions I could think of also reduced the hashing power.

For example, if we could split the network into two clusters and each of those clusters had 50% of the hashing power, would they have enough to remain safe?

At what point should the clusters be split or merged?

[jgarzik]

I was thinking about the ways of reducing the cost of running a full node. The only solutions I could think of also reduced the hashing power.

A full node just verifies and shovels blocks.  We have a few thousand full nodes (and need more!).  The whole point of bitcoin's Proof-Of-Work scheme is that data is cheap to verify, but expensive to produce.

A miner is different from a full node.