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Author Topic: This 51% numbers kills everything!  (Read 1217 times)
wickedgoodtrader
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February 01, 2013, 07:58:53 AM
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I'm a professional online poker player. Life is tough for us as the US government keeps blocking online gaming transactions and bitcoins are popping up big on the poker forums as a way around this. I was thinking of investing in some bitcoins. I decided to do some research. 99% of everything I read blows way over my head. The one thing that got me was that if someone/organization could mine 51% of bitcoins, they could collapse the system.

It blows my mind that this system could be so creative and complex to me, but yet you could mine 51% and destroy it all.


Really the whole idea of this seems to undermine the government and banks which is great. But how the hell do you make it so easy for them to destroy the system considering they have endless amounts of money? How much money would it take to get a setup that mines 51%?


I love this digital currency thing, but I have a feeling this one will be destroyed a new one will take over. This is just waaaaaaaaaay too big of a loophole.
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ColdHardMetal
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February 01, 2013, 08:48:47 AM
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I'm a professional online poker player. Life is tough for us as the US government keeps blocking online gaming transactions and bitcoins are popping up big on the poker forums as a way around this. I was thinking of investing in some bitcoins. I decided to do some research. 99% of everything I read blows way over my head. The one thing that got me was that if someone/organization could mine 51% of bitcoins, they could collapse the system.

It blows my mind that this system could be so creative and complex to me, but yet you could mine 51% and destroy it all.


Really the whole idea of this seems to undermine the government and banks which is great. But how the hell do you make it so easy for them to destroy the system considering they have endless amounts of money? How much money would it take to get a setup that mines 51%?


I love this digital currency thing, but I have a feeling this one will be destroyed a new one will take over. This is just waaaaaaaaaay too big of a loophole.

Except what you are saying, and what you are actually talking about are completely different and have nothing to do with who has how many coins.

https://en.bitcoin.it/wiki/Weaknesses#Attacker_has_a_lot_of_computing_power

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February 01, 2013, 09:03:53 AM
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You've got some more reading to do.

The 51% attack cannot "collapse the whole system", and in fact attackers are very limited in what kinds of damage they can do. They can only fraudulently reverse or modify their own transactions, not anyone else's. They can (temporarily) prevent other people's transactions from being confirmed, but not modify them in any way or reverse transactions which were already confirmed before the attack. They cannot steal other people's coins (except for sending his own coins and taking them back), and cannot create coins out of thin air. Such an attack would also be extremely obvious and users would be warned not to perform any transactions until it is clear the attack has stopped.

Also, the attackers can only do anything during the time they are actively mining with 51% of the hashing power. As soon as they stop mining, or if legitimate miners summon enough resources to regain the majority of the mining power, the network will resume normal operation, all transactions which the attacker blocked would soon start being confirmed, and it'll be almost as though nothing had ever happened.

That's not to say such the 51% attack is nothing to worry about. It would cause a total (but temporary) disruption of all Bitcoin services and probably a loss of faith in the currency resulting in a massive price crash, and it may take a long time to recover, but it's not the end of the world either.

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February 01, 2013, 11:57:50 AM
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There's really no loopholes besides the fact that multiple people can hoard thousands of BTC and make a huge profit off of it, kind of like gold or silver.
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February 01, 2013, 12:33:04 PM
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I'm a professional online poker player. Life is tough for us as the US government keeps blocking online gaming transactions and bitcoins are popping up big on the poker forums as a way around this.

I wonder how much new users is commin from this direction. Since you are professional online poker player, can you provide some links and stats? Thanks.

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February 01, 2013, 12:57:26 PM
 #6

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Except what you are saying, and what you are actually talking about are completely different and have nothing to do with who has how many coins.
He is a bit confused, but he is right when he says that a government has tons of money and CAN make such attack.

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The 51% attack cannot "collapse the whole system"
Yes it can, with a 51% attack bitcoin becomes instantly useless.

Quote
They can only fraudulently reverse or modify their own transactions, not anyone else's. They can (temporarily) prevent other people's transactions from being confirmed, but not modify them in any way or reverse transactions which were already confirmed before the attack
What? With a 51% attack you can replace the current blockchain with your! And that blockchain can for example start being modified since a year ago. This means that since a year ago all the blocks were found by the attacker. This means that he own all these bitcoins and that no other transaction has been confirmed since then. You mined your coin 6 months ago and spent them? No more, he mined these coins! Not you! So your transaction disappear. It never existed.

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cannot create coins out of thin air
True  Smiley

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the attackers can only do anything during the time they are actively mining with 51% of the hashing power
This rely on your hope that the attack eventually would stop. Why it should? After a government start the computers, it can leave them attacking for whatever time it want!

Yes, if the attack stop then we can fix everything (lot of people keep a backup of the current blockchain). But that is a big if!
tpantlik
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February 01, 2013, 01:19:43 PM
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They can only fraudulently reverse or modify their own transactions, not anyone else's. They can (temporarily) prevent other people's transactions from being confirmed, but not modify them in any way or reverse transactions which were already confirmed before the attack
What? With a 51% attack you can replace the current blockchain with your! And that blockchain can for example start being modified since a year ago. This means that since a year ago all the blocks were found by the attacker. This means that he own all these bitcoins and that no other transaction has been confirmed since then. You mined your coin 6 months ago and spent them? No more, he mined these coins! Not you! So your transaction disappear. It never existed.

Well, there are checkpoints in bitcoin-qt to minimize this.

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February 01, 2013, 01:34:12 PM
 #8

I'm a professional online poker player. Life is tough for us as the US government keeps blocking online gaming transactions and bitcoins are popping up big on the poker forums as a way around this.

I wonder how much new users is commin from this direction. Since you are professional online poker player, can you provide some links and stats? Thanks.


Bitcoin is a regular discussion on 2+2 for two years.

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February 01, 2013, 01:42:05 PM
 #9

I'm a professional online poker player. Life is tough for us as the US government keeps blocking online gaming transactions and bitcoins are popping up big on the poker forums as a way around this.
I wonder how much new users is commin from this direction. Since you are professional online poker player, can you provide some links and stats? Thanks.
Bitcoin is a regular discussion on 2+2 for two years.

This has actually been a trend. I welcome our new gambling overlords as the will be the lesser fool to me when it comes to sports betting.

I'm a professional online poker player. Life is tough for us as the US government keeps blocking online gaming transactions and bitcoins are popping up big on the poker forums as a way around this. I was thinking of investing in some bitcoins. I decided to do some research. 99% of everything I read blows way over my head.

What you need to understand is the size of the Bitcoin network versus how much or little the USG cares about online poker.

The amount of computing power it would take to get to ten percent is astronomical at the present. It is beyond any combination of the three (probably more) highest performing supercomputers in the world at the moment, and as the wiki article shows the dangerous attacks from superior computing power aren't fast. They require sustained focus on the bitcoin network, which gets very expensive when you start talking about not only the cost of the computers, but the electricity to run them.

The risk of a 51% attack happing is actually very, very trivial.

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February 01, 2013, 02:40:37 PM
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The amount of computing power it would take to get to ten percent is astronomical at the present
No, 20-30 millions $ and you can do such attack.
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It is beyond any combination of the three (probably more) highest performing supercomputers in the world at the moment
The fact that the supercomputers are build to do OTHER things is why they aren't good at mining. Some supercomputers are made of nvidia cards, everyone know that nvidia cards sucks at mining but probably they excel in what they have to do in supercomputers.
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which gets very expensive
For us normal people. Not for a government, corporation, bank, other powerful entity.

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February 01, 2013, 02:53:54 PM
 #11

This is a very complicated subject. I think these are all true:

  • It would be costly to implement a 51% attack. Once ASIC devices are widespread (which is soon), there won't be any (known) easy tricks left for the wealthy attacker.
  • The State has lots and lots of money nonetheless.
  • The more disruptive Bitcoin becomes, the more costly and difficult it gets to implement an attack. Bitcoin is arguably still too small to care about and it's already more powerful than all supercomputers combined.
  • There are other measures than checkpoints when push comes to shove. It would be a messy war rather than a mere 51% challenge.
  • Bitcoin is not only a network but a technology. Even if you could destroy this one, hundreds more will crop up.
  • None of those hundred clones will be as useful as Bitcoin, so a successful attack would partially be effective.
  • At this point, they have to create a facility from scratch just for the purpose of attacking Bitcoin.
  • State doesn't openly attack people. It is politically very risky for it to do that, so the element with the idea would most likely go through all the bureaucratic process, which is a challenge by itself.
  • There is no apparent danger to the State. Bitcoin as a technology and network is not illegal, anywhere.
  • State would likely go after exchanges, gambling sites and the like first. The network itself would be the last resort.

All in all it's highly unlikely that any State, union of states or any power will set up a facility for the sole purpose of attacking Bitcoin (and possibly any type of cryptocurrency) any time soon. It might eventually happen, but gambling and drugs aren't enough reason by a long shot. I'm sure it will be a toy for politicians to play, and they might go as far as to try to outlaw the exchange of goods for Bitcoin.

We will all have to see whether Bitcoin will become a hindrance to sovereignty. If it proves to be so, then I can see them attacking the network itself.
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February 01, 2013, 03:31:12 PM
 #12

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It is beyond any combination of the three (probably more) highest performing supercomputers in the world at the moment
The fact that the supercomputers are build to do OTHER things is why they aren't good at mining. Some supercomputers are made of nvidia cards, everyone know that nvidia cards sucks at mining but probably they excel in what they have to do in supercomputers.

NVIDIA cards excel in many supercomputing tasks so long as they are trying to model the real world and not break cryptography. From what I understand though at least one of the top two supercomputers doesn't use GPU cores at all and does everything on AMD opteron cores so power efficiency....

I'm not even sure the top three are enough to do it themselves.

I've done very wong math on this forum tonight, but from what I understand it would be between 20,000,000 and 20,000,000,000 dollars to mount a 51% attack and as summaries mention that attack is actually rather limited in the damage it might inflict.

The only truly destructive attacks though go back and start rewriting the blockchain. Anything less is merely inconvenient. On a long enough timeline it could be done with 50.0...1% of the hashing power, but more realistically any serious distance is going to take a long time at more than 90% of the network's hashing power.

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February 01, 2013, 03:41:43 PM
 #13

I've done very wong math on this forum tonight, but from what I understand it would be between 20,000,000 and 20,000,000,000 dollars to mount a 51% attack and as summaries mention that attack is actually rather limited in the damage it might inflict.

If we are talking about the current difficulty, a few hundred thousand dollars would do to develop a specific circuit for Bitcoin and print thousands of it. Even in the near future, a few million would still be enough. If there were enough incentive, they would be able to do it.

The only truly destructive attacks though go back and start rewriting the blockchain. Anything less is merely inconvenient. On a long enough timeline it could be done with 50.0...1% of the hashing power, but more realistically any serious distance is going to take a long time at more than 90% of the network's hashing power.

They can easily prevent all transactions from happening with 51%.
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February 01, 2013, 04:12:27 PM
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I've done very wong math on this forum tonight, but from what I understand it would be between 20,000,000 and 20,000,000,000 dollars to mount a 51% attack and as summaries mention that attack is actually rather limited in the damage it might inflict.

If we are talking about the current difficulty, a few hundred thousand dollars would do to develop a specific circuit for Bitcoin and print thousands of it. Even in the near future, a few million would still be enough. If there were enough incentive, they would be able to do it.

Avalon already owns the few hundred thousand dollar price range

Quote
The only truly destructive attacks though go back and start rewriting the blockchain. Anything less is merely inconvenient. On a long enough timeline it could be done with 50.0...1% of the hashing power, but more realistically any serious distance is going to take a long time at more than 90% of the network's hashing power.

They can easily prevent all transactions from happening with 51%.


Only so long as they continue running. It is like a very expensive pause button. A pause button that has to put up with the fact that luck can get the rest of the miners to pick up consecutive blocks. Thanks to Luke-jr we have seen 51% attacks on small altchains and the solution seems to be wait it out.

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February 01, 2013, 04:16:25 PM
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The 51% attack cannot "collapse the whole system"
Yes it can, with a 51% attack bitcoin becomes instantly useless.
It becomes instantly useful again the moment the attack ceases.

Quote
They can only fraudulently reverse or modify their own transactions, not anyone else's. They can (temporarily) prevent other people's transactions from being confirmed, but not modify them in any way or reverse transactions which were already confirmed before the attack
What? With a 51% attack you can replace the current blockchain with your! And that blockchain can for example start being modified since a year ago. This means that since a year ago all the blocks were found by the attacker. This means that he own all these bitcoins and that no other transaction has been confirmed since then. You mined your coin 6 months ago and spent them? No more, he mined these coins! Not you! So your transaction disappear. It never existed.
That would require a lot more than 51% to do in any reasonable timeframe. For example, to rewrite 1 year of transaction history within 1 year would require 67% of the hashing power. That's a whole year of continuous mining with double the hashing power of the rest of the network before you can even begin your attack. And that's assuming no checkpoints. With checkpoints, such an attack is completely and utterly impossible.

Quote
the attackers can only do anything during the time they are actively mining with 51% of the hashing power
This rely on your hope that the attack eventually would stop. Why it should? After a government start the computers, it can leave them attacking for whatever time it want!
The attack will stop if legitimate miners can upgrade their equipment faster than the government does (which the government has to constantly pay for). Also, I didn't know the government got free electricity.

Yes, if the attack stop then we can fix everything (lot of people keep a backup of the current blockchain). But that is a big if!
Double spends can't be fixed by reverting to a back-up blockchain, but apart from that (which is probably not a major problem anyway, since nobody will trust any transactions that occur during the attack), nothing will need fixing anyway. As disruptive as a 51% attack would be, the disruption is only temporary (though even a temporary disruption might still be economically disastrous).

Will pretend to do unverifiable things (while actually eating an enchilada-style burrito) for bitcoins: 1K6d1EviQKX3SVKjPYmJGyWBb1avbmCFM4
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February 01, 2013, 04:39:32 PM
 #16

The thing i keep in mine is motive. Who would spend huge sums of money to destroy the value of the bitcoins they are forging? It is not rational as it would cost money and produce little/nothing for the attacker. 

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February 01, 2013, 04:46:29 PM
 #17

The thing i keep in mine is motive. Who would spend huge sums of money to destroy the value of the bitcoins they are forging? It is not rational as it would cost money and produce little/nothing for the attacker. 

perhaps the agent of an organization that sold a competing currency

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February 01, 2013, 04:49:35 PM
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What you need to understand is the size of the Bitcoin network versus how much or little the USG cares about online poker.

The amount of computing power it would take to get to ten percent is astronomical at the present. It is beyond any combination of the three (probably more) highest performing supercomputers in the world at the moment, and as the wiki article shows the dangerous attacks from superior computing power aren't fast. They require sustained focus on the bitcoin network, which gets very expensive when you start talking about not only the cost of the computers, but the electricity to run them.

The risk of a 51% attack happing is actually very, very trivial.

This is fun, working with high performance comuting i could not resist to throw around some fast numbers.



Here is a rough estimate of the hashing capacity of the fastest (publicly known) supercomputers today. This does not mean that they
are the best publicly known systems for Bitcoin mining... The exact specification of those cpus and cards are not on the Bitcoin hardware list but a rough estimate using slightly older(worse) equipment makes for a pessimistic estimate.

Remember today that the total network hashrate is: 22 776 GH or 22 TH
The today fastest supercomputer (top500.org) has approximately 300 000 opteron cores and 19 000 tesla cards.
rank

Top 500 rankNamecpugpuGH/s
1Titan system at Oak Ridge300000190003177GH/s
2Sequoia - BlueGene/Q157286405662GH/s
8Tianhe-1A 1863682656GH/s

So no 51% attack there, Notable is that only two of the top 500 machines are using amd cards (largest one has 4*56 7970)

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February 01, 2013, 04:58:19 PM
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They can only fraudulently reverse or modify their own transactions, not anyone else's. They can (temporarily) prevent other people's transactions from being confirmed, but not modify them in any way or reverse transactions which were already confirmed before the attack
What? With a 51% attack you can replace the current blockchain with your! And that blockchain can for example start being modified since a year ago. This means that since a year ago all the blocks were found by the attacker. This means that he own all these bitcoins and that no other transaction has been confirmed since then. You mined your coin 6 months ago and spent them? No more, he mined these coins! Not you! So your transaction disappear. It never existed.
That would require a lot more than 51% to do in any reasonable timeframe. For example, to rewrite 1 year of transaction history within 1 year would require 67% of the hashing power. That's a whole year of continuous mining with double the hashing power of the rest of the network before you can even begin your attack. And that's assuming no checkpoints. With checkpoints, such an attack is completely and utterly impossible.



In practice it's impossible to rewrite 1 year of blockchain faster than the honest network in hope that will become the longest chain and replace the legit one. Even if you're hashing your blockchain offline you must obey the rules of the protocol which means that the difficulty will update each 2016 blocks (up to a maximum of 4 times the previous difficulty if i'm not mistaken). Even if you're using processing power orders of magnitude higher than the honest network the difficulty will catch up with your hashrate leaving you producing blocks at the same average (around 10 min each) and your blockchain will never ever catch up.
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February 01, 2013, 05:03:19 PM
 #20

Avalon already owns the few hundred thousand dollar price range

What's your point? They can already 51% the network, since the items they have produced can do more than the total network hashrate.
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