How to destroy Bitcoin with a 10% attack: Roadmap for a Central Bank Takeover

[ArcCsch]

This seems like a silly and expensive way of screwing with the network. I've never understood why no one has figured out how to hack the 16 minute protection for device time changes to the unencrypted network time protocol. Just turn the network time back a couple of days and watch the whole thing come crashing down for almost no cost. A man-in-the-middle-attack between the Bitcoin network and the Network Time Protocol would be catastrophic. I'm sure some 12 year old kid will figure it out eventually.

Are you worried about someone changing the Unix time-stamp server?
It does seem like a central point of failure.
If this happens, someone would notice very soon.
Can the bitcoin network mitigate this issue?

[QuestionAuthority]

This seems like a silly and expensive way of screwing with the network. I've never understood why no one has figured out how to hack the 16 minute protection for device time changes to the unencrypted network time protocol. Just turn the network time back a couple of days and watch the whole thing come crashing down for almost no cost. A man-in-the-middle-attack between the Bitcoin network and the Network Time Protocol would be catastrophic. I'm sure some 12 year old kid will figure it out eventually.

Are you worried about someone changing the Unix time-stamp server?
It does seem like a central point of failure.
If this happens, someone would notice very soon.
Can the bitcoin network mitigate this issue?

No, not really. NTP uses coordinated universal time. Special computers set up as primary time servers are connected with receivers to a radio clock and those time servers use protocols such as NTP to synchronize the clock times of networked computers. Why couldn't some little brilliant bastard with no life figure out a way to interrupt the network connection to NTP servers and possibly a way to roll back the network time? Seems like a better "central bank" project than just throwing a begillion dollars at mining (Sybil Attack, Eclipse Attack, etc.)

[gmaxwell]

Even with an unlimited blocksize all the miners will try to get as much possible as they can, by limiting them self the blocks as they did until now.

Limiting yourself will not increase your income when other miners undercut you-- they will take the transactions you reject, undercut your price, and be more profitable than you, then the difficulty will adjust and they will be making a profit and you will be making a loss and either have to adopt their practices or exit the business.

[QuestionAuthority]

Even with an unlimited blocksize all the miners will try to get as much possible as they can, by limiting them self the blocks as they did until now.

Limiting yourself will not increase your income when other miners undercut you-- they will take the transactions you reject, undercut your price, and be more profitable than you, then the difficulty will adjust and they will be making a profit and you will be making a loss and either have to adopt their practices or exit the business.

That's possibly correct for today. What happens when the block reward drops in seven years and the price of Bitcoin+transaction fees have not kept up with rising inflation, electricity cost and equipment replacement?

Difficulty adjustments take roughly two weeks (2016 blocks), don't they? In the interim they aren't making a profit. I remember mining and switching off when the price dumped from $15 to $2 but not before I had mined for a couple of weeks at a loss (granted, I was mining in California, land of expensive electricity and not paying attention). Profit is based on the efficiency of your individual equipment setup. What returned my profitability was just sitting still for months until the price recovered not the difficulty adjustment. Isn't the difficulty drop also an incentive for more miners to enter the playing field and further dilute the "profit" from those people that continued to mine?

[HostFat]

Limiting yourself will not increase your income when other miners undercut you-- they will take the transactions you reject, undercut your price, and be more profitable than you, then the difficulty will adjust and they will be making a profit and you will be making a loss and either have to adopt their practices or exit the business.

Miners will not work for free.
In the situation that you are writing, this just means that I've chosen the wrong limit, one time.

As a miner, if I want to put a limit (because I want the users pay more), I'll see which is the usual mempool amount of tx.
I'll put an higher limit (but not higher than the average block setting showed by all the BU nodes), and I'll start to lower it by like the 1% every next block.
I'll do this until I will see that other miners are usually making blocks bigger then me.

Then, I'll just stop lowering it, and I'll put it back at the block size of the block of the other miner that was bigger then mine.

This, after a while, all the miners will have likely the same blocksize (market result), and all of them will also have some stats to check the behavior of the other miners.

[gmaxwell]

Limiting yourself will not increase your income when other miners undercut you-- they will take the transactions you reject, undercut your price, and be more profitable than you, then the difficulty will adjust and they will be making a profit and you will be making a loss and either have to adopt their practices or exit the business.

Miners will not work for free.

I never said they would. If you make a block smaller than the maximum permitted when there are fee paying transactions waiting-- you are making less money than someone who builds the largest block they can. -- and when they do so they undermine the effort you made at your own expense to artificially boost prices.

(but not higher than the average block setting showed by all the BU nodes)

What nodes 'show' is perfectly Sybil attackable-- if it weren't we wouldn't need mining at all.

[HostFat]

I never said they would. If you make a block smaller than the maximum permitted when there are fee paying transactions waiting-- you are making less money than someone who builds the largest block they can. -- and when they do so they undermine the effort you made at your own expense to artificially boost prices.

Right, than this means that there is another miner that is working better then you. (he has a better management of his costs)

What nodes 'show' is perfectly Sybil attackable-- if it weren't we wouldn't need mining at all.

Yes, but this is the same as now for nodes supporter of BU or Segwit or whatever, miners know this. The possible sybil attack is a common knowledge for every one, even for the possible sybil attacker.
So it isn't an easy attack, because it isn't an automatic signal, but it is still a signal between all the others.*

Example: the common connection on the larger part of the world is 4 MB/s (*this is one of the things evaluated by miners), but miners will see that there are 60% of nodes that are signaling as supporting only 1 MB ... or the opposite 10MB!
So the sybil attack is mostly useless and expensive for a real result.

This kind of signal is more likely a confirmation: "The larger part of the nodes is confirming that they are supporting the common widespread of connections/cpu/harddisk (like 4MB, as the example before), by more than 7/8 months. Time to try with a bigger block. Let's add 50 Kb over the last limit!"

The good things about this, it is exactly that it isn't automatic, so miners will be very careful on making changes, but still they will be "free" to conform to the market request, without waiting any permission by some perceived authorities...


Everything that can be done wrong from the miners can cause panic on the market (as it happen when a pool was near the 50%), and the lowering of the price is the first thing that worries the miners.
I think that it is easy to say that even if someone try to cause a fake panic, then this will still help the decentralization (and making miners moving even safer)

[Quickseller]

Limiting yourself will not increase your income when other miners undercut you-- they will take the transactions you reject, undercut your price, and be more profitable than you, then the difficulty will adjust and they will be making a profit and you will be making a loss and either have to adopt their practices or exit the business.

Miners will not work for free.

I never said they would. If you make a block smaller than the maximum permitted when there are fee paying transactions waiting-- you are making less money than someone who builds the largest block they can. -- and when they do so they undermine the effort you made at your own expense to artificially boost prices.

Part of the cost of mining is the cost of orphaned blocks. If a block is so large that it takes a long time to propagate, and get validated throughout the network, then a miner who finds this very large block might not broadcast this block (nor build on top of it) because the chances of it becoming orphaned is too high (they would probably not actually be working on a block this size in the first place).

If a miner calculates that adding 1 kB worth of additional transactions increases the chances of their block getting orphaned by 0.0005 BTC, then the miner will probably not include any transactions that pay fees at a rate of 0.0005 BTC per 1 kB because doing so would not allow them to have any net benefit.

[QuestionAuthority]

Limiting yourself will not increase your income when other miners undercut you-- they will take the transactions you reject, undercut your price, and be more profitable than you, then the difficulty will adjust and they will be making a profit and you will be making a loss and either have to adopt their practices or exit the business.

Miners will not work for free.

I never said they would. If you make a block smaller than the maximum permitted when there are fee paying transactions waiting-- you are making less money than someone who builds the largest block they can. -- and when they do so they undermine the effort you made at your own expense to artificially boost prices.

Part of the cost of mining is the cost of orphaned blocks. If a block is so large that it takes a long time to propagate, and get validated throughout the network, then a miner who finds this very large block might not broadcast this block (nor build on top of it) because the chances of it becoming orphaned is too high (they would probably not actually be working on a block this size in the first place).

If a miner calculates that adding 1 kB worth of additional transactions increases the chances of their block getting orphaned by 0.0005 BTC, then the miner will probably not include any transactions that pay fees at a rate of 0.0005 BTC per 1 kB because doing so would not allow them to have any net benefit.

That's a good point. I hadn't thought of that. There was a smaller pool (I can't remember the name right now) being discussed in a thread by organofcorti and Meni Rosenfeld that was about to fail because of their constant orphaned blocks. I can't remember when or I'd look it up. It was back when deepbit was crushing everybody and finding most of the blocks and right after organofcorti started his pool watch thread.  They were talking about the very same thing.

[cromex]

I did not read through all the post so maybe someone said this, wouldn't it mean that the entity would have to bring enough hashing power to guarantee them getting all the blocks going forward to execute this or at least half to make it effective in the first place. Then the expense of putting the operation together would be eminence and would need cooperation among banks, they don't trust each other.