A possible bitcoin (sort-of) attack

[fergalish]

It seems we already have a large proportion of bitcoin generation being controlled by few people with server farms, and there's no reason to think that should change.  It may even get worse.  So, suppose the Men In Black decide they want to control bitcoin.  They make a *really* big server farm, so big that all the other server farms seem small in comparison.  Eventually all transactions will be verified and inserted into the block chain by only a few farms with most going to the MiB's farm.

At this point, the Men in Black could disconnect from all other block generators, and the chain would fork.  By the time anyone figured out what had happened, the new mega-server farm would be established, and reverting would require the distribution of a new bitcoin client to *all* users programmed specifically to avoid MiB's farm, and a roll-back to the pre-fork state, with consequent loss of many transactions.  More importantly, loss of confidence in BTC.

Or alternatively, the network could accept that the MiB now control the world's only block generator, who would now see *all* transactions, and could impose any arbitrary tax on each - a situation even better for the government than with today's paper currency.  At that point it would be easy for them to issue BTC identities and ignore all transactions going to non-approved addresses so anonymity vanishes.  Although, since they directly tax each transaction, maybe they wouldn't be interested in the actual identities of the parties in each transaction.

Hey, there's an idea.  Maybe Satoshi is *really* a government agent, and bitcoin is *actually* Big Government's latest attempt to regulate and control the world's trading.  Shoot me down folks!

*EDIT: Just in case it ain't clear from the tone, I'm not actually a conspiracy theorist.  It just seems that Bitcoin could go really, horribly wrong, giving unprecedented monetary influence to whoever has the biggest server farm, diametrically opposite to what it aims to achieve - a decentralised anonymous currency.  Has anyone thought about that?

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[The Madhatter]

Or alternatively, the network could accept that the MiB now control the world's only block generator, who would now see *all* transactions, and could impose any arbitrary tax on each - a situation even better for the government than with today's paper currency.  At that point it would be easy for them to issue BTC identities and ignore all transactions going to non-approved addresses so anonymity vanishes.  Although, since they directly tax each transaction, maybe they wouldn't be interested in the actual identities of the parties in each transaction.

I'd imagine that Bitcoin would fork into something else. "Bitcoin II: The resurrection"? It would have extensive block locking support or something. *shrug*

Hey, there's an idea.  Maybe Satoshi is *really* a government agent, and bitcoin is *actually* Big Government's latest attempt to regulate and control the world's trading.  Shoot me down folks!

* The Madhatter cues the x-files theme song

[fergalish]

I'd imagine that Bitcoin would fork into something else. "Bitcoin II: The resurrection"? It would have extensive block locking support or something. *shrug*

With consequent loss of bitcoins for everyone.  The Bitcoin II economy would have to start from scratch, and who'd believe it couldn't happen again?  What do you mean "block locking support"?

[The Madhatter]

I more or less just talking out of my arse. I know that each release of the Bitcoin application has a block lock in it. They move this lock forward each release.

I was just toying with the idea (if it is possible) to move that lock forward (never backward) automatically.

[Anonymous]

Well they control all the money now .How could it get any worse?

[Anonymous]

I more or less just talking out of my arse. I know that each release of the Bitcoin application has a block lock in it. They move this lock forward each release.

I was just toying with the idea (if it is possible) to move that lock forward (never backward) automatically.

Like a trailing stop the share traders use....

[ShadowOfHarbringer]

Hey, there's an idea.  Maybe Satoshi is *really* a government agent, and bitcoin is *actually* Big Government's latest attempt to regulate and control the world's trading.  Shoot me down folks!

We already discussed this issue extensively. Satoshi is definately *NOT* a government agent.

Well they control all the money now .How could it get any worse?

Good point.

[fergalish]

We already discussed this issue extensively. Satoshi is definately *NOT* a government agent.

We have?  Where?  On this forum?  I'd be curious to see that discussion.

Well they control all the money now .How could it get any worse?

The could control all *your* money too, see what you're buying & selling, who you're buying from & selling to.  Also tax you.  I mean, imagine if all the banks were operated by the govt.  They could very easily throw an X% tax on *every* transaction.

I was just toying with the idea (if it is possible) to move that lock forward (never backward) automatically.

This seems even worse.  You couldn't even roll back to a previous fork in the event that the chain became compromised by MiB.

[Gavin Andresen]

At this point, the Men in Black could disconnect from all other block generators, and the chain would fork.

Umm... how would they do that?

If even one machine remained connected to both the MiB and the rest of the network, then there will be no split.  Transactions and blocks will continue to flow between them.

And if the MiB disconnect themselves from everybody else... then what they do has no effect on anybody else.

If the MiB have more than 50% of the block generating power then they can set the rules as you describe (refuse to put transactions with fees into the block chain, etc).  If we didn't like it, we could write code that detected that they were "breaking the rules" (for example, we could reject generated blocks with no or very few free transactions, when we know there are old, free transactions waiting to go into a block), and work on our own "minority" chain.  Convince the merchants and exchanges to run our code instead of the MiB code and the MiB can go play with themselves, we'll all happily continue trading with each other on the minority chain.

[theymos]

Or alternatively, the network could accept that the MiB now control the world's only block generator, who would now see *all* transactions, and could impose any arbitrary tax on each - a situation even better for the government than with today's paper currency.

Everyone can already see all Bitcoin transactions.

Generators can't charge arbitrary fees. Transactions offer a certain fee, and generators can accept the offer by including it in their blocks, or reject the offer and not include it in their blocks. Lower-fee transactions will build up, creating incentive for other people to enter the generating market.

[ShadowOfHarbringer]

We already discussed this issue extensively. Satoshi is definately *NOT* a government agent.

We have?  Where?  On this forum?  I'd be curious to see that discussion.

http://bitcointalk.org/index.php?topic=1350.0

[Cdecker]

As much as it must hurt for Americans but they are not the only players in the field. Sure if the so feared MiB are the only ones interested in taking over the entire network we'd be in trouble, I therefor suggest making Bitcoin a Project of interest to other nations as well. Should it ever become important enough I can see coalitions of agencies keeping a close eye on what the others are doing in the system and out balancing each other.

So the options are really twofold: keep under the radar or become prominent enough to gain vetting from multiple parties with comparable investment powers :-)