20 articles on 'Bitcoin is broken', researchers warn' doesn;t move price? why?

[bitwhizz]

Researchers are claiming a fundamental flaw in bitcoin which leaves this 2 billion dollar currency vulnerable to take over, yet we're still going up,

http://www.bbc.co.uk/news/technology-24818975

some one make sense to me?

As this doesn;t make sense?

SUrely panic selling should happen, unless theirs market manipulation



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Academics Ittay Eyal and Emin Gun Sirer say this group could stay ahead of the competition, which would be stuck solving cryptographical challenges that have already yielded bitcoins, losing time, effort and money.

“The key insight behind the selfish mining strategy is to force the honest miners into performing wasted computations on the stale public [blockchain] branch. Specifically, selfish mining forces the honest miners to spend their cycles on blocks that are destined to not be part of the blockchain,” explained the researchers.

In time, rational miners would prefer to join the selfish miners in order to maximise their profits, and the selfish group would increase its influence until it becomes a majority. At this point, Bitcoin would stop being decentralised, losing one of its most attractive properties. Control by a single entity could even lead to the complete collapse of the digital currency.

Researchers say that selfish mining is feasible for any group size of colluding miners, as long as they have enough hardware at their disposal. Indeed groups capable of such projects already exist.

Eyal  and Sirer propose a modification to the Bitcoin protocol that protects against selfish mining pools that command less than a quarter of the overall mining resources. But they say that the virual currency will never be completely safe against this type of attack.

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[wobber]

Researchers are claiming a fundamental flaw in bitcoin which leaves this 2 billion dollar currency vulnerable to take over, yet we're still going up,

http://www.bbc.co.uk/news/technology-24818975

some one make sense to me?

As this doesn;t make sense?

SUrely panic selling should happen, unless theirs market manipulation

My paranoia tells me that there is some manipulation, maybe people realized the self-healing power of bitcoin regarding the price? Hmm.. I might turn bull now...

[rocks]

Researchers are claiming a fundamental flaw in bitcoin which leaves this 2 billion dollar currency vulnerable to take over, yet we're still going up,

http://www.bbc.co.uk/news/technology-24818975

some one make sense to me?

As this doesn;t make sense?

SUrely panic selling should happen, unless theirs market manipulation

Simple, people who easily buy into such articles without understanding them and the same type of people who casually glance at bitcoin and say it is a scam. People who know bitcoin well are the ones who trade/purchase at these pricees and they easily see through the FUD.

What this means is the Bitcoin market is mostly comprised of people who have investigated the concept enough to understand it well and not be scared off random to FUD. It is a very healthy sign that the price did not even blink in response to 100 MSM FUD articles.

Also, as usual I found it most informative to skip the articles and go to the comment sections. Great explaintions there on what the issue was, what was discussed about it in 2010, and why that attack avenue does not matter. MSM journalists are a joke

[bitwhizz]

sure you can call it fud, but it can;t be ignored............. and even if it can be patched, their should be a drop in price


WHen an exchanged was hacked in the first bubble, a huge price drop was caused


when gox lagged/ got ddos's  in the second bubble their was a huge price drop

we are in a bubble and this is the most serous news of all the bubbles combined,even if it can be fixed/patched, their should be a price drop until it is certain it can be patched

 people are still rallying, i mean why?

[DeathAndTaxes]

It isn't serious news, it doesn't need to be patched and this new "research" was known and debated on this forum ..... in 2010.

Maybe that is why it hasn't moved the price.

This isn't to say there won't be a correction a 30% move in a week is excessive but any drop will have more to do with profit taking then a "researchers" FUD.

[Chalkbot]

sure you can call it fud, but it can;t be ignored............. and even if it can be patched, their should be a drop in price


WHen an exchanged was hacked in the first bubble, a huge price drop was caused


when gox lagged/ got ddos's  in the second bubble their was a huge price drop

we are in a bubble and this is the most serous news of all the bubbles combined,even if it can be fixed/patched, their should be a price drop until it is certain it can be patched

 people are still rallying, i mean why?

No, as he was trying to explain, this is not a serious issue at all, and the people who understand bitcoin can plainly see that, thus they continue to trade. There is no patch required.

[solex]

sure you can call it fud, but it can;t be ignored............. and even if it can be patched, their should be a drop in price

when gox lagged/ got ddos's  in the last bubble their was a huge price drop

this is serous news, and people are still rallying, i mean why?

It is the research paper which is "broken" not bitcoin. The market knows this because all it got out of core dev was a yawn.

Also the gox problems were not significant to the market during the April peak/crash. Gox was even closed for 8 hours and the market continued its prior trend. Also gox was shut for a week in 2011 when it had nearly all the bitcoin market - and still the market just continued on from the prior level as if the gox outage never happened.

[dnaleor]

Did not have time to check it myself, but I guess the market already found out that bitcoin isnt broken. I would be surprised if it is the opposite case

[Mageant]

It should be obvious to everyone now that there is a concerted effort by established institutions to discredit and spread fear about Bitcoin.

[bitwhizz]

My point isn;t really  whether it can be achieved or not, and whether its a flaw or not,

I;ve read up on this subject matter......


My point is that if you type bitcoin into google news, you will see a ton of these articles, which is very bad news, enough to cause a price drop despite whether it can be achieved or not,

Plus its not very comforting to know that all it requires is lots of cash in hardware in order to take down something like bitcoin, which can easily be done by single/group of  high net worth individuals (not that i am personaly perticuarly worried, i'm pro bitcoin and sure a problem will be fixed if it does occur)

Therefore my query is not so much as to whether the flaw is a problem, however why the negative PR being induced by the media hasn't  cuased panic selling too occur, especially based on the outcome of past events of negative press

[ArticMine]

To the informed Bitcoin holder yes, but to the uninformed holder this kind of thing will induce panic. I suspect as in the SilkRoad case that there is a massive institutional demand, that more than compensates for the panic these kind of news would normally create. Just take a look at this thread on Second Market. https://bitcointalk.org/index.php?topic=326558.0. If the Winklevoss twins get SEC approval for their ETF. Watch out.

[SheHadMANHands]

ITT, OP shorted BTC immediately after the "big news".  Got left holding the bag and is steaming in the Speculation sub-forum.

 

[TERA]

By 20 articles do you mean 20 copies of one article? Greedy mining pools? Its not an issue yet and developers are probably already working on a patch. They have proven themselves very skillful and in control of these kinds of things in the past.

[Chalkbot]

ITT, OP shorted BTC immediately after the "big news".  Got left holding the bag and is steaming in the Speculation sub-forum.

 

Heh, This might be the case, as it's been explained at least 3 times in here that this is not actually a problem, and OP still talks as if it is a serious threat to bitcoin.

Even from the angle that it's a "top story" when searching for bitcoin news, it wouldn't have any effect. When has the top story NOT been some negative and uninformed media FUD? Like, maybe 2 times in all of bitcoin history?

[mvidetto]

Bad press may exist for bitcoin, but in my opinion this isn't a bad thing.  Whether or not this is truly an attack on bitcoin does not matter, people will read this article and if interested delve farther into the bitcoin atmosphere.  In time, they may understand that it is incorrect, or the many advantages of bitcoin will shine through. Just check google trends on bitcoin searches its spiking up again.

[dnaleor]

oh well, I will do a mid night read of the paper now... I forgot that I will meet my promoter (who "helps" me with my bitcoin thesis) tomorrow. He will probably ask about it. Might as well give him a very well documented answer

[darkmule]

Researchers are claiming a fundamental flaw in bitcoin which leaves this 2 billion dollar currency vulnerable to take over, yet we're still going up,

http://www.bbc.co.uk/news/technology-24818975

some one make sense to me?

As this doesn;t make sense?

SUrely panic selling should happen, unless theirs market manipulation

Because the media hype is a bunch of bullshit and everyone can see that.  It also completely blows the claims of the researchers out of proportion.  It also says nothing about Bitcoin that was not already widely known, i.e. that an attacker with control over a large part of the network can do bad things.  For everyone to panic about something that isn't even news would be sort of like suddenly discovering the 51% attack is possible and panicking.

Yes, someone with a vast amount of computing power could squander it for little or negative profit solely to harm the network.  The same can be said of any network.  Actually, worse can be said of most, i.e. many networks are so porous a random script kiddie could fuck them up for little to no effort just for the hell of it.

[dnaleor]

So this is my response:

This one was already found in the article:

"No honest (or semi-honest) miner would want to join a selfish pool," he suggested. "Even if they do have a small incentive to [join], they have an even greater incentive to not break the Bitcoin network to preserve the value of their own Bitcoins and mining hardware."

And than there is just this argument: "what does it matter that there is a selfish attack?"
When such an attack occurs, what will those guys do? They just continue to confirm all the transactions... (ok, their is no incentive for other people to mine, but hey, They are doing all the work, that deserves a reward )
They do not have the power to change the protocol. When they do that, we get a hard fork and all regular miners will just continue on the "normal blockchain". Let those selfish people mine on their selfish fork
If they like to exclude some transactions from the confirmation process, they reveal themselves and we would probably get a new "selfish" fork (or just a regular non-selfish fork) wich includes all transactions.

I dont really see the problem.

[kokojie]

Because it's obviously false, anyone with half a brain can figure it out.

[theonewhowaskazu]

I don't claim to know the technical details of why the article in the OP doesn't work, although I've seen lots of people talking about that in the past.

Can somebody shed some light? Why won't that "selfish miner" strategy work?

[BitcoinAshley]

The reason there haven't been panic sells is because - and I can think of no other explanation - the majority of bitcoin investors and traders are intelligent enough that they don't automatically believe everything they read on the internet at face value.

I am truly surprised, and OP, you might have trouble believing this. But it is the only feasible explanation I can think of.

Another option would have been that "bitcoin really IS broken and people are just ignoring it and trying to make money b/c 'greed.' " But that is impossible since it is widely known that it is the research paper that is broken, not the bitcoin protocol.


If you're anything like me, you read the article, read core dev's response, read the coding community's response, read the non-coding community's response to the coding community's response, looked at the market's response, determined that the authors of the paper were pretty much full of shit, and went on about your merry business. Had there been any legitimate threat I may have reduced my bitcoin position, according to the severity of the threat, either into fiat or some altcoins which did not share that security issue. Or I would buy something nice for myself.

[dnaleor]

I don't claim to know the technical details of why the article in the OP doesn't work, although I've seen lots of people talking about that in the past.

Can somebody shed some light? Why won't that "selfish miner" strategy work?

check my post. It works, but it isnt a problem.

As long as those selfish miners behave, there is no problem...

[notme]

If you're anything like me, you read the article, read core dev's response, read the coding community's response, read the non-coding community's response to the coding community's response, looked at the market's response, determined that the authors of the paper were pretty much full of shit, and went on about your merry business.

yup

[dnaleor]

The reason there haven't been panic sells is because - and I can think of no other explanation - the majority of bitcoin investors and traders are intelligent enough that they don't automatically believe everything they read on the internet at face value.

I am truly surprised, and OP, you might have trouble believing this. But it is the only feasible explanation I can think of.

Another option would have been that "bitcoin really IS broken and people are just ignoring it and trying to make money b/c 'greed.' " But that is impossible since it is widely known that it is the research paper that is broken, not the bitcoin protocol.


If you're anything like me, you read the article, read core dev's response, read the coding community's response, read the non-coding community's response to the coding community's response, looked at the market's response, determined that the authors of the paper were pretty much full of shit, and went on about your merry business. Had there been any legitimate threat I may have reduced my bitcoin position, according to the severity of the threat, either into fiat or some altcoins which did not share that security issue. Or I would buy something nice for myself.

any links would help

[BitPirate]

I don't claim to know the technical details of why the article in the OP doesn't work, although I've seen lots of people talking about that in the past.

Can somebody shed some light? Why won't that "selfish miner" strategy work?

I haven't looked in detail, but the idea seems to just be a 51% attack that you do in secret -- not very likely. The very premise of "don't communicate your bitcoin find to other miners" makes no sense, as your bitcoins are only bitcoins (and are only redeemable) if they are in the public blockchain.

[dnaleor]

I don't claim to know the technical details of why the article in the OP doesn't work, although I've seen lots of people talking about that in the past.

Can somebody shed some light? Why won't that "selfish miner" strategy work?

I haven't looked in detail, but the idea seems to just be a 51% attack that you do in secret -- not very likely. The very premise of "don't communicate your bitcoin find to other miners" makes no sense, as your bitcoins are only bitcoins (and are only redeemable) if they are in the public blockchain.

the point of the article is that they release their valid nonce with a delay, so they have a head start for the next block, so they have a larger chance of finding the next block and so one...

But indeed, it is almost impossible to keep it as a secret: all other pools will notice it!

[CMMPro]

It's actually not 20 articles...it's one article being stupidly repeated over and over in different ways.

No matter how hard they try to push this garbage down our throats it doesn't make this fantasy story any more plausible.

[oakpacific]

According to what I have collected, the article seems to be based on an assumption of Satoshi's assumption, while the assumed assumption is actually Satoshi's conclusion, that the network is safe as long as there are more honest miners than dishonest ones, yet this is not something assumed to be known to a miner in Satoshi's paper, which is the case in this article.

[goxed]

I don't claim to know the technical details of why the article in the OP doesn't work, although I've seen lots of people talking about that in the past.

Can somebody shed some light? Why won't that "selfish miner" strategy work?

I haven't looked in detail, but the idea seems to just be a 51% attack that you do in secret -- not very likely. The very premise of "don't communicate your bitcoin find to other miners" makes no sense, as your bitcoins are only bitcoins (and are only redeemable) if they are in the public blockchain.

the point of the article is that they release their valid nonce with a delay, so they have a head start for the next block, so they have a larger chance of finding the next block and so one...

But indeed, it is almost impossible to keep it as a secret: all other pools will notice it!

I think it will work to the benefit of a small pool during a  very good streak of luck since they can put some extra effort immediately after the streak ends, by keeping the chain private for sometime.
Anyways selfish miners employ pool-hopping already I read the paper cursorily and it looks like an academic exercise because it's difficult to model luck and variation.

[redwraith]

Yes, if you are at all familiar with market psychology, you would know that very often supposed bad news causes the market to react in exactly the opposite of what you would expect.  You saw that most recently with the Silk Road bust and your seeing it now with the supposed "bitcoin is broken" theme.  In fact, many people in the stock markets of the world measure market sentiment and try to buy when people are most pessimistic and sell when optimism is high.  Buy when blood is flowing in the streets, in other words.

[im3w1l]

The most important point I think is the sybil attack. The selfish miners create a shitload of dummy miners. If the selfish miners have found one block, and then someone else finds another block, the selfish use their enormous amounts of dummy miners to ensure that their chain propagates faster, and becomes the most popular, even though it is released (just slightly) after the other block. Without this attack that means they win even though they "should" lose the race, the attack doesn't work.

[freequant]

This time's rally is driven by Chinese, and whoever spread the FUD this time was a bit too western centric and it didn't manage to spread the FUD in China. FUD fail. FUDster can now watch the price keep going up and bite his cheeks for selling everything.

[ronaldlee0917]

This time's rally is driven by Chinese, and whoever spread the FUD this time was a bit too western centric and it didn't manage to spread the FUD in China. FUD fail. FUDster can now watch the price keep going up and bite his cheeks for selling everything.

Agreed.
If the news somehow hit CCTV, no one could imagine what would happen....

[goxed]

This time's rally is driven by Chinese, and whoever spread the FUD this time was a bit too western centric and it didn't manage to spread the FUD in China. FUD fail. FUDster can now watch the price keep going up and bite his cheeks for selling everything.

Hmm, so one theory could be this guy who published the article, was paid for by someone with deep pockets to buy in.

[BitcoinAshley]

This time's rally is driven by Chinese, and whoever spread the FUD this time was a bit too western centric and it didn't manage to spread the FUD in China. FUD fail. FUDster can now watch the price keep going up and bite his cheeks for selling everything.

Hmm, so one theory could be this guy who published the article, was paid for by someone with deep pockets to buy in.

Chances are that it was just a sterile academic trying to make a name for himself.

If there's one thing I've learned - it's that paid shills do exist on the internet and in academic circles, and in significant number, as has been proven by multiple FOIA requests and leaked documents. But on the other hand, the supply of "useful idiots" is unimaginably greater! So the chances that these academics were actually paid to spread FUD is incredibly small. They were just like "Hey let's write about this attack on Bitcoin" without realizing that it has already been discussed and dismissed, 3 years ago, and even with its infeasibility, changes are continually being considered for future releases (and for miners themselves) that even further diminish its feasibility.

But really, it's amazing how many people read the article, believed it at face value without any further research, and are now quoting the article's introductory paragraph on ZH comments as if it is gospel and an eternal "debunk" of all things bitcoin. I would think these people should have learned their "Don't believe everything you read on the internet" lesson the first time they fell for an Onion article...

[Le Happy Merchant]

The reason the price hasn't dropped is because after ~4.5 this scenario has not yet developed even though it would have been intensely profitable.

If it was going to happen, it should have already. Also, the price will react accordingly if/when this actually starts to occur.

[darkmule]

Chances are that it was just a sterile academic trying to make a name for himself.

Well, if you can easily see that the contents of the media articles are at best shallow and at worst utter bullshit, you shouldn't be so quick to accept their characterizations of the researchers themselves at face value.  Even some people here are working on implementing and testing how such an attack would work and (presumably) how to respond to it if it did.

The reason this isn't a huge problem (and why it hasn't affected price) isn't that it doesn't exist, but that if anyone did try to do it they'd a) be caught pretty quickly and b) there would be a rapid response.  Part of why there'd be a rapid response is that people are poking at it looking for potential attacks and (one hopes) having countermeasures already in place if they're ever used.

[Zangelbert Bingledack]

Dumb economists ignore human action and incentives. Just want to model everything. You have to look at social effects, too, because Bitcoin is a community. Even if the selfish miner attack did somehow work, people would just boycott it and/or move to a new fork. Social behavior isn't in this man-child's model.

[DoomDumas]

Media FUD.  
The point is this is known an not worth a worry for now..

Medias, having no more SR fud to spread about Bitcoin, they just jumped in on something else that can make a show, as they are all in the business for making money selling pub, so they try to spread spectacular news, to bring reader to their pub.. Most of them, most of the time have facts wrong, errors in numbers/quantities, and true journalistic news a quite rare today.. not so much research, verification.  

IMO, the price rise is just the begining of a long long run up, as more peoples understand how much Bitcoin is a revolution, comparable to many other technological revolution, and imo it's an understatement.

[DoomDumas]

Yes, if you are at all familiar with market psychology, you would know that very often supposed bad news causes the market to react in exactly the opposite of what you would expect.  You saw that most recently with the Silk Road bust and your seeing it now with the supposed "bitcoin is broken" theme.  In fact, many people in the stock markets of the world measure market sentiment and try to buy when people are most pessimistic and sell when optimism is high.  Buy when blood is flowing in the streets, in other words.

True market tends to react the opposite of what would be expected about news.. But for the SR bust, I think it was a good thing for Bitcoin, as media now cant associate Bitcoin to drug in direct relation.  This SR bust just prove Bitcoin are way cleaner than it was described by so many article.

[btcxyzzz]

Listen to what Vitalik the wise man says:

"No honest (or semi-honest) miner would want to join a selfish pool," he suggested. "Even if they do have a small incentive to [join], they have an even greater incentive to not break the Bitcoin network to preserve the value of their own Bitcoins and mining hardware."

And this smells the most like a paid jewish FUD.

[blablahblah]

Their theories don't stand up to scrutiny.
If you mine a block but then delay the news so you can secretly work on another one, you risk getting orphaned as someone else sneaks in ahead of you. Working on unconfirmed blocks is pure gambling that kills your hash-power.

If you secretly buy out all the miners, being a benevolent controller who never reveals himself is likely to be more financially rewarding than attempting some destructive publicity stunt like a double-spend attack. In an unusual move, there seems to be a tendency towards less corruption as political power grows.

Even if someone with non-financial motives wanted to destroy Bitcoin, they could probably do it, but the cat's so far outside of the bag that it's on the other side of the river.

..But who cares. As they say: buy the rumour, sell the news.