GHash.IO and double-spending against BetCoin Dice

[running]

Do I understand it correctly that if those Dice services waited for even 1 confirmation, this attack wouldn't happen?

[wachtwoord]

Do I understand it correctly that if those Dice services waited for even 1 confirmation, this attack wouldn't happen?

Yup.

[wachtwoord]

I have been hearing speculation that the reason Satoshi is no longer involved is because of all the criminals and nut cases who have tried to attach themselves to Bitcoin.  That is the most plausible explanation I have heard.

That's the most retarded thing ever. First off, he left before most of that even materialized. Second off, he left because he wants to remain anonymous. The longer he stayed connected to Bitcoin using his original alias the smaller the chances of achieving that.

[mmitech]

I have been hearing speculation that the reason Satoshi is no longer involved is because of all the criminals and nut cases who have tried to attach themselves to Bitcoin.  That is the most plausible explanation I have heard.

That's the most retarded thing ever. First off, he left before most of that even materialized. Second off, he left because he wants to remain anonymous. The longer he stayed connected to Bitcoin using his original alias the smaller the chances of achieving that.

I agree, but by saying he left you really mean that he is just not using his nick name, I am sure he is still around and visit this forum and daily post under another nick name

[wachtwoord]

I have been hearing speculation that the reason Satoshi is no longer involved is because of all the criminals and nut cases who have tried to attach themselves to Bitcoin.  That is the most plausible explanation I have heard.

That's the most retarded thing ever. First off, he left before most of that even materialized. Second off, he left because he wants to remain anonymous. The longer he stayed connected to Bitcoin using his original alias the smaller the chances of achieving that.

I agree, but by saying he left you really mean that he is just not using his nick name, I am sure he is still around and visit this forum and daily post under another nick name

Doesn't my previous response imply just that?

[mmitech]

I have been hearing speculation that the reason Satoshi is no longer involved is because of all the criminals and nut cases who have tried to attach themselves to Bitcoin.  That is the most plausible explanation I have heard.

That's the most retarded thing ever. First off, he left before most of that even materialized. Second off, he left because he wants to remain anonymous. The longer he stayed connected to Bitcoin using his original alias the smaller the chances of achieving that.

I agree, but by saying he left you really mean that he is just not using his nick name, I am sure he is still around and visit this forum and daily post under another nick name

Doesn't my previous response imply just that?

oh I see now

using his original alias

[jaked]

If anyone is still not convinced that mining centralization is a threat, this is a taste of the bad things that can happen.

[mushin77]

Hmm... there is a lot of speculation and misinformation in here as well as some good facts.

I think if we break it all down. People are worried that this pool is dishonest because of the double spend "attack" which I agree is not good. However, in perspective I do mine at Ghash.io and contrary to what others have said you can easily cash out BTC. I know that I have personally cashed out a ton of BTC with no difficulty. It is as simple and withdrawing BTC or setting up an "investor" with an external wallet and 100% payout. The pool fee is 0% as stated and indeed they have had some problems with orphaned blocks and at time there have been some minor issues where solved blocks did not pay out properly. However on those solved blocks not paying out... each and every time they were paid once the issue was resolved. As for support they appear to have an very adequate staff because each and every ticket I have opened has been resolved within an hours time.

There is also confusion in this thread about how CEX.io / Ghash.io operates. They do not sell the hashing power that is pointed to the pool. With that regard the pool operates just like any other. The CEX.io component allows users to buy hashing power along the lines of cloud hashing. The hashing power they sell is... as someone else pointed out... essentially a share of hardware they own/control. You pay a % fee taken at the time blocks are paid. This is how they make money and cover costs. While I obviously don't have access to their financials I am sure they are making pretty good money... just like many other pools where they charge a pool fee etc. All in all I really think that they are probably a profitable enterprise.

As a business owner myself I have to throw my perspective out there that I just can not come to a conclusion that they would be a "dishonest" pool looking perform some 51% attack or any other attack as it would ruin the hard work and effort they have obviously put into the business. This is not to mention that they would also have to have other pools join in for the 51% attack that people are in fear of.

The best solution overall to large pools and the fears of things becoming centralized is though competition. I have used several pools throughout my mining history as I am sure many people have. I have come to point most of my gear at Ghash.io because I like the added benefit of being able to add hashing power on demand. The ability to easily get hashing power is also contributing to the growth of this pool. As others said above new miners looking to get into the game can get started with fairly low barriers to entry. This directly leads to pool growth because many of those new miners are also buying equipment. It would be a logical assumption that any of these new miners with physical equipment will eventually point their gear to Ghash.io. They currently have what I would consider a major competitive advantage over other pools. There are two ways to temper this growth: 1.) Through competition for miners or 2.) Discredit them so that they are forced to go away. I wonder if that is the reason for this thread? To slander them out of existance.

All in all when reading the original post and subsequent replies I can't help but get the feeling that the initial post by the OP is more of a "witch hunt" than anything else and all the posts I see about scams and dishonest pools etc are really starting to scare me as a proponent of BitCoin. There was another thread about what people think is the biggest threat to Bit Coin. When I read that post I did not have an answer but now only a few hours later I do.

I think the Bit Coin community is the biggest threat to Bit Coin. Each and every day there are posts screaming SCAM here and Scam there. While I am not oblivious to the fact that there are scams occurring I think the vast majority of the claims are unwarranted. The more we cry foul as a bit coin community with conjecture and un-substantiated claims the less reliable and attractive the Bit Coin network becomes to the world. The more we cry scam and foul play the more attention we garner from Governments, Law Enforcement, and Media looking for a scandal. When the negative attention reaches a certain threshold we can expect massive government attention and regulation.

My advice is that we temper our claims of foul play across the board and keep unsubstantiated claims out of the discussions. Be vigilant to look into possible abuse but do so in such a manner that we don't permanatly mar the reputation of Bit Coin. If we want total Bit Coin adoption we can not be slinging mud in the streets as conventional banking institutions look down from their skyward offices as they laugh all the way to the bank knowing that we are going to implode without any additional effort on their part.

[Ditto]

And we can't do anything about this?

If you are a multi-millionaire you can do something about it, just buy and setup the same power of GHasg.IO so you will balance the network......

Paging Mr.Cat, Mr. Fried Cat...

[gmaxwell]

Do I understand it correctly that if those Dice services waited for even 1 confirmation, this attack wouldn't happen?

No, with 29% hashpower a double spending attack would have a 60% success rate on confirmed transactions. The fact that the success rate isn't 100% would just mean that they'd need their profits when successful to be at least 17 BTC in order to make up for the cost of a lost block (less if they don't have to pay their miners for orphans).
 

[luqash3]

mmitech I am new to bitcoins actually I don’t understand what is double-spending can you please explain me about it? It seem you have made a good post but really I don’t understand it well so please provide me some links that shall help in learning bitcoins in short period of time. Thanks in advance

[itod]

mmitech I am new to bitcoins actually I don’t understand what is double-spending can you please explain me about it? It seem you have made a good post but really I don’t understand it well so please provide me some links that shall help in learning bitcoins in short period of time. Thanks in advance

https://www.khanacademy.org/economics-finance-domain/core-finance/money-and-banking/bitcoin/v/bitcoin-what-is-it

[edmundedgar]

What I'm wondering with these miners with really big market shares is how long they'll be able get away with being regulated like a node in a p2p network. If there was only one miner and 100% of transactions went through them, governments would obviously be saying they were financial intermediaries, and expecting them to do consumer protection and anti-money laundering checking and follow know-your-customer regulations. If you only have 1% you're clearly a p2p node without control over the transactions, but where's the dividing line? 50%?

This could be end up being another of the many cases where governments seem to be shutting down any business that is excessively centralized and fails to follow strict crypto-anarchist principles.

[neutralist]

what I don't understand is how miners keep joining BTCguild when they have many other pools with lower hashrate, some even join the private pool GHash.IO !!!!

This is a flaw of a decentralized currency powered by democracy. The following is a nice video on explaining the implications of this effect:

http://www.youtube.com/watch?v=s7tWHJfhiyo

In essence, those who are worrying about a single pool getting to 51% (i.e. "first past the post") will go to the second largest pool, instead to the smaller ones. Essentially only two pools will be left.

Same with the two-party system in America.

[wachtwoord]

what I don't understand is how miners keep joining BTCguild when they have many other pools with lower hashrate, some even join the private pool GHash.IO !!!!

This is a flaw of a decentralized currency powered by democracy. The following is a nice video on explaining the implications of this effect:

http://www.youtube.com/watch?v=s7tWHJfhiyo

In essence, those who are worrying about a single pool getting to 51% (i.e. "first past the post") will go to the second largest pool, instead to the smaller ones. Essentially only two pools will be left.

Same with the two-party system in America.

When I minded I used P2Pool https://en.bitcoin.it/wiki/P2Pool

[mmitech]

what I don't understand is how miners keep joining BTCguild when they have many other pools with lower hashrate, some even join the private pool GHash.IO !!!!

This is a flaw of a decentralized currency powered by democracy. The following is a nice video on explaining the implications of this effect:

http://www.youtube.com/watch?v=s7tWHJfhiyo

In essence, those who are worrying about a single pool getting to 51% (i.e. "first past the post") will go to the second largest pool, instead to the smaller ones. Essentially only two pools will be left.

Same with the two-party system in America.

When I minded I used P2Pool https://en.bitcoin.it/wiki/P2Pool

I remember mining at P2pool as well, but the problem at the time was dust, I would pay crazy fees for transactions, although I was looking at P2pool and the Litecoin Devs with the Bitcoin devs were giving funds to make a better software that solves many of the problems, I don't know how is it today with P2Pool since I stopped mining a long time ago but I think this problem is solved.

Hint: you can still use P2pool even if the dust issue still exist,  the key to reduce this problem is to use coin control, you simply take all inputs to one transaction and pay the fee only once, this is what I was doing...

and P2Pool is the only solution for decentralized mining so I don't know if miners understand that and at least give it a try !

[wachtwoord]

what I don't understand is how miners keep joining BTCguild when they have many other pools with lower hashrate, some even join the private pool GHash.IO !!!!

This is a flaw of a decentralized currency powered by democracy. The following is a nice video on explaining the implications of this effect:

http://www.youtube.com/watch?v=s7tWHJfhiyo

In essence, those who are worrying about a single pool getting to 51% (i.e. "first past the post") will go to the second largest pool, instead to the smaller ones. Essentially only two pools will be left.

Same with the two-party system in America.

When I minded I used P2Pool https://en.bitcoin.it/wiki/P2Pool

I remember mining at P2pool as well, but the problem at the time was dust, I would pay crazy fees for transactions, although I was looking at P2pool and the Litecoin Devs with the Bitcoin devs were giving funds to make a better software that solves many of the problems, I don't know how is it today with P2Pool since I stopped mining a long time ago but I think this problem is solved.

Hint: you can still use P2pool even if the dust issue still exist,  the key to reduce this problem is to use coin control, you simply take all inputs to one transaction and pay the fee only once, this is what I was doing...

and P2Pool is the only solution for decentralized mining so I don't know if miners understand that and at least give it a try !

I felt a moral obligation to use p2pool so I just did. Everyone should make that decision for themselves though.

[bryant.coleman]

This is a flaw of a decentralized currency powered by democracy. The following is a nice video on explaining the implications of this effect:

http://www.youtube.com/watch?v=s7tWHJfhiyo

In essence, those who are worrying about a single pool getting to 51% (i.e. "first past the post") will go to the second largest pool, instead to the smaller ones. Essentially only two pools will be left.

Same with the two-party system in America.

If only two pools are left, then definitely one of them will cross the 51% mark and the other one will be decimated.

[Piper67]

This is a flaw of a decentralized currency powered by democracy. The following is a nice video on explaining the implications of this effect:

http://www.youtube.com/watch?v=s7tWHJfhiyo

In essence, those who are worrying about a single pool getting to 51% (i.e. "first past the post") will go to the second largest pool, instead to the smaller ones. Essentially only two pools will be left.

Same with the two-party system in America.

If only two pools are left, then definitely one of them will cross the 51% mark and the other one will be decimated.

The analogy is false. Firstly, there is no cultural component that favours membership in any one pool over any other (as there is with the political party system). Secondly, as opposed to the political party system, when it comes to Bitcoin there is a much more limited number of variables at play. Thirdly, switching pools is trivial, and since it is the miners themselves who stand to lose the most by destroying the network, they have the greatest incentive to switch, as opposed to the political party system where, in principle at least, achieving 100% power is desirable.

[RangerK]

This is a flaw of a decentralized currency powered by democracy. The following is a nice video on explaining the implications of this effect:

http://www.youtube.com/watch?v=s7tWHJfhiyo

In essence, those who are worrying about a single pool getting to 51% (i.e. "first past the post") will go to the second largest pool, instead to the smaller ones. Essentially only two pools will be left.

Same with the two-party system in America.

If only two pools are left, then definitely one of them will cross the 51% mark and the other one will be decimated.

The analogy is false. Firstly, there is no cultural component that favours membership in any one pool over any other (as there is with the political party system). Secondly, as opposed to the political party system, when it comes to Bitcoin there is a much more limited number of variables at play. Thirdly, switching pools is trivial, and since it is the miners themselves who stand to lose the most by destroying the network, they have the greatest incentive to switch, as opposed to the political party system where, in principle at least, achieving 100% power is desirable.

I would add, simply, that this is an explanation for two parties emerging in a system of winner-take-all elections.  It doesn't apply to mining because it's not winner take all.  With smaller pools, and individual miner simply gets bigger shares of less-frequent blocks.