Transactions Withholding Attack

[AnonyMint]

Because offchain would not be protected against double-spend.

You can't have it both ways. If you need protection from double spends on the regular block chain, then you need to get your transactions mined as soon as possible. If you don't need protection from double spends, then you can conduct your transactions off-chain.

There are (at least) two orthogonal cases of risk from double-spends.

1. Cartel is in race to protect against a rapidly issued double-spend which is trying to achieve this by propagating two spends where one ends up orphaned. Or where cartel is trusting a 0-transaction spend.

2. Cartel permanently accepts a Bitcoin as a cartel coin, without ever requiring the spend in the Bitcoin blockchain, thus the customer could at some point in the future also spend the Bitcoin and the cartel coin separately.

It doesn't seem like #2 makes much sense as a cartel strategy, so I assume we both agree it won't be employed.

So let's focus on #1.

The customer is not going to shop only one time on the cartel, because it is a cartel meaning the cartel covers a wide range of the commerce the customer encounters.

So the cartel doesn't have to worry about case #1, because they can ban the customer if the customer issues a double-spend.

The the cartel can accept 0-confirmation transactions and wait until the cartel's miners solve a block, to add the spend to the Bitcoin blockchain.

Thus my attack works perfectly well as I have explained throughout this thread.

This "attack" just doesn't make any sense.

Sorry you presented no cogent, logical argument to support that opinion.

I wrote downloadfast.com back in 2001. I did payment processing for software authors back when we had to devise our anti-fraud strategies in-house. I know these issues very well.

Joel I have had several months to think about this. I have a very high IQ. You are not going to win this. But please keep trying. I want to accept all challenges just to make sure I didn't miss something.

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[rampalija]

i belive offchain, dont know why u dont

[JoelKatz]

The customer is not going to shop only one time on the cartel, because it is a cartel meaning the cartel covers a wide range of the commerce the customer encounters.

So the cartel doesn't have to worry about case #1, because they can ban the customer if the customer issues a double-spend.

So, again, you have two cases:

1) Cases where the cartel cares about double spends, in which case it must get transactions into the block chain as soon as possible.

2) Cases where the cartel doesn't care about double spends, in which case, they don't need the block chain because this is the only service it offers.

Any cartel large enough to successfully make this attack work would have to handle a large enough fraction of Bitcoin transactions that it would just do them off the block chain. All the cartel would do is keep for itself transaction fees it wouldn't need to pay anyway.

But there's another reason this attack can't possibly work that's even more fundamental. The cost to the cartel of mining its own transactions would equal the benefit of not paying transaction fees on its own transactions. This attack is only sensible if zero-fee transactions rarely, if ever, make it into blocks. That means blocks will typically be full of fee-paying transactions. That means every transaction of its own that the cartel mines is one fee-paying transaction it gives up the chance to mine. So what's the point?

[AnonyMint]

The customer is not going to shop only one time on the cartel, because it is a cartel meaning the cartel covers a wide range of the commerce the customer encounters.

So the cartel doesn't have to worry about case #1, because they can ban the customer if the customer issues a double-spend.

So, again, you have two cases:

1) Cases where the cartel cares about double spends, in which case it must get transactions into the block chain as soon as possible.

Cartel doesn't need to get the transactions into the Bitcoin block chain asap, for the reason I explained in my prior post.

2) Cases where the cartel doesn't care about double spends, in which case, they don't need the block chain because this is the only service it offers.

Any cartel large enough to successfully make this attack work would have to handle a large enough fraction of Bitcoin transactions that it would just do them off the block chain. All the cartel would do is keep for itself transaction fees it wouldn't need to pay anyway.

You appear to be ignoring the game theory of a cartel. A cartel grows because it hurts competitors who don't join the cartel.

I explained the game theory upthread, and I will repeat a summary again.

As the cartel gains more and more of the Bitcoin network hashrate, it can delay non-cartel transactions by an ever increasing delay, i.e. asymptotically infinite delay.

This forces non-cartel entities to join the cartel else lose their businesses.

But there's another reason this attack can't possibly work that's even more fundamental.

Thanks. Fundamentals are a genre of peer review that has high utility IMO.

The cost to the cartel of mining its own transactions would equal the benefit of not paying transaction fees on its own transactions.

I am not entirely following your logic here. Are you referring to mining them on the Bitcoin chain?

I will say this which might cause you to conclude that your line-of-thinking could be irrelevant. The cartel's incentive is the value of all the business that is not already in the cartel.

Could you clarify your logic further? I think I may understand, but I don't want to try respond until I am sure I understand your point.

This attack is only sensible if zero-fee transactions rarely, if ever, make it into blocks. That means blocks will typically be full of fee-paying transactions. That means every transaction of its own that the cartel mines is one fee-paying transaction it gives up the chance to mine. So what's the point?

[AnonyMint]

I guess I am not so stupid after all, the author the selfish-mining paper took an interest in my proposed fix.

[BitchicksHusband]

Oh, I see, so you envision a world in which everyone uses Amazon.com's wallet app. "The masses" may be stupid, but they're not so stupid that they'll use a wallet service that takes far longer than every other wallet service for their transactions to get confirmed.

But as long as it clears before Amazon ships, nobody will be the wiser.  And if Amazon is putting that much processing power into the network to save a few measly fees, I still think it's a net loss for Amazon (in our hypothetical).

[AnonyMint]

Oh, I see, so you envision a world in which everyone uses Amazon.com's wallet app. "The masses" may be stupid, but they're not so stupid that they'll use a wallet service that takes far longer than every other wallet service for their transactions to get confirmed.

But as long as it clears before Amazon ships, nobody will be the wiser.  And if Amazon is putting that much processing power into the network to save a few measly fees, I still think it's a net loss for Amazon (in our hypothetical).

Agreed on your first sentence which is support of my theory.

Disagree on the second sentence. Please re-read my last reply to JoelKatz on the profits cartels make by eliminating the competition.

[murraypaul]

You can't because #1 was recorded onchain, not offchain.

They sure were, but now my balance is with MtGox, not the blockchain.  Your argument is that MtGox's systems are so inept that I can buy something off them and then send those bitcoins somewhere else (non-cartel).  I'm pretty sure those programmers would be fired.

I was expecting you to say that

You are confused.

And I know exactly what your confusion is, because I used to do techsupport.

Listen up. When the customer spends on the cartel, the offchain transaction would happen at that point. So the Bitcoin blockchain still shows the customer owning the coins. Whereas for your MtGox example, the Bitcoin blockchain shows MtGox owning the coins. So you are comparing two different things, apples-to-oranges.

It has nothing to do with ineptness once the coins are inside the cartel or MtGox. Both are managed correctly and no double-spends. The double-spend is due to the Bitcoin chain showing the customer still owns the coins in the cartel case, so customer can issue a Bitcoin chain spend again even while spending the coins in the cartel chain simultaneously. Whereas for your MtGox example, the Bitcoin chain shows MtGox owns the coins, so the customer can not issue a Bitcoin chain spend again.

In your 'cartel' situation, who controls the private key for the customer's wallet?
If it is the customer, then the cartel website cannot sign a spending transaction, and so cannot withhold it from the network, it would have to be send by the customer.
If it the cartel, then the customer cannot sign a double-spend transaction.

[AnonyMint]

You can't because #1 was recorded onchain, not offchain.

They sure were, but now my balance is with MtGox, not the blockchain.  Your argument is that MtGox's systems are so inept that I can buy something off them and then send those bitcoins somewhere else (non-cartel).  I'm pretty sure those programmers would be fired.

I was expecting you to say that

You are confused.

And I know exactly what your confusion is, because I used to do techsupport.

Listen up. When the customer spends on the cartel, the offchain transaction would happen at that point. So the Bitcoin blockchain still shows the customer owning the coins. Whereas for your MtGox example, the Bitcoin blockchain shows MtGox owning the coins. So you are comparing two different things, apples-to-oranges.

It has nothing to do with ineptness once the coins are inside the cartel or MtGox. Both are managed correctly and no double-spends. The double-spend is due to the Bitcoin chain showing the customer still owns the coins in the cartel case, so customer can issue a Bitcoin chain spend again even while spending the coins in the cartel chain simultaneously. Whereas for your MtGox example, the Bitcoin chain shows MtGox owns the coins, so the customer can not issue a Bitcoin chain spend again.

In your 'cartel' situation, who controls the private key for the customer's wallet?
If it is the customer, then the cartel website cannot sign a spending transaction, and so cannot withhold it from the network, it would have to be send by the customer.
If it the cartel, then the customer cannot sign a double-spend transaction.

Sorry but you don't understand the technology well enough. The reason most readers dismiss my posts, is because they lack knowledge to ascertain how correct I nearly (as in 99.9%) always am if I've studied some matter for a sufficiently long time.

The attack as described in the OP is for example the customer issues a spend with his her private key to the cartel for example on the cartel's website or POS terminal. The customer would either give the private key to the cartel or sign in a client-side application provided by the cartel which would send the spend only to the cartel's server. Either case supports the attack. The masses do what they are told to do when visiting a retail website or storefront, as they just want to pay and be done with it. They don't care about your technological nirvana idealism. It is irrelevant to their purchase at that moment where they want their pizza and be on their way.

You raise an irrelevant point about double-spends (which incidentally I have also refuted in the preceding paragraph), because the offchain strategy was JoelKatz's idea and has nothing to do with the attack described in the OP. And I resoundly refuted JoelKatz's technical points as pertains to this attack.

This attack can't be disproven. I've thought out it for months and debated all comers in my Bitcoin : The Digital Kill Switch thread, as well in this thread. You can bet that none of the core devs will come here and debate me, because they know they will lose. And it is the sure way that any crypto-currency without perpetual debasement ends up as the government coin.

The only reasonable counter-point upthread was from DeathAndTaxes. Which I believe I also refuted because the cartel punishes competitors and thus takes a larger and larger market share over time, but everyone is free to make their own estimates on his point.

P.S.  JoelKatz is apparently a Bitcoin developer, but not a core one.

[davidgdg]

There is no building mass.   Say Amazon is someday 20% of global ecommerce involving Bitcoins and 30% of population is willing to use their centralized client.   Wow Amazon can withold a whole 6% of the mining revenue.

That is a good point.

However:

1. If 6% is greater than their hashrate, it is still disporportionately siphoning revenue from the mining network. So over time it does build mass.

2. I think you underestimate the percentage of customers who would demand that amazon let them use any bitcoin client they want to. I rather think it would be 20% of global ecommerce and 100% of their customers (take it or leave it attitude since most of their customers don't know and don't care). So make that 15 - 20%, not 6%.

3. Cartels work together because that is the natural mode. I forget the scientific reason, but I can dig it up. So cartels in Europe, China, Japan and all over the world join together for mutual benefit. So this can be much larger than 20%. Don't forget your US History, Standard Oil and the way free "laissez faire" markets function.

Margins for miners vary dramatically.   A server farm in kuwait (1 cent per kWh) may have a 30% gross margin when Amazon is subsiding their operation at a massive annual loss.

Amazon can put their miners in Kuwait.

When you consider all the miners globally with low or subsidized power, I don't see it as a viable attack.

Refuted.

Actually the situation is precisely the opposite of what you assert. In a free market cartels tend to be unstable because it in the interests of members to cheat.

[AnonyMint]

There is no building mass.   Say Amazon is someday 20% of global ecommerce involving Bitcoins and 30% of population is willing to use their centralized client.   Wow Amazon can withold a whole 6% of the mining revenue.

That is a good point.

However:

1. If 6% is greater than their hashrate, it is still disporportionately siphoning revenue from the mining network. So over time it does build mass.

2. I think you underestimate the percentage of customers who would demand that amazon let them use any bitcoin client they want to. I rather think it would be 20% of global ecommerce and 100% of their customers (take it or leave it attitude since most of their customers don't know and don't care). So make that 15 - 20%, not 6%.

3. Cartels work together because that is the natural mode. I forget the scientific reason, but I can dig it up. So cartels in Europe, China, Japan and all over the world join together for mutual benefit. So this can be much larger than 20%. Don't forget your US History, Standard Oil and the way free "laissez faire" markets function.

Margins for miners vary dramatically.   A server farm in kuwait (1 cent per kWh) may have a 30% gross margin when Amazon is subsiding their operation at a massive annual loss.

Amazon can put their miners in Kuwait.

When you consider all the miners globally with low or subsidized power, I don't see it as a viable attack.

Refuted.

Actually the situation is precisely the opposite of what you assert. In a free market cartels tend to be unstable because it in the interests of members to cheat.

That is incorrect. A cartel grows because the competitors have no economic means to deny joining it. For example, with Rockefeller's Standard Oil he gained economies-of-scale that were impossible to compete with if you weren't larger than his operation. So you couldn't compete on price, so you had to sell your operation to him or join in the cartel.

Cartels are only unstable when the government breaks them up. But the government doesn't really break them up of course, they just pretend to. For example, they broke up the telephone monopoly, but then why does the USA have the worst price-performance internet in the developed world? Because the monopolies were sustained via a cartel of the entities created from the break up of the former monopoly. This is because cartels and government sleep in bed together.

Perhaps you missed the following quote which I wrote upthread:

You appear to be ignoring the game theory of a cartel. A cartel grows because it hurts competitors who don't join the cartel.

I explained the game theory upthread, and I will repeat a summary again.

As the cartel gains more and more of the Bitcoin network hashrate, it can delay non-cartel transactions by an ever increasing delay, i.e. asymptotically infinite delay.

This forces non-cartel entities to join the cartel else lose their businesses.

[MoonShadow]

I've decided to respond to this theory in as much detail as I can muster, since it seems to be a perversion of my 'Walmart versus Target mining cartels' concept from two years ago....

Once Bitcoin's coin rewards decline to less than can pay for the miner's costs, e.g. <1% per annum debasement by 2033 and <0.2% by 2040, then transaction fees are supposed to fund miners. The following attack applies whether transactions are voluntary, variable, fixed, or mandatory-- it makes no difference.

Indeed, it does make no difference.  I makes no difference now, however the miners are funded.  Mining has always been intended to be a competitive function that tends towards a zero markup.  I'll get there soon....

But a cartel (e.g. Amazon.com) could for example harvest transactions from its vast network and keep them without forwarding them to other miners. Then put them on the blocks found by its own mining servers. This would starve the rest of the network of funding and eventually the cartel would be doing all the mining. They could even offer 0% transaction fees (even refund mandatory tx fees) to entice more of the masses to process through their servers.

That is the same as turning Bitcoin into a centralized currency, and thus eventually controlled by the government and thus back to fiat again.

Note this postulated attack wouldn't be possible for 20 years or so,

No, we could do it sooner than than that, and I expect it will happen within the next two years.  However, I don't consider it an attack, I consider it a feature.  I'll explain why shortly....

I believe I am the first person to raise that in my Bitcoin : The Digital Kill Switch article? I am naming it the "transactions withholding attack" since it means not forwarding transactions in order to monopolize transaction fees, as coin rewards diminish.

Not even close to being the first.  This is one of the set of memes that pops up repeatedly under the many "I'm a noob, but I alone am so smart that I have discovered the Great Bitcoin Flaw!" posts.  

Let me summerize the root of this (assumed) attack vector, for clarity.  If I miss a fine point, I'm sure that you will point it out, and we can adress it then.


As I understnad it, the thoery is that a greedy mining pool could choose to withhold fee-paying transactions that it has received, and retain them until it has solved it's own block; with the implication of boosting it's pool payouts relative to other pools. In turn attracting pool miners away from other pools, until such point that the first pool controls more than 50% of the total mining power, functionally owning the Bitcon network.

There are many counter-economic effects that would contradict the leverage that such a mining pool could gain over the network, so I'll only go over a few of the most significant.

First and foremost; the mining pools, nor any other miner, are not significant contributers to the fee paying transactions on the bitcoin netowrk.  Said another way, it's not in the interest of merchants to only submit their transactions to one mining pool, even if it's the largest.  It's in the interest of merchants to spread any transactions intended for themselves as far and wide across the bitcoin network as possible, as that reduces the risks involved in a well timed double-spend attack.  And being a p2p netowrk, there is no way for a mining pool to prevent any valid transaction from spreading regardless of whether or not that particular mining pool forwards said traansaction to it's competitiors or not.

Second, the largest miners have an economic incentive to cooperate with one another with regard to the bandwidth and information flow across the network, since working together they have a small, but notable, speed advantage over small mining outfits that must rely on slower Internet connections.  The more and faster peer connections major miners have to one another, the faster that they (as a group) can include those fee paying transactions into their own queues.  The faster they can do that, the more likely that whichever miner (among themselves) to solve the next block will have all of the fee paying transactions available at the moment.  Any effort to corner the market on transactions would be regarded as not playing square with the rest of the major players, and will end up getting that pool cut out of the core of the network, and edge connected miners have a slightly higher rate of orphaned blocks as well.

Third, one unstated premise with this kind of attack vector theory is that the fees and block rewards are the only way that professional mining operations can make money.  This has never been the intended result of a mature bitcoin network.  Since mining profits are desinged to trend towards zero, the protocol permits 'out-of-band' methods of paying for transactions.  For example (and this is where we get to my Walmart verus Target theory from two years ago), it's expected that as Bitcoin matures, major retail outfits will not only start accepting bitcoins for meatspace purchases, they will also start supporting mining themselves.  Likewise, one such advantage that Walmart could offer over it's competitors is free transactions accepted at the counters.  Since it's not safe to accept such transactions without confirmations, it then becomes highly in Walmart's own interest to sponsor a mining outfit that will process free transactions intended for Walmart's own wallet of addresses as quickly as possible.  Said another way, it's in Walmart's interest to pay a mining out fit (be it a mining pool, a seperate company, or an internal group to Walmart corporate) to process transactions at a loss.  Of course, it's also not in Walmart's interest to process a competitors' free transactions (i.e. Target) in the same way, so Walmart is also paying to keep Target's free transactions out of their own mining pools.  This sets up competing cartels, that each serve different players in each industry.  Say, as an example, that BTC Guild took contracts to mine for Walmart, McDonalds & Sears; while Eglius took contracts to mine for Target, Burger King & JCPenny's.  While this certainly is consolidation of the market for mining services, and consistant with the dirve towards driving the profit margin for mining to zero (or perhaps lower, under certain conditions) it's also impossible for there to be only one, because if any single mining pool were to gain more market share over the others, the others would suddenly be able to offer these out-of-band services for much cheaper to unrepresented merchants.  The cartels are, thus, self limiting in scope with regard to the bitcoin network itself, which is all that we really care about on the macro scale.

And fourth, there will always be a minority of small and sigular miners that mine at less than zero profit for various reasons.  One such reason is simply that mining produces heat in the winter, and thus a mining rig, once you already own it, is nothing more than an elector-resistive heater.  If you live in a area with both a high heat demand & relatively chaep electricty (i.e. Iceland) any actual coins your mining rigs produce become secondary profit.  No mining pool will ever be able to compete with that, if for no other reason than bandwidth consumptionbecomes a greater burden than solo mining in this context.

Questoins?  Objections?

[AnonyMint]

Sorry I still am the first person to write about this attack, unless someone cites for me a specific written prior art.

As I understnad it, the thoery is that a greedy mining pool could choose to withhold fee-paying transactions that it has received, and retain them until it has solved it's own block; with the implication of boosting it's pool payouts relative to other pools. In turn attracting pool miners away from other pools, until such point that the first pool controls more than 50% of the total mining power, functionally owning the Bitcon network.

No that is not the attack described in the OP. You've entirely missed the point of what makes pools different from a cartel of retailers such as Amazon et al (all the small shops that sell through Amazon).

What makes it different is the customer never interfaces with a pool and a pool interfaces with the actual miners.

I am writing about the customer interfacing directly with the miner at the miner's website or POS terminal, i.e. Amazon could have its own mining farm of computers.

The point is then Amazon can start to delay the transactions of those who are not in its cartel (also starving the rest of the mining network of transaction fees). This can eventually force customers away from non-cartel stores and to cartel stores (where store means website and/or POS terminal). Which thus increases the cartel's relative mining power over time, thus increasing the delay for the non-cartel stores. Thus it spirals until the cartel has 100%.

Sorry your rebuttal failed. Your pool and miner game theory points make no sense in my described attack.

Third, one unstated premise with this kind of attack vector theory is that the fees and block rewards are the only way that professional mining operations can make money.  This has never been the intended result of a mature bitcoin network.  Since mining profits are desinged to trend towards zero, the protocol permits 'out-of-band' methods of paying for transactions.  For example (and this is where we get to my Walmart verus Target theory from two years ago), it's expected that as Bitcoin matures, major retail outfits will not only start accepting bitcoins for meatspace purchases, they will also start supporting mining themselves.  Likewise, one such advantage that Walmart could offer over it's competitors is free transactions accepted at the counters.

Indeed! That is why the attack I described happens.

The cartels will take over the mining.

I mentioned the 0% transaction fee aspect of this attack upthread.

Slow down and re-read the thread more slowly and reflect it on it for a while before you post again.

Don't make noise here please. I will get angry. Be professional.

[MoonShadow]

Sorry I still am the first person to write about this attack, unless someone cites for me a specific written prior art.

I'm not that interested in proving it, so you can keep your false pride.

As I understnad it, the thoery is that a greedy mining pool could choose to withhold fee-paying transactions that it has received, and retain them until it has solved it's own block; with the implication of boosting it's pool payouts relative to other pools. In turn attracting pool miners away from other pools, until such point that the first pool controls more than 50% of the total mining power, functionally owning the Bitcon network.

No that is not the attack described in the OP. You've entirely missed the point of what makes pools different from a cartel of retailers such as Amazon et al (all the small shops that sell through Amazon).

What makes it different is the customer never interfaces with a pool and a pool interfaces with the actual miners.

That's not different.  Customers don't interface with a pool or miners now.

I am writing about the customer interfacing directly with the miner at the miner's website or POS terminal, i.e. Amazon could have its own mining farm of computers.

Granted.

The point is then Amazon can start to delay the transactions of those who are not in its cartel (also starving the rest of the mining network of transaction fees). This can eventually force customers away from non-cartel stores and to cartel stores (where store means website and/or POS terminal). Which thus increases the cartel's relative mining power over time, thus increasing the delay for the non-cartel stores. Thus it spirals until the cartel has 100%.

Your conclusion is dependent upon this premise highlighted, but this premise has no basis.  Even if Amazon could prevent it's vendors from issuing their own transactions to the greater bitcoin network, by what mechanism can Amazon prevent transactions on the main network from propogating?  The. core is that they can't.

Sorry your rebuttal failed. Your pool and miner game theory points make no sense in my described attack.

You're sticking with that, I see.

Third, one unstated premise with this kind of attack vector theory is that the fees and block rewards are the only way that professional mining operations can make money.  This has never been the intended result of a mature bitcoin network.  Since mining profits are desinged to trend towards zero, the protocol permits 'out-of-band' methods of paying for transactions.  For example (and this is where we get to my Walmart verus Target theory from two years ago), it's expected that as Bitcoin matures, major retail outfits will not only start accepting bitcoins for meatspace purchases, they will also start supporting mining themselves.  Likewise, one such advantage that Walmart could offer over it's competitors is free transactions accepted at the counters.

Indeed! That is why the attack I described happens.

The cartels will take over the mining.

I mentioned the 0% transaction fee aspect of this attack upthread.

Slow down and re-read the thread more slowly and reflect it on it for a while before you post again.

Don't make noise here please. I will get angry. Be professional.

I don't care if you get angry.  I'm not going to read all this noise.  You can link back to whatever proof you have offered others, but I don't need to disprove your theory, you need to defend it.  Anger is a sign of your failure.  I'm not a professional.

[AnonyMint]

As I understnad it, the thoery is that a greedy mining pool could choose to withhold fee-paying transactions that it has received, and retain them until it has solved it's own block; with the implication of boosting it's pool payouts relative to other pools. In turn attracting pool miners away from other pools, until such point that the first pool controls more than 50% of the total mining power, functionally owning the Bitcon network.

No that is not the attack described in the OP. You've entirely missed the point of what makes pools different from a cartel of retailers such as Amazon et al (all the small shops that sell through Amazon).

What makes it different is the customer never interfaces with a pool and a pool interfaces with the actual miners.

That's not different.  Customers don't interface with a pool or miners now.

Yes it is, because pools get transactions from numerous bitcoin clients (software apps) thus transactions can't be withheld from other pools.

Whereas the cartel can lock in the transactions and not share them because the customers are buying at the cartel's storefront (e.g. website or POS terminal).

It is an entirely orthogonal game theory.

I am writing about the customer interfacing directly with the miner at the miner's website or POS terminal, i.e. Amazon could have its own mining farm of computers.

Granted.

So then don't say it is not different above.

The point is then Amazon can start to delay the transactions of those who are not in its cartel (also starving the rest of the mining network of transaction fees). This can eventually force customers away from non-cartel stores and to cartel stores (where store means website and/or POS terminal). Which thus increases the cartel's relative mining power over time, thus increasing the delay for the non-cartel stores. Thus it spirals until the cartel has 100%.

Your conclusion is dependent upon this premise highlighted, but this premise has no basis.  Even if Amazon could prevent it's vendors from issuing their own transactions to the greater bitcoin network, by what mechanism can Amazon prevent transactions on the main network from propogating?  The. core is that they can't.

You just put your foot in your mouth. You write "has no basis" and "they can't", when you should first ask me "can they?". Because you are incorrect.

Now wrap your brain around a point you failed to see.

The cartel has a % of the total network hashrate, and this % is always growing as they starve the rest of the network of transaction fees and delay transactions for the rest of the network.

Thus they can delay transactions. If for example they have 20% of the network hashrate, they can delay the transactions from non-cartels 20% of the time. This is Bitcoin 101 stuff. Go read the Satoshi whitepaper again, you apparently failed to comprehend it entirely.

And I thus explained why this spirals to 100% over time.

Now please stop intentionally pissing me off and learn how to conduct a debate professionally and cordially by asking questions instead of making baseless statements.

Sorry your rebuttal failed. Your pool and miner game theory points make no sense in my described attack.

You're sticking with that, I see.

Because you did fail. You just couldn't see, but now hopefully you do.

[MoonShadow]

As I understnad it, the thoery is that a greedy mining pool could choose to withhold fee-paying transactions that it has received, and retain them until it has solved it's own block; with the implication of boosting it's pool payouts relative to other pools. In turn attracting pool miners away from other pools, until such point that the first pool controls more than 50% of the total mining power, functionally owning the Bitcon network.

No that is not the attack described in the OP. You've entirely missed the point of what makes pools different from a cartel of retailers such as Amazon et al (all the small shops that sell through Amazon).

What makes it different is the customer never interfaces with a pool and a pool interfaces with the actual miners.

That's not different.  Customers don't interface with a pool or miners now.

Yes it is, because pools get transactions from numerous bitcoin clients (software apps) thus transactions can't be withheld from other pools.

Whereas the cartel can lock in the transactions and not share them because the customers are buying at the cartel's storefront (e.g. website or POS terminal).

It is an entirely orthogonal game theory.

You seem to enjoy using big words, but it's still not different however you say it.  An Amazon.com vendor may or may not be compelled to use the Amazon.com POS; but that is no garantee that the transaction can be kept within house, but even if it can....

I am writing about the customer interfacing directly with the miner at the miner's website or POS terminal, i.e. Amazon could have its own mining farm of computers.

Granted.

So then don't say it is not different above.

Saying that Amazon can have it's own mining servers isn't remotely sthe same as saying that they can lockout the vendors from the bitcoin network.  You seem to lack a basic understanding of how the p2p netowrk actually functions.

The point is then Amazon can start to delay the transactions of those who are not in its cartel (also starving the rest of the mining network of transaction fees). This can eventually force customers away from non-cartel stores and to cartel stores (where store means website and/or POS terminal). Which thus increases the cartel's relative mining power over time, thus increasing the delay for the non-cartel stores. Thus it spirals until the cartel has 100%.

Your conclusion is dependent upon this premise highlighted, but this premise has no basis.  Even if Amazon could prevent it's vendors from issuing their own transactions to the greater bitcoin network, by what mechanism can Amazon prevent transactions on the main network from propogating?  The. core is that they can't.

You just put your foot in your mouth. You write "has no basis" and "they can't", when you should first ask me "can they?". Because you are incorrect.

This is a dodge.  Any native English speaker would know that my posing of the question above was retorical.  Either show how Amazon could prevent progagation of transactions across the main bitcoin network, or admit that you don't know how this part of your thory would actually occur.

Now wrap your brain around a point you failed to see.

All I see is that you had no point that was visable.  Again, it's your theory.  It's not mine to prove your theory wrong, it's yours' to prove my objections wrong.  You havent' even tried to do that.  You're the one that stated it as an economic attack.  I simply preesented four simple counter forces to your theory.  If you cannot address those counter points, then you have no theory.  Your back in class, son.

The cartel has a % of the total network hashrate, and this % is always growing as they starve the rest of the network of transaction fees and delay transactions for the rest of the network.

But how does the idea tha tAmazon can mine it's own transactions lead to this conclusion?  It's a stretch by any metric.  I've seen no argument that they can, economic or otherwise; and I personally know of several effects in the protocol that would undermine any such efforts, economic incetives notwithstanding.  I haven't even touched on those points yet.

Thus they can delay transactions.

Thus?  You've just made a conclusio without an argumetn.  You are presuming your conclusion, really.

his is Bitcoin 101 stuff. Go read the Satoshi whitepaper again, you apparently failed to comprehend it entirely.

Nope.  I'm not the one who missed something there.  BTW, I do agree that a major player can delay[/b] the procesing of bitcoin transactions under certain conditions.  The obvious problem with this is that delays are part of the protocol, and thus delays are not, into themselves, an issue.  Your premise depends upon Amazon preventing competitors from mining on fee paying transactions outside of their own network scope.  This is not possible.  If you disagree, show me how] such a mechaism would work.  With details, not vague statements.

And I thus explained why this spirals to 100% over time.

You have done no such thing.  

Now please stop intentionally pissing me off and learn how to conduct a debate professionally and cordially by asking questions instead of making baseless statements.

Baseless?

Look whose acting all professional now.  You get one forum member who's been around long enough to have seen this crap before, and you just fall to bits.  This is why the developers don't pay you any mind, they know you're full of shit.

[calian]

Wow, page 4 and no mention of proof of stake yet? I think bitcoin will adopt proof of stake at some level in the next 20 years to remain competitive and reduce the massive electricity consumption it would otherwise involve. Also if mining hardware is available in the format of electric heaters, hot water heaters, etc. then decentralized miners will always be able to operate cheaper than miners in a data center.

Once you have stake mining in addition to proof of work mining it becomes much more expensive to dominate the network.

[AnonyMint]

MoonShadow is the type of person who is too stupid to understand (or too stubborn, I am not sure which) when he has been refuted. He will go on and on ad nauseum with noise, even after his points are clearly refuted.

I don't want to feed him, because he will never stop. He will try to bury the thread in noise.

The whole point of cartel is they won't let you in if you don't follow the rules. That is all I need to say to refute all that noise in his latest post above.

P.S. Besides any one who has been to amazon.com knows that amazon.com processes the payment for the order, not the vendors. But that isn't necessary to make my point above. Maybe he is thinking instead of Amazon payments, not Amazon vendors.


calin, I am aware the PoS would claim to avoid this attack. Also perpetual debasement of the coin is a fix with PoW.

[MoonShadow]

Wow, page 4 and no mention of proof of stake yet? I think bitcoin will adopt proof of stake at some level in the next 20 years to remain competitive and reduce the massive electricity consumption it would otherwise involve. Also if mining hardware is available in the format of electric heaters, hot water heaters, etc. then decentralized miners will always be able to operate cheaper than miners in a data center.

Once you have stake mining in addition to proof of work mining it becomes much more expensive to dominate the network.

Bitcoin might adopt proof of stake in the future, as the protocol does permit it to be spliced into the blockchain with some effort.  However, proof of stake is a much more complicated security model that has yet to prove itself.  Proof of work certainly works, even if it is computationally expensive.  However, proof of stake doesn't really alter his theory much, and might actually make it more likely if implimented poorly. 

[AnonyMint]

I thought miners were to be funded by the theoretical rise in value over time.

That doesn't make any sense. The miners have to earn something on each block they solve, else why would they continue to expend electricity and hardware ongoing.

To protect their prior blocks from being 51% attacked would be one reason.

If you can't be paid anything, you can't pay your electricity. Then you can't continue mining.

That coinbase transaction can't be spent for 120 blocks.

You missed the point that this entire thread is about when coin rewards diminish to near 0.

Please do not post in this thread again. You don't have the knowledge to post in this technical thread. Please. You are making noise.

If you continue to post batshit nonsense, I will raise this with the moderator. I want high quality rebuttals in this thread.