Transactions Withholding Attack

[freedomno1]

I digress that is off topic here but the point must be stated for the record


Is Bitcoin a Ponzi scheme?

In a Ponzi Scheme, the founders persuade investors that they’ll profit. Bitcoin does not make such a guarantee. There is no central entity, just individuals building an economy.

A ponzi scheme is a zero sum game. Early adopters can only profit at the expense of late adopters. Bitcoin has possible win-win outcomes. Early adopters profit from the rise in value. Late adopters, and indeed, society as a whole, benefit from the usefulness of a stable, fast, inexpensive, and widely accepted p2p currency.
The fact that early adopters benefit more doesn't alone make anything a Ponzi scheme. All good investments in successful companies have this quality.

I asked you to post that in the linked thread that discuss why it is a ponzi scheme. And you have not refuted the reasons given in the thread I linked to. Indeed early adopters can only profit at the expense of late adopters. And they can't exit, because the investment has no value other than as a ponzi (no significant currency use). The statistics prove bitCON can never be a currency. Distribution is lacking and can't be fixed (not without offchain fractional reserves which means bankruptcy and government regulation). Read the linked thread for why. And reply there if you want to.

Done now provide your solution to the problem in this thread

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[AnonyMint]

I refuted you over at the other linked thread. The solution is never stop coin rewards. That also improves the distribution problem, which fixes the fact that BitCON can never be a currency, as I explained in my rebuttal at the other thread.

[AnonyMint]

since bitcoin is, itself, resistant to regulation.

Hahaha. Hahahahahahaha!

Again, I don't need to disprove your theory.  I only need to point out objections.  If you can't defend your theory, then you don't have one.  I can prove that off-network transactions exist today, if I desire. I can tell you how to do some with a MtGox account, and I've done it many times before the Silk Road was brought down.  Coin-mixers do them as a matter of their primary function.  All that is required for them to grow in scope is for a market force to require them.  Something as simple as a percentage rise in the transaction fee would be enough.  A government crackdown would certainly do it.

I told you that offchain is irrelevant to whether my attack is an attack for onchain transactions.

Also offchain reintroduces 3rd party risk, which means government and courts will be involved. So same result and smell, the government gets control.

One.  Mining as a secondary effect to electro-resistive heating.  I.e. you can't undercut the miner who's rig heats his flat.  There is also whole threads regarding using asics embeddeding into heat cable to warm pipes.

Of free energy and perpetual motion!  

I didn't write "reduced" costs, I wrote "free" costs.

Two.  The Wal-mart|McDonalds|Sears alliance versus the Target|BurgerKind|JCPenny union.  Competing cartels can mine at a negative profit, because they're primary business is selling retail products, not mining for bitcoins.  

Great you argue against cartel attack by citing an alliance of large corporations a "free" mining option.  

As if they do it for free  

That happened long before you think, but why couldn't Microsoft gain a regulatory capture advantage over Linux?  Because it wasn't a company that could be regulated, it was simply the product of a new kind of development.  Open source.  Which turns out to be rather resistant to regulation by governments.  Bitcoin is open source, and p2p, and distributed.  All things deliberately designed to contribute to it's resitance to regulation.

And what do you think I am trying to do by explaining and defending this attack?

Fix it! With open source! And you are trying  to stop me!

Great logic you have there.  

[AnonyMint]

An alternative link where I summarized why bitcoin is a ponzi scheme and the reason the 21 million coin limit makes it unarguably so:

https://bitcointalk.org/index.php?topic=339876.msg3649398#msg3649398

[murraypaul]

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 reason the core developers won't debate with you is that you appear to be a know-all blowhard who simply ignores any posts that don't agree with your views, and repeatedly tell the entire world how much smarter you are than them.

You raise an irrelevant point about double-spends

You raised it, not me.

[AnonyMint]

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 reason the core developers won't debate with you is that you appear to be a know-all blowhard who simply ignores any posts that don't agree with your views, and repeatedly tell the entire world how much smarter you are than them.

ok, ok, ok, I see your dick size. Now...

Any way, you still haven't refuted my attack.

[murraypaul]

The cartel can give 0-confirmation transactions to its customers, because these are going to be repeat customers because the cartel covers so much commerce.

Everyone can give 0-confirm transactions to their customers.  That's a question of business risk, not capacity.  It happens now.  Please search for the fast-transaction problem and/or the vending machine problem.

Don't play dumb just to obfuscate the point.

The point is the cartel doesn't have delay transactions for its customers when it withholds them from the other miners.

YES IT DOES! The nature of the protocol requires that the cartel delay transaction processing for it's customers because it withholds them from other miners.  There is no way to avoid it!  That's what you can't wrap your head around!

INCORRECT!

You still didn't get the point.

The customer will never care that the transaction is delayed into the blockchain (delayed until the cartel's mining servers wins a block in the proof-of-work), because Amazon will give their customers 0-confirmation access to what they purchased.

So that delay is irrelevant.

That only works if the customer does not have control of their wallet, otherwise they could double-spend the money away from Amazon.
So Amazon must control the wallet.
In which case it could instead just manage everything off-chain instead, as current exchanges do.
So there are no transactions to withhold.

[AnonyMint]

The customer will never care that the transaction is delayed into the blockchain (delayed until the cartel's mining servers wins a block in the proof-of-work), because Amazon will give their customers 0-confirmation access to what they purchased.

So that delay is irrelevant.

Amazon won't care about it?

Sure, Amazon can trust its customers not to double-spend. But so can all the other merchants.

I already explained this upthread!

Customer would be banned from all cartel member sellers after one double-spend. Not very wise for the customer if the cartel is widespread in retail and online.

Also most purchases (not downloaded) ship after hours, so if the cartel has 15% of the network hashrate, any double-spend would be detected before shipping.

[AnonyMint]

The cartel can give 0-confirmation transactions to its customers, because these are going to be repeat customers because the cartel covers so much commerce.

Everyone can give 0-confirm transactions to their customers.  That's a question of business risk, not capacity.  It happens now.  Please search for the fast-transaction problem and/or the vending machine problem.

Don't play dumb just to obfuscate the point.

The point is the cartel doesn't have delay transactions for its customers when it withholds them from the other miners.

YES IT DOES! The nature of the protocol requires that the cartel delay transaction processing for it's customers because it withholds them from other miners.  There is no way to avoid it!  That's what you can't wrap your head around!

INCORRECT!

You still didn't get the point.

The customer will never care that the transaction is delayed into the blockchain (delayed until the cartel's mining servers wins a block in the proof-of-work), because Amazon will give their customers 0-confirmation access to what they purchased.

So that delay is irrelevant.

That only works if the customer does not have control of their wallet, otherwise they could double-spend the money away from Amazon.
So Amazon must control the wallet.
In which case it could instead just manage everything off-chain instead, as current exchanges do.
So there are no transactions to withhold.

This line of thinking was already refuted. See my replies to JoelKatz.

[klee]

The cartel can give 0-confirmation transactions to its customers, because these are going to be repeat customers because the cartel covers so much commerce.

Everyone can give 0-confirm transactions to their customers.  That's a question of business risk, not capacity.  It happens now.  Please search for the fast-transaction problem and/or the vending machine problem.

Don't play dumb just to obfuscate the point.

The point is the cartel doesn't have delay transactions for its customers when it withholds them from the other miners.

YES IT DOES! The nature of the protocol requires that the cartel delay transaction processing for it's customers because it withholds them from other miners.  There is no way to avoid it!  That's what you can't wrap your head around!

INCORRECT!

You still didn't get the point.

The customer will never care that the transaction is delayed into the blockchain (delayed until the cartel's mining servers wins a block in the proof-of-work), because Amazon will give their customers 0-confirmation access to what they purchased.

So that delay is irrelevant.

That only works if the customer does not have control of their wallet, otherwise they could double-spend the money away from Amazon.
So Amazon must control the wallet.
In which case it could instead just manage everything off-chain instead, as current exchanges do.
So there are no transactions to withhold.

This line of thinking was already refuted. See my replies to JoelKatz.

BTW he is a Ripple core dev

[mootinator]

An alternative link where I summarized why bitcoin is a ponzi scheme and the reason the 21 million coin limit makes it unarguably so:

https://bitcointalk.org/index.php?topic=339876.msg3649398#msg3649398

Somewhere in an alternate universe:

"Hey guys, we have definitive proof there's no more gold in the earth's crust."

"Shit! Sell sell sell!"

[AnonyMint]

An alternative link where I summarized why bitcoin is a ponzi scheme and the reason the 21 million coin limit makes it unarguably so:

https://bitcointalk.org/index.php?topic=339876.msg3649398#msg3649398

Somewhere in an alternate universe:

"Hey guys, we have definitive proof there's no more gold in the earth's crust."

"Shit! Sell sell sell!"

I guess you missed where I wrote the market cap will likely go to the $trillions first, and the market cap today is about $7 billion. So where does this "Shit! Sell sell sell!" nonsense come from?  

Who wrote about no more gold in the earth's crust?  

What universe are you reading from?

[murraypaul]

This line of thinking was already refuted. See my replies to JoelKatz.

If by refuted you mean: waved hands at, blustered and ignored, sure.
If Amazon control the wallet, there would be no reason for them to have on-chain transactions in the first place, they would do the entire accounting in-house. Just like exchanges do already.

[mootinator]

An alternative link where I summarized why bitcoin is a ponzi scheme and the reason the 21 million coin limit makes it unarguably so:

https://bitcointalk.org/index.php?topic=339876.msg3649398#msg3649398

Somewhere in an alternate universe:

"Hey guys, we have definitive proof there's no more gold in the earth's crust."

"Shit! Sell sell sell!"

I guess you missed where I wrote the market cap will likely go to the $trillions first, and the market cap today is about $7 billion. So where does this "Shit! Sell sell sell!" nonsense come from?  

Who wrote about no more gold in the earth's crust?  

What universe are you reading from?

You said the 21 million coin limit makes it unarguably a ponzi scheme. If we suddenly had mined all of the gold in the universe, would that magically make gold unarguably a ponzi scheme?

The limit has no influence on whether people perceive bitcoin to have value or not. However, as long as people perceive that it has value at all, the limit puts *positive* pressure on the price. You can't turn around and say that same limit is proof bitcoin is a ponzi scheme.

[JoelKatz]

One thing that all of you have failed to do is argue why I shouldn't fix the attack?

Do you have a problem within fixing threats?

Sounds like you love to leave things broken.

So all this tit-for-tat is really a waste of my time. If we just fix the problem, then nothing more to argue about.  

You don't turn the steering wheel 15 miles before a curve that may never come.

There are definitely some cases where fixing a problem early has huge advantages. For example, if you're developing a product, it's better to fix a problem in the design stage than after manufacturing. And it's better to fix it after manufacturing than after shipping. And so on.

But when the problem is a possible problem for the far future, there are huge disadvantages to fixing it early. For one thing, the technology available to fix it will get better the longer you wait. The problem may never even materialize, in which case the effort expended to fix it is wasted. Other problems may actually materialize and it may be possible to fix both problems with the same effort. The attempt to fix the problem may create a risk of other problems that are more serious or more likely to appear.

Basically, you have to prioritize resources. If you can propose a fix and make the case that the effort and risks associated with the fix exceed the risk associated with the attack, then maybe you have something. But "I have an obscure theoretical risk that might or might not materialize in the future under circumstances that might or might not be plausible, why don't you all work to fix it?" doesn't cut it.

[MoonShadow]

The cartel can give 0-confirmation transactions to its customers, because these are going to be repeat customers because the cartel covers so much commerce.

Everyone can give 0-confirm transactions to their customers.  That's a question of business risk, not capacity.  It happens now.  Please search for the fast-transaction problem and/or the vending machine problem.

Don't play dumb just to obfuscate the point.

The point is the cartel doesn't have delay transactions for its customers when it withholds them from the other miners.

YES IT DOES! The nature of the protocol requires that the cartel delay transaction processing for it's customers because it withholds them from other miners.  There is no way to avoid it!  That's what you can't wrap your head around!

INCORRECT!

You still didn't get the point.

The customer will never care that the transaction is delayed into the blockchain (delayed until the cartel's mining servers wins a block in the proof-of-work), because Amazon will give their customers 0-confirmation access to what they purchased.

The merchant will care.  He will not get paid until the transaction is processed.  If the transaction is withheld from the majority of the miners, that opens an opprotunity for a double spend attack after product has been shipped.  This will harm merchants directly, and they will either not accept bitcoin transactions via Amazon at all (nullifying your trhoery altogether) or only accept bitcoin transactions with the added garantee from Amazon against double spend fraud.  This will hurt Amazon.

[MoonShadow]

One thing that all of you have failed to do is argue why I shouldn't fix the attack?

Because you don't know what you are doing.  You're welcome to start your own alt-coin, however, and see how it turns out.  Nothing is stopping you.

[MoonShadow]

Again, I don't need to disprove your theory.  I only need to point out objections.  If you can't defend your theory, then you don't have one.  I can prove that off-network transactions exist today, if I desire. I can tell you how to do some with a MtGox account, and I've done it many times before the Silk Road was brought down.  Coin-mixers do them as a matter of their primary function.  All that is required for them to grow in scope is for a market force to require them.  Something as simple as a percentage rise in the transaction fee would be enough.  A government crackdown would certainly do it.

I told you that offchain is irrelevant to whether my attack is an attack for onchain transactions.

Just because you say it, does not make it so.

Also offchain reintroduces 3rd party risk, which means government and courts will be involved. So same result and smell, the government gets control.

It may or may not reintroduce 3rd party risk.  Consumers may or may not be willing to invite government back into their economic activity.  Doesn't matter, it's their choice.  But if the majority of small value transactions are off-network, the majority of Amazon-cartel's transactions will have no mining value anyway.

One.  Mining as a secondary effect to electro-resistive heating.  I.e. you can't undercut the miner who's rig heats his flat.  There is also whole threads regarding using asics embeddeding into heat cable to warm pipes.

Of free energy and perpetual motion!  

I didn't write "reduced" costs, I wrote "free" costs.

Reduced costs are free costs to someone.  Please respond to the effect that sero profit margin miners would have upon your theory.

Two.  The Wal-mart|McDonalds|Sears alliance versus the Target|BurgerKind|JCPenny union.  Competing cartels can mine at a negative profit, because they're primary business is selling retail products, not mining for bitcoins.  

Great you argue against cartel attack by citing an alliance of large corporations a "free" mining option.  

As if they do it for free  

They would do it for free, because it would still be cheaper at scale than their current "cost centers" for online commerce security, as well as the overhead with the handling and security with regard to both credit card transactions and cash transactions today.  Do you think that armored cars are costless?  That IT security gurus work cheap?  That Walmart puts cameras above every cash register because they trust their $7.50 per hour part time cashiers to be trustworthy with hundreds or thousands of cash dollars?

That happened long before you think, but why couldn't Microsoft gain a regulatory capture advantage over Linux?  Because it wasn't a company that could be regulated, it was simply the product of a new kind of development.  Open source.  Which turns out to be rather resistant to regulation by governments.  Bitcoin is open source, and p2p, and distributed.  All things deliberately designed to contribute to it's resitance to regulation.

And what do you think I am trying to do by explaining and defending this attack?

Fix it! With open source! And you are trying  to stop me!

Great logic you have there.  

I'm not trying to stop you from fixing whatever you think is broken, just don't try to fis inside Bitcoin.  Go start an alt-chain, and if you're right about the problem, as well as how to fix it, then you will profit.  For that matter, considering your proposed fix, you don't even have to start a new coin, inflation coins without the block reward reductions already exist, and have for years.  Go have fun.

[MoonShadow]

The customer will never care that the transaction is delayed into the blockchain (delayed until the cartel's mining servers wins a block in the proof-of-work), because Amazon will give their customers 0-confirmation access to what they purchased.

So that delay is irrelevant.

Amazon won't care about it?

Sure, Amazon can trust its customers not to double-spend. But so can all the other merchants.

I already explained this upthread!

Customer would be banned from all cartel member sellers after one double-spend. Not very wise for the customer if the cartel is widespread in retail and online.

Also most purchases (not downloaded) ship after hours, so if the cartel has 15% of the network hashrate, any double-spend would be detected before shipping.

There is no way that this cartel starts with anything near 15% of the hashrate.

[AnonyMint]

But if the majority of small value transactions are off-network, the majority of Amazon-cartel's transactions will have no mining value anyway.

Ifs have nothing to do with my attack. We can debate if there will be nuclear winter this year too. I am not here to debate every possible exogenous factor in the universe.

If the blockchain is not the majority, we no longer have decentralized currency any way. Private offchain currencies means cheating and fractional reserves, which means failures and government intervention.

Reduced costs are free costs to someone.

No they are not. Zero fees still bankrupts a miner with very small costs.

inflation coins without the block reward reductions already exist, and have for years.

Obviously inflacoin is not compelling, because high levels of debasement are not very enticing to those who think a small coin supply returns greater ponzi system gains (oh we know they rationalize away that it is really a ponzi scheme so they don't pay attention to that tradeoff of not distributing new coins perpetually).

Large debasement and no other significant advances over Bitcoin are not going to succeed in the market place.