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Author Topic: Proof of Work: Limit node hashrate to improve decentralisation?  (Read 277 times)
HeRetiK
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June 07, 2018, 11:27:08 AM
 #21

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The "profit and greed" issue has a slightly different aspect. Attacking a PoW coin with 51% would make you lose no money other than what you have spend on energy cost. The mining rig you used for that attack (if it's yours at all) could be sold after the work is done and compensate a part of the energy cost. With PoW you don't need to have any value in the Blockchain, you can point your miners at any Blockchain you desire and the coins you earn will be spend for your profits. In other protocols you risk your own investment in the Blockchain when you attempt to attack it, or as Vitali put it: "Attacking proof of stake is like buying the biggest mining rig and set it on fire".


Running a full-on 51% attack would likely severly devaluate the PoW coin in question though, which leads to the following:

1) Opportunity cost (ie. by destroying the value of the coin, you also destroy the value of the received block reward)

2) If the PoW coin runs on ASICs, finding a buyer for the mining hardware of the coin you just destroyed won't be easy. Especially at the scale required for a 51% attack.

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June 07, 2018, 12:25:29 PM
 #22

Running a full-on 51% attack would likely severly devaluate the PoW coin in question though, which leads to the following:

1) Opportunity cost (ie. by destroying the value of the coin, you also destroy the value of the received block reward)

That is true when the foul spending is significantely smaller than the 12.5 BTC (or later on even less). That is a far smaller value you'd destroy than when you have to buy 51% of all coins in existence to attack PoS.

2) If the PoW coin runs on ASICs, finding a buyer for the mining hardware of the coin you just destroyed won't be easy. Especially at the scale required for a 51% attack.

Well as for SHA256 there are plenty of coins to mine on, take alone all the BTC forks.

And both don't apply to governments and other that just want to harm cryptos in general. And please mind the fact that here it was also said that there is an issue with single manufactors having too much power over the mining industry with their firmware and that there are backdoors has been shown with "antbleed".

As for a discussion of security matters, I always found the motivation of a possible attacker not a valid argument. It's like when someone asks why someone should use a secure password for Facebook or their email since they have nothing to hide. You can never expect a reasonable motivation of an attacker.

The one of the biggest strenghts of Blockchains is the decentralisation of the ledger and a pure peer 2 peer network to maintain asset operations. This however doesn't exist if the Blockchain is not well decentralized at all.
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June 08, 2018, 06:04:16 AM
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 #23

I believe Bitcoin "fixed" that "problem" by embracing the miner' greed. The side effect of a mining "arms race" would be a more secure network.

How does that fix the problem I described?

Before imtroducing "antbleed" give us a short explanation about it.

That's why I posted the link, it's explained there in detail. The code backdoor was fixed already but the problem remains, when a single manufactor basically has control over a large part of the hashrate. In "antbleed" there was a code in the firmware, that allowed Bitmain to shutdown miners, collected metadata about miner usage, expose miner users to government and also could be exploited by third parties due to vulnerability in the backdoor code.

With Bitmain's maschines providing most of the global hashrate, this is still an issue since there is still the possibility for more intended or unintended vulnerabilities in the firmwarecode.

Maybe "fixed" is not the right word. But we already know that mining is more complicated than "profit" and "greed". There are risk and reward ratios at play if the miner or a group of miners do foul play.

The miners remember BIP148 and NO2X very well.

Yes, there are risks but the risks are at 0% when you have 51% of the network weight. Anything below 51% can make your foul play fail, at 25% you have a 1% chance of success over 10 confirmations. But as soon as you pass 50% you have 100% of success for your foul play, no matter how many confirmations from the network (all full nodes) you get. The propability graph is expotential with reaching 100% at >50%


In theory your risks are "0" if your only goal was to attack the network and did not mind losing the money spent on the attack. From what I learned, Bitcoin works because it embraces the possibility that it might be attacked, but risks always outweigh the reward.

Maybe the reason why Bitcoin is still standing is because it appeals to the interest of all the miners and the network to be in a state of equilibrium.

Quote

Ok.

Quote
BIP148 and NO2X don't fix the majority attack at all.

The "profit and greed" issue has a slightly different aspect. Attacking a PoW coin with 51% would make you lose no money other than what you have spend on energy cost. The mining rig you used for that attack (if it's yours at all) could be sold after the work is done and compensate a part of the energy cost. With PoW you don't need to have any value in the Blockchain, you can point your miners at any Blockchain you desire and the coins you earn will be spend for your profits. In other protocols you risk your own investment in the Blockchain when you attempt to attack it, or as Vitali put it: "Attacking proof of stake is like buying the biggest mining rig and set it on fire".

Haha. But they will lose, everyone loses. The coins will be worthless, the exchanges might stop trading them, and the users will leave. The miners can sell their equipment but it would have been more profitable if they mined the coin honestly. Risks and rewards.

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June 08, 2018, 10:36:03 AM
 #24

In theory your risks are "0" if your only goal was to attack the network and did not mind losing the money spent on the attack. From what I learned, Bitcoin works because it embraces the possibility that it might be attacked, but risks always outweigh the reward.

Maybe the reason why Bitcoin is still standing is because it appeals to the interest of all the miners and the network to be in a state of equilibrium.

The reason 51% are not tried right now is that it is just impossible for a single person to get the ~17 Exahash/s you'd need. That's said for a single person, but not for a pool and also not for a manufactor of a miner who everyone uses. And if you manage to attack the miner's firmware, you'd lose no money at all, same if a pool reaches 51% and you'd attack it.

Quote
BIP148 and NO2X don't fix the majority attack at all.
Haha. But they will lose, everyone loses. The coins will be worthless, the exchanges might stop trading them, and the users will leave. The miners can sell their equipment but it would have been more profitable if they mined the coin honestly. Risks and rewards.

See above. Also, as said, in PoW miners generally don't care in the coin's health after they cashed out their profit, because they don't need to care about that. They will just move on to the next profitable SHA256 coin and continue. That's because miners in PoW don't have to hold any share in the Blockchain's value. That is different with PoS or with a PoW where you'd have to put a bail on a coin for each block you submit. If miners would care about a coin's health, they wouldn't all just cluster up on the same pools.
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June 08, 2018, 01:02:14 PM
 #25

And if you manage to attack the miner's firmware, you'd lose no money at all, same if a pool reaches 51% and you'd attack it.

If you would manage to compromise 51%+ of ASICs, how would you maintain the full control over them? What would you try to 'destroy' the network?
Regardless of what you will do with those ASICs to attack the network, it will be WAY LESS profitable than just using them for mining (or destroying them to increase the actual percentage of 'own' hashrate) while you have control over them.



See above. Also, as said, in PoW miners generally don't care in the coin's health after they cashed out their profit, because they don't need to care about that. They will just move on to the next profitable SHA256 coin and continue.

If bitcoin would suffer a 51% attack maintained over multiple hours, the whole cryptomarket would drop in value.
An attacker couldn't 'move on' to the next coin. They all would be worthless. The altcoins would be crashing first, followed by BTC.

This additionally assumes an attacker is able to cash out in a timeframe between the 51% attack and the markets reaction to such an attack, which does not necessarily apply.

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June 08, 2018, 05:58:35 PM
 #26

This topic is getting ways out of rail, by @mindphuq imo.

I am hardly trying to avoid engaging, but I think it is necessary to remind  that bitcoin has survived enough to prove the solidity of PoW and PoS is just an (both theoretically and practically) unproven alternative unlike what this guy is repeatedly insisting on.

Anyway I think it is not an appropriate practice to come to a topic that is simply about improving PoW this or that way, discussing PoS (weakly if not ridiculously) claimed PoS advantages over PoW and hijacking the thread.

Speaking of improving PoW, I have just started a topic, definitely related to what op has asked in the first post.  obviously, @mindphuq is not invited  Tongue
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June 09, 2018, 04:09:58 AM
 #27

In theory your risks are "0" if your only goal was to attack the network and did not mind losing the money spent on the attack. From what I learned, Bitcoin works because it embraces the possibility that it might be attacked, but risks always outweigh the reward.

Maybe the reason why Bitcoin is still standing is because it appeals to the interest of all the miners and the network to be in a state of equilibrium.

The reason 51% are not tried right now is that it is just impossible for a single person to get the ~17 Exahash/s you'd need. That's said for a single person, but not for a pool and also not for a manufactor of a miner who everyone uses. And if you manage to attack the miner's firmware, you'd lose no money at all, same if a pool reaches 51% and you'd attack it.

A manufacturer attacking a coin where its own machines are neing used would be stupid. The would be shooting themselves in the HEAD. Hahaha!

Quote
Quote
BIP148 and NO2X don't fix the majority attack at all.
Haha. But they will lose, everyone loses. The coins will be worthless, the exchanges might stop trading them, and the users will leave. The miners can sell their equipment but it would have been more profitable if they mined the coin honestly. Risks and rewards.

See above. Also, as said, in PoW miners generally don't care in the coin's health after they cashed out their profit, because they don't need to care about that. They will just move on to the next profitable SHA256 coin and continue. That's because miners in PoW don't have to hold any share in the Blockchain's value. That is different with PoS or with a PoW where you'd have to put a bail on a coin for each block you submit. If miners would care about a coin's health, they wouldn't all just cluster up on the same pools.

But miners should care, and they really do. Failure of the network would mean a failure in there mining operation.

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June 09, 2018, 02:09:40 PM
 #28

But miners should care, and they really do. Failure of the network would mean a failure in there mining operation.

Maybe they should but they are not required to in order to run a PoW farm.
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