Is Bitcoin subject to a "Hostile TakeOver" ?

[ryepdx]

That has probably already happened, perhaps more than once.  That would be one reasonable cause of the spike and drop in hashing power about two weeks ago.

You know, it seems to me that a person could create a crude form of leverage by directing a botnet attack on the network at large and then using whatever mining rig they have to mine while everyone else is impeded. This could be used to artificially lower the difficulty and increase the percentage of the network's hashing power their box is contributing. This could prove lucrative depending on how much leverage is possible using such a technique.

[MoonShadow]

That has probably already happened, perhaps more than once.  That would be one reasonable cause of the spike and drop in hashing power about two weeks ago.

You know, it seems to me that a person could create a crude form of leverage by directing a botnet attack on the network at large and then using whatever mining rig they have to mine while everyone else is impeded. This could be used to artificially lower the difficulty and increase the percentage of the network's hashing power their box is contributing. This could prove lucrative depending on how much leverage is possible using such a technique.

The network-at-large is pretty large.  I would doubt a DDOS attack would be effective.

[MoonShadow]

That has probably already happened, perhaps more than once.  That would be one reasonable cause of the spike and drop in hashing power about two weeks ago.

You know, it seems to me that a person could create a crude form of leverage by directing a botnet attack on the network at large and then using whatever mining rig they have to mine while everyone else is impeded. This could be used to artificially lower the difficulty and increase the percentage of the network's hashing power their box is contributing. This could prove lucrative depending on how much leverage is possible using such a technique.

The network-at-large is pretty large.  I would doubt a DDOS attack would be effective.

The largest botnet on record is BredoLab, 30,000,000 zombies strong. Let's say that the zombies are only single core capable of 2 Mhash/s, and only 10% of the processor power is being robbed for a total hashing power per zombie of 200 Khash/s ... A total of 2e+5 * 3e+7 = 6e+12 hash/s ... Yeah, that's a threat.

Unless the network grows significantly, or a protocol is developed for filtering 'valid' connections on the network this will continue to be a threat.

No, that's not a threat.  This just goes to show that it would be profitable for a botnet owner to mine using the botnet, which wouldn't harm the network at all, and would actually help it grow stronger.  What he was describing was blockading a majority of the honest network (probably by identifying the largest pools and other large miners that share an IP address) and denying those nodes access to the network in some fashion.  My point was that this probably isn't possible, because although a botnet could DDOS a large number of those major players, all of the smaller miners that the botnet isn't aware of (or simply doesn't have the size to attack) benefit as well, so the attack isn't viable.  As you have pointed out, it would be vastly more profitable for the botnet owner to simply bend his stolen clockcycles to actually mining in a 'honest' fashion.  For all we know, this is already happening.

[MoonShadow]

What he was describing was blockading a majority of the honest network

Such a botnet could also do this.

For a limited time, sure.  However, even if you could isolate every known node from one another, you would still have to be (or connected to) the largest of the isolated networks.  A botnet can't realisticly stop these nodes from generating while isolated.  Artforz, alone, once represented 5%+ of the network and his setup is on a private network, not a pool.  So even if a botnet was large enough to fracture the network, the botnet owner's clients would have to be able to out run Artforz, any other miner of equal or greater capacity, and the total of the clients that it couldn't blockade.  For the blockade must end eventually; and when the network reconsolidates, the blockchain with the greatest proof-of-work still wins.  That could be the botnet owner, but it might not.  Participating honestly in the mining is still the best overall business plan.  This is actually part of the point of the way the mining system was designed.

As you have pointed out, it would be vastly more profitable for the botnet owner to simply bend his stolen clockcycles to actually mining in a 'honest' fashion.

This will not always be the case.

Sure, but by the time it's not, the size of the Bitcoin network will be much larger than any botnet.  And this kind of plan assumes that the major players in the network right now just sit back and do nothing while a DDOS attack persists upon the network.  This is unlikely, and all that it would take to completely deny the botnet owner his ill-gotten gains would be for Artforz to set up a couple of modems on his network and connect directly to a couple other major players to directly trade blocks.  Furthermore, there is no certainty that such an emergency physical peer connection network isn't already up and running.  How would we know if Artforz and the other major miners have privately discussed this or not?  With the capital costs that these miners have already commited to their systems, a few modems and a script to call one another directly over POTS (even if it were long distance) would be a small additional cost.

If they haven't already discussed this, they will be shortly after seeing this thread.

[MoonShadow]

What he was describing was blockading a majority of the honest network

Such a botnet could also do this.

For a limited time, sure.  However, even if you could isolate every known node from one another, you would still have to be (or connected to) the largest of the isolated networks.  A botnet can't realisticly stop these nodes from generating while isolated.  Artforz, alone, once represented 5%+ of the network and his setup is on a private network, not a pool.  So even if a botnet was large enough to fracture the network, the botnet owner's clients would have to be able to out run Artforz, any other miner of equal or greater capacity, and the total of the clients that it couldn't blockade.  For the blockade must end eventually; and when the network reconsolidates, the blockchain with the greatest proof-of-work still wins.  That could be the botnet owner, but it might not.  Participating honestly in the mining is still the best overall business plan.  This is actually part of the point of the way the mining system was designed.

30,000,000 nodes and 12 times the current network capacity... Just sayin'.

For the largest botnet ever discovered...Just sayin'.

If you think your botnet is up to the challenge, give it a try.

[MoonShadow]

For the largest botnet ever discovered...Just sayin'.

If you think your botnet is up to the challenge, give it a try.

Yes, that is just the largest botnet ever discovered...

BredoLab was over twice the size of Mariposa, in the space of only a year.

Imagine a 60,000,000 strong botnet, one which is also able to harness GPU power... Where will Bitcoin be in a year?

I can't disprove a negative.

I'll just say, give it a try.  See how it works out.

[Gavin Andresen]

RE: botnets:  if the botnet operator is economically rational, then their best strategy to make money is to just follow the rules, mine coins, and then sell them on the exchanges.

RE: the original poster's question on "can somebody with lots of money and a willingness to spend it to mess with the bitcoin exchange rate and cause fear, uncertainty and doubt" :

Yes.  Yes, they can.  That will be true while the bitcoin economy is small, and that is why I tell people not to 'invest' money in bitcoins that they can't afford to lose.

I still predict that there will be natural price bubbles and artificial ponzi schemes and all sorts of other things causing wild swings in the value of bitcoins.   Next time I talk to an economist who knows something about currency markets I'll have to ask how big a currency has to be before it is mostly immune from speculative bubbles and price manipulation...

[marcus_of_augustus]

I still predict that there will be natural price bubbles and artificial ponzi schemes and all sorts of other things causing wild swings in the value of bitcoins.   Next time I talk to an economist who knows something about currency markets I'll have to ask how big a currency has to be before it is mostly immune from speculative bubbles and price manipulation...

From experience, the answer to that is never. E.g. the US dollar is the biggest reserve currency the globe has ever known and by some accounts it has just gone through, or is going through, a speculative bubble blow-off phase with reserve banks all heavily invested in US dollar denominated assets that they are beginning to unload on. Gold is the next biggest, depending on how you do the valuations, and more stable but has been subject to periodic manipulations and manias also.

Currency failure risk is always there, however remote, because humans' value systems can be extremely stable or extremely fickle.