Ethereum could afford a 51% attack on Bitcoin, and profit greatly from it

[tradingtalks]

Really fascinating read! Your analytical insights into this theoretical attack vector are quite enlightening. While these are serious concerns that should not be overlooked, it's always refreshing to see these discussions as they push for progress and contribute to better security measures in the world of cryptocurrency. Bitcoin has weathered many storms before, and it will be interesting to see how the community works towards mitigating this potential threat. Looking forward to more of your thought-provoking posts!

[franky1]

The fluctuations of the price of Ethereum does seem to follow those of the price of Bitcoin as far as I can see. The way I see it, perhaps as naive as I am, this indicates that these fluctuations are due to investors' overall confidence/regard for cryptocurrency fluctuating (put in simplified terms), whereas the relative regard for value of Ethereum vs. the value of Bitcoin remains comparatively constant in the meanwhile.

You seem to think that this is wrong. Is this an opinion you see mirrored elsewhere? Am I simply out of the loop in terms of how cryptocurrency is valued?

Is its price not ultimately based on how useful the investors foresee it to be as currency, and thus how many people will draw utility from the it and use it as a means of payment, in the present as well as in the future?

You also talk of some mechanism that ensures that the price of Bitcoin will never fall below a certain threshold. Can you perhaps provide a link or reference explaining this, or can you elaborate a bit more? It seems a tad unbelievable to be quite honest, but I'm happy to be corrected.

firstly. the linkage of the movements of the bitcoin and ethereum market are clear that ethereums market is shadowing bitcoin. because bitcoin has known market cycles and if ethereum was independent it would not be following bitcoins market cycles. so when it does follow bitcoins market cycles, its obvious that its ethereum that is the follower

also its not a case of bitcoiners dumping their bitcoin to move to ethereum and stay with ethereum. its instead a financial action called arbitrage where by traders loop around the markets to get back to their base currency to repeat opportunities again
(arbitraging is fun. but was way more fun years ago when it was just a opportunity between LTC and BTC as the swings were wide and more often)
when comparing many market pairs of different altcoins you can start to see which coins are leaders and which are followers. ethereum is not a leader
...
as for the certain thresholds. you can use the market history. and compare it to other data
for instance if you measured the hashrate average of 2021-2022 and worked out rational lowest global electric prices and calculated out the (then) generation of asics to come up with most economic global mining cost you will then see that the 2022 period tested the bottom.
this can be seen in other times too when the market bottoms were tested and compare it to those times economic cost lows.
you can then do the same for the most expensive regions and get a top(premium) and then see the periodic tops being tested. such as the 2021 ATH as well as other ATH

this is where the international market of bitcoiners know these numbers where those in the most expensive regions will happily buy all the way to the top if the market swayed in their direction but even they have a cut off point where they decide things are getting a lil too crazy
and as said a few times now about the periodic bottoms that when bitcoin cannot be acquired any cheaper people stop selling for less and it creates the supportive bottom no one wants to cross

its called economics
same applies to many assets that have real world costs. things like gold is backed and has a bottom the market wont go below due to the mining costs,

there is actual reasons why markets bottom out at certain levels periodically and topout at certain levels periodically
bitcoin topped out at $70k in 2021 for good economic logical reason..
bitcoin in 2024 has a higher window than you think right now and has not actually tested the top yet(thats the fun of next year) its currently being held down at the $70k level by whales that only have trade algo patterns that only work based on old limit data so they are holding it back until the market cycle is ready to push forward, which would be around the time the miners with lengthy hardware and electric contracts that expire and they evaluate their coins earned vs their next contract cost to calculate how much to sell coin for, for the next market cycle in 2025
(there are reasons ATH happen a year after a halving)

[coolcoinz]

firstly. the linkage of the movements of the bitcoin and ethereum market are clear that ethereums market is shadowing bitcoin. because bitcoin has known market cycles and if ethereum was independent it would not be following bitcoins market cycles. so when it does follow bitcoins market cycles, its obvious that its ethereum that is the follower

That's a great point.
ETH would not profit from attacking bitcoin because:

1. It would have to allocate tremendous resources into that and it would not destroy the network. All it would do is prove that with enough effort it can be done, but we all know it can be done and we all know it such attack cannot be sustained. It's like a DDOS on the whole country. You could do it and cut a country from the Internet for a while, but how much it would cost you and how long would you be able to sustain it?

2. A panic on the bitcoin market would most likely cause a panic on all other coins. If this attack was only to buy more of everything, that might work, but it would not make people flock from one coin to the other. The whole crypto industry is a big ecosystem.

3. What do you thing would happen if bitcoiners found out Vitalik and team are behind the attack? He'd climb above SBF and CSW to become the most hated person in the industry.

[mjdamgaard]

...Yes, it would take some time if the Ethereum stakeholders choose to set up the farms themselves, but it can be be done, even if it will take several months....

YEARS not months. That much excess mining gear does not exist, so you would have to have been stockpiling for at least a year if not 2 or 3 to get that amount of gear. Or you could just take over the used markets and buy it all but then you are suffering from having an mixed batch of used equipment you have to deal with.

Fair enough, let's agree to assume that it could take years (i.e. given that the existing Bitcoin miners are somehow very loyal and cannot be bought by the competitors/attackers).

So, do you really thing while someone is buying billions and billions of dollars of mining gear over a couple of years (and not mining with it) nobody is going to notice.
Remember, other people will keep buying gear and increasing difficulty and that would make you have to buy even more gear (and not mine with it) otherwise you will be driving up the difficulty on yourself.

ETH being a POS coin with as I stated above 60% of it's capacity at 3 providers would be easier and cheaper to kill. Think about it $20 billion will get you 1% of Amazon stock and a complete buyout of Hetzner & OVH
With 1% control of the Amazon stock it would be simple to put a proposal out to the board an have them shut down all ETH nodes hosted there along with the others you could take out 60% of the ETH nodes leaving people hanging. And then watch as a bunch of the remaining stakers all start to sell to get their coins out before the total crash.

Could probably do it for a lot less Hetzner has 18% of all ETH nodes out there and the company is valued at less then $3 billion OVH has 12% of the nodes and it valued at a lot less add in a couple of others for for $5 billion you could control over 35% of the ETH nodes and close to 50% of the staked nodes. Then you come in one morning and shut them all off. Sit back and watch the chaos.

Most people staking have no idea what to do or how it works, all the know is they clicked a few keys and now their ETH is earning less then having sold it for cash and putting that cash in a savings account. (3.25% give or take for ETH vs 4%+ for a good savings account and if you want to lock up your cash like the ETH stake people have their ETH locked up you can get 5%+ on a short term CD)

If someone (or some government) wanted to attack BTC there are better / cheaper ways of doing it then mining. EVERYONE knows this more or less. And as I keep pointing out since no person / government has done it it just kind of proves that they know that even if massively attacked BTC would improvise & adapt & overcome.

-Dave

Oh no, on the contrary. I don't think that they will be able to keep it a secret at all, nor do they need to. Secrecy is a requirement if you plan to make a replay attack where you also aim to trade the stolen Bitcoin for other commodities. But as mentioned in a previous reply, this is not the goal for a Goldfinger attack.

In fact, the less secret the attack is, the better. Since the ultimate goal is to a crash the value of Bitcoin, rather than the steal itself, it is (in my view) better to let the attack be as public as possible. Hereby the attackers can hope that the Bitcoin investors will start to get uneasy already when the attack is underway, and that some of them will start to abandon ship before the rest, causing the attack to become even cheaper. (But this last point is currently an ongoing discussion on this thread, i.e. whether a drop of the price of Bitcoin would make the attack even cheaper.)

About the potential for a reverse attack, do you then believe that Bitcoin would actually be able to profit from such a "rival Goldfinger attack" on Ethereum?

It certainly goes against the whole philosophy of PoS, which is that since the 51%-attackers will have to become stakeholders of the blockchain in order to get 51% of the vote, it will never be in their interest to attack it. Especially if we believe the word of the Ethereum community, and assume that the whole group of stakeholders would just vote to revert a 51% attack in case it happens, then it does seem unlikely that a Goldfinger attack would work against Ethereum.

In terms of "improvising and adapting" to overcome a Goldfinger attack, I think that Bitcoin would be much better off by making sure to plan ahead of what to do in case of such an attack, in order to prevent investors getting uneasy and start moving their assets away from Bitcoin.

[mjdamgaard]

I'm almost sure that these effects would make the attack a huge loss for the attackers. Well, as long as they don't short Ethereum too (and other blockchains ...) while they perform the attack (this may actually a real vulnerability for a coordinated attack against crypto as a whole ... but supposedly there are not enough coins to short)

Doesn't matter if there'd be enough coins to short though; in the end shorts are just IOUs and as we all know that there's no limit to those, at least if we talk about shorting on centralized exchanges. It would still be a risky play though, given that squeezing shorts can be just as profitable.


--


Either way, as interesting as I find this whole discussion to be, there are probably cheaper and more effective ways to sway the market in one way or another.

Imagine what you could do with even the low end of $6 billion. That's 17 times the budget of Avengers: Endgame, except it's a whole cinematic universe about crypto (tacky, I know, please don't do this). 8 stadiums like the crypto.com arena, except the crypto-community builds and owns it, instead of merely sponsoring it. Provide UBI for a small town of 1,500 people (named after the cryptocurrency of your choice), each receiving a yearly income of 50k over a lifespan of 80 years.

Or, you know, just buy a handful of politicians.

I believe either of these would probably more effective than attempting a 51% attack on Bitcoin.

I'm sure that you are right to some extent, but then again, by that logic, the Ethereum investors, as well as Bitcoin investors, should then all pursue these ventures and make their fortunes double in no time.

If we assume the hypothesis that Ethereum would fully conquer Bitcoin's share of the cryptocurrency market if Bitcoin is reduced to almost nothing, then we are talking about a growth of the investors assets of ~200% over just a matter of a few years (or perhaps less, in theory).

If they knew other investment ventures that could come even close to competing with that, they would certainly invest all their money in those, rather than being crypto investors.

[mjdamgaard]

Really fascinating read! Your analytical insights into this theoretical attack vector are quite enlightening. While these are serious concerns that should not be overlooked, it's always refreshing to see these discussions as they push for progress and contribute to better security measures in the world of cryptocurrency. Bitcoin has weathered many storms before, and it will be interesting to see how the community works towards mitigating this potential threat. Looking forward to more of your thought-provoking posts!

Thank you very much!

[anarkiboy]

What's the point of attacking Bitcoin when it's designed to self-destruct ? (halvings+not enough tx fees to cover miners)

 

[franky1]

If we assume the hypothesis that Ethereum would fully conquer Bitcoin's share of the cryptocurrency market if Bitcoin is reduced to almost nothing, then we are talking about a growth of the investors assets of ~200% over just a matter of a few years (or perhaps less, in theory).

you keep circling the weird, silly, foolish notion that the marketcap ranking have real dollar/% value

how about create a altcoin of 1trill coins and sell 0.01coin for $1 and see that you just created a #1 market cap of $100trillion for just $1

please realise that the market cap numbers are not at all related to any true $ amount held anywhere. people dont get richer via market cap numbers

[mjdamgaard]

If we assume the hypothesis that Ethereum would fully conquer Bitcoin's share of the cryptocurrency market if Bitcoin is reduced to almost nothing, then we are talking about a growth of the investors assets of ~200% over just a matter of a few years (or perhaps less, in theory).

you keep circling the weird, silly, foolish notion that the marketcap ranking have real dollar/% value

how about create a altcoin of 1trill coins and sell 0.01coin for $1 and see that you just created a #1 market cap of $100trillion for just $1

please realise that the market cap numbers are not at all related to any true $ amount held anywhere. people dont get richer via market cap numbers

@franky1, you bring a lot of knowledge and insight to this discussion, and I for one am thankful for that.

I promise to get back to you on your earlier points. By the way, I'm back to civilization now, so I can hopefully answer more frequently from now on.

In terms of your last point, yes, I have indeed been working with a perhaps simplified assumption, in my work and in my arguments for this discussion, that the price of Ethereum is not inflated.

You are right that if I were able to convince a only small number of people that my altcoin, in your example, is worth $1, then I would appear to have a much greater fortune than I actually have.

However, if I were able to convince the world (or a sufficiently large number of people) of that value, and were able to sell them all, then I would indeed have that fortune.

You argue that Ethereum is inflated. That's fair. Your claim that it is inflated to the point that 5% of stakeholders can't move their assets without causing a crash seems a bit wild, though.

However, you have made some arguments about why it is inflated that I have yet to answer, so let me get back to you.

And in the meanwhile, just know that I understand what you mean when you say that you don't think the market cap represents Ethereum's true value, and that investors won't be able to withdraw it all, and especially not if they do it simultaneously.

Edit:
Let me also just briefly repeat my earlier point that the Ethereum investors will generally also own other kinds of assets with all likelihood. So even if we accept your claim that their Ethereum investments are are so fragile that even a "withdrawal" (which is actually a trade) of 5% of the Ether will cause a crash, they will most likely still be able to afford the attack nonetheless, wouldn't you agree?

2nd edit:
Well, I guess if the Ethereum investors agree with your assessment themselves, they might fear that a big "withdrawal" in the aftermath of an attack will cause a crash. But I guess we should really ask them about that.

3rd edit:
(Not that they would have any need for withdrawing their Ether after an attack other than this hypothetical anticipation of a crash, but then we might ask ourselves: Why aren't they anticipating a crash already? And why aren't they then trading all their Ether for USD as we speak?)

[mjdamgaard]

This is a bit of a tangent but you mention that Bitcoin's price would be unaffected. Personally I don't foresee that. It seems to me that when knowing that an attack is underway, some Bitcoin investors would already start to get uneasy, and some would sell their bitcoin. And since this will cause the price of Bitcoin to drop, the 51% attack will then only be easier to afford in theory, as the mining rewards would be decreased and some of the honest miners therefore ought to fall off. This could create a feedback loop where, once the attack is looming in the near future, more and more Bitcoin investors will migrate elsewhere, potentially to Ethereum.

if the network knew the hash power was to get 2x competition(network doubles where half is a colluding group).. meaning older miners get half as much sats... its the same as a halvening event in regards to miners prospects.. we already seen miners re-evaluate global bottom value change from $25k per btc to now being ~$50k bottom due to reward halving this year
so it ends up the same thing. if miners have X cost but getting X/2 rewards then they wont sell the rewards at X they would only sell for x*2 to break even
then new users wanting to get into bitcoin but now unable to mine due to al batches for Y months are sold out. will work out the prospective costs of mining and then just buy coin on the market.. again causing a market rise effect

as we have already discussed the implications of a multi-month ramp up of batches to get a colluding group to 2x the hashrate/difficulty to get 51% of the network.. to match/beat the honest half of the network.. those honest miners would take that opportunity to buy more coin cheap at the $50k-$70k(current) knowing that the impending hashrate /difficulty growth and reduction in sat rewards would cause the market to INCREASE

and as said whilst the lead up to the collusive gangs trigger date for the attack, those getting early batches would honest mine and try to get ROI and end up not wanting to shoot self in the foot at trigger date because now they are highly invested in bitcoin and wont want to lose their investment
(in short a influencer cant convince hundreds of random ethereum users to collude becasue users end up caring more about their own investment, instead it would only work if there was one mass eth holder that doesnt care about losing investment because all he cares about is 'taking bitcoin down')

anyway, back to discussing a scenario of an impending attack in the next X months:
in that same time as the eth stakerconverting to be bitcoin miners.. exchanges would look into solidifying their deposit algo's to not allow new deposits to trade unless it meets X confirms. and then even when trading on exchange mysql databse balance. not allow withdrawals for X time to ensure that any nafarious pool trying to re-org the blockchain would need to re-org many many many blocks back.. meaning (as mentioned before) the colluding group would need far more then 51% of the network to be able to re-write blocks very far back

if you run the math of average block speed and how far back a 1% speed benefit means in reality to going backwards and then moving forwards to catch up and over take.. 1% benefit over honest network wont get the colluding group to go that far back. so services can just enforce the "6confirm rule" or a 72 hour wire transfer delay(if aim was to sell coin for dollar and cash out) to evade colluding pools from trying to double spend

You seem to be of the opinion that the price of Bitcoin is directly dependent on the cost of mining. By that logic, the Bitcoin stakeholders could always just spend a small percentage of their wealth at any given time to increase the combined hash rate of the world, and then see their assets grow by a similar factor. You do see that this logic is flawed, don't you?

I've already addressed the point that the miners loss of CapEx in terms of not being able to sell their ASICs after the attack has to be compensated by the stakeholders, and that this is part of price of the attack.

In terms of Bitcoin extending their confirmation period, you bring up a valid point. Bitcoin would indeed likely extend this period if an attack is anticipated.

However, they cannot extend this period retrospectively. And because the operational costs of an attack are relatively small compared to the full price (and not least compared to the potential winnings of a 'Rival Goldfinger attack'), the attackers could in theory rewrite months of the ledger in an attack. So in order to mitigate an attack by extending the confirmation period, Bitcoin would thus have to extend it to months. And if Bitcoin does this, its use as a cryptocurrency will then be close to none, which would therefore cause severe damage to its value already.

[d5000]

I for one could actually imagine a future where PoS cryptocurrencies will be 'the thing to have,' and where PoW blockchains are marginalized, and especially because if PoS cryptocurrencies ever take over, then the attack vector described in this topic could very well mean that the PoW blockchains will be kept down.

If you are really a researcher, and I doubt it, then you should make at least a small effort to prove the plausibility of your assumptions. Your assumption is extremely speculative.

The PoS/PoW debate is not new at all but exists since 2012. PoS has very distinct characteristics than PoW. PoS depends heavily on "weak subjectivity", this means of the ability of the user to connect to a trusted node to know the currently valid list of validators. So BFT limitations are fully in force. While PoW is not 100% "neutral" in this regard it's still much easier for an user to find the longest chain in an environment where many nodes try to eclipse attack this user, because a lot of attack vectors on PoS simply don't work on PoW.

I have defended PoS in many debates in the past and still think it has some merits, but after years of discussion my opinion now is that PoW is (unfortunately) superior in most aspects.

We could even say that "the market has decided" that PoW is superior because Bitcoin is still #1 by a wide margin, after 12 years of PoW/PoS debate. The small amount of successful PoW altcoins is not contradicting this, because PoW tends very much to a single "winner" due to the 51% attack threat for smaller blockchains. So it's reasonable for altcoins to adopt PoS because it provides reasonable security, as a tradeoff to less decentralization and the "weak subjectivity" problem.

If computer science advances and finds out that PoS can work without weak subjectivity and thus the PoW superiority paradigm is wrong (probability is very low), and also as an absolute last resort "mitigation strategy" against any large scale 51% attack, Bitcoin could simply change to PoS after the attack (i.e. creating a new chain based on a snapshot based of the old chain 1 block before the attack). This would perhaps be a "capitulation" or assuming that PoW is inferior and could make it lose some value, but a large part of the Bitcoin ecosystem would be able to be retained. Thus it is likely that Ethereum folks would not be able to profit from the attack at all. They would perhaps even be seen as pariahs of the blockchain world and Solana could take over or so

Yes, I'm speculating wildly now myself, but you have not done different in this thread. As a "researcher", you should not speculate but try to find evidence, and you should be neutral regarding the result, not trying to prove a point. I would even say that in this thread you're not behaving like a researcher but like a random Ethereum shill.

In regards to the potential for an attack on Ethereum, see my recent Reply #51. I don't believe that Bitcoin would even be able to retaliate, and the other PoS blockchains pose a much lesser threat, to say the least.

In this reply you argumented that Bitcoin (whales) would not attack Ethereum because it could only profit from a low "market share". For smaller PoS coins, the opposite would be true. Several whales of distinct "Ethereum killer" chains could even unite to take Ethereum's throne.

And I repeat: "Market cap" is not the same as "sales".

[PrivacyG]

I am not convinced an attack launched by Ethereum would crash Bitcoin and not the exact opposite effect instead.  Let technicalities to the side and think about it through the mind of an average person.  If Ethereum plan attacks on Bitcoin, they are becoming sort of an Evil force trying to destroy the other forces in their way to get through to the top.  If I was an Ethereum holder and heard of this, I would immediately sell every thing I have and move to any thing else other than it.  An attack would not destroy the Reputation of Bitcoin but of Ethereum.

[mjdamgaard]

firstly. the linkage of the movements of the bitcoin and ethereum market are clear that ethereums market is shadowing bitcoin. because bitcoin has known market cycles and if ethereum was independent it would not be following bitcoins market cycles. so when it does follow bitcoins market cycles, its obvious that its ethereum that is the follower

That's a great point.
ETH would not profit from attacking bitcoin because:

1. It would have to allocate tremendous resources into that and it would not destroy the network. All it would do is prove that with enough effort it can be done, but we all know it can be done and we all know it such attack cannot be sustained. It's like a DDOS on the whole country. You could do it and cut a country from the Internet for a while, but how much it would cost you and how long would you be able to sustain it?

2. A panic on the bitcoin market would most likely cause a panic on all other coins. If this attack was only to buy more of everything, that might work, but it would not make people flock from one coin to the other. The whole crypto industry is a big ecosystem.

3. What do you thing would happen if bitcoiners found out Vitalik and team are behind the attack? He'd climb above SBF and CSW to become the most hated person in the industry.

To your first point, the problem is that if Bitcoin somehow recovers after an attack, the steal itself would then be valuable for the attackers. In fact, they could in theory steal so much bitcoin as to pay for the whole thing. And even if they only manage to steal slightly less, they now have the CapEx for future attacks. So they could just keep coming back for seconds!

If attackers gain a 51% majority of the PoW network, and their intent is to crash the value of Bitcoin, they will be able to do so. (Edit: unless Bitcoin can mitigate the attack somehow, potentially by switching to PoS.)

To your second point, yes, the whole idea is dependent on the Ethereum stakeholders being able to convince the public that Ethereum isn't connected to Bitcoin. This is definitely worth discussing further (as we are currently doing on this thread). I personally think that with that much money on the line, they will surely be able to do so. (There's also an ongoing discussion about to what extent they are even competitors at all, which is also a relevant discussion.)

And to your last point, Vitalik and co. first of all don't have to take part. It only requires a subset of the Ethereum stakeholders to take part in principle. (And in my preprint, I even describe how they can potentially be completely anonymous.) Second of all, sure the attackers will be hated by the Bitcoin investors that are left behind, and the fans of the blockchain, but who knows, they might be revered by the early migrators from Bitcoin to Ethereum, who will also see their assets increase by perhaps as much as 100%-200%. And not least, they might be liked by a large part of the public if they can successfully campaign that PoW is a wasteful (and flawed) technology, and that the crash of Bitcoin would thus be good for the planet.

[HeRetiK]

To your first point, the problem is that if Bitcoin somehow recovers after an attack, the steal itself would then be valuable for the attackers. In fact, they could in theory steal so much bitcoin as to pay for the whole thing. And even if they only manage to steal slightly less, they now have the CapEx for future attacks. So they could just keep coming back for seconds!

Implying the attacker would get to keep the coins. Depending on the duration of the attack, reorgs after the fact are still in the realm of possibility. If the attack continues for so long as to make a reorg infeasible... congrats, you've just become a Bitcoin miner. You won't get to do another double spend though, because for that you'd have to divert hashing power, loosening your grip on the network.

Also keep in mind that double spends are easily detectable. It's highly unlikely you'd get to cash out any reasonable amount of double spent coins, especially with everyone being on high alert. The only "steal" an attacker could hope for is that the mining rewards they received aren't nullified by aforementioned reorg.

(Edit: unless Bitcoin can mitigate the attack somehow, potentially by switching to PoS.)

I'd expect Bitcoin to migrate to a different hashing algorithm long before even considering PoS. (much to the dismay of gamers worldwide)

[mjdamgaard]

We could even say that "the market has decided" that PoW is superior because Bitcoin is still #1 by a wide margin, after 12 years of PoW/PoS debate. The small amount of successful PoW altcoins is not contradicting this, because PoW tends very much to a single "winner" due to the 51% attack threat for smaller blockchains. So it's reasonable for altcoins to adopt PoS because it provides reasonable security, as a tradeoff to less decentralization and the "weak subjectivity" problem.

Well, here you are actually contradicting your earlier point somewhat, aren't you, namely that PoS and PoW (and in particular Ethereum and Bitcoin) are not in direct competition?

I agree with this latter statement that Bitcoin currently occupies the "winner" spot. But this also means that Ethereum could in theory become the "winner" at some point in the future if Bitcoin crashes (on its own or by force), and that the price of ETH would likely increase as part of this happening.

[mjdamgaard]

I have defended PoS in many debates in the past and still think it has some merits, but after years of discussion my opinion now is that PoW is (unfortunately) superior in most aspects.

I was actually personally very skeptical of PoS at first, mainly due to the potential for long-range attacks. But now it seems to me that at when you dig into the core of the concepts behind PoS and PoW, then they are both just decentralized ledgers that both create a Nash equilibrium in order to prevents cheating in their everyday protocol. And the difference in the core concepts just lies in the fact that for PoS the voting power is directly proportional to the amount of stake you have in the blockchain, whereas for PoW the power is instead distributed according to the hash rate an individual controls (and where the miners of course compete for the privilege to add new blocks and gain rewards). I personally don't see 'weak subjectivity' as ever truly becoming a problem for the consensus on a blockchain like Ethereum. The point is: Why would the Ethereum stakeholders ever allow an attack to finalize for good when that would undermine their currency?

If computer science advances and finds out that PoS can work without weak subjectivity and thus the PoW superiority paradigm is wrong (probability is very low), and also as an absolute last resort "mitigation strategy" against any large scale 51% attack, Bitcoin could simply change to PoS after the attack (i.e. creating a new chain based on a snapshot based of the old chain 1 block before the attack). This would perhaps be a "capitulation" or assuming that PoW is inferior and could make it lose some value, but a large part of the Bitcoin ecosystem would be able to be retained. Thus it is likely that Ethereum folks would not be able to profit from the attack at all. They would perhaps even be seen as pariahs of the blockchain world and Solana could take over or so

I like this proposition a lot. But I don't see why it wouldn't be even better, perhaps very much so, for the Bitcoin community to try to come to agreement on this in advance. Then it would be seen as much less of a capitulation in the hypothetical event that an attack happens, and it would perhaps not be seen as 'the "little brother," Ethereum, bullying Bitcoin into submission.'    

Yes, I'm speculating wildly now myself, but you have not done different in this thread. As a "researcher", you should not speculate but try to find evidence, and you should be neutral regarding the result, not trying to prove a point. I would even say that in this thread you're not behaving like a researcher but like a random Ethereum shill.

Since the topic of the discussion is the security of Bitcoin, it is okay to speculate about what could potentially happen. It is also okay to speculate the other way around in order to discuss why a risk might not be very high, as you do, but then you just have to make sure, at the end of the discussion, that you haven't accidentally based your conclusion that Bitcoin is safe and secure on some speculative assumptions that you made along the way. That would be a poor security strategy.

But this doesn't mean that too speculative assumptions don't need to be called out on both sides, and you are free to call mine out if you can point to some; at the end of the day, we have to assess together what is probable and what is not, on both sides of the argument.

(And I don't see how I behave like a shill, I very much beg you to differ on that point. I'm trying to discuss a potential security risk of Bitcoin, and when almost everyone here has so far tried to argue that there is nothing to worry about, then that requires me to argue the position that the risk might be real. Otherwise it would be a moot and boring discussion, wouldn't it?)

In regards to the potential for an attack on Ethereum, see my recent Reply #51. I don't believe that Bitcoin would even be able to retaliate, and the other PoS blockchains pose a much lesser threat, to say the least.

In this reply you argumented that Bitcoin (whales) would not attack Ethereum because it could only profit from a low "market share". For smaller PoS coins, the opposite would be true. Several whales of distinct "Ethereum killer" chains could even unite to take Ethereum's throne.

Yes, I can't quite see how Ethereum stakeholders will be able to profit from attacking themselves? Especially since it seems that other stakeholders would just subsequently vote to revert the attack. And since the voting power is already distributed according to PoS, this would not be a capitulation on Ethereum's part. (In fact, they already seem to state that they intend to do so in case of an attack.)

And I repeat: "Market cap" is not the same as "sales".

Sales? Bitcoin and Ethereum are a currencies. Their worth is, in principle, equal to the perceived value of each BTC, in case of Bitcoin, times the amount of BTC in circulation. Now, you might speculate that there currently is a minority of investors/buyers who perceive the value of Ether to be more than others, and that these are somehow able to set the tone for the pricing, which would mean that the price would be more than it actually is. (And if you then were to take a short position on Ethereum, you would become a wealthy person, given that you have something to invest in that venture.) But at the end of the day, the market cap is representative of what the (tone-setting) buyers currently perceive the value of the cryptocurrency to be.

Every single Ethereum stakeholder believes that their Ether is worth its price, or more. Otherwise the would sell it, the price would drop slightly, in theory, and the same proposition would be true once again. If a Goldfinger attack against Bitcoin causes the price to rise 100% or more, then each Ethereum stakeholder will by that time believe their Ether to be worth that much as well.

Please, if I'm overlooking some advanced and profound mechanism that makes this proposition untrue (and I am admittedly not an economist), do correct me.

[franky1]

Yawn

seems the topic creator is too ethereum obsessed, ignoring the math, avoiding scenarios that go against his ethereum adoration preference..
if maths, logic and common sense wont convince him. he will always fail at investing no matter what currency he chooses to hoard

when he one days comes around to reality to realise the true hardware/electric cost of securing ethereum vs cost of securing bitcoin. he will then learn that ethereum is the at risk currency

[Wind_FURY]

Ethereum could afford a 51% attack on Bitcoin, and profit greatly from it

Simply - No, Stupid, and Laughable. What would happen is they'll have one successful double-spend before the network of full nodes push them OUT.

PLUS they'll simply notice that they would actually be paid in Bitcoin if they merely mined honestly. Welcome to the Bitcoin community Ethereum Stakeholders.

 

[mjdamgaard]

To your first point, the problem is that if Bitcoin somehow recovers after an attack, the steal itself would then be valuable for the attackers. In fact, they could in theory steal so much bitcoin as to pay for the whole thing. And even if they only manage to steal slightly less, they now have the CapEx for future attacks. So they could just keep coming back for seconds!

Implying the attacker would get to keep the coins. Depending on the duration of the attack, reorgs after the fact are still in the realm of possibility. If the attack continues for so long as to make a reorg infeasible... congrats, you've just become a Bitcoin miner. You won't get to do another double spend though, because for that you'd have to divert hashing power, loosening your grip on the network.

Also keep in mind that double spends are easily detectable. It's highly unlikely you'd get to cash out any reasonable amount of double spent coins, especially with everyone being on high alert. The only "steal" an attacker could hope for is that the mining rewards they received aren't nullified by aforementioned reorg.

Yes, you are talking about the potential that the actual honest miners will make a (temporary) soft fork on order to make the original chain overtake the "attack chain" once again, right? That's a very valid point; it could certainly happen.

But this effectively still requires a rethinking of the Bitcoin protocol, namely if the defense against a Goldfinger attack is to always soft-fork back to the original chain. And then one in theory has to determine exactly what reorgs constitute an attack, and what reorgs are just normal activity on the blockchain. Otherwise the community might disagree on a particular decision, which could thus cause a hard fork.

If Bitcoin defines a specific threshold for what is an attack and what is just a normal reorg, however, then this opens up for the possibility that the 51%-attackers can target this exact threshold in order to cause disagreement on whether a certain chain is invalid or not.

The only way they can resolve this will then be by implementing a protocol for voting on which is the valid chain. They can't use PoW to distribute this vote, however, since the attackers might control the majority. So if they want it to remain decentralized, they have to opt for something like PoS instead.

So it seems that this line of thinking will eventually lead back to the question of this topic as well: Should Bitcoin adopt PoS in some capacity in order to mitigate this attack vector?   

[mjdamgaard]

Yawn

seems the topic creator is too ethereum obsessed, ignoring the math, avoiding scenarios that go against his ethereum adoration preference..
if maths, logic and common sense wont convince him. he will always fail at investing no matter what currency he chooses to hoard

when he one days comes around to reality to realise the true hardware/electric cost of securing ethereum vs cost of securing bitcoin. he will then learn that ethereum is the at risk currency

[deleted]

Edit:
@franky1, I'm sorry that you don't think I'm listening to you. I don't think that's fair of you at all, and I honestly don't think you do either. I have addressed almost all your points so far, except the point about the arbitrage market. I'm listening to your points, asking whenever I find something unclear, and trying to provide some counter points, which is what is expected in a discussion. You can simply expect me to take your word for anything outright.

In terms of the arbitrage market point, I'm afraid I also don't quite follow you here. I'm sure you might be right that the price of Ethereum might be determined by the arbitrage traders. But why does this inflate the price of Ethereum? Doesn't that just mean that the arbitrage traders are relatively determined in their regard for the value of Ethereum in relation to the value of Bitcoin? (Edit: In other words, are the arbitrage traders not just the tone-setting traders at the moment in terms of determining the price of Ether?)

I also need some clarification if we are to continue with the discussion about the supposed lower threshold on the Bitcoin price. Am I understanding you right that you are saying that the price of Bitcoin is dependent on the work it takes to mine a coin? And if so, do you not agree that Bitcoin investors potentially thereby have a complete money machine?