I am selling half of my Bitcoin holdings because of Ghash

[bluemeanie1]

My god! People, what happens will happen! GHash is at what, 31% right now? Is it really still a threat? If there's a 51% attack, it happens! That's not going to change anything. But please follow the majority, and see were that gets ya. No ones holding you back, and I don't get why you had to publicly state this. Just do it.

It's about getting others to panic sell.

absolutely.  there has been several attempts at this in the past few weeks.

-bm

[beetcoin]

i'm thinking it's impossible to make a completely decentralized cryptocurrency. the game changes, and if you don't have people who fix the issues to address those changes, then the crypto will just die out. hopefully there's a way to do it, and someone innovative will come along.. but at present i don't think it's possible.

[bluemeanie1]

i'm thinking it's impossible to make a completely decentralized cryptocurrency. the game changes, and if you don't have people who fix the issues to address those changes, then the crypto will just die out. hopefully there's a way to do it, and someone innovative will come along.. but at present i don't think it's possible.

so far, we have yet to perfect Monetary Theory itself.  There are many different schools of thought (primarily the Austrians and the Keynesian), thus why would we assume that we need to some kind of perfect theory of cryptocoins to have a usable one?  Fact is Bitcoin offers features no other technology does.  I think there are room for innovations, but there is nothing compelling out there at the moment.

-bm

[beetcoin]

i'm thinking it's impossible to make a completely decentralized cryptocurrency. the game changes, and if you don't have people who fix the issues to address those changes, then the crypto will just die out. hopefully there's a way to do it, and someone innovative will come along.. but at present i don't think it's possible.

so far, we have yet to perfect Monetary Theory itself.  There are many different schools of thought (primarily the Austrians and the Keynesian), thus why would we assume that we need to some kind of perfect theory of cryptocoins to have a usable one?  Fact is Bitcoin offers features no other technology does.  I think there are room for innovations, but there is nothing compelling out there at the moment.

-bm

well, because most people (at least here) love bitcoin mainly because it's supposedly decentralized. when you put power in the hands of the corrupt, then there will be.. corruption.

a lot of people complain about status quo economics.. at least most here.

[bluemeanie1]

i'm thinking it's impossible to make a completely decentralized cryptocurrency. the game changes, and if you don't have people who fix the issues to address those changes, then the crypto will just die out. hopefully there's a way to do it, and someone innovative will come along.. but at present i don't think it's possible.

so far, we have yet to perfect Monetary Theory itself.  There are many different schools of thought (primarily the Austrians and the Keynesian), thus why would we assume that we need to some kind of perfect theory of cryptocoins to have a usable one?  Fact is Bitcoin offers features no other technology does.  I think there are room for innovations, but there is nothing compelling out there at the moment.

-bm

well, because most people (at least here) love bitcoin mainly because it's supposedly decentralized. when you put power in the hands of the corrupt, then there will be.. corruption.

a lot of people complain about status quo economics.. at least most here.

what happened to the USD when it became centralized?  did it's value go up or down?

-bm

[beetcoin]

i'm thinking it's impossible to make a completely decentralized cryptocurrency. the game changes, and if you don't have people who fix the issues to address those changes, then the crypto will just die out. hopefully there's a way to do it, and someone innovative will come along.. but at present i don't think it's possible.

so far, we have yet to perfect Monetary Theory itself.  There are many different schools of thought (primarily the Austrians and the Keynesian), thus why would we assume that we need to some kind of perfect theory of cryptocoins to have a usable one?  Fact is Bitcoin offers features no other technology does.  I think there are room for innovations, but there is nothing compelling out there at the moment.

-bm

well, because most people (at least here) love bitcoin mainly because it's supposedly decentralized. when you put power in the hands of the corrupt, then there will be.. corruption.

a lot of people complain about status quo economics.. at least most here.

what happened to the USD when it became centralized?  did it's value go up or down?

-bm

U.S. currency has always been centralized.. at least from the date that they started using paper notes. so how do we know when the value has gone up or down? and if you even want to talk about when the federal reserve was instituted, then $1 at that time was worth a lot more than $1 today.

[bluemeanie1]

i'm thinking it's impossible to make a completely decentralized cryptocurrency. the game changes, and if you don't have people who fix the issues to address those changes, then the crypto will just die out. hopefully there's a way to do it, and someone innovative will come along.. but at present i don't think it's possible.

so far, we have yet to perfect Monetary Theory itself.  There are many different schools of thought (primarily the Austrians and the Keynesian), thus why would we assume that we need to some kind of perfect theory of cryptocoins to have a usable one?  Fact is Bitcoin offers features no other technology does.  I think there are room for innovations, but there is nothing compelling out there at the moment.

-bm

well, because most people (at least here) love bitcoin mainly because it's supposedly decentralized. when you put power in the hands of the corrupt, then there will be.. corruption.

a lot of people complain about status quo economics.. at least most here.

what happened to the USD when it became centralized?  did it's value go up or down?

-bm

U.S. currency has always been centralized.. at least from the date that they started using paper notes. so how do we know when the value has gone up or down? and if you even want to talk about when the federal reserve was instituted, then $1 at that time was worth a lot more than $1 today.

good point, but inflation aside- centralization means better security.

-bm

[S4VV4S]

i'm thinking it's impossible to make a completely decentralized cryptocurrency. the game changes, and if you don't have people who fix the issues to address those changes, then the crypto will just die out. hopefully there's a way to do it, and someone innovative will come along.. but at present i don't think it's possible.

so far, we have yet to perfect Monetary Theory itself.  There are many different schools of thought (primarily the Austrians and the Keynesian), thus why would we assume that we need to some kind of perfect theory of cryptocoins to have a usable one?  Fact is Bitcoin offers features no other technology does.  I think there are room for innovations, but there is nothing compelling out there at the moment.

-bm

well, because most people (at least here) love bitcoin mainly because it's supposedly decentralized. when you put power in the hands of the corrupt, then there will be.. corruption.

a lot of people complain about status quo economics.. at least most here.

what happened to the USD when it became centralized?  did it's value go up or down?

-bm

U.S. currency has always been centralized.. at least from the date that they started using paper notes. so how do we know when the value has gone up or down? and if you even want to talk about when the federal reserve was instituted, then $1 at that time was worth a lot more than $1 today.

good point, but inflation aside- centralization means better security.

-bm

No it doesn't.
Take a look at the banking sector for example.
Constant improvement of the protocol does mean better security.

[beetcoin]

i'm thinking it's impossible to make a completely decentralized cryptocurrency. the game changes, and if you don't have people who fix the issues to address those changes, then the crypto will just die out. hopefully there's a way to do it, and someone innovative will come along.. but at present i don't think it's possible.

so far, we have yet to perfect Monetary Theory itself.  There are many different schools of thought (primarily the Austrians and the Keynesian), thus why would we assume that we need to some kind of perfect theory of cryptocoins to have a usable one?  Fact is Bitcoin offers features no other technology does.  I think there are room for innovations, but there is nothing compelling out there at the moment.

-bm

well, because most people (at least here) love bitcoin mainly because it's supposedly decentralized. when you put power in the hands of the corrupt, then there will be.. corruption.

a lot of people complain about status quo economics.. at least most here.

what happened to the USD when it became centralized?  did it's value go up or down?

-bm

U.S. currency has always been centralized.. at least from the date that they started using paper notes. so how do we know when the value has gone up or down? and if you even want to talk about when the federal reserve was instituted, then $1 at that time was worth a lot more than $1 today.

good point, but inflation aside- centralization means better security.

-bm

better security? yeah, probably for those who are controlling it. meanwhile, the others who are not involved in the decision making are the ones beholden to it.

[QuestionAuthority]

I agree with your point OP except you shouldn't just sell them into fiat. Why don't you hedge your bet by making a major purchase with half of your Bitcoin. That way you can make the statement you want, eliminate some of the risk of holding too much of a high risk investment and help the community at the same time. What Bitcoin needs badly is greater velocity of circulation. You would be doing a great favor for the community.

[ShakyhandsBTCer]

The issue with you sending a message is that ghash can not really control how much mining power they have at their pool short of disconnecting miners that are already working on it's pool.

[SpontaneousDream]

Panic selling 50% of your BTC holdings is stupid. There ARE going to be bumps in the road before bitcoin goes mainstream. Considering the amount of community outpour over this issue, I have confidence that the bigger players such as Gavin, Andreas, etc. (and the community) will find a way to resolve this.

I'm not worried.

[bluemeanie1]

Panic selling 50% of your BTC holdings is stupid. There ARE going to be bumps in the road before bitcoin goes mainstream. Considering the amount of community outpour over this issue, I have confidence that the bigger players such as Gavin, Andreas, etc. (and the community) will find a way to resolve this.

I'm not worried.

and we've never seen more evidence that it is going mainstream in all it's history!

-bm

[phillipsjk]

Bitcoin core developers and the community need to come together to fix the Bitcoin protocol so that is no longer vulnerable to hijack by large mining pools. Until that happens, I can't fully trust Bitcoin as a value store, and neither should you.

Unfortunately, you can't work around the 51% attack.

Bitcoin's innovation was to guard against malicious updates to the block-chain by requiring a "proof-of-work". This allows the validity of the block-chain to be verified in a trustless manner. The "proof-of-work" assumes two things:

• That people are generally good. (Bitcoin also makes is so that cheating in-system is more expensive than being honest.)
• That competition will ensure that no miner gets a substantial market-share. (If your business relies on bitcoin, it makes sense to invest in a full node or pay somebody to do so).

Pools having greater than 30% of the hash-power breaks the second assumption. 30% is the magic number because one of the pools may be run or coerced by a malicious person: we would not know until it is too late.

"Proof-of-work" is not something to be worked around. When you participate in the BItcoin network, you have to accept that it is a valid way to form consensus. There are no known alternatives that are still decentralized. Evidently, it is not known if "proof-of-work" can stay decentralized. However, if decentralization is not possible with "proof-of-work": that means that the experiment failed, and that Bitcoins are worth approximately $0.

This has happened before. What happened was hashers left Deepbit for other pools. This time it is different: many of the hashers seem to believe it is up to the developers to code a protocol change to solve the problem. They fail to see how they are contributing to the problem.

I see only only one solution: hashers need to start avoiding pools with more than 30% market share. Pools with more than 30% market share need to start raising fees. If these solutions don't start to materialize within about a week, I will join you in selling half my holdings.

Edit: There will probably arguments that I am asking hashers to go against their own self-interest. The purpose of hashing is to secure the network. If you refuse to monitor the health of the network, it is completely reasonable to expect more variance in price.

[galbros]

There is no doubt that the rise of Ghash.io to over 50% of the network fundamentally moves bitcoin away from a decentralized crypto currency.  While I still don't understand what made Ghash.io so irresistible to miners, it is clear that something I would never have expected to occur, has.

I think there needs to be a serious response to this other than denial and jawboning down of the threat (even though I agree it is not armageddon) and if there isn't, you may be very glad you did sell off half your coins.

Good Luck!

[beetcoin]

^ the good news is that a lot of people are concerned, and there will probably be some sort of effort to correct this issue. i don't know if cex.io is really genuine (and that things will work out well), but at least there is a discussion on it at /r/bitcoin

http://www.reddit.com/r/Bitcoin/comments/28aldt/ghashio_is_open_for_discussion/

[acs267]

Panic selling 50% of your BTC holdings is stupid. There ARE going to be bumps in the road before bitcoin goes mainstream. Considering the amount of community outpour over this issue, I have confidence that the bigger players such as Gavin, Andreas, etc. (and the community) will find a way to resolve this.

I'm not worried.

and we've never seen more evidence that it is going mainstream in all it's history!

-bm

Nope. I'm going to panic sell all of my Bitcoins, when we recently met the 100K merchant milestone, and when companies like Expedia, Holiday Inn, etc have started to accept it more. That's the smart thing to do, isn't it?

[bluemeanie1]

Panic selling 50% of your BTC holdings is stupid. There ARE going to be bumps in the road before bitcoin goes mainstream. Considering the amount of community outpour over this issue, I have confidence that the bigger players such as Gavin, Andreas, etc. (and the community) will find a way to resolve this.

I'm not worried.

and we've never seen more evidence that it is going mainstream in all it's history!

-bm

Nope. I'm going to panic sell all of my Bitcoins, when we recently met the 100K merchant milestone, and when companies like Expedia, Holiday Inn, etc have started to accept it more. That's the smart thing to do, isn't it?

also right before a major auction that has something like a 200k deposit requirement.

-bm

[toknormal]

Unfortunately, I'm following in Peter Todd's footsteps.  I'm a huge believer in decentralized cryptocurrency, not 'semi-decentralized' cryptocurrency.  Bitcoin needs to be TRUSTLESS for it to function as a viable and reliable currency.

Ghash.io has succeeded in centralizing Bitcoin.  Whether a 51% attack ever occurs is completely irrelevant; the POTENTIAL for such an attack makes Bitcoin extremely unreliable at this point.

Bitcoin core developers and the community need to come together to fix the Bitcoin protocol so that is no longer vulnerable to hijack by large mining pools. Until that happens, I can't fully trust Bitcoin as a value store, and neither should you.

You're not a "believer in decentralized crypto currency". If you were you'd understand the merits of the current philosophy. What you are asking for is more centralisation, not less.

Take a look at what's happening right now. GHash is approaching 51%. Who is that most a problem for  - THEM. Because if they get past 51% the entire Bitcoin economy will devalue and their business model will go down the pan. Being one of the biggest Bitcoin businesses, they also stand to be one of the biggest losers, so they HAVE to do something about it to save their business.

One the other hand, lets examine what will happen if we implement this suicidal solution that you propose in your post: GHash will then be able to safely continue to grow their monopoly towards 75% or even 90%.

The prospect of 90% mining pool monopolies will be far worse than a 50% one where the worst they can do is double spend the next block - and even at that not for very long because of the economic pressure to mitigate their mining monopoly.

In fact, what will happen if we simply allow this scenario to play itself out is that this period will be seen to be the age of "peak mining pool power" because from now on they'll understand that the sector has a glass ceiling to growth. They'll be less financial incentive for mining pools to grow and they'll naturally start to de-centralise.

Do NOT solve GHash's problem for them. DO NOT make it possible for them to gain a 90% monopoly by "fixing" Bitcoin. The system is good - let it do it's work.

[Jason]

I understand GHash is presently mining at 29% -- considerably down from the 51% they were mining at earlier.  Did this large decline in mining rate come about as a result of them voluntarily cutting back on their mining operations (or redirecting them elsewhere)?  Or, as I understand, were they a direct result of some actors within the community taking directed actions against GHash?  If the latter, then it seems that there is already an emergent mechanism in place for protecting the market against rogue operators.  I would be tempted to hold long enough to ascertain whether or not this mechanism can be relied upon in the future to take the necessary action should this happen again.  Presumably the threshold for going into action will be lower the next time (40% is already excessive).