BTC endgame = Mega Miner controlling everything, BTC is not "trustless"

[kendog77]

The OP has a legitimate point that BTC is supposed to be trustless, so large mining pools pose a major problem for bitcoin. I should not have to trust that GHash.IO will not double spend and damage the network in a "trustless" system.

Also, we have to worry about pool operators colluding with each other to attack the network. In a trustless system, I should not have to worry that the pool operator of GHash.IO may collude with the pool operator of Discus Fish to attack the network.

I would much rather see a system with many more small mining pools than the current behemoths like GHash.IO that control over 40% of the network.

[cbeast]

In greed we trust. Who is foolish enough to kill the golden goose?

[kendog77]

it is quite possible

right now any one pool is not a threat but think long term 5, 10 , 20 years from now,

if bitcoins destiny is to become a medium of trust for the entire world to base itself upon the ground work will be laid now for what is to come

i recall other large operations (the guild) getting close to 50% and volunteering to back off,  not this time

I guess my question is why it has to be set as the majority >= 50%?

In other types of determining a majority, some things are done at a 2/3 majority. Is there a real reason we need to have it at 50%? What is stopping a change to make it say 80%?

You make a good point of one pool isn't that bad right now because there still are some other big pools who can take over. I just feel like it is really odd that it isn't change to a higher % right now so we can avoid any further issues. once Ghash.io gets up to 70% things could get pretty ugly and they might not accept the change once they get too big.

The reason 50% is important is because whoever controls over 50% of the network can solve blocks faster than the entire rest of the network combined, and work on their own version of the block chain privately while withholding it from the rest of the network. After they do a successful double spend, they can release their version of the blockchain, which will be accepted by the rest of the network because it is longer than the version the rest of the network was working on.

Technically, this attack can be pulled off with less than 50% of the network hash rate if the attacker hits a good luck streak.

[cbeast]

The OP has a legitimate point that BTC is supposed to be trustless, so large mining pools pose a major problem for bitcoin. I should not have to trust that GHash.IO will not double spend and damage the network in a "trustless" system.

It is trustless. In a fiat system there is financial incentive to cheat the system. That's why they attempt to regulate it. Bitcoin has no incentive to cheat. Creating even one false block will be the death of the mining pool. Even if they get away with several blocks by being very lucky, it will spook people away from trusting pools in the first place.

[iluvpie60]

The OP has a legitimate point that BTC is supposed to be trustless, so large mining pools pose a major problem for bitcoin. I should not have to trust that GHash.IO will not double spend and damage the network in a "trustless" system.

It is trustless. In a fiat system there is financial incentive to cheat the system. That's why they attempt to regulate it. Bitcoin has no incentive to cheat. Creating even one false block will be the death of the mining pool. Even if they get away with several blocks by being very lucky, it will spook people away from trusting pools in the first place.

I do like the fact that BTC attempts to have a way of dealing with "rogues". my worry is that it will not be enough in the end. Is there a reason it has to be 50%? Why not make the threshold 70% to be able to double spend?

[kendog77]

The OP has a legitimate point that BTC is supposed to be trustless, so large mining pools pose a major problem for bitcoin. I should not have to trust that GHash.IO will not double spend and damage the network in a "trustless" system.

It is trustless. In a fiat system there is financial incentive to cheat the system. That's why they attempt to regulate it. Bitcoin has no incentive to cheat. Creating even one false block will be the death of the mining pool. Even if they get away with several blocks by being very lucky, it will spook people away from trusting pools in the first place.

I completely disagree. Any system where I have to trust a single human being (or even a couple that could collude together) that administer pools with over 50% of the network hash rate to not cheat is definitely not trustless.

[crunchynut]

it doesn't matter that ghash.io as a company has no benefit from and therefore no interest in a 51% attack. behind the company are people and you trust these strangers that they care about ghash.io's and bitcoin's future. it only needs one pissed ghash.io employee and bitcoin has a serious problem.

compare it to absolute poker's and ultimate bet's super user scandal back in 2007. the companies had no interest in cheating their customers. a few people inside the company had an interest and didn't care at all what their behaviour would mean for the companies or online poker.

[cbeast]

it doesn't matter that ghash.io as a company has no benefit from and therefore no interest in a 51% attack. behind the company are people and you trust these strangers that they care about ghash.io's and bitcoin's future. it only needs one pissed ghash.io employee and bitcoin has a serious problem.

compare it to absolute poker's and ultimate bet's super user scandal back in 2007. the companies had no interest in cheating their customers. a few people inside the company had an interest and didn't care at all what their behaviour would mean for the companies or online poker.

Are you saying people don't play online poker anymore? Sure, MtGox cheated customers, but all it did was make other exchanges more responsible. If a pool cheated customers, people wouldn't use that pool anymore. The pool operators better watch their employees just like poker companies watch theirs. Of course there are other cryptographic solutions as well. They will sort out this issue eventually.

[Velkro]

Mega miner coming around 2050, my bet. It will happen, matters when

[cbeast]

Mega miner coming around 2050, my bet. It will happen, matters when

I'm picturing Spaceballs sucking all the bitcoins off the planet.

[kendog77]

it doesn't matter that ghash.io as a company has no benefit from and therefore no interest in a 51% attack. behind the company are people and you trust these strangers that they care about ghash.io's and bitcoin's future. it only needs one pissed ghash.io employee and bitcoin has a serious problem.

compare it to absolute poker's and ultimate bet's super user scandal back in 2007. the companies had no interest in cheating their customers. a few people inside the company had an interest and didn't care at all what their behaviour would mean for the companies or online poker.

Also, in case folks were not aware, there are hackers out there that like to break shit and cause as much chaos as they can. They could do some serious damage to Bitcoin if they gained control of GHash.IO.

[kendog77]

it doesn't matter that ghash.io as a company has no benefit from and therefore no interest in a 51% attack. behind the company are people and you trust these strangers that they care about ghash.io's and bitcoin's future. it only needs one pissed ghash.io employee and bitcoin has a serious problem.

compare it to absolute poker's and ultimate bet's super user scandal back in 2007. the companies had no interest in cheating their customers. a few people inside the company had an interest and didn't care at all what their behaviour would mean for the companies or online poker.

Are you saying people don't play online poker anymore? Sure, MtGox cheated customers, but all it did was make other exchanges more responsible. If a pool cheated customers, people wouldn't use that pool anymore. The pool operators better watch their employees just like poker companies watch theirs. Of course there are other cryptographic solutions as well. They will sort out this issue eventually.

Your average miner is not too bright. GHash.IO was already caught cheating (see the thread below), but they are still the largest BTC mining pool by far. If miners has any common sense, they would not support a pool that was already caught red handed cheating.

https://bitcointalk.org/index.php?topic=327767.0

[rapsaodan84]

One question to Bitcoin and pool experts: is it possible to recognize a block was mined by a P2Pool rather than a centralized pool?

I really want it to be.  It'd be possible to give some incentives to that kind of pools, by making some changes in the core of the bitcoin protocol.

[jbreher]

"If Ghash.io has 55% for a day and they voluntarily turn it down to 38%, could they turn it on again to 55%?"

Answer Choice:

A: Yes
B: No

A. Yes.

Now here's one for you.

 "If Ghash.io has 55% for a day, and many of their former hashers decide consequently to mine at a different pool, bringing the pool's capability down to 38%, could Ghash.io merely raise it again to 55%?"

Answer Choice:

A: Yes
B: No

Absent any evidence determining which of these two scenarios is in play, or what the mix between them may be, all your left with is conjecture. Negative conjecture is nothing but FUD.

Of course, if you are in possession of actual evidence, I'm pretty sure that I am not the only one that would be interested in hearing it.

[iluvpie60]

One question to Bitcoin and pool experts: is it possible to recognize a block was mined by a P2Pool rather than a centralized pool?

I really want it to be.  It'd be possible to give some incentives to that kind of pools, by making some changes in the core of the bitcoin protocol.

The issue with doing this is that you are acting like a government, propping up others and giving other an incentive but not giving all the incentive. BTC isn't supposed to act like that.

[iluvpie60]

"If Ghash.io has 55% for a day and they voluntarily turn it down to 38%, could they turn it on again to 55%?"

Answer Choice:

A: Yes
B: No

A. Yes.

Now here's one for you.

 "If Ghash.io has 55% for a day, and many of their former hashers decide consequently to mine at a different pool, bringing the pool's capability down to 38%, could Ghash.io merely raise it again to 55%?"

Answer Choice:

A: Yes
B: No

Absent any evidence determining which of these two scenarios is in play, or what the mix between them may be, all your left with is conjecture. Negative conjecture is nothing but FUD.

Of course, if you are in possession of actual evidence, I'm pretty sure that I am not the only one that would be interested in hearing it.

I am rarely ever on here reading anything, yet I have read posts that show it was over 51%. They are not that hard to find. Due diligence sir. I am not paid to educate you, unless you want to send me some BTC then I will.

[BitCoinDream]

Sorry to disagree with u. I can see the future in P2Pool. P2Pool code is now open and group of miners are joining various new P2Pool. GHash.IO will lead for some more days ...but ultimately they'll surrender to cumulative miner hashpower in P2Pools. In past, we have seen deepbit to vanish after they touched 51%. Nothing is permanent in the Bitcoin world except competition.

It is all well and great if a bunch of miners join P2P pool, but I am willing to bet you the Mega Miners who spend millions on their machines are not going to give up control to P2P pool. That is the problem I see with what you are saying. Ghash.io is already set to move forward and take even more, there is an unknown % of hashing power out there and many people speculate and seem to be right about it being Ghash.io covering it up to look "unknown". In reality they have hit 51% before a few times on their "Ghash.io" branded servers. Who knows what their other miners are called, only they do, hence the "Unknown %" issue. They most likely have been doing 60% or higher this whole time and just haven't done much yet, there was double spends before through them.

Can u plz give us a few examples of double spends that GHash.IO has made in recent past ?

[Sydboy]

If a pool having 51% + has negative aspect on the price, why would the pool to continue to operate in such a manor ? it sounds counter productive.

[jbreher]

Is there a reason it has to be 50%? Why not make the threshold 70% to be able to double spend?

You were given the answer to this by kendog77 just a few posts ago. It's not a variable in the code, it is an inviolable law of mathematics - 50% is half, so any more than 50% (we shorthand it as 51%) is more than half.

If one has the majority of the hashing power, then probabilistically, one will solve the majority of blocks. I.e. One will solve more blocks than the rest of the network combined.

If one is guaranteed to solve more blocks than the rest of the network combined, one may generate a blockchain which is longer than any other blockchain.

One may:
- spend a certain coin on the 'public' chain, then;
- create  transaction 'spending' the same coin in a transaction not broadcast to the network, then;
- mine privately using that second transaction instead of the first.
When one's chain is longer than the public chain (again, more than half the hash power guarantees this will happen eventually), one releases the private chain. As the previously private chain is longer than the initial chain, the entire network 'snaps' to your new longer chain - with the second spending of that coin.

The new longer chain has not the first spending of that coin, but rather the second spend of that coin.

The net effect is that the recipient of the first 'spend' of the coin has that coin ripped from his wallet, and you get double value for that coin - you have been on the buying end of two transactions involving the same coin.

IOW, it is '51%' because that is more than half.

For someone generating so much heat on this issue, it is kind of funny that this illumination is needed.

[cbeast]

it doesn't matter that ghash.io as a company has no benefit from and therefore no interest in a 51% attack. behind the company are people and you trust these strangers that they care about ghash.io's and bitcoin's future. it only needs one pissed ghash.io employee and bitcoin has a serious problem.

compare it to absolute poker's and ultimate bet's super user scandal back in 2007. the companies had no interest in cheating their customers. a few people inside the company had an interest and didn't care at all what their behaviour would mean for the companies or online poker.

Are you saying people don't play online poker anymore? Sure, MtGox cheated customers, but all it did was make other exchanges more responsible. If a pool cheated customers, people wouldn't use that pool anymore. The pool operators better watch their employees just like poker companies watch theirs. Of course there are other cryptographic solutions as well. They will sort out this issue eventually.

Your average miner is not too bright. GHash.IO was already caught cheating (see the thread below), but they are still the largest BTC mining pool by far. If miners has any common sense, they would not support a pool that was already caught red handed cheating.

https://bitcointalk.org/index.php?topic=327767.0

The problem isn't the mining pools, it is user error. It is a special case where high risk behavior pushes the technology too far. It was entirely preventable if gamblers were willing to wait for additional confirmations.