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Author Topic: If JP Morgan and Goldman Sachs owned 80% of the entire Bitcoin mining power..  (Read 7354 times)
fergalish
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March 17, 2012, 02:43:55 PM
 #21

This whole thing is simple enough to fix. Release an updated version of the client that rejects blocks that were created by a host that refuses to process an excessive number of transactions. This will prevent abusive monopoly.
So you reject on the basis of... IP address?  Would that work?  And in the meantime, the MenInBlack are beating down the doors of all other major mining pools, leaving every individual miner to choose for himself.  And your paycheck just got incorporated in the OfficialBlockChain, so you don't really want to reject /that/ block, but maybe the next one...

I guess my point is not how difficult it is to achieve the 51% attack.  My point is that you can do *far far more* than just double-spend if you /do/ achieve it.  You become TheBitcoinOverlord - the BitLord!

Damn, with 51%, you could take old coins that haven't moved for N blocks (say, 250,000 blocks, about 5 years).  Declare them 'repossessed' and transact them to your own address.  Yeah, you don't have the private key, but it's just a matter of rejecting any future transactions that refer to those coins, and allowing yourself to mint the same number of coins in a new transaction.  And that's just supposing you decide not to abandon the 21M limitation.  I could be missing some technical details here, so feel free to correct me.

/If/ bitcoin was to take off and compete with other global currencies, there would be a *HUGE* benefit to achieving the 51% attack.  It would be much worse than the situation with today's fiat currencies, I think.
The Bitcoin network protocol was designed to be extremely flexible. It can be used to create timed transactions, escrow transactions, multi-signature transactions, etc. The current features of the client only hint at what will be possible in the future.
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March 17, 2012, 08:59:20 PM
 #22

This whole thing is simple enough to fix. Release an updated version of the client that rejects blocks that were created by a host that refuses to process an excessive number of transactions. This will prevent abusive monopoly.
So you reject on the basis of... IP address?  Would that work?  And in the meantime, the MenInBlack are beating down the doors of all other major mining pools, leaving every individual miner to choose for himself.  And your paycheck just got incorporated in the OfficialBlockChain, so you don't really want to reject /that/ block, but maybe the next one...

I guess my point is not how difficult it is to achieve the 51% attack.  My point is that you can do *far far more* than just double-spend if you /do/ achieve it.  You become TheBitcoinOverlord - the BitLord!

Damn, with 51%, you could take old coins that haven't moved for N blocks (say, 250,000 blocks, about 5 years).  Declare them 'repossessed' and transact them to your own address.  Yeah, you don't have the private key, but it's just a matter of rejecting any future transactions that refer to those coins, and allowing yourself to mint the same number of coins in a new transaction.  And that's just supposing you decide not to abandon the 21M limitation.  I could be missing some technical details here, so feel free to correct me.

/If/ bitcoin was to take off and compete with other global currencies, there would be a *HUGE* benefit to achieving the 51% attack.  It would be much worse than the situation with today's fiat currencies, I think.

Again, it's simply a matter of rejecting abusive block creations. If I wanted, I could "repossess" coins like you say, but everyone would just ignore any blocks I create. It's pretty easy to tell if someone is tampering with the system when you have a bunch of txns sitting in the incomplete txn pool that shouldn't be there.

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fergalish
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March 20, 2012, 10:05:02 AM
 #23

Again, it's simply a matter of rejecting abusive block creations. If I wanted, I could "repossess" coins like you say, but everyone would just ignore any blocks I create. It's pretty easy to tell if someone is tampering with the system when you have a bunch of txns sitting in the incomplete txn pool that shouldn't be there.

At the risk of repeating myself, my point wasn't about the difficulty *achieving* the 51% attack, but more about the power that would come once it's achieved.  However, in answer to your reply, I think that you are being a bit idealistic.  What you say is perfecty possible, but perhaps perhaps not so practical.  It requires either:
  • that lots of small time *individual* miners agree to firewall abusive IPs (and here I'm assuming that there are only a few abusive IPs, not millions such as BigGovt might muster)  OR
  • that the large mining pools are not corruptible (as in, do as BigGovt says or face the chop).  And here bear in mind that the future of bitcoin is lots of non-mining thin clients, and very few large multi-GPU,FPGA,ASIC mining arrays.  Even now the major pools supply 76% of the blocks (http://blockchain.info/pools).

And if you want proof, how come nobody has blocked the IP in this story yet?  - it's creating empty blocks: https://www.privateinternetaccess.com/blog/2012/03/bitcoin-war-the-first-real-threat-to-bitcoin/

And again, like I say, if you decide to reject blocks that leave valid transactions by the wayside, you risk losing out on approved transactions to you!  You'd probably have to be running two clients - one for the Govt-approved blockchain, and another for the blackmarket chain.  Hey, the "BlackChain".  Dudes, I should copyright that  Grin
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March 20, 2012, 11:28:48 AM
 #24

Again, it's simply a matter of rejecting abusive block creations. If I wanted, I could "repossess" coins like you say, but everyone would just ignore any blocks I create. It's pretty easy to tell if someone is tampering with the system when you have a bunch of txns sitting in the incomplete txn pool that shouldn't be there.

At the risk of repeating myself, my point wasn't about the difficulty *achieving* the 51% attack, but more about the power that would come once it's achieved.  However, in answer to your reply, I think that you are being a bit idealistic.  What you say is perfecty possible, but perhaps perhaps not so practical.  It requires either:
  • that lots of small time *individual* miners agree to firewall abusive IPs (and here I'm assuming that there are only a few abusive IPs, not millions such as BigGovt might muster)  OR
  • that the large mining pools are not corruptible (as in, do as BigGovt says or face the chop).  And here bear in mind that the future of bitcoin is lots of non-mining thin clients, and very few large multi-GPU,FPGA,ASIC mining arrays.  Even now the major pools supply 76% of the blocks (http://blockchain.info/pools).

And if you want proof, how come nobody has blocked the IP in this story yet?  - it's creating empty blocks: https://www.privateinternetaccess.com/blog/2012/03/bitcoin-war-the-first-real-threat-to-bitcoin/

And again, like I say, if you decide to reject blocks that leave valid transactions by the wayside, you risk losing out on approved transactions to you!  You'd probably have to be running two clients - one for the Govt-approved blockchain, and another for the blackmarket chain.  Hey, the "BlackChain".  Dudes, I should copyright that  Grin


I was wondering, if governments wanted to attack BitCoin, then all they needed was enough money to fund 51% Processing Power project?
If so, how much would it cost them to construct this huge farm using a) GPUs b) FPGA and c) ASICs? Anyone has any figures?




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BF Labs Inc.  www.butterflylabs.com   -  Bitcoin Mining Hardware
Dhomochevsky
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March 20, 2012, 07:08:18 PM
 #25

There were various figures floating around - at the current hashing power of 11 TH you'd need a few tens of millions $ at most to achieve >51%. With that kind of money you can conceive and build several custom ASIC units that would get you well over 5 TH.

I don't think we need to worry about governments that much though. Bitcoin is irrelevant to them at the moment. Even if it weren't, the amount of red tape and the time needed to start such an endeavor would give Bitcoin time to evolve beyond the grasp of such a project - more time and more investment would be needed to catch up with it.

Now, if a PRIVATE entity would be interested to attack the network - that's a different story...
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March 20, 2012, 07:13:21 PM
 #26

JP Morgan and Goldman Sachs probably wouldn't be very good at running a network that actually requires honest hardworking engineers. Lawyers and scam artists wouldn't be very good at defending against DoS attacks.

true, they would probably end up selling themselves short using customer funds.

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March 20, 2012, 07:15:20 PM
 #27

Moreover, the idea that people would add hashing capacity in the face of a near monopolist is absurd. The opposite would almost certainly occur.

explain deepbits 42% in that light.

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March 27, 2012, 04:56:16 AM
 #28

I was wondering, if governments wanted to attack BitCoin, then all they needed was enough money to fund 51% Processing Power project?
If so, how much would it cost them to construct this huge farm using a) GPUs b) FPGA and c) ASICs? Anyone has any figures?

It would take about 15000 BFL singles to surpass the processing power of the current network (about 12 Th/s), or $9M if you can manufacture 15000 units at your current prices :-) It would fit a medium-sized datacenter if you can go relatively high with power density: 120 racks of 10kW each, with about 120 singles in each rack.
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March 27, 2012, 06:58:24 PM
 #29

explain deepbits 42% in that light.

What 42%?
http://blockchain.info/pools?timespan=4days
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March 27, 2012, 08:58:22 PM
 #30

Who is "they"?  When was this?

Sorry, I think of things in geo-political terms, so I'm using "they" as a misnomer for "individuals having a stake in the present US Fiat via the Federal Reserve system". "They" refers to the US federal gov't, large financiers like Goldman Sachs and JP Morgan, the Federal Reserve, established politicians that are never worried about losing a reelection campaign, etc.

Such individuals aren't sworn and beholden to the Federal Reserve note like one might suggest (yes, even the Federal Reserve falls in this category), they could easily just as soon use Bitcoin, and both purchase several thousand outstanding coin and own approximately 50% of the hash rate (or more, given enough time and inclination).

But ignore all that for a moment, because this entire time when I mention this stuff, I'm doing so with whoever reading this (you all) under the assumption they'd do any of this overtly, or in a manner in which you'd see it. They don't have to, and in fact could be covertly doing so right now by spreading mining power among various pools.

In fact, if I was advising them on this, I would recommend such a program.

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March 28, 2012, 08:49:41 PM
 #31

Who cares, GS's petty cash is bigger than the entire bitcoin market capitalization...
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