Bitcoin 51% attack considered harmless

[nicktesla]

Hey all here's another write up I just completed: https://medium.com/@levandreessen/8c3410377fe6

It tries to understand from first principles what a 51% attack can and can't accomplish from the perspective of someone who's trying to figure this out for the first time and isn't satisfied with just being given a list of answers i.e. you want to know **why** you can only double spend vs doing something way more extreme.

Please let me hear any feedback and any corrections to statements i've made. Should be a short read!

Thanks.

[Marlo Stanfield]

A 51% attack would be disastrous even if they only double spent one satoshi. It's the loss of confidence in the technology that's the harm. Bitcoin relies on people believing in it to be a secure store of value.

[nomoreasd]

I think that if someone will do a successful 51% attack and do a doublespending, the price will crash but it will eventually recover after some time.

[Ayers]

it will recover but, if the double spending persist then it may kill bitcoin or reduce it to 10 dollar or below, like every dead coin out there

[RodeoX]

I think a 51% attack would be a disaster. But someone with 51% of the hashing power does not necessarily mean they are attacking.

[galbros]

I liked your article.  I also thought THIS was a pretty decent layout of what opportunistic miners could do. 

I agree that 51% isn't necessarily the end, but it would be sufficiently bad that bitcoin would lose what little mainstream credibility it has.  However, miners don't have to get to 51% to cause issues.

[catlinhappy]

A 51% attack on BTC looks harmless after recovery but its degrading for the value of Bitcoin. if we don't it to end up a dead coin its best no done during mining.

[nicktesla]

I liked your article.  I also thought THIS was a pretty decent layout of what opportunistic miners could do.  

I agree that 51% isn't necessarily the end, but it would be sufficiently bad that bitcoin would lose what little mainstream credibility it has.  However, miners don't have to get to 51% to cause issues.

Thanks! Agreed on the credibility point, though i think that would be short term. Actually read that article..pretty good and shows that the attacks that will/could happen in practice will be more about the subtle ways attackers can torment the network than some wholescale crazy action that kills the price.

[Omikifuse]

It is like a terorist attack.

Kills a few, but everyone panics and the repercussions can be thousand of times greater than be damage done by the act itself.

[xyzzy099]

Isn't it true that if you have 51% of the hashpower you can mine ALL of the blocks?  You would be able to orphan all other mined blocks, because you would always be able to produce the longest chains making your blocks the winner every time, no?

[bornil267645]

It means the whole thing is just a roller coaster ride...up and  down

[QuestionAuthority]

It's no more disastrous than the safety deposit boxes at a Wells Fargo getting robbed. I would have to believe their security was lax enough to entice robbers. Knowing they're a target might make me rethink using Wells Fargo safety deposit boxes.

[Timo Y]

A 51% attack would be disastrous even if they only double spent one satoshi. It's the loss of confidence in the technology that's the harm. Bitcoin relies on people believing in it to be a secure store of value.

It would be disastrous but it would also very likely spawn new chain acceptance rules that make this type of attack at lot more difficult. 

See:
http://gavintech.blogspot.ch/2012/05/neutralizing-51-attack.html

So it would basically be a one-off.  Either bitcoin would recover or a more robust altcoin would take its place.  Either way they attacker would fail in destroying the technology.

[deepceleron]

Having a majority hashpower means you get to decide how future blocks are constructed. If you have more hash power than the rest of the network, you will always persevere in a race to construct a longer blockchain. If I have and maintain a 50.1%+ hash rate and start mining blocks now, ignore blocks mined by others, and do something detrimental like ignore all pending transactions, eventually if not immediately I will have a longer blockchain that will replace the community chain. The certainty that I win becomes higher the more time passes.

What's even more fun is if I withhold my longer empty chain until later. If I have been mining a month silently and am ahead of the network, I can announce my blockchain and wipe a month's mining and transactions. I mine all the bitcoins, but even better, I can get back all the bitcoins I previously owned but spent during that month. This would be a bitcoin killer, 99% of clients immediately wipe the orphan chain data, and it would be a challenge to construct a client ignoring the new chain and get it out to every user before Bitcoin is declared dead.

Think of companies such as merchants and payment processors that have no way of reclaiming their payments if the sender does not retransmit after such a mass block-replace. Such a massive orphanarium will likely break the majority of Bitcoin accounting software running behind sites, maybe even in a history-wiping way depending on how the backend was programmed. The current hashrate is massive, it would take the NSA's million-square-foot Utah facility being converted into all-ASIC miners to have a chance. However, all we need is for a nation state or three-letter-agency to seize the operations of some of the biggest miners to reduce their impact or turn them against us.

[QuestionAuthority]

Having a majority hashpower means you get to decide how future blocks are constructed. If you have more hash power than the rest of the network, you will always persevere in a race to construct a longer blockchain. If I have and maintain a 50.1%+ hash rate and start mining blocks now, ignore blocks mined by others, and do something detrimental like ignore all pending transactions, eventually if not immediately I will have a longer blockchain that will replace the community chain. The certainty that I win becomes higher the more time passes.

What's even more fun is if I withhold my longer empty chain until later. If I have been mining a month silently and am ahead of the network, I can announce my blockchain and wipe a month's mining and transactions. I mine all the bitcoins, but even better, I can get back all the bitcoins I previously owned but spent during that month. This would be a bitcoin killer, 99% of clients immediately wipe the orphan chain data, and it would be a challenge to construct a client ignoring the new chain and get it out to every user before Bitcoin is declared dead.

Think of companies such as merchants and payment processors that have no way of reclaiming their payments if the sender does not retransmit after such a mass block-replace. Such a massive orphanarium will likely break the majority of Bitcoin accounting software running behind sites, maybe even in a history-wiping way depending on how the backend was programmed. The current hashrate is massive, it would take the NSA's million-square-foot Utah facility being converted into all-ASIC miners to have a chance. However, all we need is for a nation state or three-letter-agency to seize the operations of some of the biggest miners to reduce their impact or turn them against us.

Please tell me you don't own GHash.IO. You're a dangerous bastard. lol

[Krona Rev]

Having a majority hashpower means you get to decide how future blocks are constructed. If you have more hash power than the rest of the network, you will always persevere in a race to construct a longer blockchain. If I have and maintain a 50.1%+ hash rate and start mining blocks now, ignore blocks mined by others, and do something detrimental like ignore all pending transactions, eventually if not immediately I will have a longer blockchain that will replace the community chain. The certainty that I win becomes higher the more time passes.

What's even more fun is if I withhold my longer empty chain until later. If I have been mining a month silently and am ahead of the network, I can announce my blockchain and wipe a month's mining and transactions. I mine all the bitcoins, but even better, I can get back all the bitcoins I previously owned but spent during that month. This would be a bitcoin killer, 99% of clients immediately wipe the orphan chain data, and it would be a challenge to construct a client ignoring the new chain and get it out to every user before Bitcoin is declared dead.

Think of companies such as merchants and payment processors that have no way of reclaiming their payments if the sender does not retransmit after such a mass block-replace. Such a massive orphanarium will likely break the majority of Bitcoin accounting software running behind sites, maybe even in a history-wiping way depending on how the backend was programmed. The current hashrate is massive, it would take the NSA's million-square-foot Utah facility being converted into all-ASIC miners to have a chance. However, all we need is for a nation state or three-letter-agency to seize the operations of some of the biggest miners to reduce their impact or turn them against us.

This is the real danger of a 51% attack. I hope people read your post and think about it. I've heard people minimize a 51% attack as "someone can double spend for 10 minutes," but it can be much worse than that.

[BitsBitsBits]

I think a 51% attack would be a disaster. But someone with 51% of the hashing power does not necessarily mean they are attacking.

The chances of profiting from a 51% attack are just ridiculously low. Most exchanges need you to wait 3 or 6 confirmations. So basically the one attacking has to find the block 6 times in a row to be able to doublespend properly. Even if that would happen most exchanges would notice that the payment is a double spend. Chances of finding the block 6 times in a row aren't that high, even with 50% net work hashrate.

Basically you have a 50% chance to find the block.. 6 times in a row.

With lower hashrate you still have a chance to do it, but I would rather you'd pick up gambling instead. Your chances might be higher to win there.

[DDuckworth]

A 51% attack would be disastrous even if they only double spent one satoshi. It's the loss of confidence in the technology that's the harm. Bitcoin relies on people believing in it to be a secure store of value.

Would 1 satoshi really do it though?

For example, I go to a bar and buy a drink for 1 satoshi (somehow) and it turns out that my satoshi is counterfeit.  How would anyone find out it was counterfeit, and once they did do you really think that bar would turn it into national bitcoin news?  Think about real counterfeit money, we know it exists, but we don't let it affect the value of our currency, we accept all money as if it's good real money. If it turns out to be counterfeit then one person may be screwed and pissed, but it sure as hell doesn't make the news.  Not even the local news, much less the national news.  1 satoshi is probably not a problem.

[niudala]

I think a 51% attack would be a disaster. But someone with 51% of the hashing power does not necessarily mean they are attacking.

I completely agree with you!
GHash have is the only pool that can reach that 51% but I think we can trust them!
I really hope that no one get 51% of power!

[wasserman99]

A 51% attack would be disastrous even if they only double spent one satoshi. It's the loss of confidence in the technology that's the harm. Bitcoin relies on people believing in it to be a secure store of value.

Would 1 satoshi really do it though?

For example, I go to a bar and buy a drink for 1 satoshi (somehow) and it turns out that my satoshi is counterfeit.  How would anyone find out it was counterfeit, and once they did do you really think that bar would turn it into national bitcoin news?  Think about real counterfeit money, we know it exists, but we don't let it affect the value of our currency, we accept all money as if it's good real money. If it turns out to be counterfeit then one person may be screwed and pissed, but it sure as hell doesn't make the news.  Not even the local news, much less the national news.  1 satoshi is probably not a problem.

You cannot counterfeit bitcoin. What the closest thing to counterfeiting you can do is to double spend a TX. It is also not possible to spend only 1 satoshi at this time as the smallest TX that the network will accept is I believe 5160 satashi.

There are some double spend transactions that have occurred in the past and the confidence of bitcoin was not destroyed.