Part of this post addresses the economics of creating a 6 block re-org. This makes sense as 6-confimations is the standard for Bitcoin finality <i>today</i>.<p>However, as Bitcoin's security inevitably weakens over the coming years due to diminishing miner rewards (denominated in BTC), I believe this "6-confimation" acceptance policy will change to include not only the number of confirmations, but the timing of those confirmations as well. Consider a scenario where an exchange deciding whether a tx with 6-confirmations that took 4 hours to arrive (this happens occasionally) is safe to consider finalized/settled. Even though 6-confimations may be considered safe by today's acceptance policies, this tx would still have a high probability of double spend due to the assumed 4-hour long wait for the 6 confirmations (as the attacker would have 4 hours to produce 7 blocks instead of the normal/expected 1 hour). Instead of ignoring block interarrival timing, it may make sense to include block timing as part of an acceptance policy.<p>So, going forward Bitcoin acceptance policies may change from today's 6-confirmation standard to something more complicated that involves the amount of time those blocks took to arrive. This would significantly enhance Bitcoin's double spending resistance without adding/altering any code and may give the network a much needed security boost in the coming years to prevent the attack discussed in the post.
If the attacker is waiting for a lucky event to occur (finding more blocks than others while having less than 51% of the mining power) it means that they are constantly wasting mining time. That in itself is a huge cost (operational cost and block rewards thrown away), but it also means that they can't predict when it will happen. A double spend attack must be planned in advance because the first transaction must occur at the beginning of the attack. I'm not sure how they could constantly try double spends without risking losing the money each time the attack doesn't happen.<p>I don't see how it could be profitable. If it can't be profitable, then the risk of someone doing it is pretty low. If they already have the necessary hardware, they'd be much better off mining.
<i>"Bitcoin's security inevitably weakens over the coming years due to diminishing miner rewards (denominated in BTC)"</i><p>That's incorrect. Security scales with USD-denominated rewards, not BTC-denominated. And there are 16 years of real-world data showing they have been generally increasing, so a healthy sign that the Bitcoin experiment is working:<p><a href="https://newhedge.io/bitcoin/block-reward-per-block" rel="nofollow">https://newhedge.io/bitcoin/block-reward-per-block</a><p>And not only that, but rewards are still expected to stabilize <i>even when measured in BTC</i> (thereby not relying on an increase of BTC's price) as they are progressively composed more and more of tx fees instead of newly mined BTC.<p>It's puzzling to me why some still don't understand the systemic incentives that make all this work as it has for 16 years and counting...
The Eyal & Sirer paper is pretty interesting - they basically point out that there is actually some game theory involved in <i>when</i> miners should reveal that they mined a block to compete most effectively with their fellows. If a pool can set up a situation where they mine a block and wait X seconds to reveal it, they can force other miners to waste X seconds of has power and gain an advantage.<p>It looks like a result with complex implications - eg, maybe making it impossible for new miners to set up unless they have a meaningful advantage in operating costs instead of just parity with the entrenched players. It is hard to tell because market reality is a mess but if there is a meaningful strategic choice to be made beyond simply announcing a block when it is mined then there is a lot of room for weird equilibriums even if the paper's specific analysis turns out to have flaws.
> If a pool can set up a situation where they mine a block and wait X seconds to reveal it, they can force other miners to waste X seconds of has power and gain an advantage.<p>How is it wasted if they work on the current chain? If they find a block during those X seconds, they'll propagate it before the waiting pool does. The waiting pool will then just lose the revenue from the block they put on hold. They're the ones wasting mining time when that happens, while the others never do.
Isn't this the same thing as saying "if everyone just agrees that a dollar bill is actually just a piece of paper, USD becomes worthless"? Albeit at a smaller scale
TIL the scale of bitcoin derivatives in 2020 (hence volatility): ~2T on 2B market activity. Jeepers!<p>---
Starting in late 2020, as shown in The Economist's graphic, the spot market in Bitcoin became dwarfed by the derivatives markets. In the last month $1.7T of Bitcoin futures traded on unregulated exchanges, and $6.4B on regulated exchanges. Compare this with the $1.8B of the spot market in the same month.
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Why would you expect the scale of the derivatives to be related to the scale of the spot market, especially if the derivatives are cash-settled futures? One is basically gambling on the price of BTC going up or down, and the other is trading the actual BTC, right?
This is good analysis. The main longitudinal aspect omitted is that the profitability of the attack goes up as long as the price of BTC doesn't double or more each halving.<p>In ~6 more years, Bitcoin will undergo two more halvings, so if the price of BTC is not ~400k by then, then attack will have become more feasible.
TIL: <a href="https://ccaf.io/cbnsi/cbeci" rel="nofollow">https://ccaf.io/cbnsi/cbeci</a> - quite horrifying!<p>EDIT: For comparison: <a href="https://gridwatch.co.uk/" rel="nofollow">https://gridwatch.co.uk/</a>
Well what's arguably even more horrifying is according to "Estimated average energy efficiency of bitcoin mining hardware" no significant changed happened since 2014. I imagine we went from CPU to GPU to ASIC in couple of years and now for more than a decade, no change, just more.
Since when is incentivizing low cost renewable energy horrifying?
My first link shows that Bitcoin consumes roughly 40GW and my second link shows that the UK roughly does too.<p>There are a lot of ifs and buts here ... but the amount of power used to support the BT mechanism worldwide is roughly the same as the power consumption of the entirety of the UK.
Because every unit of electricity causes climate change and burns resources (even renewable sources of electricity - they just burn them slower). From a societal point of view we are dumping huge amounts of electricity and resources into a hole to accomplish nothing that couldn’t be accomplished with a database and a trusted third party at a billionth of the cost (or less).<p>The vast majority of transactions are speculation on what other people might pay for a bitcoin (i.e., a line on a spreadsheet). And even then, that speculation and trading often occurs on secondary markets which rely on trusted third parties - thus rendering the entire ordeal even more pointless.
Better shoot down the sun then.
You’re right. I’ll setup the database. Everyone can trust me, honest!
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Unless your intent isn't making the world a better place in some sort of meaningful way, learn about things and find something to care about that you can affect that actually matters. Bitcoin or AI or whatever is not worth your time. Do something real.<p>If we ever get to the point where bitcoin or what people are doing on servers is the most pressing problem in the world worthy of our outrage, I will cheer you on.<p>"Anon yells at cloud" isn't worth anyone's effort or time.
Wait till you find out how much fossil fuel energy the US burns via its military to defend the dollar.<p>Burning firewood actually immediately releases an extensive set of carcinogens, also causing depression.
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Meanwhile, Hedera remains carbon negative and 7 orders of magnitude more efficient than Bitcoin.<p>"Today, Hedera is performing the equivalent of over 10,000,000 transactions and 788,000 transactions for the same amount of energy it takes Bitcoin and Ethereum to process 1, respectively."<p>[0]: <a href="https://hedera.com/blog/going-carbon-negative-at-hedera-hashgraph/" rel="nofollow">https://hedera.com/blog/going-carbon-negative-at-hedera-hash...</a>
[1]: <a href="https://discovery.ucl.ac.uk/id/eprint/10160701/" rel="nofollow">https://discovery.ucl.ac.uk/id/eprint/10160701/</a>
I find extremely funny that I came across this spammy comment while sitting on a vulnerability in their code because my attempts of contacting them have been unsuccessful
Everything is orders of magnitude more efficient than bitcoin.
Databases either?
What this site does not show is how much of the power used to maintain the network is waste power such as gas that's normally burned off at the well site or hydro electric that goes to waste.<p>Unlike AI, there's a strong incentive to find the cheapest electricity possible. Because that's what everyone else is doing. With Bitcoin, you now exactly what your costs are and what your yields are. There's a clear threshold, when power in an area becomes too expensive there's no reason left to mine.<p>AI, on the other hand, is a bet on the future - infinite gains. No matter how much power costs, it's worth it to keep using as much as possible. We can't know how much power AI uses. Unlike Bitcoin, there aren't any metrics from which to extrapolate. But we do know that AI uses more power than Bitcoin already. We just have no idea how much more.
> We can't know how much power AI uses.<p>I call shenanigans on this statement. We can and most certainly can tell how much power AI is using. The upper bound is the total datacenter usage.
BTC enthusiasts have very creative arguments for why their currency isn’t the a complete disaster for the climate. Like pointing fingers.
> gas that's normally burned off at the well site<p>Funny thing about that. Civilized governments put a stop to that, by fining flare-offs to make it economical to not do that.
Did they require the methane be captured? I thought flare-offs were done because the methane gas is something like 1000x worse than the CO2.
I hadn't heard of this. Do they just allow the gas to go into the atmosphere instead? I've always heard that's worse than burning it
flare-offs are much better than releasing raw methane into the atmosphere because methane is a much worse greenhouse gas than CO2
They still do it in North Dakota
> What this site does not show is how much of the power used to maintain the network is waste power such as gas that's normally burned off at the well site or hydro electric that goes to waste.<p>WTF? Hydro is rarely wasted because it's so dispatchable. Typically, it can only happen during high water seasons. Same for the gas power plants.<p>> Unlike AI, there's a strong incentive to find the cheapest electricity possible.<p>Like coal.
An interesting point is that any nation state or corporation can focus resources on either AI or BTC, but not both at the same time. BTC is a sure bet in the long run while AI is potentially capable of delivering a faster ROI with no hard guarantees. As BTC FOMO hits every country on Earth it's likely that AI will take a 100+ year backseat to massive state sponsored BTC operations. It's not hard to imagine a situation where governments restrict AI HW manufacture and limit electricity for AI as a means of supporting the national BTC effort.
The answer to this problem is in the original Bitcoin whitepaper itself. It gives the formula for the required number of confirmations.<p>The Monero PoW community has had to deal with such nonsense, as have other smaller PoW coins.<p>With ε=1e-3, the expected number of 6 confirmations works only so long as the largest pool size does not exceed 12%. For a pool size of 30%, at least 24 confirmations should be required in Bitcoin, but 49 in Monero with its stricter ε=1e-6. You can see the table and the math at <a href="https://gist.github.com/impredicative/0907e1699f5ff97a9fed5dee20393266#file-confirmations-md" rel="nofollow">https://gist.github.com/impredicative/0907e1699f5ff97a9fed5d...</a> and again it's all cleanly reproducible from the whitepaper. Anyone who is still requiring only 6 confirmations then will be setting themselves up for a risk of reversal.
Bitcoin has a block/confirmation approximately every 10 minutes, and Monero every 2 minutes.<p>So 240 minutes for Bitcoin, and 98 minutes for Monero.<p>So even though Monero is more strict, it is still "faster".
TFA observes that it would be disruptive and socially difficult to move systems to expect requiring 24 confirmations, and expresses relief that other responses are possible.<p>Perhaps this is more suitable as a response over months or years to a long-term shift in the composition of Bitcoin miners than as a short-term measure when it appears that someone has suddenly acquired 30% of mining capacity today.
Before the AI bubble, Bitmain was only worth ~$1 billion. Now they are worth ~15, because they make chips for AI also.
Either way, you could buy bitmain for the budget mentioned in the attack if it were for sale.
Or bitmain could pull off the attack, if indeed they do "control ... all the major mining pools" as the article alleges.<p>But who ultimately controls Bitmain? The Chinese state.<p>So, by extension, bitcoin is controlled by the CCP.<p>What a shitshow. Crypto needs to move on from bitcoin already, pick something better... anything better. There are so many options, and bitcoin is the worst of all of them.
Too many people have a vested interest in keeping Bitcoin going for as long as possible, sadly. It's going to take a massive black swan of some kind to shake their faith.<p>Heck, they can embed CSAM into the Bitcoin blockchain and that won't stop anyone from using it, because above all else, line must go up.
Like it or not in the end it will just be BTC.
China will stop exporting Bitcoin mining tech. Nation States will dump money into proprietary BTC mining tech and keep it to themselves just like military tech.
The US needs to see this reality and focus on domestic BTC mining tech like the future depends on it.
It comes down to semiconductor manufacturing, not ASIC design. Taiwan, Korea, USA are still on top.
LOL. The Sam Altman plan. Or the US could just put Bitcoin on the Entities List and forbid any US citizen and any US owned entity from investing or trading Bitcoin and Bitcoin derived financial instruments, probably force 25% or more of the Bitcoin money to pull out, crater Bitcoin value, and not perpetuate this atrocity against nature and humanity.<p>"Democratizing finance" my a**.
Is it illegal to attack cryptocurrency?
If crypto needs legal protection from attacks, I think that would invalidate most of its value proposition.
You will probably end up in court. But you might not get convicted.<p>Shakeeb Ahmed was convicted of wire fraud for exploiting a smart contract bug.<p>Avi Eisenberg was also convicted for exploiting a smart contract bug, but he had his conviction overturned on appeal.<p>The Peraire-Bueno brothers were in court for exploiting a bug in the MEV mechanism but it ended in a mis-trial so we're going to have to wait to find out.<p>Not legal advice ;-)
Depending on the currency, it's celebrated. (Code is law, etc.)
The attack described in this article might violate CFTC market manipulation regulations.
IANAL, but from my understanding, the primary law used to prosecute hacking is the CFAA's broad "without authorization" and "exceeding authorized access" clauses.<p>That said, authorization implies an entity with ownership rights granting some kind of limited license to others to interact with the owner's property.<p>For a permissionless decentralized network with no owner, where the attack is against the consensus of which chain is valid, I'd have a hard time arguing that "authorization" as a concept is even applicable or relevant.<p>As wmf suggested, market manipulation laws may still apply, but I'm not sure traditional CFAA "without authorization" / "exceeding authorized access" hacking charges could apply, though I'd be willing to bet a prosecutor could make a case for wire fraud - a scheme to defraud using interstate communications.
Bitcoin is the least efficient technology ever created. There is no limit to how much electricity it can consume just to handle 7 transactions per second. No matter HOW much electricity it uses this value will never increase.
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This article is FUD. No one is spending $30B+ for an attack that <i>gasp</i> extends the required confirmations to a few hours until a re-org can be achieved and accounts settled.<p>In fact, wiping out the derivative markets would be seen as a net-postive by most individual hodlers.