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Message
Bitcoin faces biggest threat yet: a miner takeover
Posted on 6/17/14 at 10:31 am
Posted on 6/17/14 at 10:31 am
LINK
quote:
NEW YORK (AP) — The Bitcoin digital currency system is in danger of losing its credibility as an independent payment system because of the growing power of a group that runs some of the computers behind it.
In recent weeks, a British-based “mining pool” called GHash has amassed nearly half of the Bitcoin computing power and has briefly gone over 50 percent. Miners operate the computers that keep track of bitcoins and create additional coins.
Miners pool their computing power to spread the financial risk of their operations. If GHash amasses more than half of the computing power devoted to Bitcoin, it could in theory control the flow of transactions, freeze people out of the network and keep all future bitcoins for itself.
11
Posted on 6/17/14 at 10:43 am to LSURussian
Funny how people actually thought the Bitcoin era was on its way.
Posted on 6/17/14 at 10:47 am to LSURussian
quote:
If GHash amasses more than half of the computing power devoted to Bitcoin, it could in theory control the flow of transactions, freeze people out of the network and keep all future bitcoins for itself.
If they think that will work, those fools don't understand the tech.
Posted on 6/17/14 at 10:52 am to LSURussian
Hasn't a group been pretty close before? I thought this was nothing new. Basically, the speculation was that the currency would essentially devalue and collapse if a group sustained 51%+ of the computing power. I'm fairly certain they've avoided this in the past at least once already.
ETA: I'm not a believer in Bitcoin at all. (didn't want to confuse the non-believers that I was a supporter and risk feeling the wrath). Just thought I had read about this scenario before.
ETA: I'm not a believer in Bitcoin at all. (didn't want to confuse the non-believers that I was a supporter and risk feeling the wrath). Just thought I had read about this scenario before.
This post was edited on 6/17/14 at 10:54 am
Posted on 6/17/14 at 11:04 am to kennypowers816
I'm pretty sure you're correct in that the 50%+ threshold has been reached, or almost reached, previously.
To me the real news here is not that a private group has done it, but that if btc really does threaten a country's economy or financial or political system, then any substantial country could muster the resources to destroy bitcoin's attraction. Unlike the private group mentioned in the link, a country would have no loyalty to the btc concept and therefore would not hesitate to burn down the btc house.
This is the weak link that leaves BTC vulnerable and will never allow it to be the systemic threat the btc fan boys think it will become.
To me the real news here is not that a private group has done it, but that if btc really does threaten a country's economy or financial or political system, then any substantial country could muster the resources to destroy bitcoin's attraction. Unlike the private group mentioned in the link, a country would have no loyalty to the btc concept and therefore would not hesitate to burn down the btc house.
This is the weak link that leaves BTC vulnerable and will never allow it to be the systemic threat the btc fan boys think it will become.
Posted on 6/17/14 at 11:28 am to LSURussian
I think BTCers know its a risk today but hope that it won't be worth it for a country to do such a thing in the near future. Their hopes is that it keeps expanding and by the time its evident that its a major competitor, it will be too late.
ETA: And BTCers shouldn't bitch about it as they've done the same to altcoins preventing them from becoming major competitors to them.
ETA: And BTCers shouldn't bitch about it as they've done the same to altcoins preventing them from becoming major competitors to them.
This post was edited on 6/17/14 at 11:30 am
Posted on 6/17/14 at 11:34 am to LSURussian
How many times did Wiki assure me this could not happen? He is not around antmore, so he gets to avoid an "I told you so."
Posted on 6/17/14 at 11:44 am to LSURussian
Is this the same group that almost pulled it off 6 months ago 
Posted on 6/17/14 at 11:47 am to C
The economics of Bitcoin mining will lead to concentration of computing power into mining pools as the economies of scale will make mining unprofitable for independent miners. Eventually there will be just a few mining pools with significant portions of the Bitcoin computing power. At that point it will not be difficult for any motivated country to attack the network.
All it will take is to temporarily disable the communications of enough mining pools to seize control of the network and create whatever havoc the country feels like creating.
All it will take is to temporarily disable the communications of enough mining pools to seize control of the network and create whatever havoc the country feels like creating.
Posted on 6/17/14 at 12:14 pm to LSURussian
What happened to the but coiners around here?
Posted on 6/17/14 at 12:34 pm to LSURussian
One of the PCs at work became infected with the Cryptowall virus which is the latest "ransomware" tied to the so called RIG Exploit kit.
For those who don't know, ransomware attacks work like this.. Malicious code is delivered to the target PC and proceeds to encrypt files to RSA-2048 strength. Upon completion, the public key is delivered to the affected PC and the private key is held for ransom by the perpetrators who demand payment in .... Bitcoins.
Maybe I'm not edgy enough to understand why a so called currency that offers nothing other than a means to sell drugs, weapons, stolen property and to extort people online is so awesome.
For those who don't know, ransomware attacks work like this.. Malicious code is delivered to the target PC and proceeds to encrypt files to RSA-2048 strength. Upon completion, the public key is delivered to the affected PC and the private key is held for ransom by the perpetrators who demand payment in .... Bitcoins.
Maybe I'm not edgy enough to understand why a so called currency that offers nothing other than a means to sell drugs, weapons, stolen property and to extort people online is so awesome.
Posted on 6/17/14 at 1:25 pm to LSURussian
Perhaps I'm not privy to the intricacies of this, but why would this group want to destroy the value of something they've worked so hard to accumulate? Seems counterintuitive to their efforts.
Posted on 6/17/14 at 1:27 pm to rintintin
They don't want to destroy it. But a threatened country would.
This recent event just points out that it's not all that difficult to take control of the process. Especially for any entity with large computing power resources.
This recent event just points out that it's not all that difficult to take control of the process. Especially for any entity with large computing power resources.
Posted on 6/17/14 at 3:50 pm to LSURussian
FWIW, they can't "keep all future bitcoins for itself", what they can do is double spend transactions.
And they have consistently been over 50% in the past week or so, a few double spends have happened, but nothing major, they aren't going to attack the network as it would mean massive price inflation of their held bitcoins.
And they have consistently been over 50% in the past week or so, a few double spends have happened, but nothing major, they aren't going to attack the network as it would mean massive price inflation of their held bitcoins.
Posted on 6/17/14 at 3:52 pm to LSURussian
quote:
This recent event just points out that it's not all that difficult to take control of the process. Especially for any entity with large computing power resources.
The Bitcoin network operates at 116 exaflops right now, there is not an entity on earth with the computing power necessary for that. GHash is a cloud mining service, it takes 5 seconds to switch to another pool.
Posted on 6/17/14 at 3:54 pm to Poodlebrain
quote:
The economics of Bitcoin mining will lead to concentration of computing power into mining pools as the economies of scale will make mining unprofitable for independent miners.
Enter tree chains.
The smartest cryptographers in the world are working on this, do you seriously doubt them?
And I definitely do not think Russian's OP is accurate. The biggest threat Bitcoin faces is centralization of full nodes.
This post was edited on 6/17/14 at 4:15 pm
Posted on 6/17/14 at 4:31 pm to joshnorris14
quote:
The smartest cryptographers in the world are working on this, do you seriously doubt them?
LINK
Posted on 6/17/14 at 5:09 pm to joshnorris14
quote:So, so naive....
The Bitcoin network operates at 116 exaflops right now, there is not an entity on earth with the computing power necessary for that.
Posted on 6/17/14 at 5:19 pm to LSURussian
quote:
So, so naive....
There is a person here who is naive, but it's not me.
Do you realize how much computational power goes behind 100 exaflops?
The maximum computational power behind the #1 supercomputer is around 50 petaflops. I don't know how adept you are at math, but the Bitcoin network operates at roughly 24,000 times as much power as that.
Posted on 6/17/14 at 5:24 pm to Cold Cous Cous
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