The Eyal & Sirer paper is pretty interesting - they basically point out that there is actually some game theory involved in when 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.
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.
Take a look at the recently mined blocks. there are some miners that very frequently mine two blocks within quick succession, like just now for example: Block 930256: https://www.blockchain.com/explorer/blocks/btc/930256 Followed by block 930257: https://www.blockchain.com/explorer/blocks/btc/930257 The second block is usually almost empty.
> 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.
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.
If you mine a block without revealing it, not only are you the only one that can mine the next block after that, but everyone is mining on the "wrong head". There's of course the risk that someone finds a different head in the meantime, but otherwise, you waste competitors' resources, while you get an advantage on the next block.
They are not mining on the wrong head. They are mining on the current head. If they find a block it will be accepted as the new head and the withheld block will be rejected, so it's not wasted mining time at all.
Not an expert, but I have two thoughts:
1. They don't have to wait until another miner finds a block, they can just wait "for some time" and then release their block. All that time gives them the edge for the next block.
2. My understanding is that if two different blocks are found concurrently for the same head, then the network waits for the next block to select which "new head" is accepted. I.e. when there are competing chains, the longer chain wins. So I could imagine that a strategy could be to wait until some other miner announces their block and release yours precisely at that time, hence creating two competing chains. But you presumably have an edge because you have already been mining for a while on top of your block.
There's no edge. Having spent time mining in the past doesn't increase your odds of finding a block in the future.
The idea is that you can start with the next head earlier than all the others, giving you an edge in being the first to find the next block.
But what do they gain by doing that? What's the edge? Starting earlier doesn't give you any advantage.
> Starting earlier doesn't give you any advantage
It's a race. Starting earlier obviously gives an advantage?!
No it's not a race, it's a lottery.
It would be like saying you've an edge if you start earlier at the roulette.
I think you're confused.
In a lottery, the more tickets you buy, the higher your chances to have the winning number.
If we played with a roulette and said "the goal is to be the first to have a winning number at the roulette" and I could try 50 times before you started, obviously I would be more likely to win our game, wouldn't I?
> In a lottery, the more tickets you buy, the higher your chances to have the winning number.
Yes, and it's exactly the same in bitcoin with the hashing power. Each hash is a ticket.
> If we played with a roulette and said "the goal is to be the first to have a winning number at the roulette" and I can try 50 times before you start, obviously I am more likely to win our game, am I not?
In bitcoin the goal is not to be the first. The goal is to find a winning hash that's on a chain that will not be abandoned. As soon as a new block is propagated you start mining on the new head. It doesn't change anything that you previously worked on another chain. The time spent on the previous chain is not wasted, unless finding a block wouldn't have got you the reward.
There is a kind of a race if 2 blocks are found simultaneously. But that's not really what this discussion is about, and in this case the outcome depends mostly on network connectivity.
It is precisely what this discussion is about. From the article:
> The key idea behind this strategy, called Selfish Mining, is for a pool to keep its discovered blocks private, thereby intentionally forking the chain. The honest nodes continue to mine on the public chain, while the pool mines on its own private branch. If the pool discovers more blocks, it develops a longer lead on the public chain, and continues to keep these new blocks private. When the public branch approaches the pool's private branch in length, the selfish miners reveal blocks from their private chain to the public.
> In bitcoin the goal is not to be the first. The goal is to find a winning hash that's on a chain that will not be abandoned.
The goal is to be the first (or very close to the first), because it makes it much more likely that your chain will not be abandoned. If you wait 2 days before you reveal your block, obviously it will be abandoned...
Right, but the odds of this happening is small(ish) - I'm certain there is a sweet spot for witholding time. If they don't find a block within the time interval, then effectively all the work for that time is "wasted" by the other participants since it could not have been put on the chain anyway AND the witholder has a headstart of a couple of seconds searching for a new block.
Wasting time would mean not receiving the rewards if they find a block. But that's not the case here. If they find a block within the time interval, they get the rewards (and the withheld block is discarded).
I might be wrong but I think it's like this..
A finds a block after 1 minute, then powers off and waits for another minute. They reveal the block after 2 minutes.
B searches for the block for 2 minutes.
After 2 minutes, A has used 1 minute of their compute, and B has used 2.
But the time spent by B is not wasted. If they find a block between minute 1 and 2, their block will be accepted, and A just lose the reward of the block they found.
When you reveal a block, it's not accepted instantaneously. When two competing blocks are revealed "roughly at the same time", it ends up in two competing chains.
If B finds a block between minute 1 and 2, they start working on their competing chain, but A is already working on theirs. And A had a headstart because it started working on it somewhere between minute 1. So it's more likely that A's fork wins the race in the end.
But the head start doesn't change anything. At this point A is mining on their block, B is mining on theirs. There's no advantage.
I'd even say that B is slightly more likely to keep their reward because they started propagating their block earlier, so it's more likely other miners are mining on this block.
If A finds a second block between minute 1 and 2, then they win, but it would be the same if the didn't withhold their block.
When A is mining on their hidden block, they mine for a potential height of 2 that would win against a miner only able to push a height of 1. But by doing that they put the block they found at risk of being abandoned because another miner found a block in the meantime.
So if you find a block, you get almost 100% chance it'll stay if you publish it immediately. If you withhold it and find another one you get 100% chance of keeping your 2 blocks. If you don't find that 2nd one, you get <50% chance of your block to be the main chain (depending on time of reaction of another block being published, and connectivity). On the other hand, if you don't withhold it and find 2 blocks in a row, you also get almost 100% chance of keeping your 2 blocks. I fail to see how withholding is profitable.
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
That's a good question, but it is different. The equivalent would be "if everyone just agrees that a bitcoin is worth nothing, then it is worth nothing".
I don't know if I have a good comparison here, but maybe something like "if the bank keeps your money for a little longer before validating your transaction, they can use your money for a little longer and make more money from it". Of course if your bank says that a transaction takes 1 year, you will go to another bank. But if they say it takes a day...
I don't think it is the same thing. Everyone agrees that mining the next block is valuable.
Unless they didn’t.
There’s nothing inherently valuable about crypto beyond what value people assign to it in their minds.
But that's irrelevant to the question above. The question asks "isn't [this attack] the same as saying that if everybody agrees that the USD is worthless, then it is worthless?".
The answer is "no, it's not the same". The attack does not require everybody to agree that the bitcoin is worthless.
Obviously if everybody agrees that the bitcoin is worthless, then it is worthless. But that's a separate topic.
Same with all money. Please research more before parroting this argument. You are not the first person to think of it.
Fiat money has a difference: an army. It is issued by a government which has the legitimate right to demand taxes, paid in their currency, and deprive you of life and liberty if you don't.
Ultimately the populace could repudiate the whole social contract, which is also just consensus, but that's a far bigger deal than mere money.
Well to be pedantic, in the USA at least the value of the dollar is largely maintained by civilian law enforcement rather than the military. If you incur a tax liability and fail to pay your debt in US dollars then eventually the IRS will seize your assets and auction them off to settle the debt. Due to the Posse Comitatus Act, the Army doesn't get involved.
The true value of (fiat) money is derived from the fact that contracts are denominated in that money and those contracts are enforced by a central authority with guns. No other assumption is needed in financial engineering.
GP was arguing against GGP’s point and I was simply pointing out that the argument was hollow.
What are you referring to with “research more”?
Hmm, maybe I wasn't following the thread very well? Many people like to discredit Bitcoin by saying it's only worth is what people decide it is. If that's not what you were trying to do then I apologize.
I don’t discredit any crypto based solely on its ability or inability to fulfill debts, public and private.
But I do wonder if the abstract nature of it will forever hinder its ability to do so universally.
I’m also interested why Bitcoin Cash wasn’t more successful after the fork.
>I’m also interested why Bitcoin Cash wasn’t more successful after the fork.
you mean besides it being run by a bunch of crooks and scam artists like CSW?
I wasn’t actually asking, but making a point. Thanks for helping spell it out though!
It's always hilarious when people who are unclear on the basics themselves tell other to "research more". I suppose it's the Dunning-Kruger Effect.
False. Gold and silver have intrinsic value beyond their use as currency.
True, but only a minuscule fraction of it is used for that purpose. If that were the sole source of its value, it would be worth pennies per once.
https://pse-info.de/en/scale/price - gold doesn't stand out, there are a few similar ones (Rhodium/Palladium/Iridium/Platinum). I haven't checked, but we'd probably find the gold price sits in a boring-looking distribution of the prices of other elements. Probably an exponential or something that could be mistaken for it. https://en.wikipedia.org/wiki/Prices_of_chemical_elements if you prefer wikipedia.
If it wasn't radioactive, poisonous and pyrophoric people would probably all just leap into the Neptunium market.
That is obviously false on it's face.
If it were only worth pennies an ounce, numerous industries wouldn't be paying what they do for it. The fact that many industries value it at several thousand dollars an ounce is self-evident from their continued use of it.
This is interesting to think about: For gold I'd say the demand is coming from both industries and from people who want it as a store of value. If it was only used as an industrial chemical, then surely the price would drop because there would be less demand.
Some bitcoin advocates will talk about how useful it is as a currency, and I wonder how much bitcoin is actually used for purposes other then to hope you can sell it to someone else for more than you paid.
If the price dropped, it would be even more in demand and reach equilibrium. Gold has several unique mechanical properties, being the most corrosion resistant metal and one of the most electrically conductive, as well as being able to be flattened into extremely thin sheets and drawn into extremely fine wire.
Not for most people. They aren't going to smelt it down and use it to build electronics or jewelry.
For most people the value is what they can receive for it in trade. Which holds for all money.
Okay, fine. Everyone involved** agrees that mining the next block is valuable.
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 today.
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.
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.
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.
"Bitcoin's security inevitably weakens over the coming years due to diminishing miner rewards (denominated in BTC)"
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:
https://newhedge.io/bitcoin/block-reward-per-block
And not only that, but rewards are still expected to stabilize even when measured in BTC (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.
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...
> It's puzzling to me why some still don't understand the systemic incentives...
Then I guess you're the type who will be really surprised to learn that with diminishing rewards comes increasing consolidation.
> ... that make all this work as it has for 16 years and counting...
That's convenient way to memory hole the market flash crashes, network forks, the blocks mined without consensus, and everything bad that happened over that timeframe.
How are you so confident that it will never weaken? Especially since there will come a time when the block reward is literally 0.
Tx fees make up a bigger and bigger fraction of miner rewards over time.
Is a store of value that requires a significant fraction of it be eaten up by transaction fees to maintain security going to be actually useful in the long term?
transaction fees are not increasing though, so they can't offset miner rewards. they have been in the $100k-$200k per day range for a long time, with only occasional breakouts: https://www.blockchain.com/explorer/charts/transaction-fees-... and the trend is not to the upside. in fact with the arrival of ETFs in 2024 the trend is clearly downwards.
Rewards decrease due to halving and there is no guarantee that transaction fees will compensate it.
Rewards are also a permanent infinite money glitch that last in perpetuity? Or won't be changed in the future?
> However, as Bitcoin's security inevitably weakens over the coming years due to diminishing miner rewards (denominated in BTC),
Says you, without a hint of a rationale backing your argument.
It seems to me that the historical hashing rate curve tells a different story.
And block rewards have been diminishing regularly (and very predictably) pretty much since day one.
The hashing rate is not directly relevant. That's roughly proportional to the daily dollar value of the reward times the efficiency of the leading mining hardware. The latter has gone up many orders of magnitude over the years.
> block rewards have been diminishing regularly
That's exactly what the poster you're replying to argued; the BTC denominated block subsidy halves every 4 years, and so without a corresponding doubling in price, the bitcoin security budget keeps diminishing, at least until tx fees start to dominate the subsidy.
you can accept bitcoin at any confirmation you want, it isn't a policy
TIL the scale of bitcoin derivatives in 2020 (hence volatility): ~2T on 2B market activity. Jeepers!
--- 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. ---
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?
Well for one with a gigantic derivatives market compared to the underlying one it becomes relatively cheap to manipulate the underlying market.
If you can make a gigantic bet on the price going up and then buy a large amount of Bitcoin that moves the price up you can win from that. See the Jane street India derivatives market issue.
I dunno, ask India and Jane Street. That's the same basic situation: when the derivative market betting on the price going up or down is much larger than the market that actually sets that price, it's ripe for arbitrage/market manipulation by a player big enough to move the market (which one you think it is depends on whether you're one of the gamblers getting fleeced or the one taking their money).
How is trading the actual BTC not also gambling on the price of BTC going up or down?
It's not really, but the difference is that I'm limited by the supply of BTC, and it requires that I actually have the money to make the 'bet' at the start. That restricts the size of the spot market.
If I'm buying futures I can enter into a contract that says "I'll buy a contract for 1BTC that says BTC is going to go from $88.5k to $98.5k in 1 year." I don't actually hand over any money. In a year's time, if BTC is now $100k the person who agreed on the contract gives me $10k. If it doesn't go up then I owe the seller $10k. The futures contract is settled in cash - no BTC is involved.
Right now though, I don't have a $88.5k to spend on BTC, so the spot market isn't an option. I probably could find $10k in a year's time so a bet on a BTC future might be viable. The actual derivative 'value' isn't real though. The only money changing hands is the delta of the change in value when the contract is settled.
(Caveat: I am a total noob at finance stuff so this could be quite wrong. One of the many reasons I will not be buying that futures contract. :) )
It's very wrong. Futures contracts on traditional exchanges have no counterparty risk and require the deposit of a significant amount of upfront capital as collateral. If the spot price of the underlying moves in either direction, debits or credits are made to and from each margin account and if you don't have the money to cover a margin call, the contract gets closed.
Future markets give traders leverage of 100x sometimes or more. Margin requirements are much lower than trading spot.
You might buy BTC to actually spend it, say on paying a ransomware vendor.
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.
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.
In the near future every nation state will be vying for the largest stake of the BTC mining pie and the BTC race will be bigger than the Space Race and the Nuclear Arms Race combined and adjusted for inflation.
why
Why? BTC is not just worthless, it has negative value due to how much electricity it takes to securely mine new blocks.
It's worth around 85k USD at the time you wrote the comment
Did you read the paper? There exists a technology that has purely enforceable property rights. What is that actually worth? I don't know.
Yeah yeah, I've read the arguments about liquidity issues, shutting down the rails, making it illegal to trade, etc. but that's beside the point and depends on a thousand future variables to play out. So I don't know if btc will make it or not, but I do know property rights mean everything to humans. They literally determine whether not one is a slave (I am my own property). So just the ability to have a technology enables pure property rights to a world where nobody really has enforceable property rights over anything seems pretty interesting to me.
Property rights are enforced with guns.
That's why Monero is superior; no amount of guns is going to help somebody steal property that they don't know you have.
That's like saying cars have negative value because of how much oil it takes to run them.
Cars have the benefit of transporting humans and goods around.
It's more like saying a hypothetical car which moves itself by using gasoline as a propellant rather than fuel for its combustion engine would have negative value.
Sure, using fuel (of all things) for propulsion would be one way to move a vehicle, but it would be inefficient by design.
Bitcoin, at least, was created during a time where there was no alternative to security-by-inefficency, but PoS and other consensus mechanisms are pretty battle-tested now
But cars are useful.
Diminishing value certainly it's called depreciation
The answer to this problem is in the original Bitcoin whitepaper itself. It gives the formula for the required number of confirmations.
The Monero PoW community has had to deal with such nonsense, as have other smaller PoW coins.
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 https://gist.github.com/impredicative/0907e1699f5ff97a9fed5d... 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.
So 240 minutes for Bitcoin, and 98 minutes for Monero.
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.
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.
Yes: "Not aligning with reality is disruptive." Some lessons have to be learned the hard way if they're not learned the soft way. The problem is not reality.
you can wipe out Russia with thousands of nuclear bomb
TIL: https://ccaf.io/cbnsi/cbeci - quite horrifying!
EDIT: For comparison: https://gridwatch.co.uk/
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.
Well, improved energy efficiency just means more hashes/s and the difficulty adjusting. There's nothing to be gained in terms of the security or efficiency of the network as a whole by making the hardware faster, it's only good for whoever makes and uses that hardware.
I'm not sure what data you looking at but we went from 8300 J/TH in 2014 to 33.4 J/TH in 2023. So... what are you talking about?
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.
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.
Bitcoin cares not for how much energy it uses, just how valuable the energy it uses is. This does not make more energy available to anyone else or reduce the price.
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).
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.
In the long run BTC as a universal digital global currency will be more efficient than the fiat currencies it replaces.
Better shoot down the sun then.
You’re right. I’ll setup the database. Everyone can trust me, honest!
Meanwhile, Hedera remains carbon negative and 7 orders of magnitude more efficient than Bitcoin.
"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."
[0]: https://hedera.com/blog/going-carbon-negative-at-hedera-hash... [1]: https://discovery.ucl.ac.uk/id/eprint/10160701/
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
Here you go! https://hedera.com/bug-bounty/
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.
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.
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.
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.
Out of curiosity, do you have an estimate on that?
BTC enthusiasts have very creative arguments for why their currency isn’t the a complete disaster for the climate. Like pointing fingers.
The good that BTC will do in the long run is worth the investment. Civilization getting out from under fiat currencies - once and for all - is a massive step in the right direction.
> gas that's normally burned off at the well site
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
They still do it in North Dakota
flare-offs are much better than releasing raw methane into the atmosphere because methane is a much worse greenhouse gas than CO2
> 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.
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.
> Unlike AI, there's a strong incentive to find the cheapest electricity possible.
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.
"BTC is a sure bet in the long run "
7 transactions per second is NOT a sure bet.
At 7 TSP BTC is far more fungible than Gold.
And don't discount the negative sentiment around bitcoin as the nest of types that deserve to be completely wrecked financially, because they add no value to society, as in a Ponzi scheme. It seems inevitable to me this scheme is going to end some day and nobody is going to give a damn. It'll be the "Good Riddance Coin", filled with negative sentiment.
And what does sucking up all that low cost electricity to waste on a frivolity do to the price of electricity in general?
Cmon you remember supply and demand right
Is it illegal to attack cryptocurrency?
If crypto needs legal protection from attacks, I think that would invalidate most of its value proposition.
Definitely reduces the cost of consensus though.
You will probably end up in court. But you might not get convicted.
Shakeeb Ahmed was convicted of wire fraud for exploiting a smart contract bug.
Avi Eisenberg was also convicted for exploiting a smart contract bug, but he had his conviction overturned on appeal.
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.
Not legal advice ;-)
Depending on the currency, it's celebrated. (Code is law, etc.)
That says nothing about actual legality though, just like how me saying I am the law doesn't make me the king of the world.
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.
That said, authorization implies an entity with ownership rights granting some kind of limited license to others to interact with the owner's property.
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.
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.
This solution to this issue is extremely simple, but I bet it will never be implemented in Bitcoin BTC. That's one of the reasons why it forked in 1 August 2017.
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.
But who ultimately controls Bitmain? The Chinese state.
So, by extension, bitcoin is controlled by the CCP.
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.
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.
why? the easy solution is to let china monopolize bitcoin mining, and the value of bitcoin crashes. then the USD will stand unopposed and the chinese will end up with a bunch of useless equipmemt
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.
"Democratizing finance" my a**.
This article is FUD. No one is spending $30B+ for an attack that gasp extends the required confirmations to a few hours until a re-org can be achieved and accounts settled.
In fact, wiping out the derivative markets would be seen as a net-postive by most individual hodlers.
You forgot to do your own research and read the article.
I believe the article reached the same conclusion you did