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Bitcoin Protocol Vulnerability Could Lead To a Collapse
First time accepted submitter stanga writes "Cornell researchers unveiled an attack on the Bitcoin mining protocol
that enables selfish mining pools to earn more than their fair
share. In a technical
report the authors explain this
attack can be performed by a pool of any size. Rational miners
will join this pool to increase their benefits, creating a snowball
effect that may end up with a pool commanding a majority of the
system's mining power. Such a pool would be able to single-handedly
control the blockchain, violating the decentralized nature of the increasingly
successful Bitcoin.
The authors propose a patch to the protocol that would protect the
system from selfish mining pools smaller than 25% of the system. They
also show that Bitcoin can never be safe from selfish mining pools larger
than 33% of the network, whereas it was previously believed that only
groups larger than 50% of the network were a threat to the system.
The question is — can the miners operating today adopt the suggested fix and
dismantle too-large pools before a selfish mining pool arises?"
Someone trying to buy some bitcoins for cheap?
Here is the commentary from one of the Bitcoin core developers: https://bitcointalk.org/index.php?topic=324413.msg3476697#msg3476697
This is an old known attack which is boring, made a little more interesting by also assuming that the attacker has sybil attacked the network and inserted itself between every node. The result is that they can mine a disproportionally large share of coins. Academically interesting, but not terribly significant.
Mostly it's just another example that overly large pools are bad for the network, and that preventing sybil attacks (e.g. by miners setting up additional trusted peerings between each other) is useful.
Here, sorry I was a lazy bum before. http://www.reddit.com/r/Bitcoin/comments/1puk1a/arxiv_paper_majority_is_not_enough_bitcoin_mining/
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The headline is just plain FUD. The ideas presented in that paper are merely theoretical. Not only would it be extremely difficult to achieve the right conditions to execute the attack (at the expense of losing money when you fail), but the paper makes vast assumptions about the social response to it working. Basically, the conclusion was "if this works [which it probably won't], then everyone will collectively make decisions that destroy the network because that's the rational thing to do." Obviously, it's not so rational if people don't want to see the system collapse.
This doesn't mean it should be ignored. It's an interesting "attack" that should be kept in mind as the protocol is developed further, but it's not even close to "bitcoin collapse". The headline is perhaps just wishful thinking of the submitter.
Kinda, except that gold was used to encase the highly-valuable latinum in Star Trek because gold was virtually worthless after it became possible to replicate it (unlike latinum, which could not be replicated). In contrast, the situation here is one of gold encasing a less valuable material. I know I'm stating the obvious, but this wouldn't be Slashdot if someone wasn't playing the pedant when it comes to Star Trek.