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Bitcoin (Probably) Isn't Broken
Trailrunner7 writes "In the wake of the publication of a new academic paper that says there is a fundamental flaw in the Bitcoin protocol that could allow a small cartel of participants to become powerful enough that it could take over the mining process and gather a disproportionate amount of the value in the system, researchers are debating the potential value of the attack and whether it's actually practical in the real world. The paper, published this week by researchers at Cornell University, claims that Bitcoin is broken, but critics say there's a foundational flaw in the paper's assertions. ... The idea of a majority of Bitcoin miners joining together to dominate the system isn't new, but the Cornell researchers say that a smaller pool of one third of the miners could achieve the same result, and that once they have, there would be a snowball effect with other miners joining this cartel to increase their own piece of the pie. However, other researchers have taken issue with this analysis, saying that it wouldn't hold together in the real world. 'The most serious flaw, perhaps, is that, contrary to their claims, a coalition of ES-miners [selfish miners] would not be stable, because members of the coalition would have an incentive to cheat on their coalition partners, by using a strategy that I'll call fair-weather mining,' Ed Felten, a professor of computer science and public affairs at Princeton University and director of the Center for Information Technology Policy, wrote in an analysis of the paper."
I presume this means that whoever was behind the previous bitcoin story has now finished buying them up and wants their value to go back up.
Just to be clear, all this attack accomplishes is a small advantage (or none, depending on how other respond) for mining pools that don't immediately disclose solved blocks, but instead wait until someone else solves one, then release. This causes some miners to mine on each of the competing blocks, wasting effort, while the selfish pool occasionally gets 2 blocks ahead without wasting effort when mining the second block. Its a small gain, that can be better exploited by flooding the the network with tons of nodes to delay/control who finds out about which blocks when.
So, this attack can give one mining pool a slight advantage, and thus encourage others to join it to get a share of the higher profits. This continues and they get some real control of of which transactions are verified, who learns about what, etc. A nearly identical attack could be done by a regular mining pool that simply pays some extra money to bribe people to mine in it.
However, this attack, even if possible and implemented would not let any one steal your bitcoins, nor really do much to regular users, and it would be obvious if someone performed this attack (higher than chance orphaned block rates). If you accept bitcoins, and don't wait for > 1 confirmations, or you are a mining pool operator, this might be worth paying attention to (but not panicking over). Everyone else (which is nearly everyone) wouldn't lose anything to this attack, which might not even be practical.
Ask the Federal Reserve, they are pretty successful making money out of thin air. And if well the inventor may be anonymous, the source code is not. You can check if it is broken or not by yourself.
If Bitcoin had no value, people wouldn't be paying for them.
The problem with bitcoin isn't that it has no value. Obviously some people (not many) have a use for it. The problem(s) with bitcoin is that it is HIGHLY illiquid, volatile and risky. Few people even know what bitcoin is, and fewer are willing to accept it as a form of payment. Exchange rates bounce around like a caffeinated border collie on a pogo stick which makes for significant exchange rate risk. Furthermore it depends on encryption and one cannot be certain that said encryption is ultimately secure. And those problems are just the tip of the proverbial iceberg.
Yes, yes, we're all bummed out that we didn't join the wagon when it started rolling. Get over it.
systemd is Roko's Basilisk.
Value is not created out of thin air; it is individuals who decide whether something is valuable.
It's actually harder to mint new bitcoins than it is for the Fed to poof more money into existence.
I don't know about right now, but a few months ago people were saying it was stupid too, but I bought a new $200 video card for my machine and decided to try mining. It took me about a month, and a $6 increase in my monthly electricity bill to mine one bitcoin. I just exchanged that bitcoin for $350 yesterday, so...I don't feel particularly stupid right now. Otherwise, the small handful of bitcoins I acquired the first month that bitcoin started are still in my wallet, so this "all your bitcoins are belong to us" statement is pure FUD. Sure, if the Feds are going to torture the Dread Pirate Roberts for weeks to get him to cough up his wallet password, things like that are bound to happen, but all the other garbage people keep spouting about Bitcoin is silly, IMHO.
In crypto, an academic break is one that weakens the system, but does not transfer to a practically implementable break. The two get confused regularly by people without a clue about crypto, which is the standard. Many of these clueless people feel nonetheless qualified to comment.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
But that's exactly the point: too many people were left out early, so they would never accept it as their form of payment. Where it stands today, bitcoin is your run of the mill Ponzi scheme.
Well, the dollar is backed by the biggest most advanced army ever known in the history of the world. I count that as a point for Bitcoin, though,
They're burying the lead to cover their ass. First of all, this "flaw" is 3 years old and even I've heard of it. That should give you a good insight on the intelligence and research level of the person writing that article. If a pool purposely doesn't submit a solved block, it has zero advanced warning that another block solves it. Since work is non-progressive, they'd have to solve a 2nd block faster than the rest of the network. Probability states that it would happen less than 50% of the time so they'd actually lose money attempting to cheat. Let's say it's a 33% of all volume pool. It has a 33% chance of finding a block solution first. If it doesn't reveal it and holds it until it solves another block so it can double dip for free, that's a 33/100 x 33/100 probability with an extremely high likelihood that in the meantime, the other 67% of the mining power finds an alternative solution to the block and turns it in, getting the cheating pool absolutely zero.
If you actually got a bitcoin doing that (and I highly doubt it), then you got EXTREMELY lucky. The odds are heavily against you. If it were reliable to get a bitcoin in the way you did, then all of the coins would have been mined already. You can read lots of articles on how difficult it is to actually do and how you generally have to team up unless you have server farms dedicated to it.
Are agnostics skeptical of unicorns too?