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Bitcoin Security Endangered By Powerful Mining Pool
An anonymous reader writes Ars Technica reports that for the first time in Bitcoin's five-year history, a single entity has repeatedly provided more than half of the total computational power required to mine new digital coins, in some cases for sustained periods of time. It's an event that, if it persists, signals the end of crypto currency's decentralized structure."
Mining pools and custom hardware do make it possible for a large enough group to get over 50%, especially as the need for mining hardware crowds CPU and GPU miners out of the game. We'll see whether they decide it's more useful to stay over 50% and cheat, stay over 50% and not cheat, or split the pool into two or more pieces to keep the value of their Bitcoins higher than they would be if the market abandons Bitcoin because of perceptions of cheating.
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
Given enough of an incentive, has there ever been in history a man-made system, technical, political or otherwise, that hasn't been undermined and exploited by those with the capability and power to do so?
Probably best this happens to Bitcoin sooner rather than later. As fine as Bitcoin is, believing that technology alone can defeat human nature is a fools errand. We are betting off investing in creating more moral men and woman and a society that sustains them than technology that is supposed to be infallible against basic human nature.
Bitcoin stopped being a distributed system a long time ago. All the serious miners now have data-center sized installations of custom boards with custom ASICs. Some are liquid-cooled. The original idea was millions of end users running Bitcoin mining as a background job on their CPU. That's totally dead.
Bitcoin stopped being a distributed system a long time ago. All the serious miners now have data-center sized installations of custom boards with custom ASICs. Some are liquid-cooled. The original idea was millions of end users running Bitcoin mining as a background job on their CPU. That's totally dead.
This is absolutely hilarious. Not because it's a fake post (I honestly don't know if it is or not), but just the fact that someone would even think that this is a good enough idea to post that 'serious' miners are actually doing this. This is the California gold rush all over again... the only people making a profit off of the mining are the people selling the ASIC's/shovels. Mining isn't profitable and hasn't been for quite some time. While it might be if you ignore the hardware cost and only think of the electricity cost, you're still BARELY making a SLIGHT profit. That's only in places that you have very cheap electricity (or can find a way to make someone else pay for the electricity). And once again, that doesn't even count the cost of hardware in the first place. Lets not forget that there are other idiots funneling money into even faster hardware which makes your very expensive highly specialized and unable to be repurposed board basically worthless in a few months time, once the electricity cost passes what you'll make back from mining.
HINT: this is before you get your initial cost of hardware back out of the system. You will never make a net profit. Ever.
The only money in bitcoin right now is in speculating, and even then it's a suckers game. Your profits are based entirely on someone else guessing wrong and losing money into the system that you might be lucky enough to cash out at the right time. You can do that easier and without a datacenters worth of hardware with penny stocks. Also penny stocks are LEGAL! You don't have to worry about some new law negating all of your money like you have to do every day with bitcoin.
I'll just stop here because anyone that legit cares about bitcoin already had their opinion made before they even read a word of this comment.
"Well kids, you tried your best, and you failed. The lesson is, never try." -Homer Simpson
Oh they promised! Well, color me convinced.
And if they break it (like they did) a simple DDOS attack knocks them off the top spot, (like it did) and sets a scary precedent...
If you control 51% of the hashing power in the network, you can modify the block chain while simultaneously self-verifying your version as the one-and-true block chain.
Well the thing is, getting 51% doesn't mean you can steal any coins. It means you get to control who can and cannot spend their coins. Also you would be able to do "double spends" of coins in certain situations. Getting 51% means you control the transfer service not the coins themselves. Also it would be really really expensive and once you stop the network will start working as normal again.
The original idea was millions of end users running Bitcoin mining as a background job on their CPU. That's totally dead.
The author of the original idea bets to disagree:
Long before the network gets anywhere near as large as that, it would be safe
for users to use Simplified Payment Verification (section 8) to check for
double spending, which only requires having the chain of block headers, or
about 12KB per day. Only people trying to create new coins would need to run
network nodes. At first, most users would run network nodes, but as the
network grows beyond a certain point, it would be left more and more to
specialists with server farms of specialized hardware. A server farm would
only need to have one node on the network and the rest of the LAN connects with
that one node.
That is from Satoshi Nakamoto's post from 2008: http://www.mail-archive.com/cr...
One would assume that the thousands of other miners, if it was really that important to them, could easily step up their collective games and provide more hashing power than ghash can...
I wouldn't assume this at all. Back when everybody was mining with CPUs then a popular appeal might get people to donate a ton of unused CPU capacity to beating a big miner.
However, today mining is done with ASICs which are many orders of magnitude faster than any CPU you can buy. An Intel CPU might mine 10-20 Mhash/s, and and ASIC stats are measured in high GH/s to the low TH/s. So, you'd need 100,000 CPUs dedicated to mining to equal a single ASIC unit.
The current hash rate is 100 PH/s having doubled in the last two months, or the equivalent of 10 billion Intel CPUs. Are there even 10 billion modern Intel CPUs in existence? You'd probably need $100M to just buy that many ASICs (if I didn't miscount my zeros), which gives you a sense of the scale of Bitcoin mining today. That mining collective operates about $50M worth of hardware, though I guess controlling an entire currency for a $50M investment isn't bad.
It is a bit like saying that if it was really important people could team up in neighborhoods and produce cars, and the collective might of the entire US population could outproduce the big 3 car manufacturers. The problem is that an optimized robot-assisted assembly line can churn out a LOT of cars, and building one by hand in a garage takes a very long time even setting aside the logistics nightmare which isn't much better when you're making one car vs a million of them. 10k workers in a factory could very well produce more cars than the entire rest of the population working at home combined.