Bitcoin Snafu Causes Miners To Generate Invalid Blocks

An anonymous reader writes: A notice at bitcoin.org warns users of the cryptocurrency that many miners are currently generating invalid blocks. The cause seems to be out-of-date software, and software that assumed blocks were valid instead of checking them. They explain further "For several months, an increasing amount of mining hash rate has been signaling its intent to begin enforcing BIP66 strict DER signatures. As part of the BIP66 rules, once 950 of the last 1,000 blocks were version 3 (v3) blocks, all upgraded miners would reject version 2 (v2) blocks. Early morning UTC on 4 July 2015, the 950/1000 (95%) threshold was reached. Shortly thereafter, a small miner (part of the non-upgraded 5%) mined an invalid block--as was an expected occurrence. Unfortunately, it turned out that roughly half the network hash rate was mining without fully validating blocks (called SPV mining), and built new blocks on top of that invalid block. Note that the roughly 50% of the network that was SPV mining had explicitly indicated that they would enforce the BIP66 rules. By not doing so, several large miners have lost over $50,000 dollars worth of mining income so far."

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Shocked

[PopeRatzo]

You mean the money they just created out of thin air isn't really real?

Stop the presses.

Re:Shocked

[penguinoid]

Most money is created out of thin air (by adjusting the percentage of deposited money banks are required to keep).

Re:Shocked

[penguinoid]

It works like this: Say the banks are allowed to lend 90% of the money that is deposited, and have to keep 10% of it. Then Alice deposits $1,000. This means that the banks lend out $10,000 since they had to keep 10% of the money. If the government wanted to create money, rather than bothering with silly printing presses at the mint, they could declare that banks could lend 95% of the money deposited. Then if Alice deposits $1,000, the banks could lend out $20,000.

Now, you might have noticed my numbers aren't quite what you expected. Well, it works like this (when the banks lend 90% of a deposit). Alice deposits $1,000. Then Bob borrows $900, and deposits it in a bank. Then Charlie borrows $810, and deposits it. Then Dylan borrows $729, and deposits it... By the time everyone is done borrowing, depositing, and lending, 10 dollars have been lent for every 1 deposited. Of course, in reality only some of the borrowed money gets deposited immediately -- some of the money gets spent and put in a bank, and some gets kept around in wallets or under a mattress. But yeah, most of the money people "have" is in fact created out of thin air, not even paper.

Just don't ask what happens when too many people want to withdraw their money from the bank.

How much electricity was used last month to mine?

[FlyHelicopters]

The irony is that just a few stories down, there is a lot of talk about why more people don't drive EVs and how important it is for the world to get off fossil fuels.

So... how much power generated by fossil fuels was consumed "mining" bitcoins last month?

I can't think of anything less "green" than a computer pulling hundreds of watts sitting around 24/7 chewing on random numbers.

Re:Post should have clarified:

[timholman]

Post should have clarified, lest it send the wrong message to those not familiar:
"This did not compromise the bitcoin protocol or network or anything like that."

On the bitcoin.org website: "WARNING: many wallets currently vulnerable to double-spending of confirmed transactions."

Offhand, I'd consider that a significant "compromise", given that vulnerability to double-spending dramatically undermines confidence in using Bitcoin. If this situation continues for any length of time, you can just about guarantee that the bad guys will begin to exploit it.

Re:$50,000 dollars

[Overzeetop]

Now it's $48,200...

Now it's $46,900...

Now it's $45,700... ...

Re:This is a GODDAMN DISASTER!

[Nkwe]

How the fuck can anyone trust Bitcoin after this and the other incidents that have happened? How?

You can trust Bitcoin by learning how it works and following the proper procedures that you would if you playing with real money.

The Bitcoin system is highly resistant to "rouge" or bad actors in the system. Someone running mining software that does not follow the agreed upon rules for the system is an example of a rouge actor. When this happens the rest of the system votes down the decisions made by the rouge actors. In this case some miners were not following the system wide agreed upon protocol, generated bad data, and the rest of the system (correctly) rejected that bad data thus maintaining the integrity of the overall system as designed.

What was lost were some rewards that would normally have been paid out for operating correctly. Since the rouge actors were not operating correctly, they were not rewarded (for their invalid work). If you were hired to paint a house white and you painted it orange, would you expect to be paid? The miners did not do the work they were being paid to do. True, many miners mine within a pool and depend on the pool operator to do the right thing, but if the pool operator is not doing the right thing, it is not a flaw in Bitcoin. Lke the painting analogy, if you work for a painting company and the painting company gives you the wrong color of paint, you wouldn't expect the homeowner to pay you, if you want to get paid for your labor, your beef would be with your boss, the the homeowner.

On the transactional (non mining) side, if you are running an incomplete Bitcoin client, it is now taking longer to achieve a level of confidence that your transaction is officially as "approved" by the network. As always it is the responsibility of those making the transactions to wait an appropriate time to ensure that their transactions have been approved. This has always been the case with Bitcoin and has not changed.

Re:How much electricity was used last month to min

[gnasher719]

Very close to zero. Bitcoins are mined where power is cheapest, which means where there is plenty of hydropower, like in Iceland and the US Pacific Northwest. It is not cost effective to mine bitcoins using electricity from FFs.

Bullshit. Give us one shred of evidence that this is happening. Anyone involved in bitcoin mining isn't one bit interested in environmental issues, and coal is still the cheapest form of energy.

Re:How much electricity was used last month to min

[ShanghaiBill]

Anyone involved in bitcoin mining isn't one bit interested in environmental issues

They don't use hydropower because it is "environmental". They use it because it is cheap.

coal is still the cheapest form of energy.

No it isn't. Areas with plentiful hydropower have electricity prices much lower than coal.

Re:This is a GODDAMN DISASTER!

[Nkwe]

Perhaps my bad spelling makes me a moron, perhaps it doesn't. It does give my post a more humorous version of what I had intended to say.

Re:This is a GODDAMN DISASTER!

[BlackPignouf]

I always loose my mind when I see idiots writing rouge instead of rogue.
It really effects me deeply.

Re:This is a GODDAMN DISASTER!

[serviscope_minor]

Let's just ask the guy who set it up.

Even if he was still around, he might have set up a broken system. Instead, you should learn about how it works and check the mathematical proofs.

We can't? He's in hiding? He's been hiding for YEARS? Oh yes, I can really trust it now.

I'm not sure why a public figurehead of something like this would be inherent trustworthy. I'd actally say some public CEO type pushing a reality distortion field would be less trustworthy than a bunch of open source software backed by provable, verifyable maths.

Short term users who use it as a barter item and unload it quickly are not exposed to much potential pain,

And that's why it's popular. For people who use it as a form of currency in transactions, the risk isn't high, so there's the trust. The thing with large crowds is that a huge number of people putting a small amount of trust in something equates to a large amount of trust. As long as people find it useful for transactions, money will keep cycling through and it will stay afloat.

Re:This is a GODDAMN DISASTER!

[murdocj]

Yep. How many times has the Fed said "jeez, sorry, you know that cash that we issued, really it's not valid, you need version 2.137 of the cash, you lose.