[ExI] Kevin Dowd on Bitcoin

Mirco Romanato painlord2k at libero.it
Sun Jan 18 19:07:47 UTC 2015


Il 18/01/2015 18:43, romyen ha scritto:

> An attacker could reverse his own transactions if he controls most of
> the hashing power, by mining six consecutive blocks. A few big mining
> pools could conspire to do this, but that fact would become known
> immediately, and they would immediately put themselves out of
> business.The integrity of the blockchain would remain intact, except for
> those fraudulent transactions,

Anyone could reverse any transaction if he was able to muster enough
hashing power to be able to rebuild the block where the transaction was
recorded and all blocks after it until he was able to release chain
longer than the current.

Just having the 51% of the hashing power do not allow it. You could
control the next block and double spend or censor a transaction, but if
you want double spend or censor a transaction already in a block, you
need to mine a lot faster than the rest of the network, because as you
rewrite the past, the rest of the network discover new blocks and you
must rewrite them too.

More blocks you need to rewrite, incrementally hard the task is and more
time consuming. And longer it is the chain you are releasing (because
you had not enough hashing power to do it in less time) and louder will
be the alarms ringing. And it is probable a too long chain will not be
recognized by miners, developers of wallets and the users and that
blockchain will be ignored.

Six blocks is not a magical number you can do whatever you want.
It is just the number of blocks it was computed the chance of a random
fork would be so improbable to not happen before the end of the universe.

> At one point, GHash briefly gained control over more than half the hash
> rate. This caused some alarm in the bitcoin community, and as a result
> GHash stopped accepting new miners. They didn't even need to do this
> because enough miners jumped ship on their own initiative. Among the
> pools, there exists the opposite of a Tragedy of the Commons situation,
> where it is not in any pool's best interest to gain control of more than
> half the network.

Exactly.
I think I wrote it in the comments of the video when it come out many
weeks ago).
Any pool able to control the 51% of the network will damage its own
interests in few different ways:
1) Becoming an easy target for the government goons if the government
want to meddle with the network
2) destroying the trust model of the network would destroying the value
of the network and in turn destroying the value of the coins mined (and
it costs a lot to mine them).


> Kevin Dowd is describing a well known problem, but he misunderstands
> it's nature. He even claims that the U.S. government could destroy
> bitcoin by gaining control of the hash rate. That's pretty silly. He
> doesn't realize how big the hashing network is, with servers located
> throughout the world. The U.S. couldn't do that logistically,
> politically, or legally.
> 
> I predict bitcoin will outlive Mr. Dowd.

I had the impression Mr. Dowd was asked to write against and I
understand it is not easy to come with real problems about Bitcoin.

The US government (any government indeed) would use force against
Bitcoin if it could. But holding a gun against a decentralized network
is silly and people would notice. But also messing the network using the
network rules would be a problem, because it would show weakness. It
would show the government MUST play by the rules of the network because
its biggest guns are ineffective. And if people think they can oppose
the government peacefully and win, they will do. Everywhere in the
world. Often just for the sake to do so.

Mirco



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