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posted by martyb on Monday June 16 2014, @11:55AM   Printer-friendly [Skip to comment(s)]
from the mine!-mine!-mine! dept.

Fears and warnings about the consequences of a single entity obtaining majority network power have been known for some time, but have generally been dismissed as not conveying enough control to be worthwhile.

For the first time, and for several extended periods, the GHash mining pool delivered 51% of the bitcoin network hashing power, despite promises that they would never cross the 50% threshold.

Although GHash did not take advantage of its monopoly power during these times, it does seem that we have crossed a threshold. How do you trust the blockchain to an anonymous monopoly?

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  • (Score: 3, Interesting) by Horse With Stripes on Monday June 16 2014, @12:01PM

    by Horse With Stripes (577) on Monday June 16 2014, @12:01PM (#55857)

    So now they have the power to validate any block chain, even if it's not a legitimate transaction. In fact, they are now in the position to validate fake transactions that they themselves generate. I'm not saying that they will, but they can.

    With the semi-anonymous nature of bitcoin, and this self-validating capability, how can any transactions be trusted, let alone all of them?

    • (Score: 4, Interesting) by d on Monday June 16 2014, @12:20PM

      by d (523) on Monday June 16 2014, @12:20PM (#55862)

      From what I know, they can't authorize fake transactions, but pick which they accept and which not. IMHO people should see that as a threat and choose to pick another pool.

      • (Score: 2, Informative) by Horse With Stripes on Monday June 16 2014, @12:47PM

        by Horse With Stripes (577) on Monday June 16 2014, @12:47PM (#55871)

        Can't they validate a fake transaction then? What if they hold up a pending transaction, generate a fake transaction transferring the bitcoins to a wallet they control (rather than the intended recipient), then accept and validate their version of the transaction? Isn't that technically possible with the 51%? Their block chain would trump the others.

      • (Score: 2) by geb on Monday June 16 2014, @01:34PM

        by geb (529) on Monday June 16 2014, @01:34PM (#55886)

        There's not a great deal of difference between generating a fake transaction, and making a real transaction but then invalidating it immediately afterwards.

        "What? You think we paid you? Haha. Deal with the new reality. We just changed history to say we didn't pay."

    • (Score: 3, Interesting) by Geotti on Monday June 16 2014, @04:56PM

      by Geotti (1146) on Monday June 16 2014, @04:56PM (#55993) Journal

      Well, maybe they should get rid of the Feds silk road stash and distribute it across all wallets?

    • (Score: 1, Informative) by Anonymous Coward on Monday June 16 2014, @06:27PM

      by Anonymous Coward on Monday June 16 2014, @06:27PM (#56041)
      • With a sane definition of "fake", they can't generate (nor validate) fake transactions (they would not be accepted by the rest of the network anyway)
      • They can't steal your bitcoins
      • They can, with a higher probability than before, generate a transaction with their own bitcoins, wait for the recipient to accept it in exchange for money/goods/..., then generate a second block that will replace the first one and cancel this transaction ("double spend attack"). They could also probably cancel a transaction by someone else by the same method.
      • But this probability is not all-or-nothing when they reached 51% of hashing power; anyway, for large amounts, recipients wait more than 1 block confirmation, and rather up to 6 blocks. They would need a far higher hashing power to replace 6 blocks in a row to do a double-spend.
  • (Score: 3, Interesting) by VLM on Monday June 16 2014, @12:40PM

    by VLM (445) Subscriber Badge on Monday June 16 2014, @12:40PM (#55869)

    34 ph/s is kinda impressive to a guy who successfully software mined a long time ago. Back when the difficulty factor was a two digit number, at least for awhile.

    I would imagine 34 ph/s represents a substantial amount of electrical power being turned into heat.

    • (Score: 1, Troll) by morgauxo on Monday June 16 2014, @01:12PM

      by morgauxo (2082) on Monday June 16 2014, @01:12PM (#55879)

      Yes, that is true. All that bitcoin heat is used to keep homeless shelters warm. Isn't that great?!?! Oh.. you want to turn it off? You Monster!

  • (Score: 4, Insightful) by Thexalon on Monday June 16 2014, @02:17PM

    by Thexalon (636) on Monday June 16 2014, @02:17PM (#55900)

    Short answer: You can't.

    A funny thing happened on the way to non-government currency: A lot of the problems that had happened about a century ago with government-issued currency, such as wild fluctuations in value and prices, runs on banks (exchanges), and so forth came right back. And with government-issued currency, the way to deal with that was for the relevant government to put in place rules to prevent those kinds of problem, but without a government controlling the currency all you had was the goodwill of the dominant private actors to prevent the whole thing from collapsing into all the crazy stuff that happens in a black market.

    And in my experience the goodwill of private actors depends heavily on how profitable or successful they are. If things start going south for this group, I'd expect their magnanimous decision to not abuse the power they currently have to be reversed.

    I'm not saying it's impossible to have currency without government control, but so far BitCoin and its imitators are demonstrating that the statists that oppose the idea have a point.

    --
    Alcohol makes the world go round ... and round and round.
    • (Score: 2) by pe1rxq on Monday June 16 2014, @02:53PM

      by pe1rxq (844) on Monday June 16 2014, @02:53PM (#55914) Homepage

      The problem is not whether they are backed by a government or not.
      The problem is with trust. As long enough people trust a currency to hold value it will be used.

      The US dollar is regarded as a relatively good currency because the US government has proven that they can keep it from collapsing over a long time period. (On could argue that the US government has become so dead-locked that they are no longer able to destroy it...)

      The Zimbabwean dollar is also backed by a government, but I don't think many would advice you to ditch your bitcoins and invest in them.

      • (Score: 4, Interesting) by Thexalon on Monday June 16 2014, @03:43PM

        by Thexalon (636) on Monday June 16 2014, @03:43PM (#55955)

        As long enough people trust a currency to hold value it will be used.

        Great, so how do you manage that?

        Any claims of "intrinsic value automatically prevent collapse" don't hold much water. For example, in approximately 1000 BCE, the dominant currency in Britain was bronze ax-heads, which were absolutely intrinsically useful items to have at the time. In around 800 BCE, the bronze ax-head collapsed in value in Britain, and the dominant trading token became quantities of grain. A similar transition occurred in what is now France between 300 and 600 CE, when Roman coinage went from being valuable to being worthless, leading to land and grain as the currency and the development of manorialism. So just because a currency is intrinsically useful today doesn't mean it's intrinsically useful in the future.

        So that means that an organization will have to exist that does what the US government does with the dollar or the EU does with the Euro, namely ensure that the currency remains valuable and stable. We can, from that, determine a couple of requirements for such an organization:
        - Whoever is making the decisions of the organization must be accountable to people who use the currency, because otherwise the currency will be managed for the benefit of the organization and its managers rather than the benefit of all those who use the currency (e.g. transferring assets to another type, inflating the currency, buying a bunch of the now-cheaper currency, and then deflating it again).
        - The organization must be able to impose penalties severe enough for engaging in disruptive frauds that make it too risky to try. They must have enough enforcers looking at how the currency is being used that disruptive fraudsters are likely to get caught.

        Those two requirements point to a democratically elected government being the least-bad choice for running the currency show, because that gives you the possibility at least of accountability and enforcement.

        --
        Alcohol makes the world go round ... and round and round.
  • (Score: 3, Informative) by tynin on Monday June 16 2014, @03:36PM

    by tynin (2013) on Monday June 16 2014, @03:36PM (#55950) Journal

    Looks like ghash.io is around ~32% given the last few hours of blockchain stats. I'm glad to see miners acting in the protocols best interest and pointing their hashies someplace else.

  • (Score: 1) by poutine on Monday June 16 2014, @04:19PM

    by poutine (106) on Monday June 16 2014, @04:19PM (#55967)

    This is what happens when you copy slashdot articles. GHashIO did temporarily achieve 51%, this happened OVER a week and a half ago. GHashIO has had ~30% since then. Is this what I should come to expect from uninformed soylentnews article copy pasters?

    • (Score: 2, Informative) by Asshole on Monday June 16 2014, @07:05PM

      by Asshole (159) on Monday June 16 2014, @07:05PM (#56058)

      Exactly this. Everyone who follows crypto-currencies saw this and, if they are sane, abandoned BTC for a PoW coin with sanely distributed hashing power.
      If they are even more sane, then they will realise that what is happening to bitcoin is the fate for every permanently PoW based coin and jump to a PoS (proof of stake) coin. I personally jumped ship to pandacoin (PND) (https://bitcointalk.org/index.php?topic=632657) as it has the best development I have ever seen in a coin (some of whom are well like 4chan users) and it is an incredible value right now. It is aimed at fighting scam coins and the whole pump n' dump culture endemic to the altcoin world.
      It is a coin with a conscience and competent dev. team, a rare combination indeed. Thank you for your time.

      - Nota Shill

    • (Score: 0) by Anonymous Coward on Tuesday June 17 2014, @01:53AM

      by Anonymous Coward on Tuesday June 17 2014, @01:53AM (#56178)
    • (Score: 0) by Anonymous Coward on Tuesday June 17 2014, @09:15AM

      by Anonymous Coward on Tuesday June 17 2014, @09:15AM (#56279)

      Repeat after me: THIS IS NOW A NEWS SITE...

      Is it really so hard to grasp?

    • (Score: 2) by lubricus on Tuesday June 24 2014, @10:21AM

      by lubricus (232) on Tuesday June 24 2014, @10:21AM (#59316)

      FYI: I submitted this story, and I also don't like slashdot copy-pasters.

      I did *NOT* copy this from slashdot, I first encountered the story on ArsTechnica. The problem is the pace of publishing at soylent. Because the editorial staff is not that big, and wants to put out stories at a certain rate, the stories sit in the cue for a a few days.

      It can be pretty frustrating. For example, I submitted the story about facebook buying whatsapp about 15 minutes after the press release came out. I actually checked the submission queue at slashdot before I did it, and it had not been submitted there, and was not submitted until about 8 hours after mine, and it still appeared on the front page at slashdot about a day before mine here. [soylentnews.org]

      So, if this bothers you, the next time there is a story about the site and it's directions, bring up the slow publication problem.

      Try it yourself, find a story worth publishing, and see how long it takes to appear.

      --
      ... sorry about the typos
    • (Score: 2) by lubricus on Tuesday June 24 2014, @11:21AM

      by lubricus (232) on Tuesday June 24 2014, @11:21AM (#59333)

      Crazy, I was so cheesed responding that I had a typed stutter "a a", and forgot to close my href.

      Seriously: take some time, find a story you think people will find interesting, try to write it up in a succinct, yet informative style, submit it in a timely manner, and then watch as all the other sites publish it first, and then have an uninformed commenter trash your work.

      But, of course, you would know all this if you had contributed a story instead of being an entitled leech.

      --
      ... sorry about the typos
  • (Score: 2) by lubricus on Monday June 16 2014, @10:46PM

    by lubricus (232) on Monday June 16 2014, @10:46PM (#56130)

    Ars is reporting on a statement by the CIO of GHash [arstechnica.com].

    In the same article, they reiterate the two theoretical attacks: 1. Double spending bitcoin, and 2: Prevent new transactions.

    This really highlighted to me the possibility that many governments probably "turn on" enough computing power to obtian 51%, and seriously damage any *coin anytime it wanted.

    In other words: bitcoin and others are not, and will never be, a threat to governmental control of currency.

    --
    ... sorry about the typos