[cryptography] Bitcoin in endgame

Thu Feb 23 06:18:34 PST 2012

Wow.

These people took a known minor problem and blew it up to destroy the whole
economy. The sheer amount of assumptions alone makes it hard to call it a
paper, that and the lack of proper structure (or references).

For the sake of argument (short version: I don't think botnets can
reasonably USE that much power and even than it wouldn't likely break the
network):

They failed utterly to explain, and possibly understand, what a miner is.
No miner is created equally. People have worried about cheap power
country's taking all the mining, I've seen story's of very
sad Americans who ended up with more gaming power than they'd ever wish
for. The FPGA's will likely work out all GPU mining in the short run. The
kind of people that would have a high performance videocard are not those
that don't notice when a huge chunk of their system is being used. No one
puts an FPGA to their system that can accelerate Bitcoin mining for any
other reason than to actually do so. That doesn't change the fact that, to
a botnet operator, it'd still be profitable to mine with botnets. But it
drives down their impact on the hashrate drastically.

They assume there is and will be a practically infinite amount of computers
in a botnet. I'd say there's a damn lot. To say that there will be enough
operators willing to risk their machines (Bitcoin mining heats the computer
and slows it down, those two things people understand as "something's
wrong") for the hashrate to become filled with botnets alone is quite a
leap.

Even than it wouldn't matter. The rate at which Bitcoins are exchanged is
(or will be) higher than the rate at which they're mined. Using the
Bitcoins legitmately effectively legitimizes them, the "paper" claims that
the police forces wouldn't understand it so that fact doesn't matter.
Usually a lack of arguments makes me feel like no conclusions have been
reached, only speculation performed, but let's give a counter argument:
valid and fair (not legal per sC)) use of bitcoins is far more visible than
the mining process (something that is easily misunderstood) .

Botnet operators would be wise to point their systems at mining pools, as
they turn out the majority of profit made and the political power over the
network will be donated to legitimate pool owners. Some operators won't,
and that will spread control over the network.

>50% attacks would require a miracle of cooperation among the botnet
operators, and would break their own income. I'd certainly not be done for
profit.

Bitcoin banks (perhaps with their own pools) can mitigate any trouble of
this kind. It might require some implementation details and would likely
ruin a part of Bitcoins elegance, but it could work.

I'll admit though, to one claim of theirs: if the network becomes mostly
criminal, it will fall.

2012/2/23 Eugen Leitl <eugen at leitl.org>

> ----- Forwarded message from Jeffrey Walton <noloader at gmail.com> -----
>
> From: Jeffrey Walton <noloader at gmail.com>
> Date: Wed, 22 Feb 2012 21:22:03 -0500
> To: ianG <iang at iang.org>
> Cc: Crypto discussion list <cryptography at randombit.net>
> Subject: Re: [cryptography] Bitcoin in endgame
> Reply-To: noloader at gmail.com
>
> On Wed, Feb 22, 2012 at 9:11 PM, ianG <iang at iang.org> wrote:
> > On the crypto topic that everyone loves to hate, Bitcoin, the expected
> > attack has begun.
> >
> > http://financialcryptography.com/mt/archives/001363.html
> >
> > Philipp Guering and I wrote a paper that explains how this will fall out.
> >
> > http://iang.org/papers/BitcoinBreachesGreshamsLaw.pdf
> >
> > Although in the big picture, this is more about finance not cryptography,
> > there is an engaging question - can cryptography be used to control this
> > sort of issue?  It didn't work for Bitcoin, but more judicious uses of
> > crypto can do a lot better, and has done with other designs.  The
> challenge
> > is to get the balance right.
> Someone should have given Nancy Pelosi a chunk of BitCoin, or cut the
> Wall Street bankers in on it.
>
> The IPO offering/insider trading to Pelosi by VISA worked wonders when
> legislation was on the floor to protect consumers. Pelosi happily
> blocked the legislation, and the value of her stake in IPO skyrocketed
> [1]. I would also argue the Wall Street Bankers would have been happy
> to legitmize BitCoin if they got a cut (confer: derivatives).
>
> Jeff
>
> [1]
>
https://www.google.com/#hl=en&sclient=psy-ab&q=nancy+pelosi+visa+insider+trad
ing
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> ----- End forwarded message -----
> --
> Eugen* Leitl <a href="http://leitl.org">leitl</a> http://leitl.org
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