Comment by josu | Hacker News Reader

Comment by josu | Hacker News Reader

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>The whole consensus network of Bitcoin is based around burning so much energy/space/infrastructure on hashing that a single actor wouldn't be able to invest a bunch of money and take a controlling majority.

If you have the time and you don't mind, could you elaborate on that? It just doesn't sound right to me. What is the mechanism that discourages big investments? As far as I can tell, there seem to be some economies of scale, that's why there are mining farms.

From the bitcoin wiki "Attacker has a lot of computing power":

"Since this attack doesn't permit all that much power over the network, it is expected that no one will attempt it. A profit-seeking person will always gain more by just following the rules, and even someone trying to destroy the system will probably find other attacks more attractive. However, if this attack is successfully executed, it will be difficult or impossible to "untangle" the mess created -- any changes the attacker makes might become permanent."

[1] https://en.bitcoin.it/wiki/Weaknesses#Attacker_has_a_lot_of_...

It's not that an attacker can't win that way, the point is to play in the bitcoin world, miners must spend a lot of time doing intentionally inefficient things. They spend a lot of energy calculating the hashes, by default. playing by the rules means doing lots of calculations that get thrown away.

Sure, I understand that. My problem is with this statement:

>The whole consensus network of Bitcoin is based around burning so much energy/space/infrastructure on hashing that a single actor wouldn't be able to invest a bunch of money and take a controlling majority.

I just don't think that's true. The only thing keeping one big player from taking over the network is scale. I really don't think that the "whole consensus network of Bitcoin is based around" what he says it is, since it's not necessary. Yes, there is a proof of stake, but it has nothing to do with "burning so much energy/space/infrastructure on hashing that a single actor wouldn't be able to invest a bunch of money and take a controlling majority". It's just a way to create the right incentives for people to want to mine.

Maybe my wording is exaggerated. But the huge scale you'd need for a majority attack is the reason it's not viable, and the network is designed to encourage mining to drive that scale up.

As the wiki points out, potential gains aren't total control: you get to reverse transactions but can't directly steal coins out of someone else's wallet.

With a system of independent agents all trying to game the system to make money, it comes down to a cost/benefit analysis. If Bitcoin weren't designed to have the network scale that it does, the cost of making that attack could be cheap enough for it to be worth doing.

But since the mining incentives are made to drive terawatt-hours of energy used in huge datacenters, the attack doesn't make economic sense. That's what I mean by saying the consensus system is built around having a huge network.

I see your point, thanks.

Perhaps your point is more subtle than i'm catching on to, but this is right out of the bitcoin paper abstract:

"The longest chain not only serves as proof of the sequence of events witnessed, but proof that it came from the largest pool of CPU power. As long as a majority of CPU power is controlled by nodes that are not cooperating to attack the network, they'll generate the longest chain and outpace attackers." https://bitcoin.org/bitcoin.pdf

So, literally the group that burns the most energy/space/infrastructure is correct, as far as the system is concerned. if an attacker can burn more cpu, generate a longer chain, they win.

The way I see it, it is certainly possible for one entity to gain enough computing power to control 51% of the Bitcoin network. However, once you do that, if you actually do any of the bad things that you could do, people will notice, and consequently trust Bitcoin less, so the value goes down. So why make the huge investment to control Bitcoin for nefarious purposes if you will make it worthless in the process?

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