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Comment by rmc | Hacker News Reader

The main problem is that if you own the majority of the hashing power, you can rewrite history. You can make all the bitcoin ever mined owned by you.

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> The main problem is that if you own the majority of the hashing power, you can rewrite history. You can make all the bitcoin ever mined owned by you.

No, this is completely wrong.

If you have majority hashing power, this allows you to

a) entitle yourself to a greater proportion of the newly minted bitcoins (though you actually can not increase the global rate of creation), and

b) undo already "confirmed" transactions, within a small timeframe. This allows for double-spend attacks, but you can only do that if you owned the coins in the first place. Nothing, not even hashing power, lets you use other people's coins.

In particular, you can't "rewrite history" arbitrarily, due to hardcoded hashes in the Bitcoin clients. You also can't "make all the bitcoin ever mined owned by you".

That's incorrect. Having >50% of the hashing power gives you a good chance to double-spend your own coins, but you will never be able to steal money from someone else's wallet without doing a transaction with them.

Edit: Let me clarify, to actually steal coins from someone, you would have to forge a transaction, which takes the same effort as mining say an SSL certificate for google.com.

Assuming the manufacturer has produced 12 of these beasts already, they already possess the power to rewrite bitcoin history.

Instead of selling the machines for $30k a piece, could they not just use the machines themselves to transfer all bitcoins in the world to their own wallet? The total amount of bitcoins mined to this date should value much more than 12*$30k?

Does that mean that the entire bitcoin network should as of today be considered compromised, game over, pack up and go home?

If they did this, the attack would cause a panic, and Bitcoin would likely instantly loose its value, thereby undermining the validity of their own (illegitimately acquired) wealth. Not very smart...

The inventor of Bitcoin once described this scenario, saying it would be smarter and more profitable to simply mine bitcoins legitimately...

That clearly depends on what value you place on the destruction of the network.

A government concerned about losing control of their currency is not going to behave the same way as an independent actor looking to make some cash.

I'm not saying it's going to happen; just that the risk should not be discounted.

How would it be illegitimate? Mining bitcoins is based on math, and if they do the math they have earned it.

"Illegitimate" is the wrong word. I meant wealth acquired without following the proper rules (ie. mining on the longest chain, because the attacker would purposefully try to fork the chain from a past block.)

What if they simultaneously transfer a huge amount of BTC to multiple exchanges (double-spending), exchange to USD everywhere, running away with a bunch of dollars, while the rest of the bitcoin world slowly realizes they've been had?

How would the attacker obtain the "huge amount of BTC" in the first place? If he buys it, sells it, then executes his double spend and Bitcoin loses its value, the attacker would have made no profit.

A double spend attack only allows an attacker to double his BTC before the block chain has to be forked, and before the whole community notices the attack. You can't send the same BTC to multiple exchanges. You have to execute one double spend attack for each exchange. But the community would detect the attack after the first one.

(Double spend attacks would be noticed when multiple blocks in a row are replaced or, in Bitcoin's terminology, when a reorganization occurs: http://blockexplorer.com/q/reorglog)

I had an econ professor who would phrase that as, "if you're so smart, why aren't you rich?"

There's really no value in doing that though as the bitcoins you steal will suddenly have no value as everybody exits the network and stops accepting them. unless your goal is to destroy the network of course.

You'd have to expend as much hashing power as has already been expended. Trying to do something like that is something that would take months (or year), and it would be visible to everyone on the network, and they would be able to react.

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