Re: [bitcoin-dev] We need to fix the block withholding attack

[Matt Corallo <lf-lists@mattcorallo.com>]

Peter was referring to pool-block-withholding, not selfish mining.

On December 19, 2015 7:34:26 PM PST, Chris Priest via bitcoin-dev <bitcoin-dev@lists.linuxfoundation.org> wrote:
>Block witholding attacks are only possible if you have a majority of
>hashpower. If you only have 20% hashpower, you can't do this attack.
>Currently, this attack is only a theoretical attack, as the ones with
>all the hashpower today are not engaging in this behavior. Even if
>someone who had a lot of hashpower decided to pull off this attack,
>they wouldn't be able to disrupt much. Once that time comes, then I
>think this problem should be solved, until then it should be a low
>priority. There are more important things to work on in the meantime.
>
>On 12/19/15, Peter Todd via bitcoin-dev
><bitcoin-dev@lists.linuxfoundation.org> wrote:
>> At the recent Scaling Bitcoin conference in Hong Kong we had a
>chatham
>> house rules workshop session attending by representitives of a super
>> majority of the Bitcoin hashing power.
>>
>> One of the issues raised by the pools present was block withholding
>> attacks, which they said are a real issue for them. In particular,
>pools
>> are receiving legitimate threats by bad actors threatening to use
>block
>> withholding attacks against them. Pools offering their services to
>the
>> general public without anti-privacy Know-Your-Customer have little
>> defense against such attacks, which in turn is a threat to the
>> decentralization of hashing power: without pools only fairly large
>> hashing power installations are profitable as variance is a very real
>> business expense. P2Pool is often brought up as a replacement for
>pools,
>> but it itself is still relatively vulnerable to block withholding,
>and
>> in any case has many other vulnerabilities and technical issues that
>has
>> prevented widespread adoption of P2Pool.
>>
>> Fixing block withholding is relatively simple, but (so far) requires
>a
>> SPV-visible hardfork. (Luke-Jr's two-stage target mechanism) We
>should
>> do this hard-fork in conjunction with any blocksize increase, which
>will
>> have the desirable side effect of clearly show consent by the entire
>> ecosystem, SPV clients included.
>>
>>
>> Note that Ittay Eyal and Emin Gun Sirer have argued(1) that block
>> witholding attacks are a good thing, as in their model they can be
>used
>> by small pools against larger pools, disincentivising large pools.
>> However this argument is academic and not applicable to the real
>world,
>> as a much simpler defense against block withholding attacks is to use
>> anti-privacy KYC and the legal system combined with the variety of
>> withholding detection mechanisms only practical for large pools.
>> Equally, large hashing power installations - a dangerous thing for
>> decentralization - have no block withholding attack vulnerabilities.
>>
>> 1) http://hackingdistributed.com/2014/12/03/the-miners-dilemma/
>>
>> --
>> 'peter'[:-1]@petertodd.org
>> 00000000000000000188b6321da7feae60d74c7b0becbdab3b1a0bd57f10947d
>>
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