[Bitcoin-development] A mining pool at 46%

[Bitcoin-development] A mining pool at 46%

[Melvin Carvalho]

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There was some chat on IRC about a mining pool reaching 46%

http://blockchain.info/pools

What's the risk of a 51% attack.

I suggested that the pool itself is decentralized so you could not launch
one

On IRC people were saying that the pool owner gets to choose what goes in
the block

Surely with random non colliding nonces, it would be almost impossible to
coordinate a 51% even by the owner

Someone came back and said that creating random numbers on a GPU is hard.
But what about just creating ONE random number and incrementing from there
...

It would be great to know if this is a threat or a non issue

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Re: [Bitcoin-development] A mining pool at 46%

[Mike Hearn]

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51% isn't a magic number - it's possible to do double spends against
confirmed transactions before that. If Michael wanted to do so, with the
current setup he could, and that's obviously rather different to how
Satoshi envisioned mining working.

However, you're somewhat right in the sense that it's a self-defeating
attack. If the pool owner went bad, he could pull it off once, but the act
of doing so would leave a permanent record and many of the people mining on
his pool would leave. As he doesn't own the actual mining hardware, he then
wouldn't be able to do it again.

There are also other mining protocols that allow people to pool together,
without p2pool and without the pool operator being able to centrally pick
which transactions go into the block. However I'm not sure they're widely
deployed at the moment. It'd be better if people didn't cluster around big
mining pools, but I think p2pool still has a lot of problems dealing with
FPGA/ASIC hardware and it hasn't been growing for a long time.


On Fri, Apr 5, 2013 at 11:30 AM, Melvin Carvalho
<melvincarvalho@gmail.com>wrote:

> There was some chat on IRC about a mining pool reaching 46%
>
> http://blockchain.info/pools
>
> What's the risk of a 51% attack.
>
> I suggested that the pool itself is decentralized so you could not launch
> one
>
> On IRC people were saying that the pool owner gets to choose what goes in
> the block
>
> Surely with random non colliding nonces, it would be almost impossible to
> coordinate a 51% even by the owner
>
> Someone came back and said that creating random numbers on a GPU is hard.
> But what about just creating ONE random number and incrementing from there
> ...
>
> It would be great to know if this is a threat or a non issue
>
>
> ------------------------------------------------------------------------------
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>
>

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Re: [Bitcoin-development] A mining pool at 46%

[Gregory Maxwell]

On Fri, Apr 5, 2013 at 2:48 AM, Mike Hearn <mike@plan99.net> wrote:
> but I think p2pool still has a lot of problems dealing with
> FPGA/ASIC hardware and it hasn't been growing for a long time.

As an aside and a clarification— P2pool works great with FPGAs, and
one of the largest FPGA farms I've heard of uses it.  But it doesn't
work well the old BFL FPGA miners— because they have insane latency.
Likewise it doesn't currently work well with Avalon, again because of
insane latency.   P2pool uses a 10 second sharechain in order to give
miners low variance but that means that if you have a several second
miner you'll end up subsidizing all the faster p2pool users somewhat.

It was basically stable with the network until ASICminer came online
mining on BTCguild mostly and the first avalons started to ship, and
then the network went up 10TH in a couple weeks (and now 15TH) while
P2Pool stayed mostly constant.

ForrestV (the author and maintainer of the P2pool software) would love
to work on making Avalon and other higher latency devices first class
supported on P2Pool, but he doesn't have one— and frankly, all the
people who have them aren't super eager to fuss around with a 5BTC/day
revenue stream, especially since the avalon firmware (and its internal
copy of cgminer) itself has a bunch of quirks and bugs that are still
getting worked out... and I do believe that p2pool helps reduce
concerns around mining pool centralization. ... but I think as a
community we don't always do a great job at supporting people who work
on infrastructure— even just making sure to get them what they need to
keep giving us free stuff—, we just assume they're super rich Bitcoin
old hands, but that often isn't true.

Re: [Bitcoin-development] A mining pool at 46%

[Melvin Carvalho]

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On 5 April 2013 11:48, Mike Hearn <mike@plan99.net> wrote:

> 51% isn't a magic number - it's possible to do double spends against
> confirmed transactions before that. If Michael wanted to do so, with the
> current setup he could, and that's obviously rather different to how
> Satoshi envisioned mining working.
>

Thanks for pointing this out.  I guess 51% is mainly of psychological
significance.


>
> However, you're somewhat right in the sense that it's a self-defeating
> attack. If the pool owner went bad, he could pull it off once, but the act
> of doing so would leave a permanent record and many of the people mining on
> his pool would leave. As he doesn't own the actual mining hardware, he then
> wouldn't be able to do it again.
>

Totally see the logic of this, and it makes sense.  But I dont think the
only risk is in terms of double spend, but rather

1) vandalize the block chain which may be difficult to unwind?
2) use an attack to manipulate the price downwards, then rebuy lower

As bitcoin's market cap grows, incentives to move the market will grow


>
> There are also other mining protocols that allow people to pool together,
> without p2pool and without the pool operator being able to centrally pick
> which transactions go into the block. However I'm not sure they're widely
> deployed at the moment. It'd be better if people didn't cluster around big
> mining pools, but I think p2pool still has a lot of problems dealing with
> FPGA/ASIC hardware and it hasn't been growing for a long time.
>

I guess the market will decide which algorithm is used, but as a community
we can perhaps review the different mining protocols and order them in
terms of risk ...


>
>
> On Fri, Apr 5, 2013 at 11:30 AM, Melvin Carvalho <melvincarvalho@gmail.com
> > wrote:
>
>> There was some chat on IRC about a mining pool reaching 46%
>>
>> http://blockchain.info/pools
>>
>> What's the risk of a 51% attack.
>>
>> I suggested that the pool itself is decentralized so you could not launch
>> one
>>
>> On IRC people were saying that the pool owner gets to choose what goes in
>> the block
>>
>> Surely with random non colliding nonces, it would be almost impossible to
>> coordinate a 51% even by the owner
>>
>> Someone came back and said that creating random numbers on a GPU is
>> hard.  But what about just creating ONE random number and incrementing from
>> there ...
>>
>> It would be great to know if this is a threat or a non issue
>>
>>
>> ------------------------------------------------------------------------------
>> Minimize network downtime and maximize team effectiveness.
>> Reduce network management and security costs.Learn how to hire
>> the most talented Cisco Certified professionals. Visit the
>> Employer Resources Portal
>> http://www.cisco.com/web/learning/employer_resources/index.html
>> _______________________________________________
>> Bitcoin-development mailing list
>> Bitcoin-development@lists.sourceforge.net
>> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
>>
>>
>

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Re: [Bitcoin-development] A mining pool at 46%

[Peter Todd]

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On Fri, Apr 05, 2013 at 12:13:23PM +0200, Melvin Carvalho wrote:
> Totally see the logic of this, and it makes sense.  But I dont think the
> only risk is in terms of double spend, but rather
> 
> 1) vandalize the block chain which may be difficult to unwind?

Vandalize the chain how? By delibrately triggering bugs? (like the old
OP_CHECKSIG abuse problem) Regardless of whether or not the
vulnerability requires multiple blocks in a row, the underlying problem
should be fixed.

By putting illegal data into it? Fundementally we have no way to prevent
people from doing that other than by making it expensive. An attacker
having a lot of hashing power just means they can do so faster and a bit
cheaper.

-- 
'peter'[:-1]@petertodd.org

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Re: [Bitcoin-development] A mining pool at 46%

[Daryl Tucker]

BTC Guild's response:

51% Mitigation Plan
I want to start by thanking all users, new and old, for making BTC
Guild become what it is today. I never expected a service that
originally started on a mining PC in my dining room in April 2011 to
go this far.

However, recently BTC Guild has started to become "too big". Users of
Bitcoin are becoming scared that BTC Guild, either directly or through
hacking/coercion, could be used to attack the network as it gets
closer to 51% of the network. If this were to happen, it is likely
many people would lose confidence in Bitcoin, as a single entity could
control the network if it wanted to do so.

I have put forward a proposal of my plans on how to mitigate this
threat, but unfortunately nothing can be done without users taking
some initiative as well. The following are the actions that will be
taken if certain thresholds are crossed:


More than 40% of the Network [last 2016 blocks]
PPS fee will be raised from 5% to 7% on all new accounts. Old accounts
will also be increased (PPS ONLY) to 7% after a difficulty change. If
the pool eventually drops back under 40% for more than 72 hours, these
fees will be turned back down to 5% after the next difficulty change.

More than 45% of the Network [last 2016 blocks]
Getwork based pools will be completely removed within 24 hours. All
users on getwork have been warned in the past that it is a unsupported
and not advised method of connecting. This should remove ~15% of BTC
Guild's hash rate immediately.

More than 40% of the Network again [last 2016 blocks]
PPLNS fee will be raised from 3% to 4% after a 72 hour warning. This
fee will be reduced back to 3% once the pool drops back under 40% for
more than 72 hours.


If you have questions or comments, please leave them on the forum
thread related to this issue:
https://bitcointalk.org/index.php?topic=168108.0


https://www.btcguild.com/index.php?page=home



On 04/05/2013 07:12 AM, Peter Todd wrote:
> On Fri, Apr 05, 2013 at 12:13:23PM +0200, Melvin Carvalho wrote:
>> Totally see the logic of this, and it makes sense.  But I dont
>> think the only risk is in terms of double spend, but rather
>> 
>> 1) vandalize the block chain which may be difficult to unwind?
> 
> Vandalize the chain how? By delibrately triggering bugs? (like the
> old OP_CHECKSIG abuse problem) Regardless of whether or not the 
> vulnerability requires multiple blocks in a row, the underlying
> problem should be fixed.
> 
> By putting illegal data into it? Fundementally we have no way to
> prevent people from doing that other than by making it expensive.
> An attacker having a lot of hashing power just means they can do so
> faster and a bit cheaper.
> 
> 
> 
> ------------------------------------------------------------------------------
>
> 
Minimize network downtime and maximize team effectiveness.
> Reduce network management and security costs.Learn how to hire the
> most talented Cisco Certified professionals. Visit the Employer
> Resources Portal 
> http://www.cisco.com/web/learning/employer_resources/index.html
> 
> 
> 
> _______________________________________________ Bitcoin-development
> mailing list Bitcoin-development@lists.sourceforge.net 
> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
> 

-- 

Daryl Tucker
daryl@daryltucker.com

Re: [Bitcoin-development] A mining pool at 46%

[Robert McKay]

On Fri, 5 Apr 2013 11:48:51 +0200, Mike Hearn wrote:
> However, youre somewhat right in the sense that its a self-defeating
> attack. If the pool owner went bad, he could pull it off once, but 
> the
> act of doing so would leave a permanent record and many of the people
> mining on his pool would leave. As he doesnt own the actual mining
> hardware, he then wouldnt be able to do it again.

Unless all the miners are monitoring the work they do for their pools 
and the actual miners that found the blocks noticed (unlikely) - the 
only way anyone knows which pool did anything is the source IP that 
first disseminates the new block. Also since it's unlikely that both of 
the doublespend blocks would be found by the same end miner, neither of 
them would know that the pool operator was responsible even if they were 
monitoring their work.

There's nothing stopping the pool owner from channeling the doublespend 
blocks through some other previously unknown IP, so I don't think they 
would suffer any reputational damage from doing this repeatidly.

Robert

Re: [Bitcoin-development] A mining pool at 46%

[Gregory Maxwell]

On Fri, Apr 5, 2013 at 2:30 AM, Melvin Carvalho
<melvincarvalho@gmail.com> wrote:
> There was some chat on IRC about a mining pool reaching 46%
> http://blockchain.info/pools

The estimates on there may be a bit lossy.

> What's the risk of a 51% attack.

The whole fixation on "51" as a magic number is a bit confused— I'll
say more below.

> I suggested that the pool itself is decentralized so you could not launch
> one

None of the pools listed there are meaningfully decentralized—  before
Luke whines, in theory the ones supporting GBT could be if used in a
way that no one actually uses them.  P2Pool is decentralized based on
the same technology as Bitcoin itself, but it's certainly not as point
and click easy as a centralized pool.

> On IRC people were saying that the pool owner gets to choose what goes in
> the block

That is correct.

Though I'd point out— the major pool ops all seem to be great folks
who care about the future of Bitcoin— and the continued success of
their very profitable businesses: a 50% mining pool with a 3% fee
rakes in 54 BTC per _day_.

The more likely threat isn't that pool owners do something bad: It's
that their stuff gets hacked (again) or that they're subjected to
coercion. ... and the attacker either wants to watch the (Bitcoin)
world burn, or after raiding the pool wallet can't exploit it further
except via blockchain attacks.

> Surely with random non colliding nonces, it would be almost impossible to
> coordinate a 51% even by the owner

That makes no sense. A centralized pool is the miner, the remote
workers are just doing whatever computation it tells them to do.
Certainly these remote workers might switch to another pool if they
knew something bad was happening... but evidence suggests that this
takes days even when the pool is overtly losing money.  Miners have
freely dumped all their hashpower on questionable parties (like the
infamous pirate40) with nary a question as to what it would be used
for when they were paid a premium for doing so.  It seems even those
with large hardware investments are not aware of or thinking carefully
about the risks.

> It would be great to know if this is a threat or a non issue

It's important to know exactly what kind of threat you're talking
about—  someone with a large amount of hash-power can replace
confirmed blocks with an alternative chain that contains different
transactions. This allows them to effectively reverse and respend
their own transactions— clawing back funds that perhaps had already
triggered irreversible actions.

This doesn't require some magic "51%"— its just that when a miner has
>50% the attack would always be successful if they kept it up long
enough (long enough might be years if you're talking really close to
50% and he gets unlucky). Likewise, someone with a sustained
supermajority could deny all other blocks— but that attack's damage
stops when they lose the supermajority or go away.

More interesting is this:  An attacker with only 40% of the hashpower
can reverse six confirmations with a success rate of ~50%. There is
source for computing this at the end of the Bitcoin paper.   I did a
quick and really lame conversion of his code JS so you can play with
it in a browser:

https://people.xiph.org/~greg/attack_success.html