Billions of people trapped into financial slavery in the debt based fiat system is worth ahellava lot more money than dozens of houses, cars or yachts.
There are calculations on this exact attack. It calculates 1, 006,247,972 dollars per day in equipment and power to perform such an attack. I have no idea how accurate these numbers are but that is what I have been able to find. Found interesting. I found another calculation that puts such an attack at over 4 billion dollars. Hell Jeff Bezos could perform himself given time to accumulate the over 40k S9 mining rigs etc....
What are your thoughts on the assertions that Bitfinex and Tether are manipulating the bitcoin market cap through issuing non-USD backed Tethers which are then sold for BTC?
Jeff Bezos owns AWS... he could do it right now. He owns the most computing power of any organization on the planet, by a mile. I think 95% of the internet is powered by AWS today.
Great video, Ivan. You cannot see why would someone want to crash bitcoin today. But still you need just 2 conditions for this to happen. First, you need someone or a group of people able to get 51% of the hash power. Second, you need economical logic for someone to crash Bitcoin. 1. Lets review the industry. The barriers to entry the Bitcoin Mining Industry are getting higher and regular people are already not mining. Which means you can easily have a cartel in a few years (Chinese miners for example, who have ASICs developed for them and have independent and cheap energy sources might cooperate). 2. In just a few weeks from now we are going to see futures and options trading on CBOE (Chicago Board Options Exchange) and CME (Chicago Mercantile Exchange). So, if in 2020 you are able to buy a put option for Bitcoin (that's the option to sell a certain asset at a certain price), you can easily find economic logic for someone to crash Bitcoin. The same way some people and organizations have made a killing betting on the financial meltdown in 2008. Not hard to imagine at the time the price of Bitcoin might be $100,000 or even greater. After all, we are lucky to have tech guys warning us on the possible traps. Thanks a lot.
It cannot it's up to the users and miners to protect it for example back around 2013 there was a huge pool that was gaining a huge share so they shut off new users so they could not gain over 50% now people don't seem to care. It in theory can be executed on say the Bitcoin Cash network by any unknown mining group because they have a much smaller amount of hashing power so much easier to exploit but with bitcoin having so much it's much less likely to happen
The goal is to have at least 3 major miners who are at a constant state of war with each other. Equilateral distribution creating balance and no clear dominant miner.
Question, from your explanation, I still don't get why must it be 51%? If it's a matter of competition and being the fastest, then isn't the fastest miner can do double spend attack regardless of the percentage of the hashing power? For example, if there are 3 miners each with 33%, 33%, and 34% hash power. All of them would create their own version of the truths, and theoretically, the 34% can outpace the rest and do the double spend attack as well, am I right?
You are right it's just an unlikely scenario. And it could backfire. For instance if the 34% starts manipulating the network, both the 33% miners are in 0 control of the network. It would make more sense for them to team up and they now control 50% of the network each because their combined hashing power of 66% beats 34%. The 34% miner now has 0 control and unless he can 51% attack them both he has to join them because he will control 0% of the network. Did that make sense? And after he joins them his presence turns their 50% shared ownership of the network back to 33% and we're back where we started.
Hi Ivan, Although you are my guru I've got to correct you because you chose a bit unfavorable wording. 51% of computing power doesn't mean that you will automatically win the competition and that you immediately outperform all other miners. It only means that your PROBABILITY of finding the nonce hence to mine next block is higher! That's how the proof of work algorithm works - based on probability. Best Damian.
Yes good detail, however constantly having a higher probability over time will practically mean that you win the competition in building the longest chain :)
Well, not really. In the long term you will mine more blocks in total but in the short term you will loose about 50% of the 'battles' (51% to 49% is not much of a difference) which makes tampering with the blockchain i.e. creating longer chain difficult...
The attacker privately mines their own chain and then publishes that chain reversing transactions that are not included in that new chain, so it's not about winning the "battle" for each block in my view but the overall ability to create the longest chain by having more power
Don't for get that when the other miners start noticing that 51%er none keep popping up. They will start dropping from that network. Making the pool smaller and giving the 51%er more changes to validate more blocks. Which goes to Ivan's point.
Hi Ivan, it's been a while since you talked about the 51% attack, what is your take on the current mining pools having few holding more than 70% of the hash power?
6:00 When you make transactions on your private network , then where that transaction being saved? if they are not being saved then how it will make the longest chain , is it so that when a transaction happens on your private blockchain only then a block is created? and how it is that possible that by making private transaction ,your public blocksize increases and without listing your transactions details on that public blocks! please correct me, if i am wrong . this is very confusing😵
But will there even be a conflict in the first place to consider the longest chain? consider the hacker changes a block in the chain , and hashes all the following blocks and has the longest chain now. But the conflict shouldn't arise because the hacker's validated hash is different than the general ledger /basically everyone else. So the hacker's should be cut out , because his hash values don't match with majority of the world.
Seem's like governments only options will be to control 51% of the hashing power to control the money flow they cling to and love to much. Great to know. Will keep an eye on the pool for bitcoin and pray that ant pool gets smaller ...
Chinese anti-establishment controls almost a majority the mining and also make many of the most powerful mining products. Rothschild and their like have no skin in this game nor a way to throw money at a shortcut that doesn't pay the people they are trying to overturn and enable them to just purchase yet more powerful technology and then respond by controlling the market of mining equipment.
Its totally obvious if you understand how bitcoin works. Its a majority rule system. If you can control a majority of the network you can make bitcoins out of thin air.
Very interesting. Would people that have downloaded the entire ledger be able to see that the bitcoins coins that the 51% attack have spent twice, will they be able to know that there are more bitcoins then should have been created.
Well since bitcoin is a public ledger, you would be able to trackdown whoever did this 51% attack. And that person would be put in jail. But also this is just a ridiculous feat that would never happen.
Hey Ivan , I was watching one of your videos from back in the day, and I have a serious question About the “Shadow Mining” or Bitcoin Blockchain Reorganization If somebody created a longer blockchain, with different block/transactions in each block, then passed them on to the full nodes, that, following the longest chain Rule, would accept this new “erroneous Block chain” as valid, and drop the “Real” Blockchain, wouldn’t all transactions, contained in the dropped blockchain, return to the mempool to be added to new blocks again? As in when we have an orphaned block? So one day or another, the transactions that a malicious person/miner kept out of that new block chain, would be added again to a new block, no?
Also, who is left holding the bag when a 51% attack occurs? Wouldn't the last person holding the double spent coins be the one without the funds? Essentially the last txn and subsequently the coins from that txn would be rendered invalid and literally disappear??
Is there & what is the official response to these scenarios? If the transactions (1st round spending on house car etc) are excluded, surely the seller's wallet will be short - wouldn't he raise a ruckus? UNLESS, you're saying that his wallet will be credited but the perpetrator's won't be debited... in which case the total amount of bitcoins in circulation will have increased by the amount of that 1st round spending. Is there any check on the total amount of bitcoins in circulation ?
Hi Ivan, great video but there are 2 things I havent quite understood yet. 1. Wouldnt it be obvious that someone commited a 51% attack because once he releases the longer chain the notes could see that an usual high amount (lets say 10) of blocks were verfied by the same Miner in the row giving himself also all the coinbase transactions to his adress? 2. Is it correct that the 51% attacker may doubke spend or exclude all transactions to a certain adress BUT would not be able to transfer money to himself because he doesnt own other Note's private Keys. Hence all these transactions would be detected a froud immeditely by other Notes because they cant use the public keys to decrypt the transactions when checking them?
Yes, Ivan did not point out the reality that you just did. Also, the longer chain goes back to the genesis block of the bitcoin blockchain which is longer than an attempted 51% attack would have. Therefore, there cannot be a successful attack. Therefore, a 51% attack is a myth because it's not possible with all the nodes protecting the blockchain.
There is 2 easy ways how the gov's can stop bitcoin. 1) bitcoin works on a specific port and specific protocol, internet providers can block those protocols in their nodes. So a simple stop is to impose isp's to block ports. 2) is to change online servers time clocks, today is only few servers that serve as clock over the world, including microsoft and linux systems are syncronized by those servers :) , if they want they can easily shutdown those servers and all online computers will be desyncronized :).
Sorry but I still don't understand it. You said this transaction to buy a boat got confirmed but finally not included in the final version of the blockchain. But how this transaction could be VALIDATED if it is not included in the blockchain yet? Thanks
you talk about the possibility of blocking certain addresses. I thought you couldn't see specific addresses, that it is all encrypted. can you explain?
regarding verge exploit as I see claims its a 51% attack? But seeing your explantation perhaps it was not? As I umdetstand blockchain mined timestamps were spoofed?
So say theoretically I had 51% of Bitcoin's hashing power and was able to mine my own version of the block chain privately. In doing so, would the amount of time the remaining 49% percent takes to solve each block at least double to 20 mins, seeing as the public block chain network has only half the computing power without my 51%?
If Cryptos disrupt current Fiat currencies Why is that not enough of an incentive ??? People stop paying taxes trying to hide everything in Crypto and that for me sound like an incentive. Crypto starts messing with the USD and that sounds like enough of a reason to do this
Great Explanation. Is it possible to run a modified version of Bitcoin node which will always generate less complex puzzle for the Block so that someone can mine 51% faster than others with small computation power?
A question, Ivan. If you spent your BTC on the public chain and then announced a longer chain without your transaction excluded, would your transaction not just go back in to the pool of pending transactions? To pull this off would you not need to create a conflicting transaction from your address so that your original transaction will be rejected next time around as a double spend? Thanks for another great video!
I am finding it hard to understand how a completely new chain gets announced. Could you please explain the logic involved in accepting a block by a node ?
Thanks for your explanation. As for your double-spend example: Do I understand correctly that after having bought my house or car in the original public chain and then announcing my privately-mined version to the public, those first transactions would be annulled? So the sellers of those original assets (house/car) would notice this and context. i.e. they wouldn't let me have my car or house? => So this attack can only work for things that can very quickly change hands in a way that can't be undone. It seems a car or a house are not such good examples?
I am still unclear about the double spend. What happens to transactions that you spent to buy car,home.etc ? The blocks including these transactions will be rejected by 51% miners(you). Hence, the transactions will not be verified. So how will you be able to double spend them ?
Thank you for this video. There are a few flaws in your explanation but you final result/conclusion is definitely right: A 51% is ultimately prevented by simple economics (destroying value of your coins). The biggest and very important flaw in your explanation is, that with 51% mining power you DO NOT get All the blocks! With 51% hashing power, the chance THAT YOU GET ALL BLOCKS is statisticaly at exactly 51%!!! that means that over 1000 blocks, you will probably mine 510 blocks. The rest of 490 blocks WILL PROBABLY STILL BE MINDESTENS BY OTHERS! That also means, that the chance that you buy your house and your double spend is successful is only at 51%! So if you do that with 100 houses, you will probably only be successful with 51 of those houses. And while you do that, people and the network would probably start to realize what you are doing and the value of Bitcoin/BitcoinCash would immediately drop tremendously. That would make everything next house, on the way to 100, more expensive. So if the others power up und you loose your 51% status and prices go up again, the 49% of house sellers who received your coins will probably have received round about double the amount of Bitcoin/BitcoinCash as they would have without your attack. So if you loose your 51% status, prices will normalize, ~half of the house sellers will have received nothing and the other ~half will have received double the amount. Which means: the attacker spend the same amount of money and has no gain. = attack has no economical benefits. Additionally, when you have 51%, the other miners all have still 49% of the blocks and therefor still receive 49% of the Block rewards. So every single miner is always competing with THE WHOLE REST of the network. If he has 10% hashing power. He will on average mine 10% of the blocks and will also get 10% of all the block rewards. At the same time he will only have paid 10% of all the electricity cost of the network. How/If the other 90% are divided doesn't matter for this miner at all. He will never be put out of work because of that. That's the beauty of the Bitcoin concept, it is soo genius because it takes just everything into account :) So ultimately this attack is in no means a success. TL;DR: The explanation is flawed and underestimates the prevention mechanism of the original Bitcoin concept. 51% attack to doublespend is already prevented by immediate economic effects --And therfore still: Your conclusion is absolutely right!
How can one stop broadcasting the newly mined blocks? Like you said that you fork it and do not broadcast it to the network until you have got a larger chain than the network. Just trying to understand that technically.
Hey Ivan, what's up? Best explanation of the 51% attack I heard (or read) so far! Thank you for that! I have a question though: as the cryptocurrency market gets more popular, and more and more coins appear, doesn't the 51% attack becomes more likely on "smaller" coins? I mean, getting 51% of BTC hashing power today would be an herculean (and virtually impractical) task to accomplish. But what about 51% of, say, ZenCash, or Faircoin? Since there aren't as many people mining thoses coins, isn't it easier for one node to accquire the network absolute majority? Yours is a great channel and I wish you all success!
Ivan If that happens, does the community notice it right away? for example in the double spending, does the sender and the receiver have the bitcoins in their wallet or is it just the sender that has it?
Great video Ivan. So why do they allow miners to mine in secret and then notify the network at a later date? Wouldn't requiring them to immediately report that they are working on new blocks massively help to prevent such attacks?
When all the other miners receive a blockchain for example 10 blocks longer and diferent from the previous they were validating they will realize that theres something illegit. At this moment there will be a fork on the network. Other way to realize that theres something abnormal is the sudden increase in the hashrate of the network or the longest chains coming often from the same place
in case of a 51% attack to roll back a chain, chain could be rolled back at any event/moment in the past , or the attack should last as the time passed from the event that should be reverted till the start of the attack??? @Ivan on Tech
Hi Ivan, Today I watched you video and I am bit confused on 51% of HashPower holder can faster then other . Is it practically possible when block time is fix to approx 10 min Network will automatically increase the difficulty if more hash power tries to make block faster in such scenario how any one can mine faster.?
I still don't understand what will happen with all the attacker's "fake" transactions once he published his longer chain to the public? Surely those transactions will be republished/rebroadcasted to the public pool and available to get selected by other miners again to be included in their block (to be confirmed) right? So what's the point of creating your own chain privately and publishing it once it becomes the longest one if your old "fake" transactions are still able to be confirmed down the road by other miners? Are you saying once the attacker's transactions got confirmed, he has to do the same process all over again? (creating a private chain and broadcasting it once it becomes the longest one) Thanks.
Best technical crypto commentary by a long shot, the only people that truly understand investment prospects are programmers. Keep up the good work Ivan ! Please publish a video on Stratis if you are able.
Hi Ivan, i`m just wondering why winning 51 percent in your words automatically leads to gradual total monopolization and second how can network determine that there is a monopoly forming ?
If the problem is so clear... what is the solution for this problem???? Why there is the 51% rule??? Can it not raised to 80 or 95% or something like this??? This sounds very dangerous and the people who has the most FIAT money can get 51% of the hash power in the long term??? A friend of my has a master in IT and warned me about this problem... He said thats the reason why he is not invested in BTC. When it is so clear, why there is no solution for that or better why the people trust Blockchain???? And is this the same with ETH??? (proof of work VS proof of stake????) Please answer ;) THANKS!
What would it cost approximately to perform a 51% attack? So if me and my wealthy friends were to buy the equipment and set up, then short Bitcoin on Chicago mercantile how much would we profit while killing Bitcoin in the process? This now is going through my mind anyways if I had any money to speak of! So maybe having Bitcoin traded on markets is not such a good thing after all hum? Sorry Ivan but this video indeed left me confused and now worried that institutions and central authorities will have the means to kill Bitcoin and until you tell me otherwise profit in the process...Love to see a follow up video explaining why it will not happen!
Would cost around $6.000.000.000 - $10.000.000.000. And you'd be able to do it once. So it's hard to imagine what can you buy for 10$B+ keeping your anonymity, without crashing the market, in a stealthy way, because the rig will be useless after that. Most people agree that 51% attack is not practical anymore.
Hi Ivan, thanks for the video; keep up the work! Just one question regarding the double spending when having >50% of hashing power: You said that network would choose you privately mined blockchain once it’s longer than the publicly mined blockchain. This means that the publicly mined blockchain would be abandoned by the network. Doesn’t this mean that all transactions that where saved on the abandoned publicly mined blockchain will need to be reprocessed (unless they are already included in your privately mined blockchain). That would mean that eventually your transactions would show up again in the new blockchain which means double spending is not possible??
with futures starting Dec. 18 , a large hedge fund would have the incentive from shorting the futures to pull off this attack because even if bitcoin burns he can profit from the futures, what is your opinion about this risk ? is ETH or any other crypto immune to 51% attack ?
Hi Ivan, I would love to hear your opinion about what happens when the block reward incentive for miners goes away when the maximum amount of bitcoins have been mined. Will they switch their mining to other currencies causing bitcoin to collapse? I find it hard to believe that transaction fees would keep the miners aboard.
it would stay the same unless your transactions were some of the ones deleted from the old blocks. but what if they added a transaction where you sent all your bitcoin to them :O .. what if it was more than you even had in your wallet :O
Hi Ivan, really happy watching your videos, it means a lot for me and my friends who start creating research team since the beginning of this year, we'd be happy if you can come to Indonesia and speaking about blockchain. do you have a plan to visit Indonesia ?
Its a great explanation, and very complete, and balanced, except for one thing. (perhaps I am wrong in this?) It would NOT actually give the miner with 51% hash power a REAL double spend. As soon as he announces his longer private chain to the network, and it is adopted, the previous transactions to the seller of the Boat, House, Car etc would effectively disappear, and the seller would get really mad noticing his balance reduce.. So would not hand over such House, Car, Boat etc, and if he had given real world possession, the seller would promptly demand its return as unpaid, like a bounced cheque. So conclusion of this video seems to be there is no risk, except from malicious parties with loads of power, to crash the network.... or am I wrong?
What if several malicious gov/entity or cross regions purposely invested huge sums so it has full control over its region, cash and monetary system as well as indirect and intangible benefits where the cost of executing billions or trillions less than its "calculated benefit", that it has full control on its region? ..Separately, if these several entity purposely sold most of their crypto holdings, and launch 51% attack causing price drop to near zero, and they buy back at low price. This may happen!! Pls advice Sir Ivan. :);)
Or bitcoin could become really popular and make fiat currencies less valuable. Some government could buy up these cheap fiat currencies and then decide to crash bitcoin, sending these currencies skyrocketing and making themselves rich. Not saying this is likely, but it is also a possible scenario.
Really good explanation of the 51% attack. Although I don't agree that if you have 51% of the mining power you would always mine the next block (and always receive the reward). You would have 51% of the chance of mining the next block and not 100%.
karantan but in long period of time 51 will increase because many other miners will quit bacause they will mine very rarely and electric bill will eat all profit. 1% looks small but in statistcs it is everything. Lok at rulette game the adventage of casino is similar and in long period of time they get all money
All you have to do is keep your blocks private until your chain is longer and then release it. You will have 100% of the blocks on that part. Then do it again, wait a couple of blocks and win the race again. That's how with 51% of the hash power you can get 100% of the mining rewards.
Hey there, I have some understanding of the blockchain technology, but I have never actually played around with the code itself, so this is a complete shot in the dark - but wouldn't it theoretically be possible to find such combinations of block data and hashes so that a cyclic graph can be created in the blockchain? You know, hash of block A is used in block B and hash of block B is used in block A, so A and B form a cycle. At this stage, you could attack the network by sending a sequence of blocks ABABABABAB, which could be infinite. Does that make sense?
Great video, I was hoping that you would talk about the lost in confidence. People often think that an attack would means that they lose their bitcoins, while actually bitcoin would likely loses its value (which could have the same result in the end!).
well sam what's happening now with ETN if u look at nanopool it have the 51% (maybe more ) and all small pools dont get blocks (we sometimes get orphaned blocks -.-) this is just :c cause we can mine they only mine
what I'm really intrested is how 51% attack is connected with Byzantine generals problem, I mean we know that generals problem can only be solved when the amount of loyal miners is more than 2/3 of all miners. And the solution itself is proof of work. So is that what lays in the base of this attack? and 51% percent actually mean 2m+1 amount of miners, where m - are malicious(let's say from the attacker side) ones? can you please explain //Im sorry for my english
Yeah, the attack is called "the 51% attack", but tecnically it should be called "the 50.00000000000001% attack" or "the (50%+1hash/sec) attack". If there is m equally equipped malicious miners, the blockchain can resist the attack if there is (m+1) honest miners, meaning if there is 2m+1 miners participating. But what really matters is hashing power, not the number of miners, so you can do a more general thinking with hashrate. So, if the attacker controls "m" hash/s, the honest nodes should collectively control m+1 hash/s. In other words, if the attacker have more than 50% of the hashrate, he/she/it wins.
yeah but Im asking about Byzantine generals problem, and maybe you got me wrong, I meant that it can be solved when the amount of all generals is 3m+1 and they are dealing with m traitors (that's what i got after reading the article with proofs by Lamport). so that we have 2m+1 trusted(or more). and how actually is it related with this attack. and by hashing power you mean all full nodes that are able to solve the problem and calculate nonce(calculate is def not the right word srry)? //Im sorry for stupid questions :(
The only stupid questions are the questions that aren't asked. I'm not an expert in the Byzantine problems, but I believe that there are several forms (can the participant be sure of who sent a message, do they know the number of rogue nodes, are messages public or privately sent to an arbitrary number of peers, etc.). The theorem states that in its most general form (meaning without more hypothesis), [if there are more then 2/3 of honest nodes] then => [they can reach a consensus]. It does NOT states [if there are less than 2/3 honest nodes] then => [they are sure to fail]. I think (not sure), that the Proof of work in the Bitcoin blockchain must have more hypothesis, so the honest nodes can resist an attack with only m+1 of hash rate. Finding a block is like a lottery. Basically, the aim for the full nodes is to be the first find a correct number (the nonce) to add at the end of the current block. You just try some one after the other, in a random order. The greater your hash rate, the more times you can try each second. The more times you can try each second, the better chance you have to find one first, to broadcast it with a big "FIRST!!!!!" label on it, and claim you reward. The number of nodes doesn't matter. If you have a full node with a 100 Ghash/s or two nodes with 50 Ghash/s each, your chances are exactly the same. For the same reason, we don't care if the attacker have an army of small computers or just one big fucking super calculator. What matters is that this MF have more than 50% of the chance to win the lottery so it will stack up winning tickets faster than the rest of the world.
So if a 51% attacker makes his chain public, will all the past rewards for blocks that miners got dissappear? And if the miners sell theyre btc that they mined and people use it will all the transactions that happened after the 51% attack dissappear too?
This is a really great video. I've been trying to read all about this, but you explained it in one go. I do have a follow-up question, however. So what would the attacker be adding in their private blockchain? Are these the same blocks that the other miners with less computing power are ALSO trying to solve, you just happen to be the one getting them since you have all the power? I think I'm mixing up the term "private" with "illegitimate". If I understand, this is actually just private because you are adding the latest blocks to the chain, but you just aren't announcing them. So these blocks you are privately mining can include legitimate transactions happening in the Bitcoin network, correct? Thank you again.
The 51% problem was a concern in the early days of BTC, but now it's not very likely, I won't say impossible, but improbable. Also, 3/4 of BTC has already been mined.
Great to know! Can you please next time compare this to Tangle or some other cryptocurrencies to mention these possible/unpossible risks? I think this will be helpful to know for many people including me, thumbs up. I am so happy that you make these videos about technical side of cryptocurrencies, for me and also many other people its very helpful to understand cryptocurrencies, hope you will continue, you make awesome knowledge for people 👍🏻👍🏻👍🏻
I thought one of the protections in the blockchain was consensus seeking and rejecting "minority reports" (pardon the movie reference)? For example, my understanding is that NEO's blockchain network will reject a minority message when multiple nodes have a minority report.
Thanks for the video. Doesn’t the introduction of Bitcoin futures by the cboe create a financial incentive to do a 51% attack and crash the Bitcoin market because that will introduce a way to shot Bitcoins and profit from a crash? Also does anyone have an idea of the legality of such an attack, obviously it would be morally reprehensible but since there is no regulation does that also mean no legal protection?
First of, love your videos Ivan, they've been more than helpfull. However, I don't quite understand what happens to unconfirmed transactions. They're going back into to 'unconfirmed pool' I guess? But what if the 'double spending' transaction gets confirmed and the original goes back into the unconfirmed pool?
Hey Ivan. Great video. just wondering about a scenario. What if 99 people are the only miners, and 98 of them mines with 1h/s and the last person mines with 2h/s (100h/s total). Will that one person, who has the fastest miner also be able to execute these attacks? In that case, why are the biggest mining pools not performing these attack all the time?
Could smaller ICOs be attacked by that, Im sure someone would have enough computing power to do this to a small ICO with few miners, if they use the same architecture... ?
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If you have 51% of the hashing power, dont you already have a house and a car? Hash power is expensive.
I believe he said THEORETICALLY speaking!
What if you also want that yacht?
Exactly, it is easier (more cost-effective) to play the game and get paid to mine honestly, than to subvert the blockchain.
Billions of people trapped into financial slavery in the debt based fiat system is worth ahellava lot more money than dozens of houses, cars or yachts.
Watch your language there mate. Manners maketh Man.
Thanks for the explanation Ivan. P.S. I noticed your lighting is using at least 51% of the national grid power.
Haha!
So basically what your saying is that the cost of destroying bitcoin is within the budget of any major nation?
There are calculations on this exact attack. It calculates 1, 006,247,972 dollars per day in equipment and power to perform such an attack. I have no idea how accurate these numbers are but that is what I have been able to find. Found interesting. I found another calculation that puts such an attack at over 4 billion dollars. Hell Jeff Bezos could perform himself given time to accumulate the over 40k S9 mining rigs etc....
Thank you for sharing that
yes, yes, yes!!!!
What are your thoughts on the assertions that Bitfinex and Tether are manipulating the bitcoin market cap through issuing non-USD backed Tethers which are then sold for BTC?
Jeff Bezos owns AWS... he could do it right now. He owns the most computing power of any organization on the planet, by a mile. I think 95% of the internet is powered by AWS today.
Great video, Ivan.
You cannot see why would someone want to crash bitcoin today. But still you need just 2 conditions for this to happen.
First, you need someone or a group of people able to get 51% of the hash power. Second, you need economical logic for someone to crash Bitcoin.
1. Lets review the industry. The barriers to entry the Bitcoin Mining Industry are getting higher and regular people are already not mining. Which means you can easily have a cartel in a few years (Chinese miners for example, who have ASICs developed for them and have independent and cheap energy sources might cooperate).
2. In just a few weeks from now we are going to see futures and options trading on CBOE (Chicago Board Options Exchange) and CME (Chicago Mercantile Exchange). So, if in 2020 you are able to buy a put option for Bitcoin (that's the option to sell a certain asset at a certain price), you can easily find economic logic for someone to crash Bitcoin. The same way some people and organizations have made a killing betting on the financial meltdown in 2008. Not hard to imagine at the time the price of Bitcoin might be $100,000 or even greater.
After all, we are lucky to have tech guys warning us on the possible traps.
Thanks a lot.
Great explanation - so, how can the network be protected from the 51% to prevent this?
good question! will cover in a later video!
Look forward to that. Thanks, Ivan - great content!
It cannot it's up to the users and miners to protect it for example back around 2013 there was a huge pool that was gaining a huge share so they shut off new users so they could not gain over 50% now people don't seem to care.
It in theory can be executed on say the Bitcoin Cash network by any unknown mining group because they have a much smaller amount of hashing power so much easier to exploit but with bitcoin having so much it's much less likely to happen
The more miners out there the harder it becomes to gain the 51% of hashing power.
The goal is to have at least 3 major miners who are at a constant state of war with each other. Equilateral distribution creating balance and no clear dominant miner.
Question, from your explanation, I still don't get why must it be 51%? If it's a matter of competition and being the fastest, then isn't the fastest miner can do double spend attack regardless of the percentage of the hashing power? For example, if there are 3 miners each with 33%, 33%, and 34% hash power. All of them would create their own version of the truths, and theoretically, the 34% can outpace the rest and do the double spend attack as well, am I right?
I have the same question, did you figure it out?
the two 33% won't act against each other based on game theory
You are right it's just an unlikely scenario. And it could backfire. For instance if the 34% starts manipulating the network, both the 33% miners are in 0 control of the network. It would make more sense for them to team up and they now control 50% of the network each because their combined hashing power of 66% beats 34%. The 34% miner now has 0 control and unless he can 51% attack them both he has to join them because he will control 0% of the network. Did that make sense? And after he joins them his presence turns their 50% shared ownership of the network back to 33% and we're back where we started.
Which is why the electrical cost of generating that much hashing power is an important deterrent to put off would-be attackers.
"It's not profitable to crash the network"...
It's not about the money, It's about sending a message
Hi Ivan,
Although you are my guru I've got to correct you because you chose a bit unfavorable wording. 51% of computing power doesn't mean that you will automatically win the competition and that you immediately outperform all other miners. It only means that your PROBABILITY of finding the nonce hence to mine next block is higher! That's how the proof of work algorithm works - based on probability.
Best
Damian.
Yes good detail, however constantly having a higher probability over time will practically mean that you win the competition in building the longest chain :)
Well, not really. In the long term you will mine more blocks in total but in the short term you will loose about 50% of the 'battles' (51% to 49% is not much of a difference) which makes tampering with the blockchain i.e. creating longer chain difficult...
The attacker privately mines their own chain and then publishes that chain reversing transactions that are not included in that new chain, so it's not about winning the "battle" for each block in my view but the overall ability to create the longest chain by having more power
Don't for get that when the other miners start noticing that 51%er none keep popping up. They will start dropping from that network. Making the pool smaller and giving the 51%er more changes to validate more blocks. Which goes to Ivan's point.
Is there no way on the protocol layer to instead drop the source of the 51% attack?
Hi Ivan, it's been a while since you talked about the 51% attack, what is your take on the current mining pools having few holding more than 70% of the hash power?
6:00 When you make transactions on your private network , then where that transaction being saved? if they are not being saved then how it will make the longest chain , is it so that when a transaction happens on your private blockchain only then a block is created?
and how it is that possible that by making private transaction ,your public blocksize increases and without listing your transactions details on that public blocks!
please correct me, if i am wrong .
this is very confusing😵
But will there even be a conflict in the first place to consider the longest chain?
consider the hacker changes a block in the chain , and hashes all the following blocks and has the longest chain now.
But the conflict shouldn't arise because the hacker's validated hash is different than the general ledger /basically everyone else.
So the hacker's should be cut out , because his hash values don't match with majority of the world.
In this case hacker has majority of the computing power in the world - 51%
Seem's like governments only options will be to control 51% of the hashing power to control the money flow they cling to and love to much. Great to know. Will keep an eye on the pool for bitcoin and pray that ant pool gets smaller ...
Crypto News my thoughts exactly
TANGLE
Chinese anti-establishment controls almost a majority the mining and also make many of the most powerful mining products. Rothschild and their like have no skin in this game nor a way to throw money at a shortcut that doesn't pay the people they are trying to overturn and enable them to just purchase yet more powerful technology and then respond by controlling the market of mining equipment.
Its totally obvious if you understand how bitcoin works. Its a majority rule system. If you can control a majority of the network you can make bitcoins out of thin air.
stop smoking crack Skyler
Very interesting. Would people that have downloaded the entire ledger be able to see that the bitcoins coins that the 51% attack have spent twice, will they be able to know that there are more bitcoins then should have been created.
Well since bitcoin is a public ledger, you would be able to trackdown whoever did this 51% attack. And that person would be put in jail. But also this is just a ridiculous feat that would never happen.
Hey Ivan , I was watching one of your videos from back in the day, and I have a serious question
About the “Shadow Mining” or Bitcoin Blockchain Reorganization
If somebody created a longer blockchain, with different block/transactions in each block, then passed them on to the full nodes, that, following the longest chain Rule, would accept this new “erroneous Block chain” as valid, and drop the “Real” Blockchain, wouldn’t all transactions, contained in the dropped blockchain, return to the mempool to be added to new blocks again? As in when we have an orphaned block?
So one day or another, the transactions that a malicious person/miner kept out of that new block chain, would be added again to a new block, no?
So how do we know Bitmain aren't doing this on the bcash network?
Also, who is left holding the bag when a 51% attack occurs? Wouldn't the last person holding the double spent coins be the one without the funds? Essentially the last txn and subsequently the coins from that txn would be rendered invalid and literally disappear??
Is there & what is the official response to these scenarios? If the transactions (1st round spending on house car etc) are excluded, surely the seller's wallet will be short - wouldn't he raise a ruckus? UNLESS, you're saying that his wallet will be credited but the perpetrator's won't be debited... in which case the total amount of bitcoins in circulation will have increased by the amount of that 1st round spending. Is there any check on the total amount of bitcoins in circulation ?
Ivan can you brief what is nonce in terms of blockchain?
If bitcoin derivatives are traded, a 51% attack on bitcoin together with simultaneously short-selling bitcoin could of course be very profitable
Thank you for a very good explanation of this 51% attack possebility!
It prooves again that decentralisation of miners is vital.
Hi Ivan, great video but there are 2 things I havent quite understood yet.
1. Wouldnt it be obvious that someone commited a 51% attack because once he releases the longer chain the notes could see that an usual high amount (lets say 10) of blocks were verfied by the same Miner in the row giving himself also all the coinbase transactions to his adress?
2. Is it correct that the 51% attacker may doubke spend or exclude all transactions to a certain adress BUT would not be able to transfer money to himself because he doesnt own other Note's private Keys. Hence all these transactions would be detected a froud immeditely by other Notes because they cant use the public keys to decrypt the transactions when checking them?
Yes, Ivan did not point out the reality that you just did. Also, the longer chain goes back to the genesis block of the bitcoin blockchain which is longer than an attempted 51% attack would have. Therefore, there cannot be a successful attack. Therefore, a 51% attack is a myth because it's not possible with all the nodes protecting the blockchain.
You can make as many wallets as you like!
There is 2 easy ways how the gov's can stop bitcoin.
1) bitcoin works on a specific port and specific protocol, internet providers can block those protocols in their nodes. So a simple stop is to impose isp's to block ports.
2) is to change online servers time clocks, today is only few servers that serve as clock over the world, including microsoft and linux systems are syncronized by those servers :) , if they want they can easily shutdown those servers and all online computers will be desyncronized :).
What are your thoughts on tails and the onion network
Sorry but I still don't understand it. You said this transaction to buy a boat got confirmed but finally not included in the final version of the blockchain. But how this transaction could be VALIDATED if it is not included in the blockchain yet? Thanks
what does he mean by private mining? thought you couldnt do it offline?
you talk about the possibility of blocking certain addresses. I thought you couldn't see specific addresses, that it is all encrypted. can you explain?
Truth is provided by an arms race of computation power.. Do not let one become too powerful
regarding verge exploit as I see claims its a 51% attack? But seeing your explantation perhaps it was not? As I umdetstand blockchain mined timestamps were spoofed?
Goodness grace I felt so lucky finding your channel. Very very informative !!
Can we explain proof of stake and what kind of attacks are vulnerable?
So say theoretically I had 51% of Bitcoin's hashing power and was able to mine my own version of the block chain privately. In doing so, would the amount of time the remaining 49% percent takes to solve each block at least double to 20 mins, seeing as the public block chain network has only half the computing power without my 51%?
If Cryptos disrupt current Fiat currencies Why is that not enough of an incentive ??? People stop paying taxes trying to hide everything in Crypto and that for me sound like an incentive. Crypto starts messing with the USD and that sounds like enough of a reason to do this
Great Explanation. Is it possible to run a modified version of Bitcoin node which will always generate less complex puzzle for the Block so that someone can mine 51% faster than others with small computation power?
A question, Ivan. If you spent your BTC on the public chain and then announced a longer chain without your transaction excluded, would your transaction not just go back in to the pool of pending transactions? To pull this off would you not need to create a conflicting transaction from your address so that your original transaction will be rejected next time around as a double spend?
Thanks for another great video!
Yeah, had the same question lol
I am finding it hard to understand how a completely new chain gets announced. Could you please explain the logic involved in accepting a block by a node ?
Thanks for your explanation.
As for your double-spend example: Do I understand correctly that after having bought my house or car in the original public chain and then announcing my privately-mined version to the public, those first transactions would be annulled? So the sellers of those original assets (house/car) would notice this and context. i.e. they wouldn't let me have my car or house?
=> So this attack can only work for things that can very quickly change hands in a way that can't be undone. It seems a car or a house are not such good examples?
so the 51% attack and leveraged shorts are still not profitable in this sort of scenario?
@Ivan on Tech Why would there be different length chains? Can you please elaborate and provide and example? Thank you great video!
I am still unclear about the double spend. What happens to transactions that you spent to buy car,home.etc ? The blocks including these transactions will be rejected by 51% miners(you). Hence, the transactions will not be verified. So how will you be able to double spend them ?
Thank you for this video. There are a few flaws in your explanation but you final result/conclusion is definitely right: A 51% is ultimately prevented by simple economics (destroying value of your coins).
The biggest and very important flaw in your explanation is, that with 51% mining power you DO NOT get All the blocks! With 51% hashing power, the chance THAT YOU GET ALL BLOCKS is statisticaly at exactly 51%!!! that means that over 1000 blocks, you will probably mine 510 blocks. The rest of 490 blocks WILL PROBABLY STILL BE MINDESTENS BY OTHERS! That also means, that the chance that you buy your house and your double spend is successful is only at 51%! So if you do that with 100 houses, you will probably only be successful with 51 of those houses. And while you do that, people and the network would probably start to realize what you are doing and the value of Bitcoin/BitcoinCash would immediately drop tremendously. That would make everything next house, on the way to 100, more expensive. So if the others power up und you loose your 51% status and prices go up again, the 49% of house sellers who received your coins will probably have received round about double the amount of Bitcoin/BitcoinCash as they would have without your attack. So if you loose your 51% status, prices will normalize, ~half of the house sellers will have received nothing and the other ~half will have received double the amount. Which means: the attacker spend the same amount of money and has no gain. = attack has no economical benefits.
Additionally, when you have 51%, the other miners all have still 49% of the blocks and therefor still receive 49% of the Block rewards. So every single miner is always competing with THE WHOLE REST of the network. If he has 10% hashing power. He will on average mine 10% of the blocks and will also get 10% of all the block rewards. At the same time he will only have paid 10% of all the electricity cost of the network. How/If the other 90% are divided doesn't matter for this miner at all. He will never be put out of work because of that.
That's the beauty of the Bitcoin concept, it is soo genius because it takes just everything into account :)
So ultimately this attack is in no means a success.
TL;DR:
The explanation is flawed and underestimates the prevention mechanism of the original Bitcoin concept. 51% attack to doublespend is already prevented by immediate economic effects
--And therfore still: Your conclusion is absolutely right!
what if 51% of the mining power is owned by different companies, but these companies are from the same owner without anybody knowing it?
You're doing so well on using the opportunities you get to the fullest. Keep it going!
How can you do this without the support of the full nodes?
How can one stop broadcasting the newly mined blocks? Like you said that you fork it and do not broadcast it to the network until you have got a larger chain than the network. Just trying to understand that technically.
you modify the mining software to not send the PoW solution for each block you mine to the network
Hey Ivan, what's up? Best explanation of the 51% attack I heard (or read) so far! Thank you for that!
I have a question though: as the cryptocurrency market gets more popular, and more and more coins appear, doesn't the 51% attack becomes more likely on "smaller" coins? I mean, getting 51% of BTC hashing power today would be an herculean (and virtually impractical) task to accomplish. But what about 51% of, say, ZenCash, or Faircoin? Since there aren't as many people mining thoses coins, isn't it easier for one node to accquire the network absolute majority?
Yours is a great channel and I wish you all success!
Ivan
If that happens, does the community notice it right away? for example in the double spending, does the sender and the receiver have the bitcoins in their wallet or is it just the sender that has it?
What is to stop covert collusion between miners to aggregate 51%?
Great video Ivan. So why do they allow miners to mine in secret and then notify the network at a later date? Wouldn't requiring them to immediately report that they are working on new blocks massively help to prevent such attacks?
When all the other miners receive a blockchain for example 10 blocks longer and diferent from the previous they were validating they will realize that theres something illegit. At this moment there will be a fork on the network. Other way to realize that theres something abnormal is the sudden increase in the hashrate of the network or the longest chains coming often from the same place
in case of a 51% attack to roll back a chain, chain could be rolled back at any event/moment in the past , or the attack should last as the time passed from the event that should be reverted till the start of the attack??? @Ivan on Tech
What are your thoughts on the assertions that Tether is being used to pump up the bitcoin market cap?
Hi Ivan, Today I watched you video and I am bit confused on 51% of HashPower holder can faster then other . Is it practically possible
when block time is fix to approx 10 min
Network will automatically increase the difficulty if more hash power tries to make block faster
in such scenario how any one can mine faster.?
What about owning 51% of nodes? How would this change the equation?
hey ivan
and hat will happend to the transaction you made for the housh? the bitcoin will stay in the seller account or they will disapear?
Ivan, thank-you for this video, I tried to explain a 51% attack the other day and failed miserably, just emailed this to those two Devs.
you know he's wrong and it's completly impossible to compete with miners and consumers!
Great explanation Ivan. I suggest in videos like this to prepare a little animation. I think it could be a lot easier to understand. Cheers
So would that mean the coins would be taken from the wallets where you had sent them to buy all the stuff?
I still don't understand what will happen with all the attacker's "fake" transactions once he published his longer chain to the public? Surely those transactions will be republished/rebroadcasted to the public pool and available to get selected by other miners again to be included in their block (to be confirmed) right? So what's the point of creating your own chain privately and publishing it once it becomes the longest one if your old "fake" transactions are still able to be confirmed down the road by other miners? Are you saying once the attacker's transactions got confirmed, he has to do the same process all over again? (creating a private chain and broadcasting it once it becomes the longest one) Thanks.
Can we force the discovery of new blocks as soon as they are mined?
(Blocks found instantly/publicly update network or something?)
Best technical crypto commentary by a long shot, the only people that truly understand investment prospects are programmers. Keep up the good work Ivan ! Please publish a video on Stratis if you are able.
@Ivan on Tech. You sound Kazakhstani. Are you from there?
Hi Ivan, i`m just wondering why winning 51 percent in your words automatically leads to gradual total monopolization and second how can network determine that there is a monopoly forming ?
If the problem is so clear... what is the solution for this problem???? Why there is the 51% rule??? Can it not raised to 80 or 95% or something like this??? This sounds very dangerous and the people who has the most FIAT money can get 51% of the hash power in the long term??? A friend of my has a master in IT and warned me about this problem... He said thats the reason why he is not invested in BTC. When it is so clear, why there is no solution for that or better why the people trust Blockchain???? And is this the same with ETH??? (proof of work VS proof of stake????) Please answer ;) THANKS!
How do you double spend if the TXN is not confirmed? I will not release the product until it is confirmed on the Blockchain.
What would it cost approximately to perform a 51% attack? So if me and my wealthy friends were to buy the equipment and set up, then short Bitcoin on Chicago mercantile how much would we profit while killing Bitcoin in the process? This now is going through my mind anyways if I had any money to speak of! So maybe having Bitcoin traded on markets is not such a good thing after all hum? Sorry Ivan but this video indeed left me confused and now worried that institutions and central authorities will have the means to kill Bitcoin and until you tell me otherwise profit in the process...Love to see a follow up video explaining why it will not happen!
Would cost around $6.000.000.000 - $10.000.000.000. And you'd be able to do it once. So it's hard to imagine what can you buy for 10$B+ keeping your anonymity, without crashing the market, in a stealthy way, because the rig will be useless after that. Most people agree that 51% attack is not practical anymore.
Hi Ivan, thanks for the video; keep up the work!
Just one question regarding the double spending when having >50% of hashing power: You said that network would choose you privately mined blockchain once it’s longer than the publicly mined blockchain. This means that the publicly mined blockchain would be abandoned by the network. Doesn’t this mean that all transactions that where saved on the abandoned publicly mined blockchain will need to be reprocessed (unless they are already included in your privately mined blockchain). That would mean that eventually your transactions would show up again in the new blockchain which means double spending is not possible??
Well how do we do that bc I could use a jet , House, and boat
I was just looking for info on this and the video popped up! Awesome Ivan, thanks!
Dude, this is something that I had figured a while back but thought of it as extremely hard to do. Glad there's others like me.
with futures starting Dec. 18 , a large hedge fund would have the incentive from shorting the futures to pull off this attack because even if bitcoin burns he can profit from the futures, what is your opinion about this risk ? is ETH or any other crypto immune to 51% attack ?
In another video I got told with 51% you can undo transactions on the blockchain. True or False?
Is this the same as a Time Warp attack?
Thanks for your explanation, 51% hashing power makes BTC less decentralised? If someone can control it like that?
Hi Ivan, I would love to hear your opinion about what happens when the block reward incentive for miners goes away when the maximum amount of bitcoins have been mined. Will they switch their mining to other currencies causing bitcoin to collapse? I find it hard to believe that transaction fees would keep the miners aboard.
How is the wallet balance affected when suddenly a new version of blockchain is presented?
Max T who knows...
it would stay the same unless your transactions were some of the ones deleted from the old blocks. but what if they added a transaction where you sent all your bitcoin to them :O .. what if it was more than you even had in your wallet :O
Hi Ivan, really happy watching your videos, it means a lot for me and my friends who start creating research team since the beginning of this year, we'd be happy if you can come to Indonesia and speaking about blockchain. do you have a plan to visit Indonesia ?
How long would it take for a 51% actor to have the longest chain? Thx.
Its a great explanation, and very complete, and balanced, except for one thing. (perhaps I am wrong in this?) It would NOT actually give the miner with 51% hash power a REAL double spend. As soon as he announces his longer private chain to the network, and it is adopted, the previous transactions to the seller of the Boat, House, Car etc would effectively disappear, and the seller would get really mad noticing his balance reduce.. So would not hand over such House, Car, Boat etc, and if he had given real world possession, the seller would promptly demand its return as unpaid, like a bounced cheque. So conclusion of this video seems to be there is no risk, except from malicious parties with loads of power, to crash the network.... or am I wrong?
What if several malicious gov/entity or cross regions purposely invested huge sums so it has full control over its region, cash and monetary system as well as indirect and intangible benefits where the cost of executing billions or trillions less than its "calculated benefit", that it has full control on its region? ..Separately, if these several entity purposely sold most of their crypto holdings, and launch 51% attack causing price drop to near zero, and they buy back at low price. This may happen!! Pls advice Sir Ivan. :);)
Or bitcoin could become really popular and make fiat currencies less valuable. Some government could buy up these cheap fiat currencies and then decide to crash bitcoin, sending these currencies skyrocketing and making themselves rich. Not saying this is likely, but it is also a possible scenario.
Why do they pick the longest chain? I think it would be very suspicious.
When your tx is not on your chain, no tx is on your chain and every tx isnt valid, right? Or do you just cut your txs out of your chain?
Really good explanation of the 51% attack. Although I don't agree that if you have 51% of the mining power you would always mine the next block (and always receive the reward). You would have 51% of the chance of mining the next block and not 100%.
karantan but in long period of time 51 will increase because many other miners will quit bacause they will mine very rarely and electric bill will eat all profit. 1% looks small but in statistcs it is everything. Lok at rulette game the adventage of casino is similar and in long period of time they get all money
True but 1% is still not 100% no matter how you look at it :)
All you have to do is keep your blocks private until your chain is longer and then release it. You will have 100% of the blocks on that part. Then do it again, wait a couple of blocks and win the race again. That's how with 51% of the hash power you can get 100% of the mining rewards.
Hey there, I have some understanding of the blockchain technology, but I have never actually played around with the code itself, so this is a complete shot in the dark - but wouldn't it theoretically be possible to find such combinations of block data and hashes so that a cyclic graph can be created in the blockchain? You know, hash of block A is used in block B and hash of block B is used in block A, so A and B form a cycle. At this stage, you could attack the network by sending a sequence of blocks ABABABABAB, which could be infinite. Does that make sense?
Great video, I was hoping that you would talk about the lost in confidence. People often think that an attack would means that they lose their bitcoins, while actually bitcoin would likely loses its value (which could have the same result in the end!).
well sam what's happening now with ETN if u look at nanopool it have the 51% (maybe more ) and all small pools dont get blocks (we sometimes get orphaned blocks -.-) this is just :c cause we can mine they only mine
what I'm really intrested is how 51% attack is connected with Byzantine generals problem, I mean we know that generals problem can only be solved when the amount of loyal miners is more than 2/3 of all miners. And the solution itself is proof of work. So is that what lays in the base of this attack? and 51% percent actually mean 2m+1 amount of miners, where m - are malicious(let's say from the attacker side) ones?
can you please explain
//Im sorry for my english
Yeah, the attack is called "the 51% attack", but tecnically it should be called "the 50.00000000000001% attack" or "the (50%+1hash/sec) attack". If there is m equally equipped malicious miners, the blockchain can resist the attack if there is (m+1) honest miners, meaning if there is 2m+1 miners participating. But what really matters is hashing power, not the number of miners, so you can do a more general thinking with hashrate. So, if the attacker controls "m" hash/s, the honest nodes should collectively control m+1 hash/s. In other words, if the attacker have more than 50% of the hashrate, he/she/it wins.
yeah but Im asking about Byzantine generals problem, and maybe you got me wrong, I meant that it can be solved when the amount of all generals is 3m+1 and they are dealing with m traitors (that's what i got after reading the article with proofs by Lamport). so that we have 2m+1 trusted(or more). and how actually is it related with this attack. and by hashing power you mean all full nodes that are able to solve the problem and calculate nonce(calculate is def not the right word srry)?
//Im sorry for stupid questions :(
The only stupid questions are the questions that aren't asked.
I'm not an expert in the Byzantine problems, but I believe that there are several forms (can the participant be sure of who sent a message, do they know the number of rogue nodes, are messages public or privately sent to an arbitrary number of peers, etc.). The theorem states that in its most general form (meaning without more hypothesis), [if there are more then 2/3 of honest nodes] then => [they can reach a consensus]. It does NOT states [if there are less than 2/3 honest nodes] then => [they are sure to fail].
I think (not sure), that the Proof of work in the Bitcoin blockchain must have more hypothesis, so the honest nodes can resist an attack with only m+1 of hash rate.
Finding a block is like a lottery. Basically, the aim for the full nodes is to be the first find a correct number (the nonce) to add at the end of the current block. You just try some one after the other, in a random order. The greater your hash rate, the more times you can try each second. The more times you can try each second, the better chance you have to find one first, to broadcast it with a big "FIRST!!!!!" label on it, and claim you reward.
The number of nodes doesn't matter. If you have a full node with a 100 Ghash/s or two nodes with 50 Ghash/s each, your chances are exactly the same. For the same reason, we don't care if the attacker have an army of small computers or just one big fucking super calculator. What matters is that this MF have more than 50% of the chance to win the lottery so it will stack up winning tickets faster than the rest of the world.
Akita, thank you for proper explanation about hashing power!
So if a 51% attacker makes his chain public, will all the past rewards for blocks that miners got dissappear? And if the miners sell theyre btc that they mined and people use it will all the transactions that happened after the 51% attack dissappear too?
There is incentive for the IMF and the IMF has more than billions. Trillions even. It will happen. Mark my words.
How can someone (for example the government) become holder of 51% of hashing power? Would 50.5% be enough since it's already a majority?
Ivan (or anyone), is bch more exposed to a 51% attack? Does the eda make it more likely?
hello pal greetings from Ecuador, thanks for the video, explanation begin at 1:25
This is a really great video. I've been trying to read all about this, but you explained it in one go. I do have a follow-up question, however. So what would the attacker be adding in their private blockchain? Are these the same blocks that the other miners with less computing power are ALSO trying to solve, you just happen to be the one getting them since you have all the power? I think I'm mixing up the term "private" with "illegitimate". If I understand, this is actually just private because you are adding the latest blocks to the chain, but you just aren't announcing them. So these blocks you are privately mining can include legitimate transactions happening in the Bitcoin network, correct? Thank you again.
The 51% problem was a concern in the early days of BTC, but now it's not very likely, I won't say impossible, but improbable. Also, 3/4 of BTC has already been mined.
Great to know! Can you please next time compare this to Tangle or some other cryptocurrencies to mention these possible/unpossible risks? I think this will be helpful to know for many people including me, thumbs up.
I am so happy that you make these videos about technical side of cryptocurrencies, for me and also many other people its very helpful to understand cryptocurrencies, hope you will continue, you make awesome knowledge for people 👍🏻👍🏻👍🏻
I thought one of the protections in the blockchain was consensus seeking and rejecting "minority reports" (pardon the movie reference)? For example, my understanding is that NEO's blockchain network will reject a minority message when multiple nodes have a minority report.
Thanks for the video. Doesn’t the introduction of Bitcoin futures by the cboe create a financial incentive to do a 51% attack and crash the Bitcoin market because that will introduce a way to shot Bitcoins and profit from a crash? Also does anyone have an idea of the legality of such an attack, obviously it would be morally reprehensible but since there is no regulation does that also mean no legal protection?
First of, love your videos Ivan, they've been more than helpfull.
However, I don't quite understand what happens to unconfirmed transactions. They're going back into to 'unconfirmed pool' I guess? But what if the 'double spending' transaction gets confirmed and the original goes back into the unconfirmed pool?
Hmm, thoughts on China having 60%+ of the hashing power?
Hey Ivan. Great video. just wondering about a scenario. What if 99 people are the only miners, and 98 of them mines with 1h/s and the last person mines with 2h/s (100h/s total). Will that one person, who has the fastest miner also be able to execute these attacks? In that case, why are the biggest mining pools not performing these attack all the time?
Could smaller ICOs be attacked by that, Im sure someone would have enough computing power to do this to a small ICO with few miners, if they use the same architecture... ?