Comment by XR0CSWV3h3kZWg | Hacker News Reader

Comment by XR0CSWV3h3kZWg | Hacker News Reader

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It matters quite a bit because of the halving. The security of bitcoin essentially relies on the idea that the electicty_cost_per_block/2 * num_conf_needed > tx_value_by_individual_actor.

e.g. if a block costs ~70k USD of electricity and you accept a tx for more than 210k USD after 6 conf then if the sender is a purely self interested actor in a perfect market their rational decision would be to spend a bit more than 210k USD in electricity to mine 7 blocks.

Obviously this is a completely idealized market where you can purchase mining power to fork at will.

But the end result is that the more electricity burned the larger tx you can trust with a lower amount of confirmations. In ~7 years we'll see block rewards drop to ~3 BTC. By that point if we don't have tx fees that compensate then we'll see a large drop in hash rate. If the size of the blocks doesn't increase, the size of a tx decrease or something else we will either see the security drop quite a bit or the cost of a on the chain tx increase dramatically.

> e.g. if a block costs ~70k USD of electricity and you accept a tx for more than 210k USD after 6 conf then if the sender is a purely self interested actor in a perfect market their rational decision would be to spend a bit more than 210k USD in electricity to mine 7 blocks.

The math doesn't work that way.

If you take all the bitcoin mining operations in the whole world, China and every other country, put them together and somehow duplicated all that under your own control, so that you own as much as everyone else put together, you own 50% of the global hashrate... that only gives you a 50% chance that you will mine the next block, let alone 7 in a row.

The chances of mining 7 blocks in a row, even if you own as much as everyone else in the world put together, is less than 1%.

And it would cost billions of dollars worth of ASICs to get that 1% chance.

You have this wrong. If you have 51% of the mining power, you do indeed have a negligible chance of winning seven consecutive blocks in a row if you mine the normal way. But, if you just mine seven sequential blocks without publishing the first six until you've mined all seven, you have a rather good chance of getting all seven blocks before the rest of the network mines seven blocks.

The idea that it would cost billions of dollars worth of ASICs to get this chance relies on the fact that Bitcoin is in an absurd boom right now, such that only new ASICs are competitive and there isn't a pile of old used ASICs available. If Bitcoin ever stagnates, this will rapidly stop being true.

You're also assuming that the ability to rewrite an hour of Bitcoin history isn't worth a couple billion dollars to anyone. That's an interesting assumption. (If I were, say, Israel, one of my enemies started using Bitcoin to buy weapons, and I thought that the ability to rewrite Bitcoin history an hour at a time could bankrupt them, I would be thrilled at the opportunity to spend a billion dollars to do so.)

I'm frankly rather surprised that Bitcoin, and proof-of-work blockchains in general, are considered secure enough for serious high-value work.

> if you just mine seven sequential blocks without publishing the first six until you've mined all seven

Then you end up with an orphaned chain which will have effect at all.

Nope, if you mine seven blocks in the time that it takes the rest of the network to mine six and you publish your longer chain, then the blockchain reorganizes and you win.

owning 50% + eplison of the hash rate gives you the expectation of being able to undo an unlimited amount of history in theory.

In practice you'd need to show the world the blocks before they got to old or they'd be dropped due to an old timestamp.

Buying up the ASICs would be the real cost, It seems like the chain is largely safe because of that. If the price drops enough that lots of mines liquidate it'd be good to keep an eye on where they go. If 50% of the hash power is dark large txs should rely on a whole lot of confirmations if at all.

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