Comment by apo | Hacker News Reader

Comment by apo | Hacker News Reader

Oddly enough, one of the selling points of Bitcoin Gold (a hard fork of Bitcoin) was its use of Equihash instead of SHA-256. The idea was that a memory-hard proof-of-work function would inoculate Bitcoin Gold from miner centralization.

The problem with mining centralization is that sufficiently powerful miners can attack the network by rewriting blocks. This opens the door to double spending.

This was exactly the attack the article described.

It appears that Bitcoin Gold's decision to use Equihash led to this mess. The algorithm is used by several other coins. Hardware optimized for this algorithm can therefore be used with equal ease to mine on a network or attack it.

Bitcoin Cash may be headed for a similar fate. It retains SHA-256, but is a minority chain in terms of hash power. A powerful Bitcoin miner deciding to perform double spends on Bitcoin Cash would have everything needed to do repeat the Bitcoin Gold attack.

BTW, a similar attack recently occured on Verge:

https://blog.theabacus.io/the-verge-hack-explained-7942f63a3...

It's possible that any altcoin that becomes sufficiently valuable will suffer similar attacks to the ones that have now taken place on Verge and Bitcoin Gold.

The problem I think is that there are 25 cryptocurrencies bigger than it. Particularly with its form of mining, it's trivially easy for say a big player in the 10th largest currency to shift their mining power to a smaller one like Bitcoin Gold, overpowering everything else.

Normally the non-51% attack argument is that anyone who invests enough in 51% of the infrastructure and has sufficient coins to profit from double-spending, is very unlikely to do so because it would render the coins and mining equipment worthless or at least worth less than the investment had cost.

That'd be true for bitcoin, but not for a GPU-mined 26th largest cryptocurrency. You can completely destroy it, cash out and use your equipment elsewhere on coins in which people still have faith.

so how exactly do you cash out? by exchanging double spent coins for btc or usd? but then can't exchanges just stop that from happening?

I'm not even sure you would need to exchange it to another coin. You would never be exchanging it to USD because USD withdrawals will require you to identify yourself and a corresponding bank account. To withdraw crypto you just need an address.

So you can exchange it to BTC or ETH and withdraw. Or you can just deposit it and withdraw it after. Most exchanges just mix customer funds together, so as long as the exchange has enough BTG balance minus the double spent deposit, they will send you real BTG.

You're forgetting that the lower you go with a cryptocurrency the less volume it has. This will have a major effect on your profits.

> It's possible that any altcoin that becomes sufficiently valuable will suffer similar attacks to the ones that have now taken place on Verge and Bitcoin Gold.

The trust in these systems seems to be based on proving a negative.

The lack of an attack is neither a proof of robustness nor proof that one or more zero days aren’t already known. We can only “know” it’s safe when the temptation to use an exploit is far too high to resist.

I think there are a lot of people who imagine “an attack” as a ready-aim-fire affair. There’s a juicy target, someone concocts a plan and then uses it.

But as you illustrate, maybe there is already a plan and someone is waiting for the target to get juicy enough. Aim, ready, fire.

I guess the conclusion is that if you're attempting to create a new PoW cryptocurrency you better make sure to tweak your PoW algorithm enough to make sure that existing miners cannot easily convert their special purpose mining rigs to sink you for fun and/or profit.

All those arguments do make sense, but only if the underlying cryptocurrency is actually big enough. That it has enough hashpower (in whatever algorithm) - to be secure. Bitcoin Gold simply was too small.

Sounds like it isn't very wise to come up with new cryptocurrencies as long as the mining network is unregulated and the double spending problem isn't solved...

the verge attack was different

All of the major Bitcoin miners are very pro Bitcoin cash. They basically created Bitcoin cash. They would be more likely to attack Bitcoin Core, if anything.

I would also point out that Bitcoin cash is the 4th largest crypto currency in the world, by market cap. If IT is in danger.... Well I fear for everyone else even more.

Bitcoin Cash is only protected by the benevolence of the large miners. It is otherwise wide open to a 51% attack.

So... Then I guess that means it is safe then right?

The whole point of crypto is that you are relying on the fact that 50% of the network is honest.

So yes, you are correct that it relies on half the network being "benevolent". That's how ALL cryptos work.

You are missing the point. Bitcoin and Bitcoin Cash use the same hash algorithm. Bitcoin Cash has about 15% of the total available SHA256 hashpower, and Bitcoin the other 85%. So it only take's a fraction of Bitcoin's miners to turn against Bitcoin Cash to attack it.

Yes, and the Bitcoin network ITSELF can be attacked with a faction of the total hashpower on the Bitcoin network.

Specifically, the fraction is 51/100, or 51 percent of the network. This is for the main Bitcoin network.

The fraction for Bitcoin cash would be around 15%, or 15/100, expressed as a fraction.

The Bitcoin cash network would require a smaller fraction, yes. But this still isn't a huge concern.

If it is 3 times easier to attack bitcoin cash, that is still extremely difficult.

Fractional hashpower attacks, (51% attacks) are all explained quite clearly in the white paper.

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