Overall it's pretty good.
Overall it's pretty good.
Should be: Q. Who can shut it down? A. Anyone who is willing to pay 51% of the monthly operating cost of all miners. Plus an initial investment to manufacture the hardware. Neither of these numbers are out of the range of Governments or Banks. And they probably won't be for a long time. This is the death of Bitcoin scenario that worries me most. And it seems no one is really worrying about it or taking it seriously.
edit: Here are the numbers someone calculated at the height of the first mining bubble [1]. We're currently at less than double the hashing power of then [2]. So a current rough estimate would be to double all those numbers.
Note that we aren't trying to reverse any transactions or steal people's bitcoin. We are just trying to stop all transactions. This is what bitcoin is all about, so do this and you've destroyed bitcoin.
You're right, sometimes someone else will find a block before you and will add it onto the longest existing chain. IF you always appended your bad blocks to the longest chain then the blockchain would look something like bad->bad->good->bad->bad->good->bad->bad. BUT you WONT be adding your blocks to the longest chain. You will always add your blocks to YOUR OWN last bad block. So you will always be working on a blockchain that looks like ... ->bad->bad->bad->bad. And since you have 51% of the power your blockchain will eventually always be longer than the other chain(s) miners are working on. For a while the two chains (legitimate and your bad one) will go back and forth between which is longer. But at some point yours will get long enough and outpace the legitimate one.
If you don't understand this you don't understand how bitcoin works. I don't say this to be a dick, but I say it because this is a real concern that a lot of people don't realize or think about.
A piece I'm missing is the heuristic most clients use to determine "longest". Depending on how that works, this plan could be really easy or really hard.
If so, could people could react by making btc nodes that consider that rude behavior and begin blacklisting rude nodes wrt which block chains they consider accepted?
This is one of the proposed solutions. Basically centralize bitcoin by somehow whitelisting good blocks or blacklisting bad ones. The problem is this would require a change to _all_ bitcoin software. Meaning EVERYONE has to upgrade to this new centralized approach. Plus the decentralization of bitcoin is lost.
Pretty sure that solution would spell certain doom for bitcoin.
Gavin offered a solution which _might_ work [1]
[1] http://gavintech.blogspot.com/2012/05/neutralizing-51-attack...
However, the block size limit has nothing to do with scarcity and competition. If there were no limit, nothing would change today as number of transactions created is not even approaching 1 Mb per 10 minutes. And if somebody wants to create a lot of spam, they would have to pay for that in form of fees to compensate for the wasted bandwidth and blockchain storage.
If I understand correctly, the block size is limited to make block distribution smoother across the peers + limit the disk space consumption until there are lightweight clients.
Please correct me if I'm wrong.