Post
Topic
Board Bitcoin Discussion
Re: Concern? over 50% of miners controlled by two pools
by
cr1776
on 24/12/2013, 20:34:59 UTC
Please don't talk down to people like that, it's not constructive, and given the nature of a lot of the conversations on this board, I don't think this was an invalid question.

If the two pools collude for a 51% attack, what would they gain?  A double spend?  What would the double spend get them?  

Suppose it was for something like a Lamborghini which would be a good sized purchase.  Probably won't happen because the dealer is going to wait a reasonable number of confirmations - more than 6 no doubt - or use escrow.  So large purchases are pretty much out.  So it would be for something less.  What happens after a double spend for $10,000 then?  The double spend is seen (whomever the double-spend is against will point it out ASAP if it is of any size and/or it will be noticed by others), and the pools lose 95% of their members within hours or days.  The pool is done and the operator loses a lot of recurring income from fees.  So it seems unlikely.

Alternatively, what happens to the bitcoin price if the two pools collude and the miners stay with them to help keep the collusion going?  The price of bitcoin plummets and the pools and miners lose out again.  

No rational miners will stay with pools colluding so any attack will be short-lived, so it would only be attempted for a large reward, but no large transaction will be accepted without many confirmations or escrow making a double-spend unlikely to be profitable for the pools.

Perhaps a state-sponorsored pool might try it solely to destroy bitcoin, but every day that becomes less likely due to the increasing hash rate. Perhaps 3 years ago pre-GPUs it would have been easy.  With the GPUs, it was still possible, but 2013's ASIC explosion has made it much more difficult and much more expensive to even consider.  With the miners shipping now and next year it will become even more unlikely.

Obviously more decentralization is better as various people have said with regard to p2pool, but some ASICs can't mine with it reliably, and it is not nearly as easy to set up.  I believe this will improve with time.  I certainly hope it will because p2pool-like mining is an important part of the future of bitcoin.

Regarding the quote above, people get frustrated because the same question has been asked and discussed hundreds of times on here.  His questions are valid because if the person can't answer them, then they may not be clear on some of the concepts, and so the question comes from misconceptions.  

;-)