Re: Is it possible that the 51 Percent Attack on Bitcoin could Happen?
Isn't it interesting how information flows through our complex world. I see a news article pop up about btc mining centralization in china, then another about how bitcoin's destiny as "for the people" is at stake and then a thread on bitcointalk is started 
. In fact I had just read an article and was doing some research, pondering over the topic and was about to make a post myself.
There is a really useful geospatial visualization of bitcoin miner distribution developed by Cambridge university: https://cbeci.org/mining_map. According to this map, approx 71% of hashing is conducted in china. I have some points of thought on this topic:
Point 1: How much effort is it to compromise future blocks ?
Is there a function such that E = f(node%), where E is the electricity required to successfully alter the Blockchain and node% is the amount of colluding nodes as a subset of the Bitcoin mining network? 51% attacks take alot of electricity, but what if it was a 60% attack? or 70% or 80%? Does the amount of electricity reduce as the subset of colluding nodes becomes more larger?
Point 2: What could be done with such control over the network?
i guess this has been covered quite extensively. Basically you can edit how future blocks look like (e.g. censor transactions). My question is how does the voting for protocol feature changes get impacted by this?
Point 3: What are the causal factors for centralization in china?
I understood that centralization occurred for 2 major reasons.
A ranting note on the second point. The fact that china has cheaper electricity is in itself a manipulation. It places miners in china at an advantage as their cost per hash is inherently less. But it also means that more electricity is consumed with less compensation for environmental degradation. And that is my issue and it is not unique to the case of Bitcoin. China has for decades not considered environmental impact in the scaling of their manufacturing and industrious nature. And it interferes with efforts from other global players (which are already quite shallow). For example, having carbon credits in in Europe means manufacturers in Europe have an extra overhead cost. So, to remain competitive, these processes are moved to china where carbon credits don't exist. The ending result is not that less carbon is produced or funds are gathered to drive carbon offsetting processes. Instead it is just that carbon is produced in another location (in china). And as a convenient side effect, more economic activity is shifted to china.
This is not the fault of the Chinese people, or the miners in our local case. But it is the intentional strategic growth maneuver of the Chinese government which uses a lack of consideration for factors like the environmental impact.
Rant over. But the issue remains.
. In fact I had just read an article and was doing some research, pondering over the topic and was about to make a post myself. There is a really useful geospatial visualization of bitcoin miner distribution developed by Cambridge university: https://cbeci.org/mining_map. According to this map, approx 71% of hashing is conducted in china. I have some points of thought on this topic:
Point 1: How much effort is it to compromise future blocks ?
Is there a function such that E = f(node%), where E is the electricity required to successfully alter the Blockchain and node% is the amount of colluding nodes as a subset of the Bitcoin mining network? 51% attacks take alot of electricity, but what if it was a 60% attack? or 70% or 80%? Does the amount of electricity reduce as the subset of colluding nodes becomes more larger?
Point 2: What could be done with such control over the network?
i guess this has been covered quite extensively. Basically you can edit how future blocks look like (e.g. censor transactions). My question is how does the voting for protocol feature changes get impacted by this?
Point 3: What are the causal factors for centralization in china?
I understood that centralization occurred for 2 major reasons.
- The shelf life of mining hardware was short and so it was more profitable for chip manufacturers to mine themselves than sell the rigs. This cause colocated centralization around manufacturers in china. This has now changed since we reached 16nm architecture. Andreas Antonopolous describes it in a talk: https://www.youtube.com/watch?v=GGwHIHBsjbU
- The electricity price in china is lower. This a main concern for me and it is a way in which government can interfere with the distribution of bitcoin mining network topology.
A ranting note on the second point. The fact that china has cheaper electricity is in itself a manipulation. It places miners in china at an advantage as their cost per hash is inherently less. But it also means that more electricity is consumed with less compensation for environmental degradation. And that is my issue and it is not unique to the case of Bitcoin. China has for decades not considered environmental impact in the scaling of their manufacturing and industrious nature. And it interferes with efforts from other global players (which are already quite shallow). For example, having carbon credits in in Europe means manufacturers in Europe have an extra overhead cost. So, to remain competitive, these processes are moved to china where carbon credits don't exist. The ending result is not that less carbon is produced or funds are gathered to drive carbon offsetting processes. Instead it is just that carbon is produced in another location (in china). And as a convenient side effect, more economic activity is shifted to china.
This is not the fault of the Chinese people, or the miners in our local case. But it is the intentional strategic growth maneuver of the Chinese government which uses a lack of consideration for factors like the environmental impact.
Rant over. But the issue remains.