Quote from: spooderman on June 14, 2014, 06:35:33 PM

They have the potential disrupt bitcoin in a large way.

But a pool like GHash.io is demonstrating that it is not doing what that would require. (It may be, but anyone else also may be).

A 51% attack - the type worth actually being afraid of - will logically only be done by a silent entity, apparently solving no blocks, until suddenly it broadcasts a large amount of solved blocks on a chain longer than the current chain, that goes back many blocks, leaving many transactions potentially unconfirmed, or many coins double spent. Anyone can make an alt chain at any time, but having more power than the rest of the network (meaning having over 50% of your network and the rest of the network combined) means you have the ability to make a longer chain - one that will be automatically accepted by the rest of the network.

If a person/organisation has 51% of the total power of the network (which would be greater than double the entire known hashrate of the network due to this needing to be done in secret) they can mine their own chain on which they can conduct whatever mischief they like.

However, if they are solving blocks, and broadcasting them to the network, they are starting from the beginning of their "altchain" each time they broadcast a block - and will have to start a new fork. If they hide all their blocks from the network until they have say 100 blocks, and due to their 51% of the total (secret and known) hashing power (at least 230,000Th) eventually they will have an alt chain of a greater block size than the main chain (say, 99 blocks) then all the nodes will switch over to the longer chain.

I've read over this and it's slightly confusingly put. I will explain again, hopefully better here:

If Ghash.io wants to fork us, and it can given how much power it has, it would have to use all its hashing power to make a silent, parallel chain to the blockchain which it keeps silent for as many blocks as possible, until it has a few more blocks than the main chain. If this chain has not confirmed any transactions since the beginning of the fork, or had double spends within it, it would be very disruptive. However, given that Ghash is braodcasting blocks to the network, it cannot be doing this because it is USING its hashing power to solve blocks that the bitcoin community can see, and has no issues with.

The only risk is that they start being naughty. At which point the community will react, and a solution will be found. This is unlikely, as many have pointed out because it would destroy their business.

A true bitcoin destroying entity does not do what Ghash is doing. It buys up enough hashing power to equal, and then supersede the entire network, then makes a silent, longer blockchain with lots of unconfirmed transactions, most likely transactions that they had made that were included in the shorter chain that they then make invalid, allowing them to scam people as a secondary motive, but their primary motive of course, would be to destroy bitcoin completely by making all transactions in the last x blocks (since the fork) unconfirmed, and by continuing to not allow their confirmation.

Unfortunately, the above scenario is possible, but the chances of a mining pool doing it is just as likely as anyone else doing it, and a large amount of legitimately solved blocks, even an amount greater than 51% is not an attack, it's just a lot of solved blocks. Nothing is being attacked here.

Unless Ghash is only using say 20% of it's hashrate to mine the blocks we see, and is slyly building a powerful 200Petahash rig with which it makes a huge chain that wreaks havoc on the whole community, it is doing nothing wrong, it is just solving lots of blocks.

And to be honest, it is LESS likely to be doing this than anyone else, because if it was, it would be fighting against a network whose main power comes from itself.

Reasonable conclusion:

People who are attempting 51% attacks are not contributing to the honest part of the network, because if they were, they would be making their own goal harder.

The more legitimate blocks you create, the less likely you are to be attempting a 51% attack (the dangerous kind).

They may be attempting to make a "stupid" 51% attack, where they *shock* double spend a couple of transactions, we all notice and their whole pool comes crashing down.

Be afraid of 51% attacks. They could destroy us but they won't be done by a mining pool we all know about that submits honest blocks to the network.

Thanks Spooderman, your explanation is a bit of sanity in the recent hysteria.