Defense against a 51{88c91daedd271a990a10650c05d769cae2765e0603edf30ca95f18704e5748e8} attack

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Recently Peter R. outlined a 3 phase plan how he believes bitcoin unlimited will hard fork

In a nutshell:

  • Phase 1. Miners start signaling support of the hard fork (already started, at ~38{88c91daedd271a990a10650c05d769cae2765e0603edf30ca95f18704e5748e8} support)
  • Phase 2. When they have a clear majority (suggested between 66 and 75{88c91daedd271a990a10650c05d769cae2765e0603edf30ca95f18704e5748e8}), they start orphan all blocks that don't also support the hard fork
  • Phase 3. They hard fork to a new chain, and devote some resources to orphan all legitimate blocks on the original chain (replacing them with empty blocks instead). The idea being users will have to pick between a chain with empty blocks or switch to the hard fork

Regardless of what you think of this particular hard-fork, it should be obvious this is a text-book 51{88c91daedd271a990a10650c05d769cae2765e0603edf30ca95f18704e5748e8} attack that would change the rules unilaterally by the majority of hashing power rather any illusion of consensus of the whole bitcoin economy.

While the deeper issue is how to better decentralize mining to better represent the state of the economy, the more pressing issue is how to successfully overcome such a 51{88c91daedd271a990a10650c05d769cae2765e0603edf30ca95f18704e5748e8} attack. Instead of something drastic like a proof-of-work change, my proposal is simple: establish a bitcoin defense fund to work with legitimate miners

The mechanism of the bitcoin defense fund is simple: During phase 3 of the attack, the bitcoin defense fund would offer a hard guarantee that any mining on the original chain is more profitable. This means means paying miners have blocks orphaned, as well as holding coins on both sides of the fork to offer such a hard guarantee. This will allow legitimate miners to risk-free continue mining the original chain even in the face of constant and persistent orphaning.

There will be a more or less symmetric cost to the attacker and defender at this stage, although there are some interesting technicalities for both sides. As soon as the original chain is able to overcome the 51{88c91daedd271a990a10650c05d769cae2765e0603edf30ca95f18704e5748e8} attack, the rest will be up to bitcoin holders. All they need to do is sell their coins on the attack-chain for less than 1 BTC. As long as the attack-chain coins are strictly worth less than BTC, it will guarantee that mining is more profitable on BTC. Done for long enough, miners will start to come back to BTC where it's more profitable.

At this point, if the attack chain has no anti-annihilation logic (such as BU in its current state), then the entire chain will disappear in its entirety when the BTC chain surpasses it in total work. Although even with it, all who attacked bitcoin will end up losing a fortune.

submitted by /u/RHavar
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Kryptous

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Ticker

1 BTC = $46073.93 USD  (via Coinbase)
1 ETH = $3527.64 USD  (via Coinbase)
1 LTC = $291.86 USD  (via Coinbase)
Quotes delayed up to 2 minutes.

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