Cryptocurrency researchers from FECAP University in Brazil have shown that it would take only around $1.5 million to attack the ETC network and still pull a nice little profit. With $55 million dollars, you could effectively bankrupt the currency, netting nearly $1 billion in straight profit.If a party that controlled just 2.5% of the Ethereum hash rate switched to ETC, they’d instantly control over 51% of the total network hash rate. The attack wouldn’t even be absurdly expensive. It’d cost what you would earn mining on the ETH network with 2.5% of the hash rate, which equates to roughly 525 ETH, or $318,000.
Source: 51% Percent Attacks: Hacking a $2 Billion Dollar Cryptocurrency for Less Than $1.5 Million – Bitcoinist.com
The biggest takeaway from all of this is that mining is for big players. The more money you spend, the more of an advantage you have, and there’s not an easy way to change that equation. At least with traditional Nakamoto style consensus, a large entity that produces and controls most of the hashrate seems to be more or less the outcome, and at the very best you get into a situation where there are 2 or 3 major players that are all on similar footing. But I don’t think at any point in the next few decades will we see a situation where many manufacturing companies are all producing relatively competitive miners. Manufacturing just inherently leads to centralization, and it happens across many different vectors.
Source: The State of Cryptocurrency Mining – Sia Blog
Posted in algorithms, blockchain, consensus mechanisms, cryptocurrencies, decentralization, governance, issues/conflicts, papers, people, privacy, quantitative analysis, Research Notes, smart contracts, tools
The conference will explore the use of formal methods, empirical analysis, and risk modeling to better understand security and systemic risk in blockchain protocols. The conference aims to foster multidisciplinary collaboration among practitioners and researchers in blockchain protocols, distributed systems, cryptography, computer security, and risk management.
Source: Blockchain Protocol Analysis and Security Engineering 2017 | Cyber Initiative
If proof of stake proves itself to actually work, Bitcoin will adopt it. Migrating a 200 billion dollar network to an untested PoW proposal would be irresponsible.Arbitrarily increasing blocksize without addressing propagation delay and centralization impacts is also irresponsible.Bitcoin has been tirelessly working on the scaling problem in a responsible way. SegWit will allow up to 12t/s. Mimble Wimble and Schnorr Signatures will further compress transaction size and increase t/s to roughly 20t/s. All this without increasing propagation delay (increasing blocksize).Lightning network further reduces the number of onchain transactions necessary.Rootstock adds ethereum compatible smart contracts to bitcoin as a side chain.All these technologies responsibly scale Bitcoin. Your comment implies Bitcoin is stagnant which to me implies you don’t know what you’re talking about.reply PaulRobinson 1 day ago [-]PoS will never be adopted by Bitcoin. The mining pools that have invested in PoW won’t allow it.Every attempt to date to improve transaction rates on BTC have been hampered by a small group of developers who have a vested interest in it not scaling for reasons explained here: https://www.reddit.com/r/BitcoinMarkets/comments/6rxw7k/info…Bitcoin won’t get any of the improvements you hope it will because there is too much money vested in keeping it exactly how it is today.
Source: Did Bitcoin just prove it can’t scale? | Hacker News
As many people here know, my interest in consensus mechanisms runs far and wide. In the KPMG research report I co-authored “Consensus: Immutable Agreement for the Internet of Value”, many consensus mechanisms were discussed. In Appendix 3 of the paper, many of the major players in the space discussed their consensus methodologies. One consensus mechanism which wasn’t in the paper was the Swirlds Hashgraph Consensus Algorithm. That whitepaper is a great read and this consensus mechanism holds quite a lot of promise. I have had many discussions with its creator, Leemon Baird and this blog post comes from conversations, questions and emails about the topic. Also at the end of the blog I asked Leemon to fill out the consensus questionnaire from the KPMG report and he graciously did. His answers appear at the end of this post.
Source: A New Approach to Consensus: Swirlds HashGraph — SAMMANTICS