Ppcoin 51 attack bitcoin
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Archived from the original on 3 February Retrieved 2 January Retrieved 22 December Retrieved 29 December CoinSutra - Bitcoin Community. An Introduction and Guide". Retrieved 21 December Retrieved 3 January A Punitive Proof-of-Stake Algorithm". Retrieved 23 January Ethash is the planned PoW algorithm for Ethereum 1.
Retrieved Jan 19, Cryptocurrencies without Proof of Work. Retrieved 30 December Ethereum Ethereum Classic KodakCoin. Dogecoin Gulden Litecoin PotCoin. Dash Decred Primecoin Auroracoin. Solving a crypto-puzzle is hard work; a computer has to plug in many different values and see if they solve the crypto-puzzle posed by the new block.
The puzzles are such that a home computer working alone will take many years to solve a crypto-puzzle. Of course, this process is not free, as the process of solving these crypto-puzzles consumes power and requires cooling. For the currency to be viable, the miners need to be compensated for their efforts. Bitcoin miners are compensated through two mechanisms: This lump sum fee creates new Bitcoins, according to a time-varying formula.
Hence, "mining" is similar to digging for gold -- every now and then, a miner is rewarded with a nugget. The difficulty of crypto-puzzles are automatically adjusted such that a new block is added to the ledger approximately every 10 minutes, which ensures a predictable coin generation rate for the system, which stems inflation and makes the currency supply more predictable than it would be otherwise.
The nice thing about having crypto-puzzles that are so difficult is that it is not practical for an attacker to modify the ledger. Someone who wants to, say, buy something from a Bitcoin merchant, get the goods shipped, and then later change that block to erase the transfer of money to the merchant, faces a very difficult task: What makes this difficult is that the main bulk of the miners will be working hard on adding new blocks at the tail end of the ledger, so an attacker, with limited resources, cannot hope to find alternative solutions for all the past blocks and catch up to the rest of the miners.
Miners today organize themselves into groups known as pools. A pool will typically consist of a set of cooperating nodes that share their revenues whenever they find blocks. Mining pools are kind of like the shared tip jar at a restaurant: Since this occurs relatively infrequently from the point of view of any given miner, sharing the proceeds enables the miners to have more predictability in their lives. The honest Bitcoin protocol assumes that all miners engage in a benign strategy where they quickly and truthfully share every block they have discovered.
Until now, everyone assumed that this was the dominant strategy; no other strategy was known that could result in higher revenues for miners. Our work shows that there is an alternative strategy, called Selfish-Mine, that enables a mining pool to make additional money at the risk of hurting the system.
In Selfish-Mining, miners keep their block discoveries private to their own pool, and judiciously reveal them to the rest of the honest miners so as to force the honest miners to waste their resources on blocks that are ultimately not part of the blockchain.
Here's how this works in practice. Selfish miners start out just like regular miners, working on finding a new block that goes at the end of the blockchain.
On occasion, like every other miner, they will discover a block and get ahead of the rest of the honest miners. Whereas an honest miner would immediately publicize this new block and cause the rest of the honest miners to shift their effort to the newly established end of the chain, a selfish miner keeps this block private. From here, two things can happen. The selfish miners may get lucky again, and increase their lead by finding another block.
They will now be ahead of the honest crowd by two blocks. They keep their new discovery secret as well, and work on extending their lead. Eventually, the honest miners close the gap. Just before the gap is closed, the selfish pool publishes its longer chain. The result is that all the honest miners' work is discarded, and the selfish miners enjoy the revenue from their previously secret chain. The analysis of revenues gets technical from here, and the only way to do it justice is to follow along the algorithm and state machine provided in our paper.
But the outcome is that the selfish mining pool, on the whole, nullifies the work performed by the honest pool through their revelations. The nice thing about having crypto-puzzles that are so difficult is that it is not practical for an attacker to modify the ledger. Someone who wants to, say, buy something from a Bitcoin merchant, get the goods shipped, and then later change that block to erase the transfer of money to the merchant, faces a very difficult task: What makes this difficult is that the main bulk of the miners will be working hard on adding new blocks at the tail end of the ledger, so an attacker, with limited resources, cannot hope to find alternative solutions for all the past blocks and catch up to the rest of the miners.
Miners today organize themselves into groups known as pools. A pool will typically consist of a set of cooperating nodes that share their revenues whenever they find blocks. Mining pools are kind of like the shared tip jar at a restaurant: Since this occurs relatively infrequently from the point of view of any given miner, sharing the proceeds enables the miners to have more predictability in their lives.
The honest Bitcoin protocol assumes that all miners engage in a benign strategy where they quickly and truthfully share every block they have discovered.
Until now, everyone assumed that this was the dominant strategy; no other strategy was known that could result in higher revenues for miners. Our work shows that there is an alternative strategy, called Selfish-Mine, that enables a mining pool to make additional money at the risk of hurting the system. In Selfish-Mining, miners keep their block discoveries private to their own pool, and judiciously reveal them to the rest of the honest miners so as to force the honest miners to waste their resources on blocks that are ultimately not part of the blockchain.
Here's how this works in practice. Selfish miners start out just like regular miners, working on finding a new block that goes at the end of the blockchain. On occasion, like every other miner, they will discover a block and get ahead of the rest of the honest miners.
Whereas an honest miner would immediately publicize this new block and cause the rest of the honest miners to shift their effort to the newly established end of the chain, a selfish miner keeps this block private. From here, two things can happen. The selfish miners may get lucky again, and increase their lead by finding another block.
They will now be ahead of the honest crowd by two blocks. They keep their new discovery secret as well, and work on extending their lead. Eventually, the honest miners close the gap. Just before the gap is closed, the selfish pool publishes its longer chain.
The result is that all the honest miners' work is discarded, and the selfish miners enjoy the revenue from their previously secret chain. The analysis of revenues gets technical from here, and the only way to do it justice is to follow along the algorithm and state machine provided in our paper.
But the outcome is that the selfish mining pool, on the whole, nullifies the work performed by the honest pool through their revelations. The success of the attack, and the amount of excess revenue it yields, depends on the size of the selfish mining pool. It will not be successful if the pool is below a threshold size. But this threshold is non-existent in the current implementation -- selfish mining is immediately profitable.
Once a group of selfish miners appear on the horizon, rational miners will preferentially join that mining group to obtain a share of their higher revenues. And their revenues will increase with increasing group size. This creates a dynamic where the attackers can quickly acquire majority mining power, at which point the decentralized nature of the Bitcoin currency collapses, as the attackers get to control all transactions.
It all depends on how the controlling group runs the currency. But the decentralization, which in our view is so critical to Bitcoin's adoption, is lost.