we can all relax now

we can all relax now
2013-11-06  9:26 ` Frank F
                   ` (4 more replies)
  
From: kjj @ 2013-11-06  5:33 UTC (permalink / raw)
  To: Bitcoin-development

One of the things that really gets me going is when someone devises a 
model, tests it against itself, and then pretends that they've learned 
something about the real world.

Naturally, the Selfish Mining paper is exactly this sort of nonsense.  
Their model is one with no latency, and one where the attacker has total 
visibility across the network.  An iterated FSM is not a suitable 
simulation of the bitcoin system.  The bitcoin network does not have 
states, and to the extent that you can pretend that we do, you can't 
simulate transitions between them with static probabilities.

The authors understand this deep down inside, even though they didn't 
work out the implications.  They handwave the issue by assuming a total 
sybil attack, and in true academic spirit, they don't realize that the 
condition necessary for the attack is far, far worse than the attack itself.

Greg said he'd like to run some simulations, and I'm thinking about it 
too.  Unfortunately, he is busy all week, and I'm lazy (and also busy 
for most of tomorrow).

If neither of us get to it first, I'm willing to pitch in 1 BTC as a 
bounty for building a general bitcoin network simulator framework. The 
simulator should be able to account for latency between nodes, and 
ideally within a node.  It needs to be able to simulate an attacker that 
owns varying fractions of the network, and make decisions based only on 
what the attacker actually knows.  It needs to be able to simulate this 
"attack" and should be generic enough to be easily modified for other 
crazy schemes.

(Bounty offer is serious, but expires in one year [based on the earliest 
timestamp that my mail server puts on this email], and /may/ be subject 
to change if the price on any reputable exchange breaks 1000 USD per BTC 
in that period.)

Basically, the lack of a decent network simulator is what allowed this 
paper to get press.  If the author had been able to see the importance 
of the stuff he was ignoring, we wouldn't be wasting so much time 
correcting him (and sadly the reporters that have no way to check his 
claims).

https://bitcointalk.org/index.php?topic=324413.msg3495663#msg3495663





 permalink raw reply	[|nested]
2013-11-06  9:26 ` 
                   ` 
  
From: kjj @ 2013-11-06  5:33 UTC (permalink / raw)
  To: Bitcoin-development

One of the things that really gets me going is when someone devises a 
model, tests it against itself, and then pretends that they've learned 
something about the real world.

Naturally, the Selfish Mining paper is exactly this sort of nonsense.  
Their model is one with no latency, and one where the attacker has total 
visibility across the network.  An iterated FSM is not a suitable 
simulation of the bitcoin system.  The bitcoin network does not have 
states, and to the extent that you can pretend that we do, you can't 
simulate transitions between them with static probabilities.

The authors understand this deep down inside, even though they didn't 
work out the implications.  They handwave the issue by assuming a total 
sybil attack, and in true academic spirit, they don't realize that the 
condition necessary for the attack is far, far worse than the attack itself.

Greg said he'd like to run some simulations, and I'm thinking about it 
too.  Unfortunately, he is busy all week, and I'm lazy (and also busy 
for most of tomorrow).

If neither of us get to it first, I'm willing to pitch in 1 BTC as a 
bounty for building a general bitcoin network simulator framework. The 
simulator should be able to account for latency between nodes, and 
ideally within a node.  It needs to be able to simulate an attacker that 
owns varying fractions of the network, and make decisions based only on 
what the attacker actually knows.  It needs to be able to simulate this 
"attack" and should be generic enough to be easily modified for other 
crazy schemes.

(Bounty offer is serious, but expires in one year [based on the earliest 
timestamp that my mail server puts on this email], and /may/ be subject 
to change if the price on any reputable exchange breaks 1000 USD per BTC 
in that period.)

Basically, the lack of a decent network simulator is what allowed this 
paper to get press.  If the author had been able to see the importance 
of the stuff he was ignoring, we wouldn't be wasting so much time 
correcting him (and sadly the reporters that have no way to check his 
claims).

https://bitcointalk.org/index.php?topic=324413.msg3495663#msg3495663





 permalink raw reply	[|nested]
* 
  2013-11-06  5:33 [Bitcoin-development] we can all relax now kjj

  2013-11-06 11:35 ` 
                   ` 
  4 siblings, 0 replies; 21+ messages in thread
From: Frank F @ 2013-11-06  9:26 UTC (permalink / raw)
  Cc: Bitcoin Dev

[-- Attachment #1: Type: text/plain, Size: 3333 bytes --]

The problem with academics is that they don't have to worry about the real
world. They get paid to publish things, not to be helpful to society.


On Tue, Nov 5, 2013 at 11:33 PM, kjj <bitcoin-devel@jerviss•org> wrote:

> One of the things that really gets me going is when someone devises a
> model, tests it against itself, and then pretends that they've learned
> something about the real world.
>
> Naturally, the Selfish Mining paper is exactly this sort of nonsense.
> Their model is one with no latency, and one where the attacker has total
> visibility across the network.  An iterated FSM is not a suitable
> simulation of the bitcoin system.  The bitcoin network does not have
> states, and to the extent that you can pretend that we do, you can't
> simulate transitions between them with static probabilities.
>
> The authors understand this deep down inside, even though they didn't
> work out the implications.  They handwave the issue by assuming a total
> sybil attack, and in true academic spirit, they don't realize that the
> condition necessary for the attack is far, far worse than the attack
> itself.
>
> Greg said he'd like to run some simulations, and I'm thinking about it
> too.  Unfortunately, he is busy all week, and I'm lazy (and also busy
> for most of tomorrow).
>
> If neither of us get to it first, I'm willing to pitch in 1 BTC as a
> bounty for building a general bitcoin network simulator framework. The
> simulator should be able to account for latency between nodes, and
> ideally within a node.  It needs to be able to simulate an attacker that
> owns varying fractions of the network, and make decisions based only on
> what the attacker actually knows.  It needs to be able to simulate this
> "attack" and should be generic enough to be easily modified for other
> crazy schemes.
>
> (Bounty offer is serious, but expires in one year [based on the earliest
> timestamp that my mail server puts on this email], and /may/ be subject
> to change if the price on any reputable exchange breaks 1000 USD per BTC
> in that period.)
>
> Basically, the lack of a decent network simulator is what allowed this
> paper to get press.  If the author had been able to see the importance
> of the stuff he was ignoring, we wouldn't be wasting so much time
> correcting him (and sadly the reporters that have no way to check his
> claims).
>
> https://bitcointalk.org/index.php?topic=324413.msg3495663#msg3495663
>
>
>
>
> ------------------------------------------------------------------------------
> November Webinars for C, C++, Fortran Developers
> Accelerate application performance with scalable programming models.
> Explore
> techniques for threading, error checking, porting, and tuning. Get the most
> from the latest Intel processors and coprocessors. See abstracts and
> register
> http://pubads.g.doubleclick.net/gampad/clk?id=60136231&iu=/4140/ostg.clktrk
> _______________________________________________
> Bitcoin-development mailing list
> Bitcoin-development@lists•sourceforge.net
> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
>



-- 
*MONEY IS OVER!*
                                IF YOU WANT IT<http://www.zeitgeistmovie.com/>
=====================================================
The causes of my servitude can be traced to the tyranny of money.
-Serj Tankian

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^ permalink raw reply	[|nested] 21+ messages in thread
2013-11-06 11:35 ` Jeff Garzik

  2013-11-07  3:44     ` Peter Todd
  2013-11-07  5:24     ` Kyle Jerviss
  
From: Christophe Biocca @ 2013-11-06 18:06 UTC (permalink / raw)
  To: Bitcoin-development

[-- Attachment #1: Type: text/plain, Size: 1944 bytes --]

I might try building this sometime soon. I think it may also serve an
educational purpose when trying to understand the whole network's behaviour.

What level of accuracy are we looking for though? Obviously we need to
fully emulate the steps of the network protocol, and we need to be able to
specify time taken for transmission/processing for each node. Do we care
about the actual contents of the messages (to be able to simulate double
spend attempts, invalid transactions and blocks, SPV node communication),
and their validation (actual signatures and proof of work)?

I imagine the latter is pretty useless, beyond specifying that the
signature/proof of work is valid/invalid.

If we could build up a set of experiments we'd like to run on it, it would
help clarify what's needed.

Off the top of my head:

- Peter Todd's miner strategy of sending blocks to only 51% of the
hashpower.
- Various network split conditions, and how aware of the split nodes would
be (and the effect of client variability).
- Testing the feasability of network race double spends, or Finney attacks.
- Various network partition scenarios.
- Tricking SPV nodes.
On Nov 6, 2013 6:37 AM, "Jeff Garzik" <jgarzik@bitpay•com> wrote:

> I will contribute 1 BTC to this bounty, under same terms and expiration.
>
>
> ------------------------------------------------------------------------------
> November Webinars for C, C++, Fortran Developers
> Accelerate application performance with scalable programming models.
> Explore
> techniques for threading, error checking, porting, and tuning. Get the most
> from the latest Intel processors and coprocessors. See abstracts and
> register
> http://pubads.g.doubleclick.net/gampad/clk?id=60136231&iu=/4140/ostg.clktrk
> _______________________________________________
> Bitcoin-development mailing list
> Bitcoin-development@lists•sourceforge.net
> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
>
>

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 permalink raw reply	[|nested]
* 
  2013-11-06  5:33 [Bitcoin-development] we can all relax now kjj
  2013-11-06  9:26 ` Frank F

  2013-11-06 18:06   ` Christophe Biocca
  2013-11-06 18:17 ` 
                   ` 
  4 siblings, 1 reply; 21+ messages in thread
From: Jeff Garzik @ 2013-11-06 11:35 UTC (permalink / raw)
  To: kjj;  Bitcoin-development

[-- Attachment #1: Type: text/plain, Size: 73 bytes --]

I will contribute 1 BTC to this bounty, under same terms and expiration.

[-- Attachment #2: Type: text/html, Size: 80 bytes --]

^ permalink raw reply	[|nested] 21+ messages in thread
2013-11-06  5:33 [Bitcoin-development] we can all relax now kjj
                   ` (2 preceding siblings ...)
  2013-11-06 18:17 ` Melvin Carvalho

  2014-05-10 11:05 ` E willbefull
  
From: Jouke Hofman @ 2013-11-06 22:19 UTC (permalink / raw)
  To: bitcoin-development

bounty++

On 06-11-13 06:33, kjj wrote:
> One of the things that really gets me going is when someone devises a 
> model, tests it against itself, and then pretends that they've learned 
> something about the real world.
> 
> Naturally, the Selfish Mining paper is exactly this sort of nonsense.  
> Their model is one with no latency, and one where the attacker has total 
> visibility across the network.  An iterated FSM is not a suitable 
> simulation of the bitcoin system.  The bitcoin network does not have 
> states, and to the extent that you can pretend that we do, you can't 
> simulate transitions between them with static probabilities.
> 
> The authors understand this deep down inside, even though they didn't 
> work out the implications.  They handwave the issue by assuming a total 
> sybil attack, and in true academic spirit, they don't realize that the 
> condition necessary for the attack is far, far worse than the attack itself.
> 
> Greg said he'd like to run some simulations, and I'm thinking about it 
> too.  Unfortunately, he is busy all week, and I'm lazy (and also busy 
> for most of tomorrow).
> 
> If neither of us get to it first, I'm willing to pitch in 1 BTC as a 
> bounty for building a general bitcoin network simulator framework. The 
> simulator should be able to account for latency between nodes, and 
> ideally within a node.  It needs to be able to simulate an attacker that 
> owns varying fractions of the network, and make decisions based only on 
> what the attacker actually knows.  It needs to be able to simulate this 
> "attack" and should be generic enough to be easily modified for other 
> crazy schemes.
> 
> (Bounty offer is serious, but expires in one year [based on the earliest 
> timestamp that my mail server puts on this email], and /may/ be subject 
> to change if the price on any reputable exchange breaks 1000 USD per BTC 
> in that period.)
> 
> Basically, the lack of a decent network simulator is what allowed this 
> paper to get press.  If the author had been able to see the importance 
> of the stuff he was ignoring, we wouldn't be wasting so much time 
> correcting him (and sadly the reporters that have no way to check his 
> claims).
> 
> https://bitcointalk.org/index.php?topic=324413.msg3495663#msg3495663
> 
> 
> 
> ------------------------------------------------------------------------------
> November Webinars for C, C++, Fortran Developers
> Accelerate application performance with scalable programming models. Explore
> techniques for threading, error checking, porting, and tuning. Get the most 
> from the latest Intel processors and coprocessors. See abstracts and register
> http://pubads.g.doubleclick.net/gampad/clk?id=60136231&iu=/4140/ostg.clktrk
> _______________________________________________
> Bitcoin-development mailing list
> Bitcoin-development@lists•sourceforge.net
> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
> 




 permalink raw reply	[|nested]
2013-11-06 18:06   ` Christophe Biocca

  2013-11-07  4:15       ` Kyle Jerviss
                         ` (2 more replies)
  2013-11-07  5:24     ` Kyle Jerviss
  
From: Peter Todd @ 2013-11-07  3:44 UTC (permalink / raw)
  To: Christophe Biocca;  Bitcoin-development

[-- Attachment #1: Type: text/plain, Size: 6003 bytes --]

On Wed, Nov 06, 2013 at 01:06:47PM -0500, Christophe Biocca wrote:
> I might try building this sometime soon. I think it may also serve an
> educational purpose when trying to understand the whole network's behaviour.
> 
> What level of accuracy are we looking for though? Obviously we need to
> fully emulate the steps of the network protocol, and we need to be able to
> specify time taken for transmission/processing for each node. Do we care
> about the actual contents of the messages (to be able to simulate double
> spend attempts, invalid transactions and blocks, SPV node communication),
> and their validation (actual signatures and proof of work)?
> 
> I imagine the latter is pretty useless, beyond specifying that the
> signature/proof of work is valid/invalid.
> 
> If we could build up a set of experiments we'd like to run on it, it would
> help clarify what's needed.
> 
> Off the top of my head:
> 
> - Peter Todd's miner strategy of sending blocks to only 51% of the
> hashpower.

Speaking of, I hadn't gotten around to doing up the math behind that
strategy properly; turns out 51% I was overly optimistic and the actual
threshold is 29.3%

Suppose I find a block. I have Q hashing power, and the rest of the
network 1-Q. Should I tell the rest of the network, or withhold that
block and hope I find a second one?

Now in a purely inflation subsidy environment, where I don't care about
the other miners success, of course I should publish. However, if my
goals are to find *more* blocks than the other miners for whatever
reason, maybe because transaction fees matter or I'm trying to get
nLockTime'd announce/commit fee sacrifices, it gets more complicated.


There are three possible outcomes:

1) I find the next block, probability Q
2) They find the next block, probability 1-Q
2.1) I find the next block, probability Q, or (1-Q)*Q in total.
2.2) They find the next block, probability (1-Q)^2 in total.

Note how only in the last option do I lose. So how much hashing power do
I need before it is just as likely that the other miners will find two
blocks before I find either one block, or two blocks? Easy enough:

Q + (1-Q)*Q = (1-Q)^2 -> Q^2 - Q + 1/2 -> Q = (1 - \sqrt(2))/2

Q ~= 29.2%

So basically, if I'm trying to beat other miners, once I have >29.3% of
the hashing power I have no incentive to publish the blocks I mine!

But hang on, does it matter if I'm the one who actually has that hashing
power? What if I just make sure that only >29.3% of the hashing power
has that block? If my goal is to make sure that someone does useless
work, and/or they are working on a lower height block than me, then no,
I don't care, which means my original "send blocks to >51% of the
hashing power" analysis was actually wrong, and the strategy is even
more crazy: "send blocks to >29.3% of the hashing power" (!)


Lets suppose I know that I'm two blocks ahead:

1) I find the next block: Q                    (3:0)
2) They find the next block: (1-Q)             (2:1)
2.1) I find the next block: (1-Q)*Q            (3:1)
2.2) They find the next block: (1-Q)^2         (2:2)
2.2.1) I find the next block: (1-Q)^2 * Q      (3:2)
2.2.2) They find the next block: (1-Q)^3       (2:3)

At what hashing power should I release my blocks? So remember, I win
this round on outcomes 1, 2.1, 2.2.1 and they only win on 2.2.2:

Q + (1-Q)*Q + (1-Q)^2*Q = (1-Q)^3 -> Q = 1 - 2^-3

Q ~= 20.6%

Interesting... so as I get further ahead, or to be exact the group of
miners who have a given block gets further ahead, I need less hashing
power for my incentives to be to *not* publish the block I just found.
Conversely this means I should try to make my blocks propagate to less
of the hashing power, by whatever means necessary.

Now remember, none of the above strategy requires me to have a special
low-latency network or anything fancy. I don't even have to have a lot
of hashing power - the strategy still works if I'm, say, a 5% pool. It
just means I don't have the incentives people thought I did to propagate
my blocks widely.

The other nasty thing about this, is suppose I'm a miner and recently
got a block from another miner: should I forward that block, or not
bother? Well, it depends: if I have no idea how much of the hashing
power has that block, I should forward the block. But again, if my goal
is to be most likely to get the next block, I should only forward in
such a way that >30% of the hashing power has the block.

This means that if I have some information about what % already has that
block, I have less incentive to forward! For instance, suppose that
every major miner has been publishing their node addresses in their
blocks - I'll have a pretty good idea of who probably has that most
recent block, so I can easily make a well-optimized decision not to
forward. Similarly because the 30% hashing power figure is the
*integral* of time * hashes/second, if miners are forwarding
near-target-headers, I might as well wait a few seconds and see if I see
any near-target-headers; if I do for this block then I have evidence
that hashing power does have it, and I shouldn't forward.


So yeah, we're fucked and have got to fix this awful incentive structure
somehow before the inflation subsidy gets any smaller. Also, raising the
blocksize, especially by just removing the limit, is utter madness given
it can be used to slow down block propagation selectively, so the
hashing power that gets a given block is limited repeatably to the same
group.


P.S: If any large pools want to try this stuff out, give me a shout. You
have my PGP key - confidentiality assured.

P.P.S: If you're mining on a pool with more than, like, 1% hashing
power, do the math on varience... Seriously, stop it and go mine on a
smaller pool, or better yet, p2pool.

-- 
'peter'[:-1]@petertodd.org
00000000000000078b970f5134bae96da021744f80e04aa9dc2e2d2c2bcb07c2

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 permalink raw reply	[|nested]
2013-11-06 18:06   ` Christophe Biocca

  2013-11-07  4:15       ` 
                         ` 
  2013-11-07  5:24     ` Kyle Jerviss
  
From: Peter Todd @ 2013-11-07  3:44 UTC (permalink / raw)
  To: Christophe Biocca;  Bitcoin-development

[-- Attachment #1: Type: text/plain, Size: 6003 bytes --]

On Wed, Nov 06, 2013 at 01:06:47PM -0500, Christophe Biocca wrote:
> I might try building this sometime soon. I think it may also serve an
> educational purpose when trying to understand the whole network's behaviour.
> 
> What level of accuracy are we looking for though? Obviously we need to
> fully emulate the steps of the network protocol, and we need to be able to
> specify time taken for transmission/processing for each node. Do we care
> about the actual contents of the messages (to be able to simulate double
> spend attempts, invalid transactions and blocks, SPV node communication),
> and their validation (actual signatures and proof of work)?
> 
> I imagine the latter is pretty useless, beyond specifying that the
> signature/proof of work is valid/invalid.
> 
> If we could build up a set of experiments we'd like to run on it, it would
> help clarify what's needed.
> 
> Off the top of my head:
> 
> - Peter Todd's miner strategy of sending blocks to only 51% of the
> hashpower.

Speaking of, I hadn't gotten around to doing up the math behind that
strategy properly; turns out 51% I was overly optimistic and the actual
threshold is 29.3%

Suppose I find a block. I have Q hashing power, and the rest of the
network 1-Q. Should I tell the rest of the network, or withhold that
block and hope I find a second one?

Now in a purely inflation subsidy environment, where I don't care about
the other miners success, of course I should publish. However, if my
goals are to find *more* blocks than the other miners for whatever
reason, maybe because transaction fees matter or I'm trying to get
nLockTime'd announce/commit fee sacrifices, it gets more complicated.


There are three possible outcomes:

1) I find the next block, probability Q
2) They find the next block, probability 1-Q
2.1) I find the next block, probability Q, or (1-Q)*Q in total.
2.2) They find the next block, probability (1-Q)^2 in total.

Note how only in the last option do I lose. So how much hashing power do
I need before it is just as likely that the other miners will find two
blocks before I find either one block, or two blocks? Easy enough:

Q + (1-Q)*Q = (1-Q)^2 -> Q^2 - Q + 1/2 -> Q = (1 - \sqrt(2))/2

Q ~= 29.2%

So basically, if I'm trying to beat other miners, once I have >29.3% of
the hashing power I have no incentive to publish the blocks I mine!

But hang on, does it matter if I'm the one who actually has that hashing
power? What if I just make sure that only >29.3% of the hashing power
has that block? If my goal is to make sure that someone does useless
work, and/or they are working on a lower height block than me, then no,
I don't care, which means my original "send blocks to >51% of the
hashing power" analysis was actually wrong, and the strategy is even
more crazy: "send blocks to >29.3% of the hashing power" (!)


Lets suppose I know that I'm two blocks ahead:

1) I find the next block: Q                    (3:0)
2) They find the next block: (1-Q)             (2:1)
2.1) I find the next block: (1-Q)*Q            (3:1)
2.2) They find the next block: (1-Q)^2         (2:2)
2.2.1) I find the next block: (1-Q)^2 * Q      (3:2)
2.2.2) They find the next block: (1-Q)^3       (2:3)

At what hashing power should I release my blocks? So remember, I win
this round on outcomes 1, 2.1, 2.2.1 and they only win on 2.2.2:

Q + (1-Q)*Q + (1-Q)^2*Q = (1-Q)^3 -> Q = 1 - 2^-3

Q ~= 20.6%

Interesting... so as I get further ahead, or to be exact the group of
miners who have a given block gets further ahead, I need less hashing
power for my incentives to be to *not* publish the block I just found.
Conversely this means I should try to make my blocks propagate to less
of the hashing power, by whatever means necessary.

Now remember, none of the above strategy requires me to have a special
low-latency network or anything fancy. I don't even have to have a lot
of hashing power - the strategy still works if I'm, say, a 5% pool. It
just means I don't have the incentives people thought I did to propagate
my blocks widely.

The other nasty thing about this, is suppose I'm a miner and recently
got a block from another miner: should I forward that block, or not
bother? Well, it depends: if I have no idea how much of the hashing
power has that block, I should forward the block. But again, if my goal
is to be most likely to get the next block, I should only forward in
such a way that >30% of the hashing power has the block.

This means that if I have some information about what % already has that
block, I have less incentive to forward! For instance, suppose that
every major miner has been publishing their node addresses in their
blocks - I'll have a pretty good idea of who probably has that most
recent block, so I can easily make a well-optimized decision not to
forward. Similarly because the 30% hashing power figure is the
*integral* of time * hashes/second, if miners are forwarding
near-target-headers, I might as well wait a few seconds and see if I see
any near-target-headers; if I do for this block then I have evidence
that hashing power does have it, and I shouldn't forward.


So yeah, we're fucked and have got to fix this awful incentive structure
somehow before the inflation subsidy gets any smaller. Also, raising the
blocksize, especially by just removing the limit, is utter madness given
it can be used to slow down block propagation selectively, so the
hashing power that gets a given block is limited repeatably to the same
group.


P.S: If any large pools want to try this stuff out, give me a shout. You
have my PGP key - confidentiality assured.

P.P.S: If you're mining on a pool with more than, like, 1% hashing
power, do the math on varience... Seriously, stop it and go mine on a
smaller pool, or better yet, p2pool.

-- 
'peter'[:-1]@petertodd.org
00000000000000078b970f5134bae96da021744f80e04aa9dc2e2d2c2bcb07c2

[-- Attachment #2: Digital signature --]
[-- Type: application/pgp-signature, Size: 685 bytes --]

 permalink raw reply	[|nested]
2013-11-07  4:15       ` Kyle Jerviss

  2013-11-07  4:59           ` Kyle Jerviss
  
From: Peter Todd @ 2013-11-07  4:33 UTC (permalink / raw)
  To: Kyle Jerviss;  Bitcoin-development

[-- Attachment #1: Type: text/plain, Size: 1695 bytes --]

On Wed, Nov 06, 2013 at 10:15:40PM -0600, Kyle Jerviss wrote:
> You are ignoring the gambler's ruin. We do not operate on an
> infinite timeline.  If you find a big pool willing to try this,
> please give me enough advance warning to get my popcorn ready.

Gamblers ruin has nothing to do with it.

At every point you want to evaluate the chance the other side will get
ahead, vs. cashing in by just publishing the blocks you have. (or some
of them) I didn't mention it in the analysis, but obviously you want to
keep track of how much the blocks you haven't published are worth to
you, and consider publishing some or all of your lead to the rest of the
network if you stand to lose more than you gain.

Right now it's a mostly theoretical attack because the inflation subsidy
is enormous and fees don't matter, but once fees do start to matter
things get a lot more complex. An extreme example is announce/commit
sacrifices to mining fees: if I'm at block n+1, the rest of the network
is at block n, and there's a 100BTC sacrifice at block n+2, I could
easily be in a situation where I have zero incentive to publish my block
to keep everyone else behind me, and just hope I find block n+2. If I
do, great! I'll immediately publish to lock-in my winnings and start
working on block n+3


Anyway, my covert suggestion that pools contact me was more to hopefully
strike fear into the people mining at a large pool and get them to
switch to a small one. :) If everyone mined solo or on p2pool none of
this stuff would matter much... but we can't force them too yet.

-- 
'peter'[:-1]@petertodd.org
0000000000000005713cac303bd2d529ebeffa82fff60be5307010a83933698d

[-- Attachment #2: Digital signature --]
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 permalink raw reply	[|nested]
2013-11-07  3:44     ` Peter Todd
  2013-11-07  4:15       ` Kyle Jerviss

  2013-11-07 13:24         ` Peter Todd
  2013-11-07  8:07       ` Jannes Faber
  
From: Gavin Andresen @ 2013-11-07  4:56 UTC (permalink / raw)
  To: Peter Todd;  Bitcoin Dev

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> P.S: If any large pools want to try this stuff out, give me a shout. You
> have my PGP key - confidentiality assured.
>

If I find out one of the large pools decides to run this 'experiment' on
the main network, I will make it my mission to tell people to switch to a
more responsible pool.

And if you think you can get away with driving up EVERYBODY's orphan rate
without anybody noticing, you should think again.


> P.P.S: If you're mining on a pool with more than, like, 1% hashing
> power, do the math on varience... Seriously, stop it and go mine on a
> smaller pool, or better yet, p2pool.
>

That I agree with.

-- 
--
Gavin Andresen

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 permalink raw reply	[|nested]
2013-11-07  4:33         ` Peter Todd

  2013-11-07 13:09             ` Peter Todd
  
From: Kyle Jerviss @ 2013-11-07  4:59 UTC (permalink / raw)
  To: Peter Todd, Bitcoin Dev

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Each block that you solve has a reward.  In practice, some blocks will 
be orphaned, so the expected reward is slightly less than the nominal 
reward.  Each second that you delay publishing a block, the expected 
reward drops somewhat.

On an infinite timeline, the total reward approaches the expected 
reward.  But reality is discrete, and zero tends to be a brick wall.  If 
you delay publishing a block, you will get either the nominal reward, or 
zero, not some fraction in between.  And if your personal random walk 
involves an excursion through negative land, you may not stick around 
long enough for it to come back.

Thus, a positive expected value is not sufficient for some strategy to 
be a good one.

Peter Todd wrote:
> On Wed, Nov 06, 2013 at 10:15:40PM -0600, Kyle Jerviss wrote:
>> You are ignoring the gambler's ruin. We do not operate on an
>> infinite timeline.  If you find a big pool willing to try this,
>> please give me enough advance warning to get my popcorn ready.
> Gamblers ruin has nothing to do with it.
>
> At every point you want to evaluate the chance the other side will get
> ahead, vs. cashing in by just publishing the blocks you have. (or some
> of them) I didn't mention it in the analysis, but obviously you want to
> keep track of how much the blocks you haven't published are worth to
> you, and consider publishing some or all of your lead to the rest of the
> network if you stand to lose more than you gain.
>
> Right now it's a mostly theoretical attack because the inflation subsidy
> is enormous and fees don't matter, but once fees do start to matter
> things get a lot more complex. An extreme example is announce/commit
> sacrifices to mining fees: if I'm at block n+1, the rest of the network
> is at block n, and there's a 100BTC sacrifice at block n+2, I could
> easily be in a situation where I have zero incentive to publish my block
> to keep everyone else behind me, and just hope I find block n+2. If I
> do, great! I'll immediately publish to lock-in my winnings and start
> working on block n+3
>
>
> Anyway, my covert suggestion that pools contact me was more to hopefully
> strike fear into the people mining at a large pool and get them to
> switch to a small one. :) If everyone mined solo or on p2pool none of
> this stuff would matter much... but we can't force them too yet.
>
>
>
> ------------------------------------------------------------------------------
> November Webinars for C, C++, Fortran Developers
> Accelerate application performance with scalable programming models. Explore
> techniques for threading, error checking, porting, and tuning. Get the most
> from the latest Intel processors and coprocessors. See abstracts and register
> http://pubads.g.doubleclick.net/gampad/clk?id=60136231&iu=/4140/ostg.clktrk
>
>
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> Bitcoin-development mailing list
> Bitcoin-development@lists•sourceforge.net
> https://lists.sourceforge.net/lists/listinfo/bitcoin-development


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 permalink raw reply	[|nested]
2013-11-06 18:06   ` Christophe Biocca
  2013-11-07  3:44     ` Peter Todd

  
From: Kyle Jerviss @ 2013-11-07  5:24 UTC (permalink / raw)
  To: Christophe Biocca, Bitcoin-development

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What I want is configurable 1/10/100 millisecond ticks, and accurate 
flow of information.

It doesn't seem necessary to really emulate the whole protocol, nor to 
be overly concerned with the content of messages, nor to simulate every 
little housekeeping step or network message.

I'm not looking for a bitcoin-network-in-a-bottle, I just want to see 
flows.  In the current situation, how often does a miner win if they 
hold their block until they see another one?  How does that change with 
various numbers of remote sensors?

Other applications in the future could very well involve transaction 
spread, double spends, network partitions, transaction replacement, etc.

If the simulation run in question involves blocks, I'd like realistic 
latencies for blocks.  If it is about transactions, the latencies should 
be realistic for transactions.

What is realistic for those?  That brings me to...

I'll kick in another 1 BTC for an instrumentation package for the 
reference client.  Same conditions as before.  A runtime option, 
disabled by default, that collects data for the simulator.  If this 
creates an uproar, I'll also accept a compile-time option. Support 
dumping to a file that can be uploaded to a parser as the bare minimum, 
and if you are feeling clever, add automatic uploads to a server 
specified in the conf file, or whatever.  All data should be anonymous, 
of course.  Local file should be in a format that humans can read (JSON, 
XML, CSV, etc) so that people can verify that the data is indeed anonymous.

I want stats on peers (number, turnover, latency, in/out, etc), stats on 
local operations (I/O stats, sigs per second when verifying a block, 
fraction of sig cache hits when validating, etc) and whatever else might 
be useful to a simulator.  Each parameter should collect min, max, mean, 
std. deviation, etc so that the simulator can provide realistic virtual 
nodes.

Also, I don't want anyone to think that they need to satisfy me 
personally to collect on either of these two bounties.  I will pay mine 
for a product that is generally along the lines I have laid out, if a 
couple of the core devs (Gavin, Greg, Jeff, sipa, Luke, etc) agree that 
your work is useful.


Christophe Biocca wrote:
>
> I might try building this sometime soon. I think it may also serve an 
> educational purpose when trying to understand the whole network's 
> behaviour.
>
> What level of accuracy are we looking for though? Obviously we need to 
> fully emulate the steps of the network protocol, and we need to be 
> able to specify time taken for transmission/processing for each node. 
> Do we care about the actual contents of the messages (to be able to 
> simulate double spend attempts, invalid transactions and blocks, SPV 
> node communication), and their validation (actual signatures and proof 
> of work)?
>
> I imagine the latter is pretty useless, beyond specifying that the 
> signature/proof of work is valid/invalid.
>
> If we could build up a set of experiments we'd like to run on it, it 
> would help clarify what's needed.
>
> Off the top of my head:
>
> - Peter Todd's miner strategy of sending blocks to only 51% of the 
> hashpower.
> - Various network split conditions, and how aware of the split nodes 
> would be (and the effect of client variability).
> - Testing the feasability of network race double spends, or Finney 
> attacks.
> - Various network partition scenarios.
> - Tricking SPV nodes.
>
> On Nov 6, 2013 6:37 AM, "Jeff Garzik" <jgarzik@bitpay•com 
> <mailto:jgarzik@bitpay•com>> wrote:
>
>     I will contribute 1 BTC to this bounty, under same terms and
>     expiration.
>
>
>     ------------------------------------------------------------------------------
>     November Webinars for C, C++, Fortran Developers
>     Accelerate application performance with scalable programming
>     models. Explore
>     techniques for threading, error checking, porting, and tuning. Get
>     the most
>     from the latest Intel processors and coprocessors. See abstracts
>     and register
>     http://pubads.g.doubleclick.net/gampad/clk?id=60136231&iu=/4140/ostg.clktrk
>     _______________________________________________
>     Bitcoin-development mailing list
>     Bitcoin-development@lists•sourceforge.net
>     <mailto:Bitcoin-development@lists•sourceforge.net>
>     https://lists.sourceforge.net/lists/listinfo/bitcoin-development
>
>
>
> ------------------------------------------------------------------------------
> November Webinars for C, C++, Fortran Developers
> Accelerate application performance with scalable programming models. Explore
> techniques for threading, error checking, porting, and tuning. Get the most
> from the latest Intel processors and coprocessors. See abstracts and register
> http://pubads.g.doubleclick.net/gampad/clk?id=60136231&iu=/4140/ostg.clktrk
>
>
> _______________________________________________
> Bitcoin-development mailing list
> Bitcoin-development@lists•sourceforge.net
> https://lists.sourceforge.net/lists/listinfo/bitcoin-development


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 permalink raw reply	[|nested]
2013-11-07  3:44     ` Peter Todd
  2013-11-07  4:15       ` Kyle Jerviss
  2013-11-07  4:56       ` Gavin Andresen

  
From: Jannes Faber @ 2013-11-07  8:07 UTC (permalink / raw)
  To: Peter Todd;  Bitcoin-development

[-- Attachment #1: Type: text/plain, Size: 7209 bytes --]

I wonder if you need to take into consideration the fact that there might
be another "bad" pool (in the 1-Q part of the network) running the same
strategy and also holding on to two blocks of their own? Once they find
their third block before you do, then your 2 blocks lead is gone instantly.


--
Jannes Faber
Elevate BV

t: +31 20 636 9977
m: +31 6 5342 9669
j.faber@elevate•nl


On 7 November 2013 04:44, Peter Todd <pete@petertodd•org> wrote:

> On Wed, Nov 06, 2013 at 01:06:47PM -0500, Christophe Biocca wrote:
> > I might try building this sometime soon. I think it may also serve an
> > educational purpose when trying to understand the whole network's
> behaviour.
> >
> > What level of accuracy are we looking for though? Obviously we need to
> > fully emulate the steps of the network protocol, and we need to be able
> to
> > specify time taken for transmission/processing for each node. Do we care
> > about the actual contents of the messages (to be able to simulate double
> > spend attempts, invalid transactions and blocks, SPV node communication),
> > and their validation (actual signatures and proof of work)?
> >
> > I imagine the latter is pretty useless, beyond specifying that the
> > signature/proof of work is valid/invalid.
> >
> > If we could build up a set of experiments we'd like to run on it, it
> would
> > help clarify what's needed.
> >
> > Off the top of my head:
> >
> > - Peter Todd's miner strategy of sending blocks to only 51% of the
> > hashpower.
>
> Speaking of, I hadn't gotten around to doing up the math behind that
> strategy properly; turns out 51% I was overly optimistic and the actual
> threshold is 29.3%
>
> Suppose I find a block. I have Q hashing power, and the rest of the
> network 1-Q. Should I tell the rest of the network, or withhold that
> block and hope I find a second one?
>
> Now in a purely inflation subsidy environment, where I don't care about
> the other miners success, of course I should publish. However, if my
> goals are to find *more* blocks than the other miners for whatever
> reason, maybe because transaction fees matter or I'm trying to get
> nLockTime'd announce/commit fee sacrifices, it gets more complicated.
>
>
> There are three possible outcomes:
>
> 1) I find the next block, probability Q
> 2) They find the next block, probability 1-Q
> 2.1) I find the next block, probability Q, or (1-Q)*Q in total.
> 2.2) They find the next block, probability (1-Q)^2 in total.
>
> Note how only in the last option do I lose. So how much hashing power do
> I need before it is just as likely that the other miners will find two
> blocks before I find either one block, or two blocks? Easy enough:
>
> Q + (1-Q)*Q = (1-Q)^2 -> Q^2 - Q + 1/2 -> Q = (1 - \sqrt(2))/2
>
> Q ~= 29.2%
>
> So basically, if I'm trying to beat other miners, once I have >29.3% of
> the hashing power I have no incentive to publish the blocks I mine!
>
> But hang on, does it matter if I'm the one who actually has that hashing
> power? What if I just make sure that only >29.3% of the hashing power
> has that block? If my goal is to make sure that someone does useless
> work, and/or they are working on a lower height block than me, then no,
> I don't care, which means my original "send blocks to >51% of the
> hashing power" analysis was actually wrong, and the strategy is even
> more crazy: "send blocks to >29.3% of the hashing power" (!)
>
>
> Lets suppose I know that I'm two blocks ahead:
>
> 1) I find the next block: Q                    (3:0)
> 2) They find the next block: (1-Q)             (2:1)
> 2.1) I find the next block: (1-Q)*Q            (3:1)
> 2.2) They find the next block: (1-Q)^2         (2:2)
> 2.2.1) I find the next block: (1-Q)^2 * Q      (3:2)
> 2.2.2) They find the next block: (1-Q)^3       (2:3)
>
> At what hashing power should I release my blocks? So remember, I win
> this round on outcomes 1, 2.1, 2.2.1 and they only win on 2.2.2:
>
> Q + (1-Q)*Q + (1-Q)^2*Q = (1-Q)^3 -> Q = 1 - 2^-3
>
> Q ~= 20.6%
>
> Interesting... so as I get further ahead, or to be exact the group of
> miners who have a given block gets further ahead, I need less hashing
> power for my incentives to be to *not* publish the block I just found.
> Conversely this means I should try to make my blocks propagate to less
> of the hashing power, by whatever means necessary.
>
> Now remember, none of the above strategy requires me to have a special
> low-latency network or anything fancy. I don't even have to have a lot
> of hashing power - the strategy still works if I'm, say, a 5% pool. It
> just means I don't have the incentives people thought I did to propagate
> my blocks widely.
>
> The other nasty thing about this, is suppose I'm a miner and recently
> got a block from another miner: should I forward that block, or not
> bother? Well, it depends: if I have no idea how much of the hashing
> power has that block, I should forward the block. But again, if my goal
> is to be most likely to get the next block, I should only forward in
> such a way that >30% of the hashing power has the block.
>
> This means that if I have some information about what % already has that
> block, I have less incentive to forward! For instance, suppose that
> every major miner has been publishing their node addresses in their
> blocks - I'll have a pretty good idea of who probably has that most
> recent block, so I can easily make a well-optimized decision not to
> forward. Similarly because the 30% hashing power figure is the
> *integral* of time * hashes/second, if miners are forwarding
> near-target-headers, I might as well wait a few seconds and see if I see
> any near-target-headers; if I do for this block then I have evidence
> that hashing power does have it, and I shouldn't forward.
>
>
> So yeah, we're fucked and have got to fix this awful incentive structure
> somehow before the inflation subsidy gets any smaller. Also, raising the
> blocksize, especially by just removing the limit, is utter madness given
> it can be used to slow down block propagation selectively, so the
> hashing power that gets a given block is limited repeatably to the same
> group.
>
>
> P.S: If any large pools want to try this stuff out, give me a shout. You
> have my PGP key - confidentiality assured.
>
> P.P.S: If you're mining on a pool with more than, like, 1% hashing
> power, do the math on varience... Seriously, stop it and go mine on a
> smaller pool, or better yet, p2pool.
>
> --
> 'peter'[:-1]@petertodd.org
> 00000000000000078b970f5134bae96da021744f80e04aa9dc2e2d2c2bcb07c2
>
>
> ------------------------------------------------------------------------------
> November Webinars for C, C++, Fortran Developers
> Accelerate application performance with scalable programming models.
> Explore
> techniques for threading, error checking, porting, and tuning. Get the most
> from the latest Intel processors and coprocessors. See abstracts and
> register
> http://pubads.g.doubleclick.net/gampad/clk?id=60136231&iu=/4140/ostg.clktrk
> _______________________________________________
> Bitcoin-development mailing list
> Bitcoin-development@lists•sourceforge.net
> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
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>

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 permalink raw reply	[|nested]
2013-11-07  4:59           ` Kyle Jerviss

  
From: Peter Todd @ 2013-11-07 13:09 UTC (permalink / raw)
  To: Kyle Jerviss;  Bitcoin Dev

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On Wed, Nov 06, 2013 at 10:59:28PM -0600, Kyle Jerviss wrote:
> Each block that you solve has a reward.  In practice, some blocks
> will be orphaned, so the expected reward is slightly less than the
> nominal reward.  Each second that you delay publishing a block, the
> expected reward drops somewhat.

You don't understand how to read papers.

A good author will state his assumptions. For instance my third
paragraph read:

    Now in a purely inflation subsidy environment, where I don't care about
    the other miners success, of course I should publish. However, if my
    goals are to find *more* blocks than the other miners for whatever
    reason, maybe because transaction fees matter or I'm trying to get
    nLockTime'd announce/commit fee sacrifices, it gets more complicated.

Now that you understand the assumptions made, you can attack the paper
in one of two ways:

1) Show it's wrong.

2) Show its assumptions make it irrelevant.

You've done neither.

-- 
'peter'[:-1]@petertodd.org
0000000000000006d61eb32f3643aa30c2f9647e4e758af84b03abc43f09959f

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 permalink raw reply	[|nested]
2013-11-07  4:56       ` Gavin Andresen

  2013-11-07 16:14           ` Mike Hearn
  
From: Peter Todd @ 2013-11-07 13:24 UTC (permalink / raw)
  To: Gavin Andresen;  Bitcoin Dev, webmaster, webmaster

[-- Attachment #1: Type: text/plain, Size: 1891 bytes --]

On Thu, Nov 07, 2013 at 02:56:56PM +1000, Gavin Andresen wrote:
> > P.S: If any large pools want to try this stuff out, give me a shout. You
> > have my PGP key - confidentiality assured.
> >
> 
> If I find out one of the large pools decides to run this 'experiment' on
> the main network, I will make it my mission to tell people to switch to a
> more responsible pool.

I hope they listen.

A few months ago ASICMiner could have made use of that attack if my
memories of their peak hashing power were correct. They certainely could
have used the selfish miner version, (we need better name for that)
although development costs would eat into profits.

GHash.IO, 22%, says they're a "private Bitfury ASIC mining pool" - dunno
what they mean by that, but they're involved with CEX.IO who has
physical control of a bunch of hashing power so I guess that means their
model is like ASICMiners. They're a bit short of 30%, but maybe some
behind-the-scenes deals would fix that, and/or lowering the barrier with
reactive block publishing. (a better name)

> And if you think you can get away with driving up EVERYBODY's orphan rate
> without anybody noticing, you should think again.

...and remember, if you only do the attack a little bit, you still can
earn more profit, and only drive up the orphan rate a little bit. So who
knows, maybe the orphans are real, or maybe they're an attack? ASICMiner
was involved with a bunch of orphans a while back...

You know what this calls for? A witchhunt!

BURN THE LARGE POOLS!

> > P.P.S: If you're mining on a pool with more than, like, 1% hashing
> > power, do the math on varience... Seriously, stop it and go mine on a
> > smaller pool, or better yet, p2pool.
> >
> 
> That I agree with.

Glad to hear.

-- 
'peter'[:-1]@petertodd.org
0000000000000007bd936f19e33bc8b8f9bb1f4c013b863ef60a7f5a6a5d2112

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 permalink raw reply	[|nested]
2013-11-07 13:24         ` Peter Todd

  2013-11-07 18:28             ` Daniel Lidstrom
  
From: Mike Hearn @ 2013-11-07 16:14 UTC (permalink / raw)
  To: Peter Todd;  webmaster, webmaster, Bitcoin Dev

[-- Attachment #1: Type: text/plain, Size: 3339 bytes --]

Once the ASIC race calms down because everyone has one, has more or less
optimal power supplies, process improvements aren't easily reachable
anymore etc then I'd expect people to dissipate from the large pools
because eliminating their fees will become the next lowest hanging fruit to
squeeze out extra profit. There's no particular reason we need only a
handful of pools that control a major fraction of the hashpower.

If we end up with a few hundred pools or lots of miners on p2pool, then a
lot of these theoretical attacks become not very relevant (I don't think ID
sacrifices will be so common or large as to justify a pile of custom mining
code+strategies at any point ...)


On Thu, Nov 7, 2013 at 2:24 PM, Peter Todd <pete@petertodd•org> wrote:

> On Thu, Nov 07, 2013 at 02:56:56PM +1000, Gavin Andresen wrote:
> > > P.S: If any large pools want to try this stuff out, give me a shout.
> You
> > > have my PGP key - confidentiality assured.
> > >
> >
> > If I find out one of the large pools decides to run this 'experiment' on
> > the main network, I will make it my mission to tell people to switch to a
> > more responsible pool.
>
> I hope they listen.
>
> A few months ago ASICMiner could have made use of that attack if my
> memories of their peak hashing power were correct. They certainely could
> have used the selfish miner version, (we need better name for that)
> although development costs would eat into profits.
>
> GHash.IO, 22%, says they're a "private Bitfury ASIC mining pool" - dunno
> what they mean by that, but they're involved with CEX.IO who has
> physical control of a bunch of hashing power so I guess that means their
> model is like ASICMiners. They're a bit short of 30%, but maybe some
> behind-the-scenes deals would fix that, and/or lowering the barrier with
> reactive block publishing. (a better name)
>
> > And if you think you can get away with driving up EVERYBODY's orphan rate
> > without anybody noticing, you should think again.
>
> ...and remember, if you only do the attack a little bit, you still can
> earn more profit, and only drive up the orphan rate a little bit. So who
> knows, maybe the orphans are real, or maybe they're an attack? ASICMiner
> was involved with a bunch of orphans a while back...
>
> You know what this calls for? A witchhunt!
>
> BURN THE LARGE POOLS!
>
> > > P.P.S: If you're mining on a pool with more than, like, 1% hashing
> > > power, do the math on varience... Seriously, stop it and go mine on a
> > > smaller pool, or better yet, p2pool.
> > >
> >
> > That I agree with.
>
> Glad to hear.
>
> --
> 'peter'[:-1]@petertodd.org
> 0000000000000007bd936f19e33bc8b8f9bb1f4c013b863ef60a7f5a6a5d2112
>
>
> ------------------------------------------------------------------------------
> November Webinars for C, C++, Fortran Developers
> Accelerate application performance with scalable programming models.
> Explore
> techniques for threading, error checking, porting, and tuning. Get the most
> from the latest Intel processors and coprocessors. See abstracts and
> register
> http://pubads.g.doubleclick.net/gampad/clk?id=60136231&iu=/4140/ostg.clktrk
> _______________________________________________
> Bitcoin-development mailing list
> Bitcoin-development@lists•sourceforge.net
> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
>
>

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 permalink raw reply	[|nested]
2013-11-07 16:14           ` Mike Hearn

  2013-11-08 19:49               ` Andreas M. Antonopoulos
  2013-11-15 10:58               ` Peter Todd
  
From: Daniel Lidstrom @ 2013-11-07 18:28 UTC (permalink / raw)
  To: Mike Hearn;  Bitcoin Dev, webmaster, webmaster

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Hey Peter, something seems wrong with your above analysis: I think a miner
would withhold his block not because it leads to a greater probability of
winning the next one, but because it increases his expected revenue.

Suppose a cabal with fraction q of the total hashing power is n blocks
ahead on a secret branch of that has mined r_tot coins, and let r_next be
its next block's reward.  If the cabal chooses not to broadcast its secret
chain until at least the next block, its expected revenue after the next
block is found is

(1 - (1-q)^(n+1))*(r_tot + r_next)

If it does broadcast, its expected revenue after the next block is found is

r_tot + q * r_next

If the cabal seeks only to maximize immediate revenue, then after a bit of
algebra we find that it will withhold its chain if

q > 1 - ( 1 + r_tot / r_next )^(-1/n)

So if the cabal has just mined his first block off of the public chain,
i.e. n = 1, and if the block reward is relatively stable, i.e. r_next =
r_tot, then it needs q > 50% to profitably withhold, not the 29.2% you
calculated.

From this formula we can also see that if the miner wins the race and
withholds again, then he must grow q to compensate for the increase in
r_tot, and any decrease in n.  So generally publication becomes
increasingly in the cabal's interest, and secret chains will tend not to
grow too large (intuition tells me that simulations using the above formula
should bear this out).

This seem correct to you?


On Thu, Nov 7, 2013 at 9:14 AM, Mike Hearn <mike@plan99•net> wrote:

> Once the ASIC race calms down because everyone has one, has more or less
> optimal power supplies, process improvements aren't easily reachable
> anymore etc then I'd expect people to dissipate from the large pools
> because eliminating their fees will become the next lowest hanging fruit to
> squeeze out extra profit. There's no particular reason we need only a
> handful of pools that control a major fraction of the hashpower.
>
> If we end up with a few hundred pools or lots of miners on p2pool, then a
> lot of these theoretical attacks become not very relevant (I don't think ID
> sacrifices will be so common or large as to justify a pile of custom mining
> code+strategies at any point ...)
>
>
> On Thu, Nov 7, 2013 at 2:24 PM, Peter Todd <pete@petertodd•org> wrote:
>
>> On Thu, Nov 07, 2013 at 02:56:56PM +1000, Gavin Andresen wrote:
>> > > P.S: If any large pools want to try this stuff out, give me a shout.
>> You
>> > > have my PGP key - confidentiality assured.
>> > >
>> >
>> > If I find out one of the large pools decides to run this 'experiment' on
>> > the main network, I will make it my mission to tell people to switch to
>> a
>> > more responsible pool.
>>
>> I hope they listen.
>>
>> A few months ago ASICMiner could have made use of that attack if my
>> memories of their peak hashing power were correct. They certainely could
>> have used the selfish miner version, (we need better name for that)
>> although development costs would eat into profits.
>>
>> GHash.IO, 22%, says they're a "private Bitfury ASIC mining pool" - dunno
>> what they mean by that, but they're involved with CEX.IO who has
>> physical control of a bunch of hashing power so I guess that means their
>> model is like ASICMiners. They're a bit short of 30%, but maybe some
>> behind-the-scenes deals would fix that, and/or lowering the barrier with
>> reactive block publishing. (a better name)
>>
>> > And if you think you can get away with driving up EVERYBODY's orphan
>> rate
>> > without anybody noticing, you should think again.
>>
>> ...and remember, if you only do the attack a little bit, you still can
>> earn more profit, and only drive up the orphan rate a little bit. So who
>> knows, maybe the orphans are real, or maybe they're an attack? ASICMiner
>> was involved with a bunch of orphans a while back...
>>
>> You know what this calls for? A witchhunt!
>>
>> BURN THE LARGE POOLS!
>>
>> > > P.P.S: If you're mining on a pool with more than, like, 1% hashing
>> > > power, do the math on varience... Seriously, stop it and go mine on a
>> > > smaller pool, or better yet, p2pool.
>> > >
>> >
>> > That I agree with.
>>
>> Glad to hear.
>>
>> --
>> 'peter'[:-1]@petertodd.org
>> 0000000000000007bd936f19e33bc8b8f9bb1f4c013b863ef60a7f5a6a5d2112
>>
>>
>> ------------------------------------------------------------------------------
>> November Webinars for C, C++, Fortran Developers
>> Accelerate application performance with scalable programming models.
>> Explore
>> techniques for threading, error checking, porting, and tuning. Get the
>> most
>> from the latest Intel processors and coprocessors. See abstracts and
>> register
>>
>> http://pubads.g.doubleclick.net/gampad/clk?id=60136231&iu=/4140/ostg.clktrk
>> _______________________________________________
>> Bitcoin-development mailing list
>> Bitcoin-development@lists•sourceforge.net
>> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
>>
>>
>
>
> ------------------------------------------------------------------------------
> November Webinars for C, C++, Fortran Developers
> Accelerate application performance with scalable programming models.
> Explore
> techniques for threading, error checking, porting, and tuning. Get the most
> from the latest Intel processors and coprocessors. See abstracts and
> register
> http://pubads.g.doubleclick.net/gampad/clk?id=60136231&iu=/4140/ostg.clktrk
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> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
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 permalink raw reply	[|nested]
2013-11-07 18:28             ` Daniel Lidstrom

  2013-11-08 20:33                 ` Gregory Maxwell
  2013-11-15 10:58               ` Peter Todd
  
From: Andreas M. Antonopoulos @ 2013-11-08 19:49 UTC (permalink / raw)
  To: Bitcoin Dev

[-- Attachment #1: Type: text/plain, Size: 7003 bytes --]

Nicholas Weaver is reporting that pools have already started delaying
blocks, something that hints at Selfish Mining, since Nov. 3rd.
https://medium.com/something-like-falling/d321a2ef9317

He dismisses other reasons for delayed block propagation.

Any ideas on whether pools are already mucking around with block delaying
tactics?

I have no idea if this report is accurate or explained by some other issue
in the network, does anyone here have a comment on this?


On Thu, Nov 7, 2013 at 10:28 AM, Daniel Lidstrom <lidstrom83@gmail•com>wrote:

> Hey Peter, something seems wrong with your above analysis: I think a miner
> would withhold his block not because it leads to a greater probability of
> winning the next one, but because it increases his expected revenue.
>
> Suppose a cabal with fraction q of the total hashing power is n blocks
> ahead on a secret branch of that has mined r_tot coins, and let r_next be
> its next block's reward.  If the cabal chooses not to broadcast its secret
> chain until at least the next block, its expected revenue after the next
> block is found is
>
> (1 - (1-q)^(n+1))*(r_tot + r_next)
>
> If it does broadcast, its expected revenue after the next block is found is
>
> r_tot + q * r_next
>
> If the cabal seeks only to maximize immediate revenue, then after a bit of
> algebra we find that it will withhold its chain if
>
> q > 1 - ( 1 + r_tot / r_next )^(-1/n)
>
> So if the cabal has just mined his first block off of the public chain,
> i.e. n = 1, and if the block reward is relatively stable, i.e. r_next =
> r_tot, then it needs q > 50% to profitably withhold, not the 29.2% you
> calculated.
>
> From this formula we can also see that if the miner wins the race and
> withholds again, then he must grow q to compensate for the increase in
> r_tot, and any decrease in n.  So generally publication becomes
> increasingly in the cabal's interest, and secret chains will tend not to
> grow too large (intuition tells me that simulations using the above formula
> should bear this out).
>
> This seem correct to you?
>
>
> On Thu, Nov 7, 2013 at 9:14 AM, Mike Hearn <mike@plan99•net> wrote:
>
>> Once the ASIC race calms down because everyone has one, has more or less
>> optimal power supplies, process improvements aren't easily reachable
>> anymore etc then I'd expect people to dissipate from the large pools
>> because eliminating their fees will become the next lowest hanging fruit to
>> squeeze out extra profit. There's no particular reason we need only a
>> handful of pools that control a major fraction of the hashpower.
>>
>> If we end up with a few hundred pools or lots of miners on p2pool, then a
>> lot of these theoretical attacks become not very relevant (I don't think ID
>> sacrifices will be so common or large as to justify a pile of custom mining
>> code+strategies at any point ...)
>>
>>
>> On Thu, Nov 7, 2013 at 2:24 PM, Peter Todd <pete@petertodd•org> wrote:
>>
>>> On Thu, Nov 07, 2013 at 02:56:56PM +1000, Gavin Andresen wrote:
>>> > > P.S: If any large pools want to try this stuff out, give me a shout.
>>> You
>>> > > have my PGP key - confidentiality assured.
>>> > >
>>> >
>>> > If I find out one of the large pools decides to run this 'experiment'
>>> on
>>> > the main network, I will make it my mission to tell people to switch
>>> to a
>>> > more responsible pool.
>>>
>>> I hope they listen.
>>>
>>> A few months ago ASICMiner could have made use of that attack if my
>>> memories of their peak hashing power were correct. They certainely could
>>> have used the selfish miner version, (we need better name for that)
>>> although development costs would eat into profits.
>>>
>>> GHash.IO, 22%, says they're a "private Bitfury ASIC mining pool" - dunno
>>> what they mean by that, but they're involved with CEX.IO who has
>>> physical control of a bunch of hashing power so I guess that means their
>>> model is like ASICMiners. They're a bit short of 30%, but maybe some
>>> behind-the-scenes deals would fix that, and/or lowering the barrier with
>>> reactive block publishing. (a better name)
>>>
>>> > And if you think you can get away with driving up EVERYBODY's orphan
>>> rate
>>> > without anybody noticing, you should think again.
>>>
>>> ...and remember, if you only do the attack a little bit, you still can
>>> earn more profit, and only drive up the orphan rate a little bit. So who
>>> knows, maybe the orphans are real, or maybe they're an attack? ASICMiner
>>> was involved with a bunch of orphans a while back...
>>>
>>> You know what this calls for? A witchhunt!
>>>
>>> BURN THE LARGE POOLS!
>>>
>>> > > P.P.S: If you're mining on a pool with more than, like, 1% hashing
>>> > > power, do the math on varience... Seriously, stop it and go mine on a
>>> > > smaller pool, or better yet, p2pool.
>>> > >
>>> >
>>> > That I agree with.
>>>
>>> Glad to hear.
>>>
>>> --
>>> 'peter'[:-1]@petertodd.org
>>> 0000000000000007bd936f19e33bc8b8f9bb1f4c013b863ef60a7f5a6a5d2112
>>>
>>>
>>> ------------------------------------------------------------------------------
>>> November Webinars for C, C++, Fortran Developers
>>> Accelerate application performance with scalable programming models.
>>> Explore
>>> techniques for threading, error checking, porting, and tuning. Get the
>>> most
>>> from the latest Intel processors and coprocessors. See abstracts and
>>> register
>>>
>>> http://pubads.g.doubleclick.net/gampad/clk?id=60136231&iu=/4140/ostg.clktrk
>>> _______________________________________________
>>> Bitcoin-development mailing list
>>> Bitcoin-development@lists•sourceforge.net
>>> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
>>>
>>>
>>
>>
>> ------------------------------------------------------------------------------
>> November Webinars for C, C++, Fortran Developers
>> Accelerate application performance with scalable programming models.
>> Explore
>> techniques for threading, error checking, porting, and tuning. Get the
>> most
>> from the latest Intel processors and coprocessors. See abstracts and
>> register
>>
>> http://pubads.g.doubleclick.net/gampad/clk?id=60136231&iu=/4140/ostg.clktrk
>> _______________________________________________
>> Bitcoin-development mailing list
>> Bitcoin-development@lists•sourceforge.net
>> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
>>
>>
>
>
> ------------------------------------------------------------------------------
> November Webinars for C, C++, Fortran Developers
> Accelerate application performance with scalable programming models.
> Explore
> techniques for threading, error checking, porting, and tuning. Get the most
> from the latest Intel processors and coprocessors. See abstracts and
> register
> http://pubads.g.doubleclick.net/gampad/clk?id=60136231&iu=/4140/ostg.clktrk
> _______________________________________________
> Bitcoin-development mailing list
> Bitcoin-development@lists•sourceforge.net
> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
>
>

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 permalink raw reply	[|nested]
2013-11-08 19:49               ` Andreas M. Antonopoulos

  
From: Gregory Maxwell @ 2013-11-08 20:33 UTC (permalink / raw)
  To: Andreas M. Antonopoulos;  Bitcoin Dev

On Fri, Nov 8, 2013 at 11:49 AM, Andreas M. Antonopoulos
<andreas@rooteleven•com> wrote:
> Nicholas Weaver is reporting that pools have already started delaying
> blocks, something that hints at Selfish Mining, since Nov. 3rd.
> https://medium.com/something-like-falling/d321a2ef9317
>
> He dismisses other reasons for delayed block propagation.
>
> Any ideas on whether pools are already mucking around with block delaying
> tactics?
>
> I have no idea if this report is accurate or explained by some other issue
> in the network, does anyone here have a comment on this?

The BC.i timestamps have historically been inaccurate relative to my
local GPS clock measurements on my own nodes... but not just that, it
sounds like he's comparing block timestamps and bc.i numbers.

Thats insane, because it tells you the delay between when the miner
_started_ a work unit and when BC.i claims to have found it. Even
assuming bc.i's times were accurate and assuming miner clocks are
accurate (they are often not) you expect there to be be a gap because
it takes time to compute work, send it to the miner, search for a
valid nonce (an average of 2^31 hash operations, often executed
sequentially on a single core taking ten seconds or so on a lot of
hardware) and then return a result.

Evidence of selfish miners wouldn't be block timestamps (which are
inaccurate and controlled by miners anyways), or data on
blockchain.info (which is inaccurate and controlled by bc.i) ... but
the existence of an unusual amount of orphan blocks. High levels of
blocks are _necessary_ evidence of this sort of things, there can be
other explanations of high orphaning levels, but they're required here
and couldn't be faked.



 permalink raw reply	[|nested]
2013-11-07 18:28             ` Daniel Lidstrom
  2013-11-08 19:49               ` Andreas M. Antonopoulos

  
From: Peter Todd @ 2013-11-15 10:58 UTC (permalink / raw)
  To: Daniel Lidstrom;  Bitcoin Dev, webmaster, webmaster

[-- Attachment #1: Type: text/plain, Size: 2439 bytes --]

On Thu, Nov 07, 2013 at 11:28:52AM -0700, Daniel Lidstrom wrote:
> Hey Peter, something seems wrong with your above analysis: I think a miner
> would withhold his block not because it leads to a greater probability of
> winning the next one, but because it increases his expected revenue.
> 
> Suppose a cabal with fraction q of the total hashing power is n blocks
> ahead on a secret branch of that has mined r_tot coins, and let r_next be
> its next block's reward.  If the cabal chooses not to broadcast its secret
> chain until at least the next block, its expected revenue after the next
> block is found is
> 
> (1 - (1-q)^(n+1))*(r_tot + r_next)
> 
> If it does broadcast, its expected revenue after the next block is found is
> 
> r_tot + q * r_next
> 
> If the cabal seeks only to maximize immediate revenue, then after a bit of
> algebra we find that it will withhold its chain if
> 
> q > 1 - ( 1 + r_tot / r_next )^(-1/n)
> 
> So if the cabal has just mined his first block off of the public chain,
> i.e. n = 1, and if the block reward is relatively stable, i.e. r_next =
> r_tot, then it needs q > 50% to profitably withhold, not the 29.2% you
> calculated.
> 
> From this formula we can also see that if the miner wins the race and
> withholds again, then he must grow q to compensate for the increase in
> r_tot, and any decrease in n.  So generally publication becomes
> increasingly in the cabal's interest, and secret chains will tend not to
> grow too large (intuition tells me that simulations using the above formula
> should bear this out).
> 
> This seem correct to you?

Remember how I started off by asking what was the correct strategy if a
miner wanted to get more blocks than their *competition*, not more
blocks in total. In some scenarios that strategy is the one that
maximizes returns, such as the case when you make your returns from
transaction fees, especially without a blocksize limit restricting how
many fee paying transactions you can stuff in your blocks. It's not
correct to say the cabal is trying to maximize immediate revenue.

As for the length of those secret chains, at every step you of course
want to weigh the value of the blocks you have found against the risk
that someone else catches up, and when it makes sense, publish some or
all.

-- 
'peter'[:-1]@petertodd.org
0000000000000000b4ff49cd2cad865d6cbca99828987a02f3d5f41067eab00a

[-- Attachment #2: Digital signature --]
[-- Type: application/pgp-signature, Size: 685 bytes --]

 permalink raw reply	[|nested]
2013-11-06  5:33 [Bitcoin-development] we can all relax now kjj
                   ` (3 preceding siblings ...)
  2013-11-06 22:19 ` Jouke Hofman

  
From: E willbefull @ 2014-05-10 11:05 UTC ( / )
  To: kjj;  Bitcoin-development



I've created a simulation framework called simbit to simulate the selfish
mining attack, though it is general enough to simulate any p2p network. I
even put together a rough simulation of MinCen. The goal is to be fun/easy
to rapidly prototype protocols and strategies, and visualize them. It's
written in javascript, so it can be demoed in the web browser or run on
Node.

It's still in early alpha and a lot of things are missing.

https://github.com/ebfull/simbit

https://bitcointalk.org/index.php?topic=603171.0

Feedback is appreciated!


On Tue, Nov 5, 2013 at 10:33 PM, kjj <bitcoin-devel@jerviss•org> wrote:

> One of the things that really gets me going is when someone devises a
> model, tests it against itself, and then pretends that they've learned
> something about the real world.
>
> Naturally, the Selfish Mining paper is exactly this sort of nonsense.
> Their model is one with no latency, and one where the attacker has total
> visibility across the network.  An iterated FSM is not a suitable
> simulation of the bitcoin system.  The bitcoin network does not have
> states, and to the extent that you can pretend that we do, you can't
> simulate transitions between them with static probabilities.
>
> The authors understand this deep down inside, even though they didn't
> work out the implications.  They handwave the issue by assuming a total
> sybil attack, and in true academic spirit, they don't realize that the
> condition necessary for the attack is far, far worse than the attack
> itself.
>
> Greg said he'd like to run some simulations, and I'm thinking about it
> too.  Unfortunately, he is busy all week, and I'm lazy (and also busy
> for most of tomorrow).
>
> If neither of us get to it first, I'm willing to pitch in 1 BTC as a
> bounty for building a general bitcoin network simulator framework. The
> simulator should be able to account for latency between nodes, and
> ideally within a node.  It needs to be able to simulate an attacker that
> owns varying fractions of the network, and make decisions based only on
> what the attacker actually knows.  It needs to be able to simulate this
> "attack" and should be generic enough to be easily modified for other
> crazy schemes.
>
> (Bounty offer is serious, but expires in one year [based on the earliest
> timestamp that my mail server puts on this email], and /may/ be subject
> to change if the price on any reputable exchange breaks 1000 USD per BTC
> in that period.)
>
> Basically, the lack of a decent network simulator is what allowed this
> paper to get press.  If the author had been able to see the importance
> of the stuff he was ignoring, we wouldn't be wasting so much time
> correcting him (and sadly the reporters that have no way to check his
> claims).
>
> https://bitcointalk.org/index.php?topic=324413.msg3495663#msg3495663
>
>
>
>
> ------------------------------------------------------------------------------
> November Webinars for C, C++, Fortran Developers
> Accelerate application performance with scalable programming models.
> Explore
> techniques for threading, error checking, porting, and tuning. Get the most
> from the latest Intel processors and coprocessors. See abstracts and
> register
> http://pubads.g.doubleclick.net/gampad/clk?id=60136231&iu=/4140/ostg.clktrk
> _______________________________________________
> Bitcoin-development mailing list
> Bitcoin-development@lists•sourceforge.net
> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
>