Satoshi wrote this in the original Bitcoin paper, which logic I think still holds today:
If a greedy attacker is able to assemble more CPU power than
all the honest nodes, he would have to choose between using it
to defraud people by stealing back his payments, or using it to generate
new coins. He ought to find it more profitable to play by the rules, such
rules that favour him with more new coins than everyone else combined, than
to undermine the system and the validity of his own wealth.
The whole Game Theory element the bitcoiners keep throwing around surprises me the most. It's not as in you can apply game theory like that in practice. It also assumes rational players. People are anything but rational. Game theory works in numbers, but not on an individual level like that. Besides, there are plenty of profitable avenues if you control 51%.
All models are wrong, but some are useful. What is the chance that there is an irrational player that spends a lot of money only to destroy bitcoin? This kind of player has to be politically motivated, not just simply irrational.
Besides, there are plenty of profitable avenues if you control 51%
Like what? Basically you can do a few things:
1) Mine all the current coins
2) Double-spend
3) Not confirm any transactions
All of them are harmful to the network. However, given that it is not an actual single entity that controls 51%, I wouldn't be worried much about anything except 1)
Game theory is not even a useful model here. There are plenty of rational players who would desire the downfall of Bitcoin.
The game theorists assume at the outset that everyone involved's primary financial interest is in a valid working Bitcoin network. However, banks and Western Union would not desire competitors for international currency transfer. Governments may not want currencies they can't control. The Russian mafia may want to exploit it for short-term gain or launder money. And now that there's a single pool with >51% of the CPU power, the difficulty of a hostile takeover just went way, way down.
Before, a group would have to set up a massive amount of computing power in order to take it over, but now, taking over or disrupting Bitcoin is within the reach of non-technical entities like criminal organizations and the CIA. E.g., all the CIA has to do is threaten a few people and say "Insert this code so we can freeze the transactions of $VILLAIN_OF_THE_MONTH at any time." There's many more possibilities now.
There are plenty of rational players who would desire the downfall of Bitcoin.
Then game theory is pretty useful model. Players are rational, after all. Thats what's game theory is about.
Governments may not want currencies they can't control.
Makes perfect sense. But we're discussing 51% attack. Would a miner with 51% of hashrate willingly help a government(and why would he)?
Or, would a government simply try to legislate bitcoin out of existence? I would say that the latter is more likely than the former.
And now that there's a single pool with >51% of the CPU power, the difficulty of a hostile takeover just went way, way down.
Remember, it is not a single entity. It is a pool. And, in fact, ghash.io share is down to 39%.
all the CIA has to do is threaten a few people and say
I do agree with this point. One of the strongest points of bitcoin is decentralization. We should keep bitcoin as decentralized as possible. But I would say ghash.io having 51% is a minor obstacle.
Then game theory is pretty useful model. Players are rational, after all. Thats what's game theory is about.
Sorry, I wasn't clear enough. My argument is that the people citing game theory as a reason Bitcoin players had an incentive to avoid a 51%+ scenario kept assuming that all players wanted Bitcoin to succeed.
(However, as a former cognitive neuroscientist, I think it's mistaken to assume that people always act rationally. Check out the literature on the ultimatum game or anchoring effects in prospect theory (for which Kahneman got the Nobel prize) to see examples of people acting irrationally in a sytematic, biased way.)
Would a miner with 51% of hashrate willingly help a government(and why would he)?
Who said anything about being willing? My example suggested threats, which is way more likely than cooperation.
Remember, it is not a single entity. It is a pool. And, in fact, ghash.io share is down to 39%.
Yes, but the people running the pool have the keys to the kingdom as long the pool members don't know. So, more subtle perversion has a good chance of lasting a while, while gross manipulation is more likely to cause pool members to switch.
What is the chance that there is an irrational player that spends a lot of money only to destroy bitcoin? This kind of player has to be politically motivated, not just simply irrational.
Irrational in this context (game theory) means self-defeating, but only in the confines of Bitcoin. It doesn't mean insane in the common sense.
So you can very well be "politically motivated" and irrational in this regard.
I agree. I think one problem is that things like "enjoyment" aren't as easy to measure as income or profit. It's possible to say that hobbies are rational by arguing that the enjoyment of the hobby outweighs the cost. But then it's also possible to say that people are willing to game the system (and take a financial loss) because they get enjoyment out of gumming up the works, and that enjoyment is worth the loss.
exactly, another profitable avenue might be to sell out to the government to make bitcoin unstable. what's puzzled me most about bitcoin proponents is they think the US gov would sit idly by and just give up centralized control of the most powerful thing on earth.
There's obvious cases where this is clearly false, such as where the greedy attacker has a greater reward outside of and negatively impacted by the bitcoin ecosystem. Capturing most of the rewards of the bitcoin ecosystem may then be worth less than preventing the bitcoin ecosystem from damaging the actors other interests.
"Because some men aren't looking for anything logical, like money. They can't be bought, bullied, reasoned, or negotiated with. Some men just want to watch the world burn."
Although this is the weirdest, most out-of-place comment I have seen in a while, my life has taught me that "it's all about money" is the safest position to take in almost any scenario. That is potentially a product of our cultural and economic structure, but I have observed it to be true worldwide; I don't think we are wrong in general.
I feel sorry for you then. First, you can't understand what I meant, and, second, the basic life lesson is that money can't make you happy and feel accomplished (unless you're too primitive), but the lack of it, agreed, can definitely make you unhappy, so, it's not about hoarding as much dollar signs as possible, but it's about having enough not get unhappy and I think most of us here don't have the issue that most people around the globe have nowadays - I'm sure we're in the top 5% globally in terms of income. The whole vicious circle of greed never has a happy ending. In most cases, the inability to be happy is a mental problem, which separates the miserable mass from the blissful few. Don't get me wrong, I have this condition as well, but I've acknowledged my issues and I'm working to address them. All the wisdom of the ages can be compressed in just two words: "memento mori" or in the more accessible form for the masses: "carpe diem". Anyway, outside of the basic well-being, real happiness is helping our civilization advance a step ahead. An Instagram can make you more money than SpaceX, for example, but launching which will make you happier and more accomplished? Which one will put your name in the history books and leave no doubt that your life was meaningful.
I think that it's a correct position now, but probably temporary in some sense. We didn't start with a cash system, and we may not end up with one, but for this moment in time it's a useful way to measure value/wealth.
Ideally one would think "it's all about happiness" would be the goal, not a measure of asset worth, but rather contentedness perhaps? It doesn't take much thinking to imagine why we can't function in that way, however.
People can decide to do an attack on Bitcoin for reasons other than money: fun, fame, politics, cyberterrorism, etc. Although money is everything today, it won't be tomorrow if we really want to be something meaningful happening in this civilization. The current order does not foster higher values that have no economical value.
Often people don't like the truth in their face. :) I'm sure most of the richest techies didn't have money as their primary driver. Money always comes as a bonus for a job well done.
Comments
Satoshi wrote this in the original Bitcoin paper, which logic I think still holds today:
The whole Game Theory element the bitcoiners keep throwing around surprises me the most. It's not as in you can apply game theory like that in practice. It also assumes rational players. People are anything but rational. Game theory works in numbers, but not on an individual level like that. Besides, there are plenty of profitable avenues if you control 51%.
All models are wrong, but some are useful. What is the chance that there is an irrational player that spends a lot of money only to destroy bitcoin? This kind of player has to be politically motivated, not just simply irrational.
Like what? Basically you can do a few things:
1) Mine all the current coins
2) Double-spend
3) Not confirm any transactions
All of them are harmful to the network. However, given that it is not an actual single entity that controls 51%, I wouldn't be worried much about anything except 1)
Game theory is not even a useful model here. There are plenty of rational players who would desire the downfall of Bitcoin.
The game theorists assume at the outset that everyone involved's primary financial interest is in a valid working Bitcoin network. However, banks and Western Union would not desire competitors for international currency transfer. Governments may not want currencies they can't control. The Russian mafia may want to exploit it for short-term gain or launder money. And now that there's a single pool with >51% of the CPU power, the difficulty of a hostile takeover just went way, way down.
Before, a group would have to set up a massive amount of computing power in order to take it over, but now, taking over or disrupting Bitcoin is within the reach of non-technical entities like criminal organizations and the CIA. E.g., all the CIA has to do is threaten a few people and say "Insert this code so we can freeze the transactions of $VILLAIN_OF_THE_MONTH at any time." There's many more possibilities now.
Then game theory is pretty useful model. Players are rational, after all. Thats what's game theory is about.
Makes perfect sense. But we're discussing 51% attack. Would a miner with 51% of hashrate willingly help a government(and why would he)?
Or, would a government simply try to legislate bitcoin out of existence? I would say that the latter is more likely than the former.
Remember, it is not a single entity. It is a pool. And, in fact, ghash.io share is down to 39%.
I do agree with this point. One of the strongest points of bitcoin is decentralization. We should keep bitcoin as decentralized as possible. But I would say ghash.io having 51% is a minor obstacle.
Sorry, I wasn't clear enough. My argument is that the people citing game theory as a reason Bitcoin players had an incentive to avoid a 51%+ scenario kept assuming that all players wanted Bitcoin to succeed.
(However, as a former cognitive neuroscientist, I think it's mistaken to assume that people always act rationally. Check out the literature on the ultimatum game or anchoring effects in prospect theory (for which Kahneman got the Nobel prize) to see examples of people acting irrationally in a sytematic, biased way.)
Who said anything about being willing? My example suggested threats, which is way more likely than cooperation.
Yes, but the people running the pool have the keys to the kingdom as long the pool members don't know. So, more subtle perversion has a good chance of lasting a while, while gross manipulation is more likely to cause pool members to switch.
Players are rational, after all. Thats what's game theory is about.
Bitcoin players aren't rational. Karpeles stood to earn way more by not manipulating the market. He did so anyway and bankrupted his own company.
Game theory assumes all players are smart.
Irrational in this context (game theory) means self-defeating, but only in the confines of Bitcoin. It doesn't mean insane in the common sense.
So you can very well be "politically motivated" and irrational in this regard.
4) Only confirm transactions that give you large transaction fees, and disallow all others
Etc, etc.
I agree. I think one problem is that things like "enjoyment" aren't as easy to measure as income or profit. It's possible to say that hobbies are rational by arguing that the enjoyment of the hobby outweighs the cost. But then it's also possible to say that people are willing to game the system (and take a financial loss) because they get enjoyment out of gumming up the works, and that enjoyment is worth the loss.
exactly, another profitable avenue might be to sell out to the government to make bitcoin unstable. what's puzzled me most about bitcoin proponents is they think the US gov would sit idly by and just give up centralized control of the most powerful thing on earth.
There's obvious cases where this is clearly false, such as where the greedy attacker has a greater reward outside of and negatively impacted by the bitcoin ecosystem. Capturing most of the rewards of the bitcoin ecosystem may then be worth less than preventing the bitcoin ecosystem from damaging the actors other interests.
"Because some men aren't looking for anything logical, like money. They can't be bought, bullied, reasoned, or negotiated with. Some men just want to watch the world burn."
Like most Americans, you think it's all about money.
Although this is the weirdest, most out-of-place comment I have seen in a while, my life has taught me that "it's all about money" is the safest position to take in almost any scenario. That is potentially a product of our cultural and economic structure, but I have observed it to be true worldwide; I don't think we are wrong in general.
I feel sorry for you then. First, you can't understand what I meant, and, second, the basic life lesson is that money can't make you happy and feel accomplished (unless you're too primitive), but the lack of it, agreed, can definitely make you unhappy, so, it's not about hoarding as much dollar signs as possible, but it's about having enough not get unhappy and I think most of us here don't have the issue that most people around the globe have nowadays - I'm sure we're in the top 5% globally in terms of income. The whole vicious circle of greed never has a happy ending. In most cases, the inability to be happy is a mental problem, which separates the miserable mass from the blissful few. Don't get me wrong, I have this condition as well, but I've acknowledged my issues and I'm working to address them. All the wisdom of the ages can be compressed in just two words: "memento mori" or in the more accessible form for the masses: "carpe diem". Anyway, outside of the basic well-being, real happiness is helping our civilization advance a step ahead. An Instagram can make you more money than SpaceX, for example, but launching which will make you happier and more accomplished? Which one will put your name in the history books and leave no doubt that your life was meaningful.
I think that it's a correct position now, but probably temporary in some sense. We didn't start with a cash system, and we may not end up with one, but for this moment in time it's a useful way to measure value/wealth.
Ideally one would think "it's all about happiness" would be the goal, not a measure of asset worth, but rather contentedness perhaps? It doesn't take much thinking to imagine why we can't function in that way, however.
Care to elaborate on this?
People can decide to do an attack on Bitcoin for reasons other than money: fun, fame, politics, cyberterrorism, etc. Although money is everything today, it won't be tomorrow if we really want to be something meaningful happening in this civilization. The current order does not foster higher values that have no economical value.
I do not understand why kolev is being downvoted.Is it so hard for techies to get that there are people with motives other than money?Think different.
Often people don't like the truth in their face. :) I'm sure most of the richest techies didn't have money as their primary driver. Money always comes as a bonus for a job well done.