| ▲ | roenxi 10 hours ago |
| The Eyal & Sirer paper is pretty interesting - they basically point out that there is actually some game theory involved in when miners should reveal that they mined a block to compete most effectively with their fellows. If a pool can set up a situation where they mine a block and wait X seconds to reveal it, they can force other miners to waste X seconds of has power and gain an advantage. It looks like a result with complex implications - eg, maybe making it impossible for new miners to set up unless they have a meaningful advantage in operating costs instead of just parity with the entrenched players. It is hard to tell because market reality is a mess but if there is a meaningful strategic choice to be made beyond simply announcing a block when it is mined then there is a lot of room for weird equilibriums even if the paper's specific analysis turns out to have flaws. |
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| ▲ | jcfrei 17 minutes ago | parent | next [-] |
| Take a look at the recently mined blocks. there are some miners that very frequently mine two blocks within quick succession, like just now for example:
Block 930256: https://www.blockchain.com/explorer/blocks/btc/930256
Followed by block 930257: https://www.blockchain.com/explorer/blocks/btc/930257
The second block is usually almost empty. |
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| ▲ | mvkel 10 hours ago | parent | prev | next [-] |
| Isn't this the same thing as saying "if everyone just agrees that a dollar bill is actually just a piece of paper, USD becomes worthless"? Albeit at a smaller scale |
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| ▲ | palata an hour ago | parent | next [-] | | That's a good question, but it is different. The equivalent would be "if everyone just agrees that a bitcoin is worth nothing, then it is worth nothing". I don't know if I have a good comparison here, but maybe something like "if the bank keeps your money for a little longer before validating your transaction, they can use your money for a little longer and make more money from it". Of course if your bank says that a transaction takes 1 year, you will go to another bank. But if they say it takes a day... | |
| ▲ | ycombinatrix 9 hours ago | parent | prev [-] | | I don't think it is the same thing. Everyone agrees that mining the next block is valuable. | | |
| ▲ | cheschire 9 hours ago | parent [-] | | Unless they didn’t. There’s nothing inherently valuable about crypto beyond what value people assign to it in their minds. | | |
| ▲ | palata 10 minutes ago | parent | next [-] | | But that's irrelevant to the question above. The question asks "isn't [this attack] the same as saying that if everybody agrees that the USD is worthless, then it is worthless?". The answer is "no, it's not the same". The attack does not require everybody to agree that the bitcoin is worthless. Obviously if everybody agrees that the bitcoin is worthless, then it is worthless. But that's a separate topic. | |
| ▲ | krupan 9 hours ago | parent | prev | next [-] | | Same with all money. Please research more before parroting this argument. You are not the first person to think of it. | | |
| ▲ | jfengel 8 hours ago | parent | next [-] | | Fiat money has a difference: an army. It is issued by a government which has the legitimate right to demand taxes, paid in their currency, and deprive you of life and liberty if you don't. Ultimately the populace could repudiate the whole social contract, which is also just consensus, but that's a far bigger deal than mere money. | | |
| ▲ | nradov 8 hours ago | parent [-] | | Well to be pedantic, in the USA at least the value of the dollar is largely maintained by civilian law enforcement rather than the military. If you incur a tax liability and fail to pay your debt in US dollars then eventually the IRS will seize your assets and auction them off to settle the debt. Due to the Posse Comitatus Act, the Army doesn't get involved. |
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| ▲ | enaaem 8 hours ago | parent | prev | next [-] | | The true value of (fiat) money is derived from the fact that contracts are denominated in that money and those contracts are enforced by a central authority with guns. No other assumption is needed in financial engineering. | |
| ▲ | cheschire 9 hours ago | parent | prev | next [-] | | GP was arguing against GGP’s point and I was simply pointing out that the argument was hollow. What are you referring to with “research more”? | | |
| ▲ | krupan 8 hours ago | parent [-] | | Hmm, maybe I wasn't following the thread very well? Many people like to discredit Bitcoin by saying it's only worth is what people decide it is. If that's not what you were trying to do then I apologize. | | |
| ▲ | cheschire 7 hours ago | parent [-] | | I don’t discredit any crypto based solely on its ability or inability to fulfill debts, public and private. But I do wonder if the abstract nature of it will forever hinder its ability to do so universally. I’m also interested why Bitcoin Cash wasn’t more successful after the fork. | | |
| ▲ | yownie 6 hours ago | parent [-] | | >I’m also interested why Bitcoin Cash wasn’t more successful after the fork. you mean besides it being run by a bunch of crooks and scam artists like CSW? | | |
| ▲ | cheschire 14 minutes ago | parent [-] | | I wasn’t actually asking, but making a point. Thanks for helping spell it out though! |
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| ▲ | nradov 8 hours ago | parent | prev | next [-] | | It's always hilarious when people who are unclear on the basics themselves tell other to "research more". I suppose it's the Dunning-Kruger Effect. | |
| ▲ | TylerE 9 hours ago | parent | prev [-] | | False. Gold and silver have intrinsic value beyond their use as currency. | | |
| ▲ | jfengel 8 hours ago | parent | next [-] | | True, but only a minuscule fraction of it is used for that purpose. If that were the sole source of its value, it would be worth pennies per once. | | |
| ▲ | roenxi 8 hours ago | parent | next [-] | | https://pse-info.de/en/scale/price - gold doesn't stand out, there are a few similar ones (Rhodium/Palladium/Iridium/Platinum). I haven't checked, but we'd probably find the gold price sits in a boring-looking distribution of the prices of other elements. Probably an exponential or something that could be mistaken for it. https://en.wikipedia.org/wiki/Prices_of_chemical_elements if you prefer wikipedia. If it wasn't radioactive, poisonous and pyrophoric people would probably all just leap into the Neptunium market. | |
| ▲ | TylerE 7 hours ago | parent | prev [-] | | That is obviously false on it's face. If it were only worth pennies an ounce, numerous industries wouldn't be paying what they do for it. The fact that many industries value it at several thousand dollars an ounce is self-evident from their continued use of it. | | |
| ▲ | patrickthebold 6 hours ago | parent [-] | | This is interesting to think about: For gold I'd say the demand is coming from both industries and from people who want it as a store of value. If it was only used as an industrial chemical, then surely the price would drop because there would be less demand. Some bitcoin advocates will talk about how useful it is as a currency, and I wonder how much bitcoin is actually used for purposes other then to hope you can sell it to someone else for more than you paid. | | |
| ▲ | TylerE 5 hours ago | parent [-] | | If the price dropped, it would be even more in demand and reach equilibrium. Gold has several unique mechanical properties, being the most corrosion resistant metal and one of the most electrically conductive, as well as being able to be flattened into extremely thin sheets and drawn into extremely fine wire. |
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| ▲ | llmslave2 8 hours ago | parent | prev [-] | | Not for most people. They aren't going to smelt it down and use it to build electronics or jewelry. For most people the value is what they can receive for it in trade. Which holds for all money. |
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| ▲ | ycombinatrix 4 hours ago | parent | prev [-] | | Okay, fine. Everyone involved** agrees that mining the next block is valuable. |
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| ▲ | copirate 3 hours ago | parent | prev [-] |
| > If a pool can set up a situation where they mine a block and wait X seconds to reveal it, they can force other miners to waste X seconds of has power and gain an advantage. How is it wasted if they work on the current chain? If they find a block during those X seconds, they'll propagate it before the waiting pool does. The waiting pool will then just lose the revenue from the block they put on hold. They're the ones wasting mining time when that happens, while the others never do. |
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| ▲ | emil-lp 2 hours ago | parent | next [-] | | If you mine a block without revealing it, not only are you the only one that can mine the next block after that, but everyone is mining on the "wrong head". There's of course the risk that someone finds a different head in the meantime, but otherwise, you waste competitors' resources, while you get an advantage on the next block. | | |
| ▲ | copirate an hour ago | parent [-] | | They are not mining on the wrong head. They are mining on the current head. If they find a block it will be accepted as the new head and the withheld block will be rejected, so it's not wasted mining time at all. | | |
| ▲ | palata an hour ago | parent [-] | | Not an expert, but I have to thoughts: 1. They don't have to wait until another miner finds a block, they can just wait "for some time" and then release their block. All that time gives them the edge for the next block. 2. My understanding is that if two different blocks are found concurrently for the same head, then the network waits for the next block to select which "new head" is accepted. I.e. when there are competing chains, the longer chain wins. So I could imagine that a strategy could be to wait until some other miner announces their block and release yours precisely at that time, hence creating two competing chains. But you presumably have an edge because you have already been mining for a while on top of your block. | | |
| ▲ | copirate an hour ago | parent [-] | | There's no edge. Having spent time mining in the past doesn't increase your odds of finding a block in the future. | | |
| ▲ | adwn 38 minutes ago | parent [-] | | The idea is that you can start with the next head earlier than all the others, giving you an edge in being the first to find the next block. | | |
| ▲ | copirate 31 minutes ago | parent [-] | | But what do they gain by doing that? What's the edge? Starting earlier doesn't give you any advantage. | | |
| ▲ | palata 17 minutes ago | parent [-] | | > Starting earlier doesn't give you any advantage It's a race. Starting earlier obviously gives an advantage?! | | |
| ▲ | copirate 13 minutes ago | parent [-] | | No it's not a race, it's a lottery. It would be like saying you've an edge if you start earlier at the roulette. | | |
| ▲ | palata 7 minutes ago | parent [-] | | I think you're confused. In a lottery, the more tickets you buy, the higher your chances to have the winning number. If we played with a roulette and said "the goal is to be the first to have a winning number at the roulette" and I could try 50 times before you started, obviously I would be more likely to win our game, wouldn't I? |
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| ▲ | RealityVoid 2 hours ago | parent | prev | next [-] | | Right, but the odds of this happening is small(ish) - I'm certain there is a sweet spot for witholding time. If they don't find a block within the time interval, then effectively all the work for that time is "wasted" by the other participants since it could not have been put on the chain anyway AND the witholder has a headstart of a couple of seconds searching for a new block. | | |
| ▲ | copirate an hour ago | parent [-] | | Wasting time would mean not receiving the rewards if they find a block. But that's not the case here. If they find a block within the time interval, they get the rewards (and the withheld block is discarded). |
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| ▲ | yellow_lead 2 hours ago | parent | prev [-] | | I might be wrong but I think it's like this.. A finds a block after 1 minute, then powers off and waits for another minute. They reveal the block after 2 minutes. B searches for the block for 2 minutes. After 2 minutes, A has used 1 minute of their compute, and B has used 2. | | |
| ▲ | copirate an hour ago | parent [-] | | But the time spent by B is not wasted. If they find a block between minute 1 and 2, their block will be accepted, and A just lose the reward of the block they found. | | |
| ▲ | palata 12 minutes ago | parent [-] | | When you reveal a block, it's not accepted instantaneously. When two competing blocks are revealed "roughly at the same time", it ends up in two competing chains. If B finds a block between minute 1 and 2, they start working on their competing chain, but A is already working on theirs. And A had a headstart because it started working on it somewhere between minute 1. So it's more likely that A's fork wins the race in the end. |
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