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but if they can find a new altcoin, if it's mining on the same algorithm as bitcoin sha-256,
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5.111111
5.222222
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and pretty soon they might be well on the way to taking over the network of that new fledgling altcoin or the altcoin that not many people mining on
N
4.833333
4.166667
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Female
because there are lots of altcoins out there and lots of people's mining power is limited.
N
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Female
there have been instances where other coins have kinds of attacks.
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i think there was one on terra coin.
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do you guys remember that? i think we talked about it on the show more than a year ago. yeah.
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there have been a few 51% attacks, but there haven't been that many
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in the entire cryptocurrency monopoly, unless i'm just not hearing about most of
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them. i would say probably they're not huge events anymore. i mean,
N
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what can someone do with a 51% attack is another question. it's not this big scary thing,
N
5
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but really the worst thing that they can do pretty much is do a double spend and then put that double spent coin into an exchange,
N
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get real bitcoin or real fiat from that and then it was actually a double spend in the exchanges out. or they buy a product with it and the product ships or something, but mostly it's exchanges.
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andreas, would you agree that's pretty much the worst thing one can do with a double spend attack or a 51% attack?
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well, yes. not only is that the misunderstanding that persists out there is that
N
4.333333
3.666667
4.583333
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Male
people can use this to steal money and they can't.
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3.5
3.9
4.3
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Male
you can do a double spend attack, you have to then either get a product shipped or an exchange withdrawal to happen for it to be valuable.
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however, you can also do a denial of service attack, which is probably more serious.
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denial of service attack against transactions or other mining
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pools in such a way as to maintain dominance over a double spend possibility or capability.
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so once you get 51% attack, you can use that to keep others from mining blocks
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to a point where you maintain that hashing power by starving them of reward.
N
3.578947
4.263158
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Male
you said the misconception is that people can use a double spend or a 51% attack to steal money.
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you're talking about like rewriting history, right? like if i have bitcoins in my bitcoin address, the idea, which is mistaken,
N
5.375
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Female
could literally roll back the blockchain and roll back history and take those bitcoins out of my bitcoin address and give it to themselves, right?
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well, no. not only that, but it has nothing to do with rolling back history. there's two aspects of that. first of all,
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you can't create a transaction which you don't have signing authority over whether you control 51% of the network or not, whether you can pull off 51% attack or not.
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you still can't control funds that you don't have signing authority or keys for.
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all you can do is spend your own funds and then after someone's exchanged those funds for something else, rewrite history and then spend those funds again
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and deprive the recipients of those funds from those funds. but you can't spend other people's funds or create transactions that are bogus or signed without having keys and things like that.
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so there's a big misunderstanding of exactly what you can do. however, the disruptive potential is there.
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keep in mind, though, that there's this big economy which is that
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the coins on which it is easy to do 51% attacks don't usually have monetary
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value that is worth doing a double spend attack, and most of these attacks is just being malicious and denial of service oriented,
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and the coins that do have value, especially bitcoin...
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it's not possible at the moment with was the hashing capacity that's out there.
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there's a reason for that. it's because the incentives are aligned to prevent you from doing that.
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first of all, a lot of people are watching so that when
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people's livelihood is threatened, this economy is threatened. so, people make a big fuss about it.
X
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the miners are incented to change pools and do things about it.
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and people notice when there is a double spend attack or a potential for a double spend attack.
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where it's most profitable to do one,
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it's hardest to do one and where it's easy to do an attack, it's not very profitable. so, that's one of the
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things that makes us, at least makes me look at 51% attacks as a very interesting theoretical possibility and something we
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need to be on the lookout for and be aware of the possibility.
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but at the same time, i don't consider it a practical
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threat to bitcoin as it is today, because i think that the market will always adjust to protect the value of the network.
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given that we think the decentralization is good and we think that it's necessary and positive in bitcoin mining,
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i've often wondered, what is centralization now relative to other times in the past?
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because, it seems like again, for many of the reasons that stephanie mentioned,
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simply put, she isn't a specialist in it. and so, there's this natural drive for the people who stay in as the pie stays the same,
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are the ones that are able to continue to increase their productivity
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relative to the rest of the network. that's a very elite group of people.
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so, the question here is basically just, are we as bad as we've ever been? are we half as bad as we've ever been?
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what do you think the state is
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of mining centralization now, relative to other times in bitcoin's history?
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it's a moving target because the thing is that, it ebbs and flows and it goes in cycles.
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you have cycles of centralization and then you have cycles of de-centralization. the overall trend is towards centralization.
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you can look at the stats. for example, if you look at mining stats,
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places like blockchain info or other places that contain
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mining statistics. you can look at the percentage of blocks being discovered by various mining pools and see how that changes over time.
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where do we see mining going from here?
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the natural lead in, i think actually, is to talk about bitshares because it is
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100 rotating delegates, no mining proof of work whatsoever,
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10 second transactions. and so, they're the example of a centralization for those performance increases and for those usability benefits
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and that's a good thing from one perspective in that it provides this stuff,
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but it also is, in theory, more centralized because there are only a maximum of 101 participants actually, having a say at any given time.
N
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well, if we're going to talk about that, we could also talk about just proof of stake.
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100% proof of stake coins which, really interesting,
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there are some people who are opposed to them.
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one of the biggest criticisms that i've seen is the so called, nothing at stake problem.
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as i understand it, there's no cost to a proof of stake forger or miner
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to mining on different blockchains. if they wanted to mine on an alternate blockchain, they can do that.
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and they can do it on as many as they want with no cost.
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whereas with a proof of work currency, there is a cost to mining on alternate blockchains.
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okay. so here's a question stephanie, if you had reasonable amount of pure coin or whatever, would you have continued mining
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or would you have stopped at basically the same point? was it about profitability or was it about inconvenience of using mining?
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at the time when i was mining, there really were no proof of stake coins except pure coin, which is only half proof of stake. it's half proof of work. there were no 100% proof of stake coins at that time.
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so, i didn't really have the option of just using 100% proof of stake coin,
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but yeah. a proof of stake coin to forge it or mine it, all you have to do is hold some amount of the coin and have the client open.
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that's just not as fun. there's no engineering involved.
H
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so, the work makes it fun. the work, that's part of the enjoyment of
H
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the process? it was a curiosity thing. i think,
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i guess it's an accomplishment, whereas this is really just more like, "hey, i turned on the oven."
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i just love the smell of burnt capacitors in the morning.
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[crosstalk] yeah. that's the question is, does that actually add value? is that part of what's adding value to bitcoin? because i mean, again, like mining, people think about it, like
U
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Male
mining is the process of processing transactions and that's just not true. mining is the process of creating a number
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Male
that is unique to you based on the amount of work that you're putting in essentially.
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and then, that number is compared against everybody else in the space, essentially. it's a gross simplification.
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i would disagree with that. i think there's a big misunderstanding
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between means and ends in mining.
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it's a reward system. the goal of mining
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is to provide security and verification of transactions for the network.
N
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that is the function of mining. it verifies transactions, its aggregates transactions into blocks
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and it acts as a gatekeeper to access to the blockchain, so that the things that are recorded in the blockchain are verified.
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the new coins that are created,
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transaction fees, that's not the goal of mining. that's not why mining exists to just create new coins.
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mining exists in order to provide security in the form of a decentralized clearing house through consensus.
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the reward system is there to encourage that behavior in a way that supports the network
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in the end. it's often easy to confuse the means with the end.
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based on the statistics that i'm looking at here
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