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@klk
35,668 sats stacked
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0 sats \ 0 replies \ @klk OP 4 Jun \ parent \ on: Are you comfortable with Bitcoin's security model? AskSN
Well there is no problem yet. And there might be better solutions. Let' see!
The world isn't a 0 sum game. And 1 sat from a person with 100 ₿ appreciates exactly as fast ast 1 sat from a person just owning 1 sat.
And gives us everyone a way to escape a broken system. Tools don't need to be perfect, just better than everything else available at the time.
Bitcoin is being used to move purchasing power between very poor countries where the option before was paying 50% between taxes and Western Union fees (or whatever company).
Of course already wealthy people can potentially buy more pieces of any tool. But I would argue that in this case, Bitcoin is way more important and benefitial for the poorest. Rich people can choose where they live and have a lot of options to preserve their wealth. Poor people don't.
You could say a tool that purifies water is unfair and evil because rich people can buy lots of those devices. But in reality, having access to clean water is not really a big problem for them to begin with, whereas for poor people it can be a life changer.
I appreciate you sharing your perspective, but I think we're looking at very different interpretations of Bitcoin's history and design.
The technical concerns I raised about mining economics and security budgets are based on Bitcoin's current implementation and well-documented game theory. When I mention potential vulnerabilities from shrinking security budgets, I'm referring to established economic models that many researchers have analyzed - not claiming Bitcoin was intentionally designed with flaws.
Regarding the historical events you mention - while financial scandals like Mt. Gox and 1MDB certainly happened, the connections you're drawing to Satoshi seem highly speculative. The blockchain is transparent, so if there were clear evidence of the transactions you describe, it would be independently verifiable by anyone.
My original concern remains focused on the practical question of Bitcoin's long-term security model as block subsidies continue halving. Whether that's addressed through higher fees, protocol changes, or other solutions is an open question that deserves serious technical discussion rather than speculation about past conspiracies.
The math around security economics isn't about malice - it's about ensuring Bitcoin remains secure as its incentive structure evolves over the coming decades.
Because Satoshi never intended for PoW to be the end-all be-all solution to the double spending problem. How could anyone believe that a cypherphreak trying to implement a workaround to totalitarian power would create something that gives the most money to the most powerful. It's the exact opposite of decentralized (aka p2p). Just ask yourself, does this benefit peers in a p2p network? If the answer is no, then it is not what Satoshi intended. Satoshi posted a lot about Proof of Stake and Web of Trust, terms that he repeatedly noted had novel definitions. He defined proof-of-stake as the hash of your stake in a given system. Your participation. In a txting app, it's your conversations. Where there exists public and private data. Public data is that which can be agreed upon by other actors (generals), such as your name and phone number and length of time online. Private data is the content of the texts between two parties. If encrypted in an append only hashed timechain, that content can be used to do one-way authentication and signing, which is very useful for circumventing surveillance. This concept can be applied to any p2p app, such as a Bitcoin ledger. Once the initial network is generated and agreed upon using proof of work, you no longer need to use PoW to ensure byzantine consensus, or perhaps it is not needed at all, if the network is agreed upon in some other way, perhaps by wide publication of the genesis block. How can anyone mention "$100k per transaction fees" as being logically sound? Obviously that is not how Bitcoin is supposed to work. How does that facilitate "probably there will always be miners willing to accept zero fee transactions" from the whitepaper? Remember the difficulty is auto adjusting. Obviously everything should be auto adjusting to facilitate all beneficial transaction types. Miners should only be eligible for reward when they have a block that contains sufficient diverse attributes defined such that they facilitate the network goals. Goals like micro transactions, large cheap transactions, time-stamping documents, encrypted communication, fast tx for messaging apps, proof of replication for archival purposes, reputation/reviews for spam/DOS prevention, distributed p2p network health, etc... When Satoshi wrote one-cpu-one-vote he proffered that as an alternative to one-IP-one-vote in order the prevent large orgs buying up many IPs and getting a disproportionately high voting power. The system should be designed to distribute the wealth and power fairly to each person and use this distributed network to disincentivise concentration of power. Why are we worried about Cybill attacks? Doesn't the timechain automatically buffer against them? Oh look, here's a transaction signed by this address with a prior sequence (block) number and a prior time, sent from these coins, to recipientX, now here's another transaction spending the same coins but with different attributes. Why would anyone do that in good faith? If only we had a distributed network that could broadcast information about such haxxor attempts to prevent them from being performed secretly. Oh, we do? Why isn't it being used? Satoshi said the network would ignore invalid transactions automatically, so no need to track bad actors. This is generally true, unless there is a huge state level actor doing a Cybill attack and rewriting a long chain of blocks. Well, this is easily preventable because why did all of the Western hemisphere not hear about any of the last 20 blocks then all the sudden everyone else is spamming us with 20 blocks different from our 20 blocks?? If there is not already coded alarms/logs for such anomalies, then the system was designed to facilitate them. so... is Bitcoin designed to facilitate theft?
Thanks for the thoughtful response.
The 100k transaction fee scenario was in sats, not USD. It's basic math about what would be needed to maintain current security levels if block rewards continue halving and the security budget shrinks relative to network value. The whitepaper's mention of "zero fee transactions" was written when block rewards were 50 BTC and the network was tiny. Economic incentives evolve.
On difficulty adjustment - yes, it adjusts to maintain block times, but it doesn't magically solve the security budget problem. If total mining revenue (subsidy + fees) becomes too small relative to what's being secured, the network becomes vulnerable regardless of difficulty.
The "Sybil attack" concern you mention is actually exactly what I'm worried about, but in reverse. When mining becomes unprofitable for honest actors, attackers can potentially acquire cheap hashrate (from miners shutting down) and reorganize the chain. Maybe it's enough to add a limit of how many blocks in the past can be rewritten. But that's not yet part of the consensus rules or Bitcoin client implementations.
Bitcoin isn't "designed to facilitate theft" - but any system with economic incentives can become vulnerable if those incentives break down. That's why this conversation matters.
That's sounds reasonable. I wonder why isn't there some kind of default in Bitcoin core for automatically setting that. Maybe because of the possibility of a long term disconnection between different parts of the world?
But let's leave that aside. Wouldn't you still think that miners protect all Bitcoin available anyway, because it becomes useless if you can't ever transact with it?
Even if you mined the block with your transaction yourself, evil miners could continue mining from the previous block and do it fast enough so that's the longest chain (even if it's just one block longer). For which the precious block wouldn't save you.
Its hard to determine the value that miners are protecting, the percentage of it that is a good enough security budget, and how this will evolve over time.
What's scary is that as of now, we have a rapidly decreasing security budget relative to the value of the network.
Maybe the tendency changes. Maybe we never stay below the real security threshold. I don't know.
Yes! With enough share of the total hashrate you can rewrite the whole blockchain. Until before your wallet got its funds. Or until the Genesis block if you will (given enough time).
Apart from being able to block any transactions you try to make (way easier and equally harmful for that wallet).
I'm not saying otherwise.
There's a difference between acknowledging a possible problem and a call to action. The Bitcoin network is and will be secure in the medium term. And maybe this problem does not even happen in the future. But denying it (or at least the possibility of it) will not make it go away. I'd rather be aware and prepared.
Sure, but why didn't Satoshi choose PoW that CPUs or GPUs could already do efficiently back then? Because that would give some countries and companies with huge datacenters the possibility of attacking Bitcoin when it was still wearing diapers.
If at some point ASICs that consume more than X W/Th are being disconnected because they're no longer profitable, and someone can get access to those for very cheap, there could be more hashrate in machines of X+1 W/Th laying around than in the network. And if by then the cost of an attack is just 10x of the security budget, and the security budget does not even reach 0.1% of what's protecting, it's simple math for someone to do an attack for profit or just reckless to “end” Bitcoin.
It's better explained here: https://www.youtube.com/watch?v=0bUpF0wJrxo
That's a weak argument. There are a lot of possible attacks. A double spend that only affects someone and benefits the miner wouldn't harm the network much. A government concentrating huge amounts of hashrate and only mining OFAC compliant transactions, and ignoring blocks from other miners, is another example. And those attacks can be performed without having any Bitcoin at all. So, no, “trust” is not a solid defense strategy.
Sorry for the gaslighting, definitely not intentional. I want to be proved wrong and to learn.
The self-balancing part has a tradeoff. Less total hashrate, once ASICs have been manufactured, means that there's a lot of supply of powerful tools to attack Bitcoin laying around.
From another comment:
[...] leaves a lot of unprofitable ASICs for sale at very low prices. Something like having a lot of guns to defend something but stopping to pay the security guards. Some might stay out of conviction or whatever. But only from the ones that have the capacity to work for free. And now there are a lot of guns from the ex-security guys being sold for peanuts in the streets. It's the same guns used to protect than to attack.
I get you, but the incentives are still weird in that case.
Say Strategy₿ is that large institution that mines at a loss for supporting their profitable activities (if they even have some by then). They would be tempted to prioritize their transactions or de-prioritize/block others. They want to protect their stuff, but would then be one of the few large institutions able to subsidize a large hashrate for the network. And since they're doing it at a loss, they wouldn't care about missing out some fees on their competitors transactions.
It could be that mining is operated at a loss. But that hurts the decentralization of the network, and leaves a lot of unprofitable ASICs for sale at very low prices.
Something like having a lot of guns to defend something but stopping paying the security guards. Some might stay out of conviction or whatever. But only from the ones that have the capacity to work for free. And now there are a lot of guns from the ex-security guys being sold for peanuts in the streets. It's the same guns used to protect than to attack.
Bitcoin price growth follows a power law (as any network) but the mining rewards decrease exponentially. A power law grows slower than an exponential so in practice the security budget goes down with time (not considering fees).
But If you check the calculations from the post, they are made in Bitcoin and as a percentage of the total network. So it's independent from USD price. Miners make ~0.8 % of the total Bitcoin supply yearly. If that number in the future becomes 0.1 % or 0.01% (all purely in Bitcoin terms) it would be equivalent to having a castle protected by less and less security guys.
If you consider the Bitcoin price in USD, it might look like the security budget grows, but so does the potential “loot” for attackers, because the Bitcoin to “steal” is now more valuable. That's why it should be measured as a percentage of the total supply, or at least as an absolute value in Bitcoin terms.
This might not be the best chart but should be good enough to see the trend: https://dune.com/niftytable/bitcoin-security-budget
Maybe, but that's also not for sure. Unprofitable activities have a tendency to disappear. And for example mining to generate heat even if you got the ASICs for free would only have an maximum theoretical efficiency of 1 W of electricity to 1 W of heat whereas an air conditioner can achieve 3-5x that (see https://en.wikipedia.org/wiki/Coefficient_of_performance). So it would still be a sacrifice to use it for heating in the best case.
And the problem goes a bit deeper. When a lot of miners are unprofitable, that creates an opportunity and an incentive for attackers. It's pretty well explained in https://www.youtube.com/watch?v=0bUpF0wJrxo
And if it's sustained by large institutions and nation states, that's even worse. They could secure the network but implement arbitrary conditions for accepting transactions. Since they're doing it at a loss already so someone paying 2x fees won't make them change their mind about including your transaction or not. If their competitor is making a large transaction they don't like they could try to block it no matter how much fees it pays.
So I would say that miner profitability is key for keeping the network decentralized and secure. The only entities that have been able historically to sponsor large unprofitable things for sustained periods of time (e.g., wars) are nation state through taxation theft. So let's hope that's not what we wish for in this case xD
Or, something even cooler, some kind of script that uses a philanthropist coins to do the same. Imagine someone with millions of coins, ahem Satoshi, sponsoring the security budget in a way that we all know that there's enough funding for the next N blocks and others can add their donations to extend it.