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Main => General Discussion => Topic started by: Rune on November 12, 2014, 03:59:41 pm

Title: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Rune on November 12, 2014, 03:59:41 pm
Turns out the attack isn't possible. The assumption that miners can always mine empty blocks that the main chain has to accept is mistaken. Developers would release a full node update in response that rejects empty blocks based on some criteria of  and there would be a network partition if this was ever attempted.

The good news is that it means no one can perform this attack, so we won't be at risk by some competitor or mining pool creating a bitcoin 2.0 blockchain that destroys us. Unfortunately this also means that bitcoin will probably never be able to upgrade its consensus algorithm away from POW, and will have to become irrelevant eventually, which I think is a shame.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: nomoreheroes7 on November 12, 2014, 04:11:04 pm
I couldn't bring myself to read all of that...but what I did read sounds incredible.

You have a keen mind, Rune.  +5%
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: luckybit on November 12, 2014, 04:32:21 pm
It looks like a hostile takeover.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: fluxer555 on November 12, 2014, 04:45:19 pm
Holy shit.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: xeroc on November 12, 2014, 04:51:02 pm
Quote from: luckybit on November 12, 2014, 04:32:21 pm
It looks like a hostile takeover.
Yeah .. but I like it ...

let me read it again more carefully
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: biophil on November 12, 2014, 04:53:09 pm
Rune, you crazy guy, this looks like a very clever idea, but my gut tells me it would never work. I'll see if I can convince my gut to tell me why it's so pessimistic, but first a question: When a mining pool publishes an ERB, do they collect the normal bitcoin block reward for it as well as the future reward they get at exodus?
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Ben Mason on November 12, 2014, 04:55:29 pm
Mind blowing.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: fluxer555 on November 12, 2014, 05:05:27 pm
I wonder at what lengths Bitcoiners would do to stop pools that are mining ERBs.

This will also inevitably put us at war with Bitcoin, especially if this fails. We may see much more transaction spamming, DDoS, new exploits, etc. from Bitcoin Zealots. The resulting climate of the combined effect of these attacks on BTS with the hostile takeover of BTC will be very hard to predict...
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Rune on November 12, 2014, 05:10:30 pm
Quote from: biophil on November 12, 2014, 04:53:09 pm
Rune, you crazy guy, this looks like a very clever idea, but my gut tells me it would never work. I'll see if I can convince my gut to tell me why it's so pessimistic, but first a question: When a mining pool publishes an ERB, do they collect the normal bitcoin block reward for it as well as the future reward they get at exodus?

I think that would be a bad idea, as that could allow for the selling on of ERB's and would perhaps make it less obvious when the bitcoin blockchain is ready for the exodus (when every other block is an ERB). If miners are forced to hold onto the normal bitcoins in the ERB if they want to collect the bonus bitcoins post-exodus it will make them more vested into seeing the exodus go through, I think. I'm not sure if it really matters though.

The way I see it would work is this: When the bitcoin network stops and the new genesis block is created, the developers who make it basically manually go through a list of all ERB's they can detect that fulfill the rules of the social contract (no transactions, the word "bitshares" embedded into it). If the 25 bitcoins still sit in the same address as when the block was mined, they are manually changed to x times as many, creating the bonus bitcoins out of thin air and allowing the miners to claim them just like they claim all their other post-exodus bitcoins.

I guess the  we would vote the new genesis block into effect, we will all attempt to go through the block and make sure everything is according to the social contract, so that the transition is as smooth as possible with no errors (any error would cost us dearly, and would mean we would have to be very careful). It's possible that we would have to have the bitcoin network shut down for at least 24 hours just to be totally sure that everything is as it should be, before we vote the genesis block into effect. During this time exchanges would still work, and anyone needing to do blockchain transactions would have already moved over to bitshares as it would continue to function normally. Hodlers wouldn't need to do anything though, they could just wait for the exodus to happen and claim their new bitcoins whenever they need them. In case the new genesis block is wrong and isn't accepted by the miners, or is too slow, they would resume processing transactions on the bitcoin network and the exodus would fail, so we will have to be swift and effective. A failed exodus would hurt bitcoin a lot more than it would hurt bitshares, so there is no chance this will be used as some angle of attack - if the exodus is about to happen then the bitshares market cap will already be at 1 billion USD.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: fluxer555 on November 12, 2014, 05:16:53 pm
(http://i.imgur.com/s11w61F.jpg)
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Riverhead on November 12, 2014, 05:20:27 pm

Only flaw I can see, and I may have missed it somewhere in the Wall-O-Text is:

Would the migration from POW to DPOS of the miners need to happen in a shorter time frame than the diff adjustment? Otherwise each major miner that started to mine ERB's instead would be making mining more profitable for whoever is left because the diff would start to nose dive. Then you'd have an uptick in the number of miners and the cycle continues.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Rune on November 12, 2014, 05:24:09 pm
Quote from: fluxer555 on November 12, 2014, 05:05:27 pm
I wonder at what lengths Bitcoiners would do to stop pools that are mining ERBs.

This will also inevitably put us at war with Bitcoin, especially if this fails. We may see much more transaction spamming, DDoS, new exploits, etc. from Bitcoin Zealots. The resulting climate of the combined effect of these attacks on BTS with the hostile takeover of BTC will be very hard to predict...

I've already thought about this, and my initial conclusion is that there is nothing a bitcoin holder can do beyond normal internet shitstorms. I believe their initial reaction will be to simply dismiss that this can possibly happen, and the anger will not come until it is already obvious that the acquisition cannot be prevented. At that point if they wish to continue holding bitcoins then they will be hurting their own investment by attacking bitshares.

There is no doubt that the price of both bitcoin and bitshares would become wildly volatile once ERB's begin to be mined. You'll have tons of people, prominent community members even, publicly pledging that they are permanently done with bitcoin and blockchains, like when oculus got bought out. You'll have institutional investors claiming they are running away in fear (while secretly buying). I think the futility of the situation and the undeniable reality that this is an inherent POW flaw will eventually force people to calm down. They will realize that even if we moved to do a reverse acquisition and failed due to too much resistance, someone else would simply come along right after and would offer 10 times the ERB rewards to the miners to ensure a swift transition. In fact we in bitshares could simply vote to change our social contract to something with higher ERB rewards if we feel like the bitcoiners are being too resistant - this would hurt the bitcoiners more by having their share diluted more, and would incentivize them to take the path of most stability to avoid having it ever brought on the table: unconditionally supporting the acquisition.

Once the initial shitstorms begin to calm down we will see people beginning to learn the advantages bitshares has (now that they're suddenly on track to be stakeholders in it), and their grand vision of a single, unified blockchain holding all blockchain functions will be realized. I think the idea of a super-blockchain is actually pretty easy to sell to the bitcoiners, especially when it is a fait accompli. When the dust settles I'm sure that bitcoin/bitshares will begin an instant new 10x bubble due to the possibilities of the bitshares technology and the unification of all developers as delegates.

But yeah, it's going to be pretty crazy.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: fluxer555 on November 12, 2014, 05:27:17 pm
Rune, you are a mad scientist.


I love it.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: fluxer555 on November 12, 2014, 05:28:40 pm
I'm now mostly concerned for the safety of the BitShares dev team from irrational, crazy bitcoiners...
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Rune on November 12, 2014, 05:29:09 pm
Quote from: Riverhead on November 12, 2014, 05:20:27 pm

Only flaw I can see, and I may have missed it somewhere in the Wall-O-Text is:

Would the migration from POW to DPOS of the miners need to happen in a shorter time frame than the diff adjustment? Otherwise each major miner that started to mine ERB's instead would be making mining more profitable for whoever is left because the diff would start to nose dive. Then you'd have an uptick in the number of miners and the cycle continues.

ERB's will be on the main bitcoin blockchain at full difficulty. The idea will be to keep the bitcoin difficulty at its current levels, even long after the migration is over, so that once it has happened it will be impossible for anyone to process transactions on the bitcoin blockchain (after the new genesis block miners will only get external rewards for their bitcoin blocks if they mine on top of other empty blocks, so any future bitcoin block with a transaction in it will be rejected by the network and orphaned. Once it has been established that the only reward you get for mining bitcoin blocks are now rewards on the bitshares blockchain, and the new bitcoins themselves are completely worthless because they cannot be moved, then we can begin to gradually lower the difficulty to a level that actually makes sense (by reducing rewards), and use the bitcoin blockchain as a POW backup to determine the correct bitshares main chain (through embedded hashes).
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Rune on November 12, 2014, 05:33:25 pm
Quote from: fluxer555 on November 12, 2014, 05:28:40 pm
I'm now mostly concerned for the safety of the BitShares dev team from irrational, crazy bitcoiners...

IMO the bitshares dev team should have nothing to do with this, I guess also partially for their safety. They are busy improving the bitshares client and shouldn't have to deal with the shitstorm. To ensure that bitcoiners feel safe then once that it is becoming clear to everyone that the migration is going to happen, we can hire a prominent bitcoin developer to make the new genesis block. So it will be someone like andreas antonopolous or gavin who makes the genesis block and puts it up for bitshares stakeholders to vote for, so that bitcoiners will be more likely to trust that the social contract will be honored. Some of them might ragequit from blockchain tech permanently, but I'm sure it will be possible to find a trusted bitcoin community member who will be willing to help facilitate a smooth acquisition.

Formulating the social contract is actually all that is needed for the execution of the reverse acquisition, and then eventually making the new genesis block, so it will be something that our community of stakeholders and the bitcoin community can do autonomously and with relative ease.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: xeroc on November 12, 2014, 05:34:03 pm
First of all: This is an AWESOME idea.
Let me add some remarks:

- What you are doing is basically an airdrop on BTC addresses. There is no need to reveal the private keys of btc addresses. you can initialize all BTC addresses on the BTS chain using a corresponding BTS address for the private key .. so users import their keys and see the very same btc in their accounts. no revealing required

- we might even find a way to circumvent the EXODUS block and have an even smoother transition of funds, such that, the miners of ERBs are also taking a look into the BTS address balances and perform those transactions on both chains. If you haven't listened to the latest hangout you should do so. BM talks about the issue of stock issued on the blockchain and that the issuer needs to be able to withdraw from every owner. So in theroy, we can add the keys of the miners to the bitcoin "asset" on BTS and allow them (multi-sig) to withdraw funds from the corresponding btc addresses in the BTS chain, too. If the balance does not allow that in the BTS chain.. then the bitcoin transaction is not included into the ERBs.
You get what I am talking about? Single drawback is that those transactions in the BTS chain should require a third party to watch both chains and also sign those transactions, else miners could mess with the balances at will.

- a side effect of this is that we also kill counterparty and mastercoin :)
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Riverhead on November 12, 2014, 05:36:59 pm
Next question: How is this different than the big miners participating in the merged mining of an alt coin?

Also:

(http://cdn.memegenerator.net/instances/250x250/52015703.jpg)
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: xeroc on November 12, 2014, 05:37:58 pm
also:

- the community has the capailities to setup an own mining pool that might end up in 51% mining power because we can pay WAY more to the miners. This way we can also proof the basic flaws of POW

Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: fluxer555 on November 12, 2014, 05:43:01 pm
Quote from: Riverhead on November 12, 2014, 05:36:59 pm
Next question: How is this different than the big miners participating in the merged mining of an alt coin?

Merged miners are not incentivized to exclude BTC transactions.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Riverhead on November 12, 2014, 05:43:48 pm
Quote from: fluxer555 on November 12, 2014, 05:43:01 pm
Quote from: Riverhead on November 12, 2014, 05:36:59 pm
Next question: How is this different than the big miners participating in the merged mining of an alt coin?

Merged miners are not incentivized to exclude BTC transactions.

Right right. That was the bit I missed. Thank you.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Rune on November 12, 2014, 05:45:00 pm
Quote from: xeroc on November 12, 2014, 05:37:58 pm
also:

- the community has the capailities to setup an own mining pool that might end up in 51% mining power because we can pay WAY more to the miners. This way we can also proof the basic flaws of POW

Oooh, I like this! We set up a mining pool that only mines ERB's, and advertise higher (but delayed) rewards to miners who point their hash power at us. Another idea I had for it would be to basically bribe a pool like discus fish and say that we will give them 5k post-exodus bitcoins to distribute to their miners if they begin mining ERB's instantly. It will be an even more direct attack on POW's fundamental flaws, because we abuse that the pools are centrally controlled and that one guy can make decisions on behalf of a huge amount of miners.

In fact we can simply just publicly announce in the social contract that the first of the big 4 pools that begins mining ERB's within 5 days will get 5k extra bitcoins to share on top of the ERB's. All miners who like the idea of ERB's will flock to that pool.

If none of the big pools take us up on this offer, we create our own pool and drop the 5k post-exodus coins onto it instead, distributed across the lifetime of hashing power that is pointed at it. That would be too big an opportunity for miners not to take.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: CLains on November 12, 2014, 05:46:19 pm
Spooky. But interesting :D
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: fluxer555 on November 12, 2014, 05:50:07 pm
May be relevant:

How to Attack Bitcoin Mining (https://bitsharestalk.org/index.php?topic=7003.0)
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Ander on November 12, 2014, 05:56:00 pm
I think the only result of this will be:

1) It cant work.
and
2) Bitcoin people hate us even more and it hurts bitshares.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: bytemaster on November 12, 2014, 05:58:05 pm
Miners do not have control over what hard for users adopt.   

So the solution is really very simple:

Pay miners to produce blocks without transactions in it and eventually to ignore blocks produced that include transactions.

How much do you have to pay them?   Probably 3x the times the value of BTC transaction fees.

How will bitcoin respond?  Increase transaction fees.

How would it help Bitshares if we funded such an attack?  It wouldn't.  We would be labeled by the market as a bad actor and no one would want to join us.   











Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Frodo on November 12, 2014, 06:08:36 pm
Quote from: bytemaster on November 12, 2014, 05:58:05 pm
How would it help Bitshares if we funded such an attack?  It wouldn't.  We would be labeled by the market as a bad actor and no one would want to join us.   

I think technically this attack would work, but I agree with BM that it might hurt BitShares more than it helps.
It is not just the image damage but we would dilute our stake significantly to drop it on a crypto which market cap I expect to implode once the attack shows effect.

Think about it, why would you hold BTC in this situation. If you were interested in getting a stake in BTS you could much more efficiently buy in with BTC right now. Every one else is just going to dump for fiat.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: gamey on November 12, 2014, 06:15:15 pm
I assumed there would be some flaw but I can't bring myself to read that much text.  A succinct description would be much better than everyone going "this is awesome". 

Thank you BM for putting it into one sentence.  It is a cool idea and I'm not saying Rune is not a very bright guy, but you guys were all over this.

Bitcoin guys would hardfork a counter-measure.  You would have to have the miners slowly disrupt because otherwise they give a signature enabling a hardfork to ignore those blocks so that they no longer get the block reward.

Bitcoin might be stagnant in a lot of ways, but they would respond to this quite swiftly I imagine.  Transaction volume is high enough that empty blocks would stick out, so the best one could do is throttle transactions somewhat.  It would be an interesting battle but there are lots of people with interests outside of the transaction fees that also mine. 

etc etc
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Rune on November 12, 2014, 06:15:33 pm
Quote from: bytemaster on November 12, 2014, 05:58:05 pm
Miners do not have control over what hard for users adopt.   

So the solution is really very simple:

Pay miners to produce blocks without transactions in it and eventually to ignore blocks produced that include transactions.

How much do you have to pay them?   Probably 3x the times the value of BTC transaction fees.

How will bitcoin respond?  Increase transaction fees.

How would it help Bitshares if we funded such an attack?  It wouldn't.  We would be labeled by the market as a bad actor and no one would want to join us.

Miners have control over if transactions are put in the main chain. Ultimately it doesn't matter what hard forks a full node adopts, the miners are the final source of authority, and the only way to wrest this control away from them is a hard fork away from the main chain to another blockchain with a different mining or consensus algorithm (which bitshares incidentally is). Also bitcoin doesn't have a system that will allow the different actors in the community to work together to counter this. Even if they could, and they made some sort of weird wallet hack that refused to relay any empty blocks or something like that, the SHA-256 hashing power vested in seeing the exodus through will likely merge mine attack any forks to protect their own gains.

We will pay them drastically more than the transaction fees. An average block with a block subsidy of 25 has about 0.1 BTC in transaction fees. We (or another attacker) will pay the early ERB's 100's of bitcoins, and eventually 50 BTC per block (or whatever numbers we decide will give us the highest success rate). There is no possible way that the bitcoin community will be able to compensate miners more than this if it begins to become apparent that the migration will go through.

The way this would help us is that once bitcoin transaction stops, people will have no option but to use their new bitcoins on the bitshares blockchain. Undoubtedly some will ragequit and sell everything, but overall the average BTS shareholder will gain significantly and bitcoin holders will also gain in the long run because they now get the benefit of DPOS and the rest of bitshares (including less inflation in the long run). Even if the entire thing falls apart the amount of publicity we will gain will end up giving us a massive boost to our market cap. I don't think we have to worry about being labeled as bad market actors, we're already an evil altcoin that they wouldn't buy into no matter what. The shitstorm will not be bigger than if bitcoin died on its own and bitshares became huge and started having major infrastructure defect. Also, if we fail others will follow with the same attack (but just even worse conditions for the bitcoiners so that miners are sure to support the exodus quickly)
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Rune on November 12, 2014, 06:20:34 pm
Quote from: Frodo on November 12, 2014, 06:08:36 pm
Think about it, why would you hold BTC in this situation. If you were interested in getting a stake in BTS you could much more efficiently buy in with BTC right now. Every one else is just going to dump for fiat.

This is exactly why bitshares stakeholders will support this. Once "this situation" becomes apparent to bitcoiners they will realize that bitshares should be valued at 25% of bitcoins current market cap. Many will dump for fiat, sure (but that's going to happen anyway due to POW mining being a death sentence). With just the first few ERB's mined we will begin to see enormous spikes in the BTS price until it reaches 25% parity with bitcoin. That would put us at 1 billion and give all BTS holders an instant 2000% return. Even if the bitcoin price temporarily halved, we would still see a 1000% return. In the long run the return will obviously be much larger because bitshares with the market cap and infrastructure of bitcoin will be completely unstoppable.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: fluxer555 on November 12, 2014, 06:25:31 pm
We can structure this as a proposal to the Bitcoin community and miners. It's not hostile if they decide through their own autonomy that they would like to start mining ERBs.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: dna_gym on November 12, 2014, 06:27:21 pm
I cannot understand the motives.
OP hates wasteful uneconomic POW mining or he applauds POW for giving a good clue to light-weight clients. Which is true?
This sort of attack will surely impact the hashrate of bitcoin network as this is simply a bribe. And I think the consequence is introducing chaos only.
Anyway I enjoyed reading your hypothetical scenario, as this is necessary for a cryptocurrency's  security assessment.

edit: I was surprised by this post  ;)
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: gamey on November 12, 2014, 06:28:26 pm

Wouldn't participation in this kill the price of BTC and thus the mining rewards themselves ?

Same core argument as to why a large stake holder won't attack POS. 

Am I missing something?
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Frodo on November 12, 2014, 06:28:48 pm
Quote from: Rune on November 12, 2014, 06:20:34 pm
Quote from: Frodo on November 12, 2014, 06:08:36 pm
Think about it, why would you hold BTC in this situation. If you were interested in getting a stake in BTS you could much more efficiently buy in with BTC right now. Every one else is just going to dump for fiat.

This is exactly why bitshares stakeholders will support this. Once "this situation" becomes apparent to bitcoiners they will realize that bitshares should be valued at 25% of bitcoins current market cap. Many will dump for fiat, sure (but that's going to happen anyway due to POW mining being a death sentence). With just the first few ERB's mined we will begin to see enormous spikes in the BTS price until it reaches 25% parity with bitcoin. That would put us at 1 billion and give all BTS holders an instant 2000% return. Even if the bitcoin price temporarily halved, we would still see a 1000% return. In the long run the return will obviously be much larger because bitshares with the market cap and infrastructure of bitcoin will be completely unstoppable.

I'm not sure about that. I would expect the opposit to happen: not BTS to rise to 25% parity with BTC but rather BTC dropping to parity with BTS... (the truth would probably be between those two scenarios)
That is given that they don't find any counter measures.

And sure, BTC is probably going to drop if they stick with PoW, but as long as we don't drop a large amount of shares on them I totally don't care.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Ander on November 12, 2014, 06:30:24 pm
I think that the attempt at this would be the end of bitshares, not of bitcoin. 

The PoW algorithm is not so fragile that it can be taken down like that.  Yes, PoW is slightly flawed in that it wastes money.  But its not flawed in the sense that you cant just easily kill the coin - it does actually work to protect the network.

Any group that tried to do this to bitcoin would be hated by the entire crypto community with a passion you have never seen before.  It would be the end of that coin.  No one would ever touch it again with a 100 foot pole.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: donkeypong on November 12, 2014, 06:34:46 pm
It's brilliant. And a bit reckless. I think we can achieve the same ends by being a little less hostile. Why not let BitShares grow a bit and the market progress naturally, to the point where there are open questions in the crypto community (not just from us) about whether BTS should succeed Bitcoin? And then prepare some sharedrop on-ramps to buy us some more Bitcoin defectors, accelerating the domino effect just when it can have the greatest impact. That way, it wouldn't need to be quite as hostile/radical and we'd be giving people the choice of jumping ship for some incentive. Plus, they might actually WANT to come here rather than being forced. 
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: fluxer555 on November 12, 2014, 06:38:15 pm
Quote from: Ander on November 12, 2014, 06:30:24 pm
I think that the attempt at this would be the end of bitshares, not of bitcoin. 

The PoW algorithm is not so fragile that it can be taken down like that.  Yes, PoW is slightly flawed in that it wastes money.  But its not flawed in the sense that you cant just easily kill the coin - it does actually work to protect the network.

Any group that tried to do this to bitcoin would be hated by the entire crypto community with a passion you have never seen before.  It would be the end of that coin.  No one would ever touch it again with a 100 foot pole.

This is not a proposal to kill bitcoin. This is a migration that is outrageously incentivized for Bitcoin miners.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: fluxer555 on November 12, 2014, 06:39:52 pm
Quote from: donkeypong on November 12, 2014, 06:34:46 pm
It's brilliant. And a bit reckless. I think we can achieve the same ends by being a little less hostile. Why not let BitShares grow a bit and the market progress naturally, to the point where there are open questions in the crypto community (not just from us) about whether BTS should succeed Bitcoin? And then prepare some sharedrop on-ramps to buy us some more Bitcoin defectors, accelerating the domino effect just when it can have the greatest impact. That way, it wouldn't need to be quite as hostile/radical and we'd be giving people the choice of jumping ship for some incentive. Plus, they might actually WANT to come here rather than being forced.

I think this would be the optimal approach. We can frame the proposal as "Let's let the miners decide.", to force them to realize that that's ultimately what they always do anyway.

Question: Would this kind of attack be possible between two sets of delegates of two DPoS chains?
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Stan on November 12, 2014, 07:04:47 pm
Brilliant concept, but
We get essentially the same effect by simply positioning BitShares
as a nice, friendly crypto-savings account that pays interest. 
A complement to Bitcoin's crypto-checking account.
Bring in more new users than Bitcoin has through our funnels.
Educate them with this checking vs savings metaphor. 
Then let the ordinary consumer decide how much to keep in savings vs. checking. 
(I seldom keep more than 1% of my cash in checking.)
I expect 99% of Bitcoin's market cap to move to BitShares voluntarily.

;)
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Rune on November 12, 2014, 07:06:19 pm
Quote from: donkeypong on November 12, 2014, 06:34:46 pm
It's brilliant. And a bit reckless. I think we can achieve the same ends by being a little less hostile. Why not let BitShares grow a bit and the market progress naturally, to the point where there are open questions in the crypto community (not just from us) about whether BTS should succeed Bitcoin? And then prepare some sharedrop on-ramps to buy us some more Bitcoin defectors, accelerating the domino effect just when it can have the greatest impact. That way, it wouldn't need to be quite as hostile/radical and we'd be giving people the choice of jumping ship for some incentive. Plus, they might actually WANT to come here rather than being forced.

If this attack is possible, and we don't do it, then someone else will simply do it. The worst case scenario I can imagine is that it's simply one of the big bitcoin pools that decide "its time to upgrade bitcoin", then fork the bitshares toolkit and allocate 10% of all bitcoins to themselves on the new chain.

I think people are vastly overestimating the power of internet shitstorms when it comes to determining prices. The most lucrative companies in the world are also often those with the most disliked business practices. People invest primarily based on expected profits, with a (loud) minority being the religious fanatics we know and love from /r/bitcoin. If this attack is possible and any coin/blockchain announces they are going to perform it, they are going to be a serious hot commodity among traders who trade based on profit seeking (which is probably the majority of traders). In the long run we will not actually hurt bitcoin holders (total inflation will be lower), we will give them a massively improved system (bitshares), and we will finally give them control over their own coins, making it impossible for this kind of attack to ever happen again. Also this is a chance to actually make sure bitcoin survives through the ages and never goes away. For me at least this is very important. I think many bitcoiners who know in their heart that POW cannot be upgraded also will be quite quick to realize this, because before it was a very real possibility that bitcoin would simply die out once second generation blockchains begin to compete.

If it isn't us who does this, someone else will. They will likely give a more unfair distribution to bitcoin holders, and then they'll turn to us, fork our unique features, and destroy us. If our stakeholders think that our 20% valuation is too high, then maybe we should put it at 10%. It would still be an approximate 1000% increase in value at current market rate and thus would be massively profitable for bitshares holders.

The only way this can be presented and framed to the bitcoin community is with the obvious fact that we have to do it so someone else doesn't do it before us. We're migrating the bitcoins away from POW because it is vulnerable to this attack, and they will risk getting an even more unfair distribution, with even more going to miners, if they resist us. The initial shitstorm will be immense but once people realize that this attack vector exists they cannot deny that POW bitcoin is going to end, one way or another, and when that happens it might as well be bitshares that they migrate to.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: nomoreheroes7 on November 12, 2014, 07:16:45 pm
Quote from: Rune on November 12, 2014, 07:06:19 pm
If our stakeholders think that our 20% valuation is too high, then maybe we should put it at 10%. It would still be an approximate 1000% increase in value at current market rate and thus would be massively profitable for bitshares holders.

...I personally think BitShares is worth a lot more than a measly 10% of Bitcoin's cap. I'd much rather just see BitShares destroy the competition and suck up all of Bitcoin's value the old-fashioned way -- by being the best, and completely unstoppable.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Rune on November 12, 2014, 07:29:29 pm
Quote from: nomoreheroes7 on November 12, 2014, 07:16:45 pm
Quote from: Rune on November 12, 2014, 07:06:19 pm
If our stakeholders think that our 20% valuation is too high, then maybe we should put it at 10%. It would still be an approximate 1000% increase in value at current market rate and thus would be massively profitable for bitshares holders.

...I personally think BitShares is worth a lot more than a measly 10% of Bitcoin's cap. I'd much rather just see BitShares destroy the competition and suck up all of Bitcoin's value the old-fashioned way -- by being the best, and completely unstoppable.

Yeah well I also think 20% is the best amount, and that 10% is too low. Most people here, if they had to be honest, would probably almost always vote for an instant 2000% return, even if it meant allowing bitcoin to survive and not taking their entire market cap "the old fashioned way". When people vote for what to do, they will probably vote for it since they recognize there is nothing to lose by supporting it. The people who vote against it will do so primarily on moral grounds (or if it turns out to be unfeasible).

The existence of this attack also means that there still is a real possibility that we will ultimately be outcompeted by NXT. If they do the reverse acquisition, they will gain so much network effect that we won't have a chance to compete in the long run.

Another thing we have to consider that would be a big advantage to us is that that stakeholder centralization would be significantly reduced. All large BTS holders would be diluted to 20% (but gain 2000% profit), and all bitcoin holders would be diluted to 80% (but gain a secure consensus algorithm and long term profits). The possibility of attack by a large stakeholder would be a lot lower, as the new largest stakeholder would probably be satoshi, who would still only own about 4% of all.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Rune on November 12, 2014, 07:42:18 pm
Quote from: gamey on November 12, 2014, 06:28:26 pm

Wouldn't participation in this kill the price of BTC and thus the mining rewards themselves ?

Same core argument as to why a large stake holder won't attack POS. 

Am I missing something?

The miners will still be incentivized due to the high ERB rewards. If the bitcoin price falls to 50% but they can mine blocks that give more than twice the normal reward, they will still do it. I think most likely the huge amount of trade that bitcoin is used for now will be enough inertia to prevent the price from doing a serious crash. There will just be insane volatility but in the long run 1 bitcoin will still be 1 bitcoin, and the total possible amount of bitcoins will not have increased. Once we get to the point where volatility picks up because of the ERB's, we as bitshares stakeholders will already have made massive, irreversable gains because everyone will suddenly know what we are. In the long run everyone will obviously benefit because DPOS+bitcoin network effect is unstoppable.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: eNORm on November 12, 2014, 09:45:07 pm
/r/bitcoin reply

/r/Bitcoin/comments/2m3toy/bitcoin_attack_in_the_making/
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Ander on November 12, 2014, 09:51:38 pm
Quote from: eNORm on November 12, 2014, 09:45:07 pm
/r/bitcoin reply

/r/Bitcoin/comments/2m3toy/bitcoin_attack_in_the_making/

Indeed.

And, literally the only result that can come out of this thread is that more bitcoin people hate us and will never buy bitshares.

Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Rune on November 12, 2014, 09:56:50 pm
Quote from: eNORm on November 12, 2014, 09:45:07 pm
/r/bitcoin reply

/r/Bitcoin/comments/2m3toy/bitcoin_attack_in_the_making/

This attack vector has always existed since it is inherent to POW, it is not really in the making. If/when we get significant stakeholder support standing behind a social contract that will honor external reward blocks from bitshares, or NXT, or some other POS coin, or perhaps a new blockchain forked from the bitshares toolkit supported by one of the large bitcoin pools, then you could say an actual attack is being mounted.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: xeroc on November 12, 2014, 09:58:26 pm
Quote from: Ander on November 12, 2014, 09:51:38 pm
Quote from: eNORm on November 12, 2014, 09:45:07 pm
/r/bitcoin reply

/r/Bitcoin/comments/2m3toy/bitcoin_attack_in_the_making/

Indeed.

And, literally the only result that can come out of this thread is that more bitcoin people hate us and will never buy bitshares.
I'd say: no one over at reddit read the whole post .. not to mention the whole discussion afterwards ..

From my understanding of Bitcoin .. the proposal is a valid attack vector for bitcoin .. no matter what r/bitcoin says ..
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Rune on November 12, 2014, 10:01:33 pm
Quote from: Ander on November 12, 2014, 09:51:38 pm
Quote from: eNORm on November 12, 2014, 09:45:07 pm
/r/bitcoin reply

/r/Bitcoin/comments/2m3toy/bitcoin_attack_in_the_making/

Indeed.

And, literally the only result that can come out of this thread is that more bitcoin people hate us and will never buy bitshares.

Bitcoiners need to know this attack vector exists. If we don't perform this attack someone else will and the bitcoin market cap will be gobbled up by another coin that will then outcompetes us and destroy us. If it's possible for the bitcoin system to actually prevent it from succeeding with high probability, then great. But if not then it is not a good idea to ignore such an obvious vulnerability. Simply hoping that no one will learn of an attack like this is a terrible security strategy.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: eNORm on November 12, 2014, 10:15:12 pm
I think I some what get the idea of the "attack", but maybe Bitcoin will evolve and adapt. It's not like TCP/IP is the best solution either, if you think about evolution of protocols.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Ander on November 12, 2014, 10:17:38 pm
Quote from: Rune on November 12, 2014, 10:01:33 pm
Bitcoiners need to know this attack vector exists. If we don't perform this attack someone else will and the bitcoin market cap will be gobbled up by another coin that will then outcompetes us and destroy us. If it's possible for the bitcoin system to actually prevent it from succeeding with high probability, then great. But if not then it is not a good idea to ignore such an obvious vulnerability. Simply hoping that no one will learn of an attack like this is a terrible security strategy.

If someone tried this attack it would almost certainly fail.

The only result of pointing this attack out to them is to make them hate the messenger.  Literally all you are doing is hurting bitshares brand in the eyes of bitcoin holders.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Rune on November 12, 2014, 10:47:38 pm
Quote from: Ander on November 12, 2014, 10:17:38 pm
If someone tried this attack it would almost certainly fail.

If discus fish announced they were going to perform this attack do you think it would fail? Considering how insane the payoff for them, and all miners in general, would potentially be, I think it is a real possibility they will do it. And if not them, then someone else.

Making the attack succeed for us instead would just be a matter of getting discus fish or some other pool on board to support our reverse acquisition, instead having to create their own new coin. They would still be able to profit immensely just by buying into bitshares before publicly announcing the attack.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Ander on November 12, 2014, 10:52:00 pm
I think bitcoiners would just rebel, fork back to the old chain, and continue on from there.

Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Rune on November 12, 2014, 11:21:14 pm
Quote from: Ander on November 12, 2014, 10:52:00 pm
I think bitcoiners would just rebel, fork back to the old chain, and continue on from there.

True, many of them undoubtedly would, in fact there would probably be dozens of forks to different mining algorithms. None of them will be the original bitcoin blockchain, though, so it will be impossible for individual bitcoin holders or service providers to decide which chain to honor. If they want to be sure that their bitcoins actually have value, their only choice will be to use the bitshares blockchain, since that is the only place where trading will still continue (even if bitcoin exchanges dont switch over immediately the bitshares exchanges will still function). Once they redeem their bitcoins on the bitshares blockchain they will have revealed the private key and their coins will be lost on all other blockchains and bitcoin forks.

According to jgarzik this attack can be defended against with a future system that has full nodes ignore blocks without almost all currently broadcasted transactions. I think the danger with this will be that someone can create a network partition by sending lots of small random transactions to different parts of the network, but if it prioritizes based on transaction value then perhaps it will work.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: donkeypong on November 12, 2014, 11:54:18 pm
Quote from: Stan on November 12, 2014, 07:04:47 pm
Brilliant concept, but
We get essentially the same effect by simply positioning BitShares
as a nice, friendly crypto-savings account that pays interest. 
A complement to Bitcoin's crypto-checking account.
Bring in more new users than Bitcoin has through our funnels.
Educate them with this checking vs savings metaphor. 
Then let the ordinary consumer decide how much to keep in savings vs. checking. 
(I seldom keep more than 1% of my cash in checking.)
I expect 99% of Bitcoin's market cap to move to BitShares voluntarily.

;)

This is the public, diplomatic answer, Stan. In reality, the "checking" feature here is far better than at that other bank. It takes 10 seconds to 'write a check' with BTS or BitUSD, while BTC can take 40 minutes to clear. By 99%, don't you really mean 100%, to a person? Why exactly would customers need a second bank when BitShares gives them a one-stop-shop? Why would anyone choose to pay exchange fees to move their 1% back to BTC for a feature which BTS does better anyway?
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Stan on November 13, 2014, 12:12:43 am
Quote from: donkeypong on November 12, 2014, 11:54:18 pm
Quote from: Stan on November 12, 2014, 07:04:47 pm
Brilliant concept, but
We get essentially the same effect by simply positioning BitShares
as a nice, friendly crypto-savings account that pays interest. 
A complement to Bitcoin's crypto-checking account.
Bring in more new users than Bitcoin has through our funnels.
Educate them with this checking vs savings metaphor. 
Then let the ordinary consumer decide how much to keep in savings vs. checking. 
(I seldom keep more than 1% of my cash in checking.)
I expect 99% of Bitcoin's market cap to move to BitShares voluntarily.

;)

This is the public, diplomatic answer, Stan. In reality, the "checking" feature here is far better than at that other bank. It takes 10 seconds to 'write a check' with BTS or BitUSD, while BTC can take 40 minutes to clear. By 99%, don't you really mean 100%, to a person? Why exactly would customers need a second bank when BitShares gives them a one-stop-shop? Why would anyone choose to pay exchange fees to move their 1% back to BTC for a feature which BTS does better anyway?

Exactly.  A savings account that works better than checking.  ;)

Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Ander on November 13, 2014, 12:20:20 am
Quote from: donkeypong on November 12, 2014, 11:54:18 pm
By 99%, don't you really mean 100%, to a person? Why exactly would customers need a second bank when BitShares gives them a one-stop-shop?

The myth of satoshi will never die, the cult of satoshi will never die.

We might beat bitcoin and take most of the market cap, but there will ALWAYS be someone trying to keep bitcoin alive, no matter what.  It will never die, imo.  It might fall down the charts and get passed by 2.0 coins eventually, but it will never completely die.  Not completely.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: fluxer555 on November 13, 2014, 12:28:02 am
Quote from: Ander on November 13, 2014, 12:20:20 am
Quote from: donkeypong on November 12, 2014, 11:54:18 pm
By 99%, don't you really mean 100%, to a person? Why exactly would customers need a second bank when BitShares gives them a one-stop-shop?

The myth of satoshi will never die, the cult of satoshi will never die.

We might beat bitcoin and take most of the market cap, but there will ALWAYS be someone trying to keep bitcoin alive, no matter what.  It will never die, imo.  It might fall down the charts and get passed by 2.0 coins eventually, but it will never completely die.  Not completely.

Just look at Dogecoin... it simply refuses to die.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: starspirit on November 13, 2014, 12:34:04 am
Is it possible to be the friendly messenger rather than the hostile messenger?
Post a public notice making bitcoin holders aware of the potential for this attack and how vulnerable they are to it.
Paint any potential party that might attempt it as acting hostile to their interests, so that such other parties are actually disincetivized thereafter from attempting it.
Point out how using bitshares can free them from those risks and offer other benefits.
Incentivize the bitcoin holders to transition over.
A Reverse-Marketing Campaign?
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Ander on November 13, 2014, 12:36:04 am
Quote from: starspirit on November 13, 2014, 12:34:04 am
Is it possible to be the friendly messenger rather than the hostile messenger?

It probably was, but Bitshares already looks like the hostile messenger now.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: starspirit on November 13, 2014, 12:47:01 am
Quote from: Ander on November 13, 2014, 12:36:04 am
Quote from: starspirit on November 13, 2014, 12:34:04 am
Is it possible to be the friendly messenger rather than the hostile messenger?

It probably was, but Bitshares already looks like the hostile messenger now.
I'm not sure. One just needs to be up-front that it was raised in free discussion and rejected by the community. Could add to the marketing.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: hpenvy on November 13, 2014, 12:47:23 am
Quote from: Stan on November 12, 2014, 07:04:47 pm
Brilliant concept, but
We get essentially the same effect by simply positioning BitShares
as a nice, friendly crypto-savings account that pays interest. 
A complement to Bitcoin's crypto-checking account.
Bring in more new users than Bitcoin has through our funnels.
Educate them with this checking vs savings metaphor. 
Then let the ordinary consumer decide how much to keep in savings vs. checking. 
(I seldom keep more than 1% of my cash in checking.)
I expect 99% of Bitcoin's market cap to move to BitShares voluntarily.

;)

Yes Yes Yes!
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: donkeypong on November 13, 2014, 01:24:47 am
Quote from: Ander on November 13, 2014, 12:20:20 am
Quote from: donkeypong on November 12, 2014, 11:54:18 pm
By 99%, don't you really mean 100%, to a person? Why exactly would customers need a second bank when BitShares gives them a one-stop-shop?

The myth of satoshi will never die, the cult of satoshi will never die.

We might beat bitcoin and take most of the market cap, but there will ALWAYS be someone trying to keep bitcoin alive, no matter what.  It will never die, imo.  It might fall down the charts and get passed by 2.0 coins eventually, but it will never completely die.  Not completely.

That's why I have a specially outfitted bed with dozens of Casascius Bitcoins stuck under my mattress. But how usable will BTC be when users and merchants have moved onto something far better?
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: zerosum on November 13, 2014, 05:41:37 am
I am too lazy (aka I read like 15-20 standard pages of text in this thread), was it anywhere answered:

"Who/how are those BTC miners paid after the merger?" so they do not bring back to life the original (not reverse acquired) BTC chain?
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: gamey on November 13, 2014, 05:55:12 am
Quote from: Ander on November 12, 2014, 10:52:00 pm
I think bitcoiners would just rebel, fork back to the old chain, and continue on from there.

Bitcoin people will never just give up and rage quit or whatever Rune wants to call it.  This is all poppycock and we don't really need Bitcoiners hating us.  There are numerous points at which the plan would likely fail.

Why would you think that a network with 10s of million in VC capital is just going to roll over and move to Bitshares with the 1000s of merchants already in place?

We can only out compete them.
Title: Re: The reverse acquisition attack: Buying the bitcoin POW to DPOS hardfork
Post by: Rune on November 13, 2014, 11:36:17 am
Edited the OP.

Turns out the attack isn't possible. The assumption that miners can always mine empty blocks that the main chain has to accept is mistaken. Developers would release a full node update in response that rejects empty blocks and there would be a network partition if this was ever attempted.

The good news is that it means no one can perform this attack, so we won't be at risk by some competitor or mining pool creating a bitcoin 2.0 blockchain that destroys us. This also means that bitcoin will never be able to upgrade its consensus algorithm away from POW, and will have to die eventually, which is a shame.

I'm going to continue trying to figure out of this kind of attack can actually be done, because I still think controlling miners with the prisoners dilemma has the potential to work. But if I come up with anything I'll post it straight to the bitcoin community instead of here, to avoid negative connotations of us discussing a bitcoin attack amongst ourselves. If it turns out a hard fork can be bought in some way, it is also more fair to give the bitcoin community a chance to "choose" who should take them over, rather than simply coming out of nowhere and doing it. The important thing is to prevent a situation where a malicious actor eats bitcoin and then copies our features.

Also donkeypong mentioned if such an attack was to be launched, a better strategy would be to clone BTS and 100% sharedrop all current BTS holders, then announce the attack. This would keep the current BTS community out of direct contact with it and avoid the negative risk associated with failure, but keep the positive upside of success. This is a much better idea and I wish I'd thought of that from the beginning.