[Cryptography] Bitcoin compute power (was Re: Aggregate signatures)

[ianG]

On 10/06/2014 22:36 pm, Phillip Hallam-Baker wrote:

> ... Another big concern should be what would happen if the cost of
> mining exceeded the cost of running an appreciable percentage of the
> rigs. At that point the only way to make money would be to shut down
> the rigs, let the difficulty factor ease off and then bring them back
> in bursts to unwind the chain.



Got spare rig?  Say hello to market timing attacks.

http://financialcryptography.com/mt/archives/001473.html
http://iang.org/papers/BitcoinLatency.pdf

    Bitcoin Verification Latency
    The Achilles Heel for Time Sensitive Transactions
    Griffith & Grigg

    Abstract. Bitcoin has a high latency for verifying transactions, by
design. Averaging around 8 minutes, such high latency does not resonate
with the needs of financial traders for speed, and it opens the door for
time-based arbitrage weaknesses such as market timing attacks. Although
perhaps tractable in some markets such as peer to peer payments, the
Achilles heel of latency makes Bitcoin unsuitable for direct trading of
financial assets, and ventures seeking to exploit the market for
financial assets will need to overcome this burden.




iang