[Cryptography] Incentive Politics

[Sebastian Stache]

On 2023-10-09 04:16, Phillip Hallam-Baker wrote:
>
>
> On Fri, Oct 6, 2023 at 1:44 PM Ray Dillinger <bear at sonic.net> wrote:
>
>
> On 10/4/23 11:59, Phillip Hallam-Baker wrote:
>>
>> I don't think the trusted role bug was solved, it was merely
>> deferred. The end game of the cryptocurrency world will be mining
>> consortiums trying to stave off bankruptcy by unwinding the chain.
>>
> That may be true but I doubt it.  Unwinding the chain would
> destroy the market value of any coins stolen in the attack - along
> with the value of all the other coins in the chain.  Picture
> "success" as a huge disaster visible to the entire world, setting
> off a million simultaneous sell alarms. Picture rats attempting to
> outrun not just each other but also a hypersonic shockwave, in a
> race to be the first to yeet themselves off an exploding ship.
> Picture the attackers selling their coins at an exchange one
> second after stealing them, but all the exchanges being closed
> (and absolutely crushed under sell orders that can never be
> executed) before the next block ever arrives.
>
> Nobody wins.  All the rats get pulverized in the explosion,
> including the attackers.
>
> There's really no upside for the attackers unless they want to
> kill the system completely.  When a chain more than six blocks
> deep gets unwound because of a blatant mining attack, one minute
> later the price of BTC will be zero.
>
>
> That is precisely the outcome I expect.
>
> The unwinding will begin as a mechanism to clear smaller coins out of 
> the market. It will end as a mechanism to cover the tracks of a 
> massive fraud.
>
> Arguments that rely on the self interest of large numbers of people 
> tend to fall apart because there is insufficient imagination in  
> considering what the true self interest of the parties might be.
>
>
> My designs do assume people will mostly follow self interest, but I do 
> not rely on every actor always following what I imagine to be their 
> self interest. Hal never anticipated the possibility someone might 
> want to attack their scheme for the pure pleasure of destruction. If I 
> could wipe out $BTC for a million bucks, I would do that in a 
> heartbeat. A million bucks to end the CO2 emissions would be cheap, 
> cheap, cheap. I am sure there are many more people with considerably 
> more resources who would do the same.
>
> You might not even need to spend the money. Just hack into the nexus 
> coordinating some of the mining pools and you could probably get the 
> desired result. Of course their operations are absolutely impregnable, 
> nobody has ever hacked a pseudocurrency exchange have they?
>

To "wipe out $BTC" by "unwinding" (I suppose you're envisioning 
something akin to generating a new longest chain from scratch) would 
probably not be in your own self-interest if you possessed a fortune in 
bitcoin.

If, on the other hand, you happened to _not_ possess a bitcoin fortune, 
I suppose you could argue that it would benefit you, relatively 
speaking, to destroy the bitcoin fortunes of others. If you stumbled 
upon a million dollars and acted according to your sentiments above, 
you'd most likely be doing your arguing in prison.

However, judging from your "bitcoin hacking", "mining nexi" and 
"pseudocurrency exchanges" convolutions, I don't think you have reasons 
to worry about jural repercussions in the near future.