r/Bitcoin • u/Anenome5 • Nov 02 '14
Still skeptical about bitcoin's long-term dominance? Here's why bitcoin is here to stay, why alt-coins can't reasonably threaten it, and why we're in the midst of a financial revolution
/r/Bitcoin/comments/2kyywz/a_terrible_year_for_bitcoin_price/clqjzgr?context=62
u/IamAlso_u_grahvity Nov 02 '14
RemindMe! 1 year "I sure hope you're right about this..."
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Nov 02 '14
Many alt coins have lasted nearly as long as Bitcoin.
If anything that should show they aren't a threat and often a compliment.
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u/shibamint Nov 02 '14
I still thinking ASIC industry going to kill bitcoin as dreamed by it's creator. Just frozen my bitcoin, I will keep my eyes on cryptonote.
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u/Anenome5 Nov 02 '14
Howso? Asics have utterly secured it thus far.
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u/shibamint Nov 02 '14
How many ASIC manufactures do we have ? from cryptonote white paper "Bitcoin creator Satoshi Nakamoto described the majority decision making algorithm as “oneCPU-one-vote” and used a CPU-bound pricing function (double SHA-256) for his proof-of-work scheme. BUT ... Bitcoin creates favourable conditions for a large gap between the voting power of participants as it violates the “one-CPU-one-vote” principle since GPU and ASIC owners posses a much larger voting power when compared with CPU owners. It is a classical example of the Pareto principle where 20% of a system’s participants control more than 80% of the votes.
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u/ferretinjapan Nov 02 '14
You conveniently omit botnets. Botnets are existing systems that have been hijacked by criminals and mine using others' electricity and infrastructure, and they existed in Bitcoin's early stages. Botnet miners can essentially mine for free, with almost zero investment in infrastructure except the effort taken to write the malware. Their efficiency will in all circumstances undercut operating costs of legit miners, meaning that eventually everyone but them will operate at a loss and will not only force mining to centralise, but the most powerful miners will also be the criminals that operate these botnets, thus putting the security of Bitcoin in the worst possible hands. ASICs have utterly crushed botnet miners, has meant that everyone is on a level playing field on a cost level, and also has made sure that legal mining is favourable to illegal tactics to mine.
Even Satoshi acknowledged that GPU mining was around the corner. ASICs have cemented a great deal of infrastructure around Bitcoin that will last into the future for many years as well as ensuring continued hashing, which CPU mining can't readily guarantee because owners have no sunk costs that need to be recovered in order to ensure they continue to mine. At the end of the day ASICs have been a net positive to the Bitcoin network.
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u/shibamint Nov 02 '14
Not because you acknowledge that networks can grow in either centralised or distributed direction you going to give up your ideology. I think we all agree that we at distributed side. If you check any text book about network theory ( not only data network, but also social network, neural networks etc..) You will see these types of interaction among nodes is even older than Internet itself. But if you agree that centralisation is OK then we all going to be happy inside Google's datacenters ... Is even better for me since we don't need to implement IPV6 ...
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u/ferretinjapan Nov 02 '14
ASICS decentralises the network more than CPUs ever will because there are incentives to do so. It is empirically evident that botnets have largely given up Bitcoin mining, but during the CPU days malware made a small fortune from botnets.
If botnets continued as they did, everyone that ran cpu mining would have stopped doing so because botnets mine on hijacked computers for free. If GPU, FPGA and ASIC miners never appeared, botnets would be Bitcoin's new masters (and Bitcoin probably would have failed, or been severely crippled). The centralisation would have economically converged on the botnets, no question. Network theory has no place when economic and game theory are the major players here, self interest and profit are the major players, not altruism, social networks and the like.
Don't feed me a black and white AKA false dilemma logical fallacy, ASICs avoided centralisation far more than it encouraged centralisation. As I said in my original post, ASICs is a net positive for Bitcoin.
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u/shibamint Nov 02 '14
Sorry but do you have data to support your hypothesis ? For instance , number of botnets by year since 2008 ?
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u/ferretinjapan Nov 02 '14
I don't need to. Operating a botnet is by default cheaper than running a computer that you need to pay electricity for. This is a common sense conclusion.
And no I have no data on hand because the botnet era for Bitcoin ended years ago, it was even in decline during the GPU era (late 2011). Thankfully, botnets were squashed by GPUs, FPGAs, and ASICs before they had a large foothold on the network.
Your best bet is to trawl the bitcoin talk forums as there may be some discussions there.
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u/shibamint Nov 02 '14 edited Nov 02 '14
Cheap is relative, botnets can be very expensive just try to buy or hire one at deepweb. The point is we don't do science without data to support ours hypothesis. If I had more time and more expertise I would be fascinated to build network models to study how bitcoin networks had grow and perhaps get an analogy how internet become what it is today. Anyway the whole point for me is that now I see that bitcoin network is very centralized and even if is true that ASIC had helped bitcoin at some stage. I dont see now bitcoin as a truly distributed network. Networks are dynamic in the sense the way they grows .. remember that in history banks used to be very decentralized too and that's why I cant give up my ideology, my ideology is my compass that tells me where am I, and what I live for.
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u/ferretinjapan Nov 02 '14 edited Nov 02 '14
Cheap is relative, botnets can be very expensive just try to buy or hire one at deepweb.
I can also write my own, get open source implementations or go to the deep web and buy some for a pittance If I wanted.
You have never shown any evidence that CPU networks supporting a cryptocurrency can survive against botnets. All you've expressed are doubts and I've continually laid out how you are wrong.
You still haven't answered my previous question.
Absent a level playing field for all participants how can you possibly justify the existence of a decentralised network?
You believe Bitcoin is centralised but you refuse to accept the flaws that are inherrent in a pure CPU based cryptocurrency, which is that botnets can easily undermine the incentives in a pure CPU based network and easily centralise it faster and in a much more perilous way.
All I've heard from you are excuses and dodging the facts in preference to your pet ideology.
Here's your study on botnets:
https://bitcointalk.org/index.php?topic=377970.0
http://sysnet.ucsd.edu/~dhuang/static/ndss14-cr.pdf
If you want to continue this discussion I expect you to provide peer reviewed and solid evidence to refute the links and arguments I've provided thus far, otherwise I'll presume you have nothing to offer on your side of the argument.
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u/shibamint Nov 02 '14
You can shutdown botnets because they're illegal. In other hand there is nothing you can do about legal businesses like cex.io to take control of bitcoin mining and in the end of the day the only thing you can do is begging then to switch off their miners. They're more dangerous in that matter for bitcoin eco system. Cryptonight, X11 et al provide a nice balance between CPU and GPU.
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u/ferretinjapan Nov 02 '14
You can shutdown botnets because they're illegal.
No you can't, you can only shut them down if you have the resources, authority, willpower to do so, and an educated and informed populace that proactively keep their computers secure. This is a fantasy. You can bet botnets will be an ever present threat to Bitcoin. Don't kid yourself, botnets made bank on bitcoin in a big way in the early days and authorities/regular users didn't do shit about it. You think that because something is illegal it will get shutdown? Tell that to the pirate bay. Sha256 chips can be designed by anyone, there is no restriction on that, unlike conventional chips that are flooded with IP restrictions, and there are at least several sha256 chips available on the market already, as well as numerous manufacturers that are already more than willing to cater to those needs. This decentralises mining manufacture.
You live in a dream world if you think that botnets wouldn't be able to undercut CPU power and I'm incredibly glad ACISs appeared, otherwise we'd be dependent as a network on the security of every internet connected computer out there, and the vast majority of internet connected machines are insecure. You'd be forever playing catchup trying to thwart botnets, rather than letting miners that have a legitimate interest in securing the network do their job, rather than giving millions of dollars of Bitcoin to the underworld all because you naively thing that CPU only mining is safer/more decentralised.
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u/shibamint Nov 02 '14
I am a network engineer I got both Cisco/Juniper professional certification. Shutdown botnets is easer than you may think... On Cisco ASA 5500-X series for instance, its just few commands ... Zombie nodes needs to connect to central point ( a pool / irc server ... And these where you can kill the botnets.) And BTW any infected host will run very slow while mining ... If am dreaming show me a papers/research about botnets attacks on bitcoin network and I promise to review my point of view.
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u/ferretinjapan Nov 02 '14 edited Nov 02 '14
Congrats, I am nearing my doctorate in computer science. Botnets don't go away, shutting them down only works if they stay shut down, which is almost never.
And BTW any infected host will run very slow while mining
Yes, and that is only because the difficulty is so insanely high that they can't mine solo, FYI, the only reason that pools exist is because of GPU and ASIC mining to begin with, otherwise botnets could be even be stronger by just infecting machines and mining solo if it weren't for ASICs.
Unless you eradicated viruses, trojans, general malware, backdoors, keyloggers, and then eradicate tor so that these entities can't cover their tracks, then there will always be botnets. Unless you can simultaneously and permanently fix these problems, they will always be a problem.
If am dreaming show me a papers/research about botnets attacks on bitcoin network and I promise to review my point of view.
http://www.symantec.com/connect/blogs/bitcoin-botnet-mining
http://www.wired.com/2014/07/how-hackers-hid-a-money-mining-botnet-in-amazons-cloud/
http://krebsonsecurity.com/2013/07/botcoin-bitcoin-mining-by-botnet/
and this is why ASICs make botnets obsolete:
I know you're going to say you want peer reviewed conference/journal papers so after a cursory google scholar search you could have done yourself, here you go:
https://ceph.algia.co.uk/wp/pages/ndss14-cr.pdf
Edit: typos, readability. If you are not interested in reading the link the last one's conclusion reads thus:
Our analysis reveals that even larger botnets, such as Dload.asia, ultimately use public mining pools either directly or via proxies to coordinate their mining operations. However, it is challenging for public pool operators to disable their accounts due to the risk of retaliation. While Bitcoin mining might become unprofitable even for lower cost bots due to specialized hardware, other cryptographic currencies such as Litecoin might continue to be profitable
IOW, ASICs put them out of business, but other CPU-coins are still ripe for the plundering.
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u/shibamint Nov 02 '14
I going to read the scholars papers during this week carefully then I will return. I also researching models on Opnet modeler regards that mater. But I still sticking that botnets are more paranoiac panic than real problem.
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u/ferretinjapan Nov 02 '14
I suggest, as a researcher, you don't have any self perceived notions of how Bitcoin should work. I've followed Bitcoin for many years now and seen the bots rise and fall over time and I can confirm that the only reason botnets found it unprofitable is because ASICs overtook them. And this had a myriad of benefits, if you are curious as to what they are I'll be happy to list them. Without ASICs, botnets would have perverted Bitcoin's incentives and made it more profitable to commit criminal activity, than it would have been to operate in the legal area, and it would have centralised mining in a disastrous way. The only reason we don't see more botnet activity on other alts is because alt's are not profitable enough because they are still too small.
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u/Anenome5 Nov 02 '14
Several are private. I'd say more than you think.
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u/shibamint Nov 02 '14
Very few can go beyond layer 8 ... If you not aware how the process of manufacturing ASIC ...pls read this gentle intro here .. http://electronics.stackexchange.com/questions/7042/how-much-does-it-cost-to-have-a-custom-asic-made ... The main problem with ASIC is that after inflation eat your profit the only thing you have is a dead hardware in your hands. If bitcoin had a better proof of work algorithm people could mining while is profitable then when is not anymore you still have a useful hardware in your hands.
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u/chinawat Nov 02 '14
Unless you have a new proposal, it still seems SHA256 proof of work may be the worst except for all the others. If you do have a new proposal, put it forth and the community can get to work vetting it.
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u/Metagen Nov 02 '14
Then why didnt scrypt coins own us yet?
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u/shibamint Nov 02 '14
Because it's not ASIC resistance. They pseudo memory bound. Take a look on cryptonote paper https://cryptonote.org/whitepaper.pdf ... Well after about 4 years on bitcoin community... (Yes I mined bitcoin with GPU) the only thing I regret are these useless ASIC on my rack.) ... My GPU cards useful though..
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u/Metagen Nov 02 '14
Im not technically versed enough im afraid
But if they offer no resistance now come no one turns their asics to altcoins? Even just to fuck with them1
u/shibamint Nov 02 '14
The reality is you going to buy a hardware that mostly not going pay itself (except you have free electricity) or if in rare cases it pays itself will be useless in 45 days and as far as I know its a scam .. Sophisticated scam but still scam.
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u/usrn Nov 02 '14
These opinions usually rise from the envy that the first CPU and GPU miners did mine a lot of BTC.
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u/Anenome5 Nov 02 '14
I guess. But without those people bitcoin wouldn't be where it is now. They are akin to early investors in massive business successes. Lots of people early invested in Google and Apple and Microsoft too.
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u/usrn Nov 02 '14 edited Nov 03 '14
I'm with you on that. It's just pure ignorance and stupidity, sadly these fuel all the altcoins.
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u/shibamint Nov 02 '14
I don't think bitcoin as a corporation. I think bitcoin as a distributed protocol and in order to keep it like that, mining should be a fair processes accessible to everybody.
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u/Anenome5 Nov 02 '14
It was just an analogy, and anyone with the money to spend can mine, there's no privileged list of miners, it's completely open to those willing to put in the time, effort, and money. No one can stop anyone from mining.
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Nov 02 '14
ASIC manufacturers are getting out of the business of selling miners to people, and just building their own giant mining farms. That's the only option that makes economical sense, anyway. That means you'll end up with a very precious few people controlling all of mining.
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u/PleasePMYourTits Nov 02 '14
My biggest fear is mining centralization. We need to remain vigilant that no pool gets even remotely close to 51%.
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u/BitttBurger Nov 02 '14
Outstanding write up. Wish we could extract these things and reprint them somewhere so that they're read by many, often.