Monday, June 23, 2014

Does the NSA own bitcoin?

Eventually, selfishness will lead one group to rig, cheat, control, etc. the system so they can get better returns.  That's exactly what happened.  Here's the flaw they exploited.

When a single entity ("a single miner" or "a mining pool") controls over 50% of the transaction processing it can control the entire system.   This means they can "see" every transaction, spend the same coins more than once, and deny transactions they don't approve of. 

That's finally happened.  According to analysis from Cornell researchers, a mining pool called GHash has now reached 51% for large stretches of time (effective "ownership" is likely much less).
I don't know enough about bitcoin mathematics, but there seems to be a fair amount of buzz about this.


Ask Satoshi said...

No-one has exploited a 51% attack on Bitcoin.

There is the potential for this to happen currently, but no-one has 'exploited' a 'flaw' like you state.

R.K. Brumbelow said...

@Ask Satoahi
That we know of presently and publicly.

This is the issue with No Such Agency and her sisters: For the most part they are competent.

Teenage boys with a new toy take it out and play with it, whereas a General knows that logistics wins wars.

kx59 said...

@Ask Satoshi: 1) how do you know this?
2) This would not be a hack attack, more likely a long and subversive game.

3) I find myself to be content to be way behind the investment curve for once.

Andy Roehrl said...

The only way this would make sense for the NSA would be if they were smart enough to have come up with the bitcoin protocols in order to combine the hashing power of all miners to break codes and in exchange the pay them for doing so.

Michael Brahier said...

*shudder* That's a scary thought.