[Bitcoin-development] Long-term mining incentives

Alex Mizrahi alex.mizrahi at gmail.com
Wed May 13 12:26:17 UTC 2015

Let's consider a concrete example:

1. User wants to accept Bitcoin payments, as his customers want this.
2. He downloads a recent version of Bitcoin Core, checks hashes and so on.
(Maybe even builds from source.)
3. Let's it to sync for several hours or days.
4. After wallet is synced, he gives his address to customer.
5. Customer pays.
6. User waits 10 confirmations and ships the goods. (Suppose it's something
very expensive.)
7. Some time later, user wants to convert some of his bitcoins to dollars.
He sends his bitcoins to an exchange but they never arrive.

He tries to investigate, and after some time discovers that his router (or
his ISP's router) was hijacked. His Bitcoin node couldn't connect to any of
the legitimate nodes, and thus got a complete fake chain from the attacker.
Bitcoins he received were totally fake.

Bitcoin Core did a shitty job and confirmed some fake transactions.
User doesn't care that *if *his network was not impaired, Bitcoin Core *would
have *worked properly.
The main duty of Bitcoin Core is to check whether transactions are
confirmed, and if it can be fooled by a simple router hack, then it does
its job poorly.

If you don't see it being a problem, you should't be allowed to develop
anything security-related.

If a node is connected to 99 dishonest nodes and 1 honest node, it can
> still sync with the main network.

Yes, it is good against Sybil attack, but not good against a network-level
Attack on user's routers is a very realistic, plausible attack.
Imagine if SSL could be hacked by hacking a router, would people still use

Fucking no.

> A 3 month reversal would be devastating, so the checkpoint isn't adding
> much extra security.

WIthout checkpoints an attacker could prepare a fork for $10.
With checkpoints, it would cost him at least $1000, but more likely upwards
of $100000.
That's quite a difference, no?

I do not care what do you think about the reasons why checkpoints were
added, but it is a fact that they make the attack scenario I describe above
hard to impossible.

Without checkpoints, you could perform this attack using a laptop.
With checkpoints, you need access to significant amounts of mining ASICs.
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