Hi all, I figured I’d write this as I’ve heard about “51% attacks” over the last few years, and I felt it important to dive into it in depth.
What is a “51% attack”? it’s when one or more parties collude together to control all of the cryptocurrency coins that are created. The largest concern of recent is with a certain type of propitiatory Miners (ASICs); that take control of both creating new blocks and confirming previous blocks. Roger Ver and other activists have talked about how this would be detrimental to the Crypto industry. l need to state that the primary concern is with Proof of Work (PoW); this does exist in Proof of Stake (PoS) however the outcome is a bit different, which I’ll talk about later.
Next when you talk about taking control of a blockchain network, you need the majority of mining capabilities (hashrate), thus the majority being 51 [or greater]%. And since you have control of the majority of the network it’s dubbed as a “51% attack”. When a person, organization or colluding parties have majority control of the network, what can they do? As of this writing the Bitcoin network is a primarily a currency network, unlike a DASH, or a Decred network that has both currency creation/confirming and governance such as voting for community proposals. Or a third dimension of a blockchain that is used for accounting and ledger purposes. So far so good?
This is where advocates say, “Security of the network is at risk”. So, to talk through this, when you control the network you’re essentially creating your own coins, and/or voting and winning the on the governance that you wish to win (assuming the blockchain has voting), or “cooking the books” on an account ledger blockchain. So to summarize this, yes Security of the network is important!
But that’s not all, what happens next is blockchains are created and confirmed with various lengths on local nodes all the time. Sometime the node’s confirmation of winning the block is rejected, and which will cause that block to become “orphaned”. Orphans are very natural events, and a new block should be created behind them. [Interrupted transactions should fail, and you’d need to resend this transaction.] Notice that orphaned blocks are very infrequent with blockchains with higher difficulties, such as BTC and ETH, however you will run into this with smaller blockchains [that’s for a different blog]. The importance of this topic is the concept of “The Longest Line”, which is how individual nodes organize around themselves. (i.e. one node is at block 304534 while the second node is at block 303455, the first node is the longest line, so it forces all other nodes to catchup with it.
To bring this into together, yes security is important, yes being the longest line is important, however is a 51% attack even matter?
The answer is, perhaps not! Meaning in the Bitcoin network they’ll generate new coins, and yes the ones who investing the most in hash power should get the most coins! No? [even ASIC mined coins]
However, if you are governance coin such as Decred where votes are submitted, then yes a 51% attack is important, however they should be able to win the vote is they put $100,000,000 of Decred to be voted. Right?! This is I form of Elitism, but they did vote the most with the most amount of coins. But the way this situation, describes a Proof of Stake (PoS) network, because the only coin creation is by holding coins, and the more coins you hold the more voting power you have. This is the largest downside with PoS. (in late 2015, there were situations where if you had six or more DASH Masternodes, that you can form a ring and collectively collude, creating the longest line, and then publishing it against the mainnet; this would capture all the coins created for a duration of time when colluding. since April 2016 that DASH code was revised, and these bad actors were removed) It’s important to bring up history for such cases such as this, as this has been thought through, earlier development has been corrected and learned from to help future generations of blockchain technology.
To summarize this blog, “51% attacks” exist, have and will occur in the future, however they are not necessarily a bad thing; especially if you’re the majority holder of the coins! P.s. this happens with public companies as well, where the Majority holder has an uber amount of voting power. Warren Buffet and Bill Gates are not seen as bad nor elitists, no?
Hope this helps.
Thanks for the research on the team. I was also put off by the total lack of communication surrounding the MN deployment. It's been months now and they are not capable of answering simple questions about MNs. It seems they announced it without actually understanding what a MN integration would entail (which is a fork and thus most likely delisting from exchanges). I am a bit disapointed as I was looking forward to it and actually started accumulating Wabi recently as it looked like the price had suffered a decent correction.
YES! I can absolutely relate to what you're describing - it is a feeling deep within my bones, an intuitive KNOWING how this turns out and crypto will change the monetary system.... And sooner than I had envisioned.
@kelnel you know, i'm back on the Douglas Adams books. he wrote Hitchhikers through Almost Harmless for kids... . however i didn't realize until recently he wrote Dirk Gentry, and Salmon of Doubt (post death), for adults, and went reading them now. OH WOW, they are much different reads then when i was 15 yrs old!
Awesome @phobos777 ! Thx for posting. I aggree with you. I also think that the masternode sector will outperform other crypto sectors (and PoS outperform PoW). Here is an interesting website to keep track of such index: https://cryptdx.com/@phobos777 said:
Due to these two factors, I strongly believe that the cryptocurrencies with masternodes would outperform, by at least 2,000% over the duration of the next 7 – 10 years. See now you know why I needed to draw folks with a long-term attitude!!
In summary, if you start to observe Masternode vs non-masternode cryptocurrencies, invest in masternodes, and hold on for the long run, I think we will do very well.* Let me know your thoughts!!!!!!
There is no response that I know of. Even though a lot of experts call it the death of Petro (which I question because this executive order only apply to US citizens, and Venezuela has many other friends), seems like Maduro/Venezuela is acting like nothing happened. I think the other countries dont really care for now. They think they have bigger fish to fry. Trump has brought such a shift in the international political landscape that right now (redefining what "allies" are, clearly changing the balance of power), I think this particular international political squirmish is the least of their worries.
After being mentioned on The Daily Show by Trevor Noah, the Ellen show by Ellen, Bitcoin is now the main story of this week's John Oliver's Last Week Tonight... We are officially going mainstream friends. Pretty basic stuff, but that's what we want. Plus this guy is just overall too funny
Shoutout to INSANE, one of my first favs, who's being cited by John just in time with new wallet realease and fixes to PoS and rewards for MNs