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Date: Mon, 04 Nov 2013 16:45:24 -0500
From: Alan Reiner <etotheipi@gmail.com>
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Subject: Re: [Bitcoin-development] Auto-generated miner backbone
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Sorry guys, I'm a little late to the party here.  I skimmed over the
paper, and appreciated Peter Todd's recap of it.  My first thought was
that this seems profit-neutral at best, when you take into account all
the races you lose by trying to beat the propagation of other miners'
blocks.

So given the assumption that Alice is "well-connected" as Peter
mentioned, it seems like this is a concern.  But is this a realistic
assumption?  All miners have an incentive to be thoroughly connected to
one another, to make sure they minimize the amount of time they spend
mining on forks and that their blocks win with minimal chance of being
orphaned.  Is it realistic that one miner can somehow monopolize the
good connections when the big miners are already trying to do the same
thing for honest reasons?  If you have a network full of honest miners
and this one selfish-miner, it seems that all the honest miners need to
do is try to establish those connections to each other as well as Alice
does, and Alice will end up orphaning all her profit away.

Furthermore, you can de-incentivize it by simply randomizing the order
of broadcasts.  Although you are maintaining multiple concurrent
connections, the data still exits your network card as a serial stream
of packets, and it seems that if you randomize who gets your new-block
broadcasts first, then it further reduces the Alice's advantage if she's
not guaranteed to "be first."   Sure, she can do it sometimes, but it
would seem that even a couple failures to beat the rest of the network
is going to erase most/all of what she gained on the blocks/chains that
she wins.

I liked the statement by Chris WIllmer on the reddit thread:  "practice
> theory".  The more we can theorize our way to believing the
conclusions that this is a problem, the more incentive there is for
someone intelligent to actually try it.  It's very possible that the
conditions needed to execute this "attack" just cannot be attained in
practice. 

-Alan




On 11/04/2013 04:04 PM, Peter Todd wrote:
> On Mon, Nov 04, 2013 at 02:12:44PM -0500, Ittay wrote:
>> On Mon, Nov 4, 2013 at 10:25 AM, Ittay <ittay.eyal@cornell.edu> wrote:
>>
>>> As for the rational motivation of the individual miners - that's a good
>>> point!
>>> Here is a solution we did not put in the paper due to space constraints
>>> that should alleviate your concern:
>>> Instead of locally choosing a block at random, have a deterministic
>>> pseudo-random mechanism for choosing between competing chains. E.g., take
>>> the one whose last block hash is smaller. This way all miners choose the
>>> same chain, and the guarantees of our solution hold.
>>>
>> I take that back.
> Speaking of, I'm going to take back my solution as well; I misunderstood
> your paper.
>
> So here's your argument in a ELI5 nutshell:
>
> Alice is a miner with some amount of hashing power. She has the ability
> to detect new blocks on the network extremely effectively for whatever
> reason; in short she has unusually good knowledge of the state of the
> network. She is also very good at publishing her blocks and getting them
> to the majority of hashing power in very little time; she has unusually
> good connectivity to all miners. (low-latency and high bandwidth)
>
> She's so good at this that when she finds a new block, she keeps it a
> secret! She can get away with this because she knows that the moment Bob
> finds a block, she can immediately broadcast it to the rest of the
> network before the other block propagates. Instead of building on Bob's
> blocks, almost everyone builds on Alice's block, depriving Bob of the
> revenue. Gradually Alice gets more and more miners because Bob, and
> other pools, don't pay out as much.
>
> You propose a rule where essentially miners extend Bob's block 50% of
> the time, and show in your paper how that leads to a scenario where
> Alice needs to have at leastr 1/4 of the total hashing power to
> succesfully pull this attack off anyway.
>
>
> What I did succesfully show is that for a short-term rational miner
> they're still better off mining to extend the block they hear about
> first rather than using your pick-one-at-random rule, because when you
> hear about a block is important information about whether or not the
> majority is mining on it. This is true even if others are using the
> pick-one-at-random rule. (they're better defecting than doing what's
> right for the whole network) Even worse is that miners have a rational
> incentive to broadcast such near-target headers to try to encourage
> other miners to work on the same fork that they are working on. The
> near-target idea came about for a totally different reason, so it's
> something that might wind up being implemented anyway.
>
> Mike Hearn's idea of making it easy to identify nodes associated with
> hashing power is still wrong. Although again, it's something that miners
> themselves have rational incentives to do. (you always want to encourage
> others to send you their blocks, and you also want to be able to send
> your blocks to the majority of hashing power as quickly as possible)
>
> Where the idea goes wrong is it makes it easier for Alice to identify
> hashing power, specifically where she needs to send her blocks to
> distribute them to the majority as quickly as possible. The second
> problem occurs if those nodes also distribute blocks to connecting
> peers: this makes it easy for Alice to be sure she'll hear about a new
> block as soon as possible by connecting to every one of those peers with
> a high-speed, low-latency connection. Bizzarely the idea does work if
> the advertised nodes only accept blocks, and never send blocks - instead
> miners would *only* send their blocks to other miners who have proven
> their hashing power, and do so essentially largest miner to smallest.
> Now unless Alice already is a large miner, her strategy can't work.  Of
> course this will strongly encourage further centralization of pools. But
> it is in the interests of rational miners sadly.
>
> That blocks take a finite amount of time to propagate makes the problem
> worse: for Alice to learn that another block has been mined only
> requires her to receive the small 80 byte header from a peer; she
> doesn't need the whole block. She thus can know the block exists well
> before it has a chance to propagate fully. Even if every miner were
> directly peered to every other as some suggest, Alice could simply make
> smaller blocks, faster propagating than everyone else and use especially
> low-latency connections to win the race.
>
> On the other hand, the Bitcoin protocol is currently designed such that
> a miner can mine a block without knowing the previous block in full.
> Given the large block reward and/or a supply of transactions they knew
> no other miner had a rational miner would start trying to extend the
> longest chain they know about prior to actually receiving and validating
> the full block. Again, when miners start doing this - perhaps out of
> desperation due to low revenue - as long as Alice has the lowest latency
> network she'll win. (she doesn't even need to have the highest bandwidth
> in this case) We can change the protocol to force miners to fully
> validate blocks prior to mining extensions, but that only forces Alice
> to get more bandwidth - she still wins.
>
> Speaking of low-latency, latency not only centralizes control in a
> single pool, it centralizes pools and even mining hardware itself in a
> single physical location. Anyone at the edges of the propagation network
> will get comparatively less revenue than those in the center, gradually
> tightening the network, even without selfish mining. Alice's strategy of
> course should be to position her nodes in the geographical center. It's
> worth noting how if Alice is the one with the lowest average latency,
> she will win against any other miner trying to persue the same selfish
> miner strategy that she is using.
>
>
> Finally nLockTime makes the selfish miner strategy even more profitable.
> You may not be aware, but it's possible to make a transaction that can't
> be mined until some time in the future, measured by either block height
> or block timestamp. I've proposed to use this mechanism in
> announce/commit sacrifices: you create a transaction that can't be mined
> until some point in the future that sacrifices a large amount to mining
> fees, and then prior to that point you include it in the blockchain as
> data, proving the whole world knew about your transaction. The idea was
> that which miner managed to include the transaction, and collect the
> reward, would be random. However whenever Alice is able to maintain a
> lead over other miners she's able to reliably mine significantly more of
> those valuable transactions, further increasing her revenue over other
> miners.
>
>
> I must say, you've really opened a can of worms...
>
>
>
> ------------------------------------------------------------------------------
> Android is increasing in popularity, but the open development platform that
> developers love is also attractive to malware creators. Download this white
> paper to learn more about secure code signing practices that can help keep
> Android apps secure.
> http://pubads.g.doubleclick.net/gampad/clk?id=65839951&iu=/4140/ostg.clktrk
>
>
> _______________________________________________
> Bitcoin-development mailing list
> Bitcoin-development@lists.sourceforge.net
> https://lists.sourceforge.net/lists/listinfo/bitcoin-development


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    Sorry guys, I'm a little late to the party here.&nbsp; I skimmed over the
    paper, and appreciated Peter Todd's recap of it.&nbsp; My first thought
    was that this seems profit-neutral at best, when you take into
    account all the races you lose by trying to beat the propagation of
    other miners' blocks. <br>
    <br>
    So given the assumption that Alice is "well-connected" as Peter
    mentioned, it seems like this is a concern.&nbsp; But is this a realistic
    assumption?&nbsp; All miners have an incentive to be thoroughly connected
    to one another, to make sure they minimize the amount of time they
    spend mining on forks and that their blocks win with minimal chance
    of being orphaned.&nbsp; Is it realistic that one miner can somehow
    monopolize the good connections when the big miners are already
    trying to do the same thing for honest reasons?&nbsp; If you have a
    network full of honest miners and this one selfish-miner, it seems
    that all the honest miners need to do is try to establish those
    connections to each other as well as Alice does, and Alice will end
    up orphaning all her profit away.<br>
    <br>
    Furthermore, you can de-incentivize it by simply randomizing the
    order of broadcasts.&nbsp; Although you are maintaining multiple
    concurrent connections, the data still exits your network card as a
    serial stream of packets, and it seems that if you randomize who
    gets your new-block broadcasts first, then it further reduces the
    Alice's advantage if she's not guaranteed to "be first." &nbsp; Sure, she
    can do it sometimes, but it would seem that even a couple failures
    to beat the rest of the network is going to erase most/all of what
    she gained on the blocks/chains that she wins.<br>
    <br>
    I liked the statement by Chris WIllmer on the reddit thread:&nbsp;
    "practice &gt; theory".&nbsp; The more we can theorize our way to
    believing the conclusions that this is a problem, the more incentive
    there is for someone intelligent to actually try it.&nbsp; It's very
    possible that the conditions needed to execute this "attack" just
    cannot be attained in practice.&nbsp; <br>
    <br>
    -Alan<br>
    <br>
    <br>
    <br>
    <br>
    <div class="moz-cite-prefix">On 11/04/2013 04:04 PM, Peter Todd
      wrote:<br>
    </div>
    <blockquote cite="mid:20131104210451.GA4443@petertodd.org"
      type="cite">
      <pre wrap="">On Mon, Nov 04, 2013 at 02:12:44PM -0500, Ittay wrote:
</pre>
      <blockquote type="cite">
        <pre wrap="">On Mon, Nov 4, 2013 at 10:25 AM, Ittay <a class="moz-txt-link-rfc2396E" href="mailto:ittay.eyal@cornell.edu">&lt;ittay.eyal@cornell.edu&gt;</a> wrote:

</pre>
        <blockquote type="cite">
          <pre wrap="">As for the rational motivation of the individual miners - that's a good
point!
Here is a solution we did not put in the paper due to space constraints
that should alleviate your concern:
Instead of locally choosing a block at random, have a deterministic
pseudo-random mechanism for choosing between competing chains. E.g., take
the one whose last block hash is smaller. This way all miners choose the
same chain, and the guarantees of our solution hold.

</pre>
        </blockquote>
        <pre wrap="">
I take that back.
</pre>
      </blockquote>
      <pre wrap="">
Speaking of, I'm going to take back my solution as well; I misunderstood
your paper.

So here's your argument in a ELI5 nutshell:

Alice is a miner with some amount of hashing power. She has the ability
to detect new blocks on the network extremely effectively for whatever
reason; in short she has unusually good knowledge of the state of the
network. She is also very good at publishing her blocks and getting them
to the majority of hashing power in very little time; she has unusually
good connectivity to all miners. (low-latency and high bandwidth)

She's so good at this that when she finds a new block, she keeps it a
secret! She can get away with this because she knows that the moment Bob
finds a block, she can immediately broadcast it to the rest of the
network before the other block propagates. Instead of building on Bob's
blocks, almost everyone builds on Alice's block, depriving Bob of the
revenue. Gradually Alice gets more and more miners because Bob, and
other pools, don't pay out as much.

You propose a rule where essentially miners extend Bob's block 50% of
the time, and show in your paper how that leads to a scenario where
Alice needs to have at leastr 1/4 of the total hashing power to
succesfully pull this attack off anyway.


What I did succesfully show is that for a short-term rational miner
they're still better off mining to extend the block they hear about
first rather than using your pick-one-at-random rule, because when you
hear about a block is important information about whether or not the
majority is mining on it. This is true even if others are using the
pick-one-at-random rule. (they're better defecting than doing what's
right for the whole network) Even worse is that miners have a rational
incentive to broadcast such near-target headers to try to encourage
other miners to work on the same fork that they are working on. The
near-target idea came about for a totally different reason, so it's
something that might wind up being implemented anyway.

Mike Hearn's idea of making it easy to identify nodes associated with
hashing power is still wrong. Although again, it's something that miners
themselves have rational incentives to do. (you always want to encourage
others to send you their blocks, and you also want to be able to send
your blocks to the majority of hashing power as quickly as possible)

Where the idea goes wrong is it makes it easier for Alice to identify
hashing power, specifically where she needs to send her blocks to
distribute them to the majority as quickly as possible. The second
problem occurs if those nodes also distribute blocks to connecting
peers: this makes it easy for Alice to be sure she'll hear about a new
block as soon as possible by connecting to every one of those peers with
a high-speed, low-latency connection. Bizzarely the idea does work if
the advertised nodes only accept blocks, and never send blocks - instead
miners would *only* send their blocks to other miners who have proven
their hashing power, and do so essentially largest miner to smallest.
Now unless Alice already is a large miner, her strategy can't work.  Of
course this will strongly encourage further centralization of pools. But
it is in the interests of rational miners sadly.

That blocks take a finite amount of time to propagate makes the problem
worse: for Alice to learn that another block has been mined only
requires her to receive the small 80 byte header from a peer; she
doesn't need the whole block. She thus can know the block exists well
before it has a chance to propagate fully. Even if every miner were
directly peered to every other as some suggest, Alice could simply make
smaller blocks, faster propagating than everyone else and use especially
low-latency connections to win the race.

On the other hand, the Bitcoin protocol is currently designed such that
a miner can mine a block without knowing the previous block in full.
Given the large block reward and/or a supply of transactions they knew
no other miner had a rational miner would start trying to extend the
longest chain they know about prior to actually receiving and validating
the full block. Again, when miners start doing this - perhaps out of
desperation due to low revenue - as long as Alice has the lowest latency
network she'll win. (she doesn't even need to have the highest bandwidth
in this case) We can change the protocol to force miners to fully
validate blocks prior to mining extensions, but that only forces Alice
to get more bandwidth - she still wins.

Speaking of low-latency, latency not only centralizes control in a
single pool, it centralizes pools and even mining hardware itself in a
single physical location. Anyone at the edges of the propagation network
will get comparatively less revenue than those in the center, gradually
tightening the network, even without selfish mining. Alice's strategy of
course should be to position her nodes in the geographical center. It's
worth noting how if Alice is the one with the lowest average latency,
she will win against any other miner trying to persue the same selfish
miner strategy that she is using.


Finally nLockTime makes the selfish miner strategy even more profitable.
You may not be aware, but it's possible to make a transaction that can't
be mined until some time in the future, measured by either block height
or block timestamp. I've proposed to use this mechanism in
announce/commit sacrifices: you create a transaction that can't be mined
until some point in the future that sacrifices a large amount to mining
fees, and then prior to that point you include it in the blockchain as
data, proving the whole world knew about your transaction. The idea was
that which miner managed to include the transaction, and collect the
reward, would be random. However whenever Alice is able to maintain a
lead over other miners she's able to reliably mine significantly more of
those valuable transactions, further increasing her revenue over other
miners.


I must say, you've really opened a can of worms...

</pre>
      <br>
      <fieldset class="mimeAttachmentHeader"></fieldset>
      <br>
      <pre wrap="">------------------------------------------------------------------------------
Android is increasing in popularity, but the open development platform that
developers love is also attractive to malware creators. Download this white
paper to learn more about secure code signing practices that can help keep
Android apps secure.
<a class="moz-txt-link-freetext" href="http://pubads.g.doubleclick.net/gampad/clk?id=65839951&amp;iu=/4140/ostg.clktrk">http://pubads.g.doubleclick.net/gampad/clk?id=65839951&amp;iu=/4140/ostg.clktrk</a></pre>
      <br>
      <fieldset class="mimeAttachmentHeader"></fieldset>
      <br>
      <pre wrap="">_______________________________________________
Bitcoin-development mailing list
<a class="moz-txt-link-abbreviated" href="mailto:Bitcoin-development@lists.sourceforge.net">Bitcoin-development@lists.sourceforge.net</a>
<a class="moz-txt-link-freetext" href="https://lists.sourceforge.net/lists/listinfo/bitcoin-development">https://lists.sourceforge.net/lists/listinfo/bitcoin-development</a>
</pre>
    </blockquote>
    <br>
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