Yeah, no doubt they could easily obtain millions of computers just like that and spin up nodes on all of them, sync with the network. Point is that every Bitcoin node holds a full copy of the block chain which is currently about 200GB in size, so even if CIA created 1M nodes they operate that wouldn't allow them to alter the chain or pose any threat.
They could change the rules for their own advantage but that would only result in a fork, where we get Bitcoin (original unchanged with 10,000+ independent nodes) and a new "CIA Bitcoin" with 1M malicious nodes that nobody would use.
The 51% attack has nothing to do with the nodes, it's about the mining hash rate. The difference here is that while a node could run on a $100 one card computer chip with a HDD attached to it, a mining device (ASIC) which is about 100M times more powerful than a regular PC at solving the SHA256 hash and does nothing else cost about $3000 per unit and provides 110TH/s using about 1500W of energy.
No doubt that CIA could easily cough up billions of dollars and build a huge data center with over 1M mining devices consuming 1.4GW of energy, but even if they did that, all they could do is to delay on chain transactions, causing payments to have a 50% chance to be verified in 20 minutes instead of 10 minutes as they normally do.
Double that setup and CIA could delay transactions to between 10 and 30 minutes. Sure it's annoying with slower payments and all that but that kind of attack isn't really a big threat. Also if something like that where going on for a longer time everyone might just agree to fork into a different algorithm than SHA256, to say something that works best on a GPU.
Monero do this all the time to prevent ASIC units. And with that simple action taken, CIA would suddenly sit there with billions of dollars worth of now worthless Chinese hardware.
It's good to be paranoid, don't get me wrong. All I'm saying is that arguing against Bitcoin is like being afraid of a certain brand of car just because the radio might be produced in China, and then go and buy a 100% Chinese car instead.
I was getting my terminology mixed up: I think I meant hash rate instead of nodes (I thought they were pretty much interchangeable terms, but I guess each node could have a subpar hash rate!).
I guess I should ask your advice about my concerns about crypto then, rather than stating facts, because I’m clearly not as fully up to speed as I thought I was here:
That majority hashrate situation: my understanding of that is that if you control more than 50% of hashrate, you can control the drop rate and game the system to disproportionately award yourself more coins than you should get based on your raw TH/s would suggest. Thus, you’d be able to scoop up a lot more coins than the rest of the pool. Is that correct?
I was told another thing about that majority situation too (not sure if it’s nodes or hash rate though!): if one party controls a majority, they can scupper the built in anonymity and track individual coin transactions down to your personal machine/IP, thus identifying you. Is that correct?
I guess I haven’t looked into crypto in a long time so I may be remembering old out of date concerns, or even just ancient conspiracy theories tbh. I didn’t even know that GPU mining was still a profitable option! So I’m definitely misinformed at the very least!! Thanks :)
No worries :) The development is making fast progress these days.
There are node operators and there are miners, node operators holds a copy of the entire blockchain which is verified by the miners, so there really isn't much that can be altered there, no matter how many nodes one single entity control as a change would just create a fork.
Now mining is what generate profits, 6.25BTC per block is the current payout, in about 4 years from now it'll go down to 3.125BTC per 10 minutes. In any case, controlling more than 50% theoretically allows some tampering with the transactions, but coins that are just stored in a wallet are safe.
It wouldn't go unnoticed tho since the network keeps track of which entities are mining and many people are likely to throw in some more computation power to keep up against whoever tries. Last but not least, most ASIC miners are built in China so the question is will CIA and China cooperate, and how fast could China build them? China has been considered a threat ever since the beginning but they never actually managed to do anything.
Which brings us to the second question, anonymity in Bitcoin is actually a common misconception, machine and IP cannot be traced easily, maybe if you run a full node but since there are light nodes too a hacker wouldn't be able to tell the difference. TOR and VPN can be used as well for additional safety.
Then there's the exchanges who knows your identity, buying Bitcoin from there and transferring to your own wallet before doing say a drug deal isn't very anonymous or smart. If using Monero instead you could get away with that approach since Monero is anonymous by design.
Bitcoin however isn't very anonymous and has never been. Tho with a coin mixer or any simple money laundering scheme involved it can easily be made anonymous. I think the easiest description would be opt-in anonymity, unlike banks where anonymity simply doesn't exist.
So to conclude, there are certain risks with cryptocurrencies still. But they're already far better and safer than any legacy payment system or even cash. It's complicated stuff and requires a huge amount of math and engineering skills to understand, I'm an engineer myself but not even I fully understands how it all works ;)
Thanks! I think I owe you a huge apology then, I guess I was misinformed with some scaremongering way back when I investigated all this.
I’m a mechanical engineer myself. But this is clearly outside of my AOE lol! Definitely over my head, I heard about those potential downsides and that put me off taking the whole crypto movement seriously (I don’t buy drugs or anything like that where anonymity would matter, so had no real need to investigate anon payments). Well, for now anyway. I’m a quick learner given the right incentive!
I might look into this in more detail over Christmas break if mining as an individual is still viable, is there much profit to be had these days? Or would it be better just to invest in, or trade, coins? For example, what kind of return would you expect over the next one or two years from a $5k investment? Does $5k even buy enough kit to get started? How much would you recommend a noob invests? (I have a bunch of old PCs knocking about, I’d say maybe 5-8 old PC’s from various vintages over the past decade [i5’s & i7’s] that I should be able to get up and running if I needed to, and if they’re viable of course. Would they be suitable if I bought GPUs for them?).
To be fair, crypto has been competing directly against the banks and the elite thereby exposed to plenty of propaganda, very similar to Trump in some ways. It's easy to fall for all of that, happened to me as well and caused me to sell low in fear to save a few thousand dollars, unfortunately that little sell action caused a loss of a potential profit of millions.
I got into crypto early due to the governments attempts to implement a cashless society, even tho the digital payment systems provided by the banks never worked very well at all.
Not to mention the mass surveillance and censorship opportunities that would allow, at the time they where already shutting down bank accounts for some right wing parties. (I'm in Sweden). I've seen old people bringing their life savings in cash to the bank only to have it confiscated because the bank simply assume it's drug money.
So to be fair, I'm not a drug dealer or even criminal, I just don't like being fucked over by the government ;)
if mining as an individual is still viable
Mining is still viable, tho I would recommend Ethereum or Monero which can be mined on regular ordinary GPU's and then sold second hand to gamers. Got a few rigs myself powered by this card: https://www.asus.com/us/Motherboards/B250-MINING-EXPERT/ supporting up to 19 GPU's.
For Bitcoin you'll need a ASIC miner, a special piece of hardware that can literally only do SHA256 hashes, while that might be more profitable than GPU mining on Ethereum or Monero, I personally don't think it's worth it considering that once such device is no longer profitable it's literally useless trash, while a GPU mining rig is actually a regular ordinary PC in a sense that can be used for other tasks.
On the software side, I'd recommend https://www.nicehash.com/, it has a open source Linux iso with mining software pre installed, ready to be written to any storage device and booted up instantly on any type of rig, it's really easy to manage and stable as well.
Does $5k even buy enough kit to get started? How much would you recommend a noob invests? (I have a bunch of old PCs knocking about
For GPU mining, $5k would definitely give you a decent mining rig with maybe 6 high end GPU's and return of investment in just a few months. I'm using overclocked GTX 1060 cards (bought for $200/card a few years ago) and get about $1/day/card. Today there's better cards on the market.
Old PC's can definitly be used for mining, larger chases with space and cooling for 2 or more GPU's is actually brilliant, then you wouldn't even need to buy a rig, just the GPU's. Plus that you get some home servers running 24/7 which is perfect for backup, home made IoT, hosting of websites and much more.
[i5’s & i7’s] that I should be able to get up and running if I needed to
I'm using 11 year old i7, 950's in old Russian ATX chases, yeah I'm just as surprised as anyone else but it does work pretty well. They even paid of themselves multiple times. For newer systems I'd prefer AMD tho.
Yeah, no doubt they could easily obtain millions of computers just like that and spin up nodes on all of them, sync with the network. Point is that every Bitcoin node holds a full copy of the block chain which is currently about 200GB in size, so even if CIA created 1M nodes they operate that wouldn't allow them to alter the chain or pose any threat.
They could change the rules for their own advantage but that would only result in a fork, where we get Bitcoin (original unchanged with 10,000+ independent nodes) and a new "CIA Bitcoin" with 1M malicious nodes that nobody would use.
The 51% attack has nothing to do with the nodes, it's about the mining hash rate. The difference here is that while a node could run on a $100 one card computer chip with a HDD attached to it, a mining device (ASIC) which is about 100M times more powerful than a regular PC at solving the SHA256 hash and does nothing else cost about $3000 per unit and provides 110TH/s using about 1500W of energy.
No doubt that CIA could easily cough up billions of dollars and build a huge data center with over 1M mining devices consuming 1.4GW of energy, but even if they did that, all they could do is to delay on chain transactions, causing payments to have a 50% chance to be verified in 20 minutes instead of 10 minutes as they normally do.
Double that setup and CIA could delay transactions to between 10 and 30 minutes. Sure it's annoying with slower payments and all that but that kind of attack isn't really a big threat. Also if something like that where going on for a longer time everyone might just agree to fork into a different algorithm than SHA256, to say something that works best on a GPU.
Monero do this all the time to prevent ASIC units. And with that simple action taken, CIA would suddenly sit there with billions of dollars worth of now worthless Chinese hardware.
It's good to be paranoid, don't get me wrong. All I'm saying is that arguing against Bitcoin is like being afraid of a certain brand of car just because the radio might be produced in China, and then go and buy a 100% Chinese car instead.
Hey thanks for such a detailed reply!
I was getting my terminology mixed up: I think I meant hash rate instead of nodes (I thought they were pretty much interchangeable terms, but I guess each node could have a subpar hash rate!).
I guess I should ask your advice about my concerns about crypto then, rather than stating facts, because I’m clearly not as fully up to speed as I thought I was here:
That majority hashrate situation: my understanding of that is that if you control more than 50% of hashrate, you can control the drop rate and game the system to disproportionately award yourself more coins than you should get based on your raw TH/s would suggest. Thus, you’d be able to scoop up a lot more coins than the rest of the pool. Is that correct?
I was told another thing about that majority situation too (not sure if it’s nodes or hash rate though!): if one party controls a majority, they can scupper the built in anonymity and track individual coin transactions down to your personal machine/IP, thus identifying you. Is that correct?
I guess I haven’t looked into crypto in a long time so I may be remembering old out of date concerns, or even just ancient conspiracy theories tbh. I didn’t even know that GPU mining was still a profitable option! So I’m definitely misinformed at the very least!! Thanks :)
No worries :) The development is making fast progress these days.
There are node operators and there are miners, node operators holds a copy of the entire blockchain which is verified by the miners, so there really isn't much that can be altered there, no matter how many nodes one single entity control as a change would just create a fork.
Now mining is what generate profits, 6.25BTC per block is the current payout, in about 4 years from now it'll go down to 3.125BTC per 10 minutes. In any case, controlling more than 50% theoretically allows some tampering with the transactions, but coins that are just stored in a wallet are safe.
It wouldn't go unnoticed tho since the network keeps track of which entities are mining and many people are likely to throw in some more computation power to keep up against whoever tries. Last but not least, most ASIC miners are built in China so the question is will CIA and China cooperate, and how fast could China build them? China has been considered a threat ever since the beginning but they never actually managed to do anything.
Which brings us to the second question, anonymity in Bitcoin is actually a common misconception, machine and IP cannot be traced easily, maybe if you run a full node but since there are light nodes too a hacker wouldn't be able to tell the difference. TOR and VPN can be used as well for additional safety.
Then there's the exchanges who knows your identity, buying Bitcoin from there and transferring to your own wallet before doing say a drug deal isn't very anonymous or smart. If using Monero instead you could get away with that approach since Monero is anonymous by design.
Bitcoin however isn't very anonymous and has never been. Tho with a coin mixer or any simple money laundering scheme involved it can easily be made anonymous. I think the easiest description would be opt-in anonymity, unlike banks where anonymity simply doesn't exist.
So to conclude, there are certain risks with cryptocurrencies still. But they're already far better and safer than any legacy payment system or even cash. It's complicated stuff and requires a huge amount of math and engineering skills to understand, I'm an engineer myself but not even I fully understands how it all works ;)
Thanks! I think I owe you a huge apology then, I guess I was misinformed with some scaremongering way back when I investigated all this.
I’m a mechanical engineer myself. But this is clearly outside of my AOE lol! Definitely over my head, I heard about those potential downsides and that put me off taking the whole crypto movement seriously (I don’t buy drugs or anything like that where anonymity would matter, so had no real need to investigate anon payments). Well, for now anyway. I’m a quick learner given the right incentive!
I might look into this in more detail over Christmas break if mining as an individual is still viable, is there much profit to be had these days? Or would it be better just to invest in, or trade, coins? For example, what kind of return would you expect over the next one or two years from a $5k investment? Does $5k even buy enough kit to get started? How much would you recommend a noob invests? (I have a bunch of old PCs knocking about, I’d say maybe 5-8 old PC’s from various vintages over the past decade [i5’s & i7’s] that I should be able to get up and running if I needed to, and if they’re viable of course. Would they be suitable if I bought GPUs for them?).
To be fair, crypto has been competing directly against the banks and the elite thereby exposed to plenty of propaganda, very similar to Trump in some ways. It's easy to fall for all of that, happened to me as well and caused me to sell low in fear to save a few thousand dollars, unfortunately that little sell action caused a loss of a potential profit of millions.
I got into crypto early due to the governments attempts to implement a cashless society, even tho the digital payment systems provided by the banks never worked very well at all.
Not to mention the mass surveillance and censorship opportunities that would allow, at the time they where already shutting down bank accounts for some right wing parties. (I'm in Sweden). I've seen old people bringing their life savings in cash to the bank only to have it confiscated because the bank simply assume it's drug money.
So to be fair, I'm not a drug dealer or even criminal, I just don't like being fucked over by the government ;)
Mining is still viable, tho I would recommend Ethereum or Monero which can be mined on regular ordinary GPU's and then sold second hand to gamers. Got a few rigs myself powered by this card: https://www.asus.com/us/Motherboards/B250-MINING-EXPERT/ supporting up to 19 GPU's.
For Bitcoin you'll need a ASIC miner, a special piece of hardware that can literally only do SHA256 hashes, while that might be more profitable than GPU mining on Ethereum or Monero, I personally don't think it's worth it considering that once such device is no longer profitable it's literally useless trash, while a GPU mining rig is actually a regular ordinary PC in a sense that can be used for other tasks.
On the software side, I'd recommend https://www.nicehash.com/, it has a open source Linux iso with mining software pre installed, ready to be written to any storage device and booted up instantly on any type of rig, it's really easy to manage and stable as well.
For GPU mining, $5k would definitely give you a decent mining rig with maybe 6 high end GPU's and return of investment in just a few months. I'm using overclocked GTX 1060 cards (bought for $200/card a few years ago) and get about $1/day/card. Today there's better cards on the market.
Old PC's can definitly be used for mining, larger chases with space and cooling for 2 or more GPU's is actually brilliant, then you wouldn't even need to buy a rig, just the GPU's. Plus that you get some home servers running 24/7 which is perfect for backup, home made IoT, hosting of websites and much more.
I'm using 11 year old i7, 950's in old Russian ATX chases, yeah I'm just as surprised as anyone else but it does work pretty well. They even paid of themselves multiple times. For newer systems I'd prefer AMD tho.