
Bitcoin Workings Explained, for Real - iroq
http://michal.space/ipns/michal.space/
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Yatima1460
I wonder about a vulnerability: what happens if an organization buys so many
computers to create so many nodes they will be about 25-50% of the entire
network?

Can this organization exploit the network by mining the majority of blocks to
invalidate some transactions or in some other way?

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iroq
I describe this in the "Security in numbers" paragraph in the last part (Part
Three):

"As pointed out before, giving rewards for creating blocks creates an arms
race in computing power. Transaction fees only magnify the effect. This is
very healthy for the security of our system — anyone can add blocks, so anyone
can do it according to their own agenda, but to have any kind of significant
effect on the whole thing they would have to invest a tremendous amount of
resources.

Remember, the only way to determine which version of the transaction history
is the commonly accepted one to look for the longest one. In theory, someone
possessing 51% of the computing power of the network is able to completely
control the system, as they can just start their own branch of the blockchain
and create new blocks faster than anyone else. The resulting branch will
become the longest and therefore accepted one, invalidating any blocks mined
on other branches. Performing the 51% attack is however uneconomical even for
actors the size of a government or a multinational corporation — it would
simply cost too much for the trouble."

To give you some numbers, an Antminer S9 costs $3k and provides 14 TH/s.
Current Bitcoin network hashrate is around 7,700,000 TH/s. Assuming a 51%
attack is not underway already, an attacker needs to have at least the same
hashrate as the rest of the network. This would cost over 1,5 billion dollars
in non-reusable single purpose hardware alone. Add to this the ginormous power
costs and additional costs of housing, maintenance, cabling etc. and you start
to get the idea.

A sizeable entity who doesn't have complete majority can still make life
harder for users by censoring specific transactions (simply deliberately
choosing not to include them in their blocks), but this is more akin to a DDoS
attack than a security breach.

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Yatima1460
So besides bugs in the code, theoretically speaking the 51% computing power is
the only real "vulnerability"?

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iroq
Correct, as far as I know. Breaking the cryptography with quantum computers is
often raised as well, but Bitcoin can transition to a quantum-resistant
algorithm if that proves to be a real danger.

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cheez
Great introduction to the math/comp sci behind it, and I'm not sure if I
missed it but I am wondering how nodes get in contact with each other.

As it is decentralized, it isn't obvious how the network knows about itself.

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samlewis
Theres a number of DNS seed servers that are hard coded into the Bitcoin core
codebase. A Bitcoin client does a nslookup on these seeds to find intial peers
to connect to and bootstraps this way.

For a bit more detail and if you're interested in this sort of thing, have a
read of my blog article I wrote about the technical side of Bitcoin:
[http://www.samlewis.me/2017/06/a-peek-under-bitcoins-
hood/](http://www.samlewis.me/2017/06/a-peek-under-bitcoins-hood/)

~~~
cheez
The original post and yours complement each other very well, thanks for the
information!

