Showing posts with label Proof-of-work system. Show all posts
Showing posts with label Proof-of-work system. Show all posts

Friday, April 25, 2014

The bitcoin logo
The bitcoin logo (Photo credit: Wikipedia)




There is no greater point of weakness in Bitcoin than a 51% attack. A fifty-one percent attack can shut down the network. This video discusses all the attack vectors available to an attacker. And there are many, even worse, the devastation available is catastrophic. While a 51% attack doesn't appear to offer a lot of financial gain, history is not just made up of rational actors.

James goes through Transaction Denial of Service, Selfish Mining, Monopoly Mining and Double Spending, finding fault with proposed patches and solutions. It is not pretty. As Gavin Andresen says, if someone was able to run a 51% attack "that would be bad". We agree. It would be very bad.

At the end of the video we discuss protocol changes that would make an attack much more difficult. We highlight Proof of Stake as a fallback algorithm. The biggest advantage is that POS provides a MUCH higher cost to the attacker for perpetrating such an attack. That, would be good.

In part one, we go through a cost analysis of the current hardware needed to launch a successful 51% attack to get a better picture how much it might cost. Unfortunately, the numbers are lower than expected, and most of the previously published values come in three to fifty times higher than actuality. In part two we will talk more about what an attacker might be able to do (double spending is not the worse tool at their disposal) and we prod at some possible solutions. Stay tuned


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Sunday, March 2, 2014

Bitcoin 101 - Merkle Roots and Merkle Trees - Bitcoin Coding and Software - The Block Header

The bitcoin logo
The bitcoin logo (Photo credit: Wikipedia)



Most people on earth have never even heard of Merkle roots. But bitcoin programmers deal with them every day. This is old school technology in terms of software, but still very important in terms of security and data management. In this video James will walk you into the world of Merkle roots and Ralph Merkle, who invented this technology in the late 1980s. If you like seeing actual coding examples, your in luck. James starts incorporating actual python examples...after all, would you want to listen to Car Talk and not want to hear about a muffler? Enjoy.


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Thursday, January 23, 2014

Bitcoin 101 - Understanding Bitcoin (pt. 3 of 3) - A Beginner's Guide

The bitcoin logo
The bitcoin logo (Photo credit: Wikipedia)



Wikipedia's a great place to start when you want to learn about anything. Trouble is bitcoin is so novel, that most people get even more confused when they read the Wikipedia page. With terms like double spending, decentralized computing and cryptocurrency, it often feels like one might need a PhD just to read wikipedia. Our humble goal is to help you get through the first paragraph and get a full grasp of these terms. So, sit back, relax, in due time you'll be understanding this amazing new currency like a bitcoin insider.

This episode (number three) focuses on PROOF OF WORK.
This video is part two of the three part series

For reference, here's Wikpedia's first paragraph on Bitcoin

"Bitcoin is an open source peer-to-peer payment network and digital currency introduced in 2009 by pseudonymous developer "Satoshi Nakamoto". Bitcoin has been called a cryptocurrency because it uses cryptography to secure funds. Transactions transfer bitcoins, the unit of currency, between Bitcoin addresses derived from cryptographic public keys. To spend the funds associated with an address, a user must broadcast a payment message digitally signed with the associated private key. Transactions are verified by a decentralized network of computers all over the world. Specialized computers use a proof-of-work system to prevent people from copying and spending the same bitcoin multiple times, a problem for digital currencies known as double-spending. The operators of these computers, known as "miners", are rewarded with transaction fees and newly minted bitcoins."

Welcom to WBN's Bitcoin 101 Blackboard Series -- a full beginner to expert course in bitcoin. We hope you enjoy. And remember the official WBN launch is coming up : January 1st, 2014.
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