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I was recently listening to Mike Green and Anthony Pompliano debate the future of Bitcoin on RealVision. And Mike raised an interesting point regarding Bitcoin (I'm paraphrasing). "Scenario: Let's say the majority of miners, which are no longer bound by financial incentives, decides to attack the Bitcoin network by continuously rejecting blocks, could they do it? Could you essentially reject-spam Bitcoin's network?"

That, I found to be an interesting question to which I haven't been able to find an answer. Is anyone able to shed light on the plausibility of this scenario?

Murch
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Paul Hoffman
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2 Answers2

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Bitcoin nodes consider the chain with the most work the best chain. Whenever a miner finds a new block that extends the best chain, they broadcast it to the network and all nodes update their chaintip as they hear about it. Miners could ignore that new blocks are found, but this would not affect any other network participants.

They could however instead provide a competing chaintip. As your scenario states that the attackers have a majority of the hashrate, (among other things), they could build a chain of empty blocks, i.e. blocks that only pay the block subsidy to the miners, but don't confirm any transactions. This would allow the attackers to collect the block subsidy, but they would no longer be collecting transaction fees, reducing their revenue by (currently) about 15%. However, the delay in confirmations would drive up the feerates of the waiting transactions, and the lost revenue would quickly increase.

Note that the attackers must continue to mine blocks in order to maintain their denial of service, or they would be out-competed by the minority eventually. So, the attacker is still spending energy cost (and has already invested in hardware). Depending on how the scenario exactly specifies "no longer bound by financial incentives", I'd surmise that the rising transaction fees would eventually entice miners to break rank from the attack.

Murch
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  • Thank you for your reply. The scenario dictates that the attacker(s) cannot be enticed by financial incentives. In this circumstance, could they not continue the denial of service attack indefinitely? – Paul Hoffman Feb 11 '21 at 16:32
  • Well, yes, but then the scenario is a bit lame, since the main protection against this coming to pass are the economic incentives that are set against this scenario. – Murch Feb 11 '21 at 16:45
  • Mike's example on the podcast, he's specifically referring to a "non-economic" actor that could pull this off. That hypothetical actor is China since they could theoretically confiscate all of the ASICs on their soil and attempt to perform this attack (which wouldn't be easy in practice also: why would they want to). As a random (and possible crazy) side note: One thing miners could preemptively do is run custom firmware or make physical modifications to allow for remote destruction of the miners. I wrote a thread on the interview: https://twitter.com/lylepratt/status/1357110453588140032 – Lyle Pratt Feb 11 '21 at 18:48
  • Ah, okay, that makes more sense. – Murch Feb 11 '21 at 18:50
  • @LylePratt your thread on Twitter is very informative. I would like to throw some counters in there, if you're open to responding?

    First, I'm not sure to what extent China has a vested interest in crypto other than mining. I believe the ownership of crypto is in many cases illegal? Also, exchanges and other service providers are banned/severely limited. Hence the cost to the Chinese economy in disrupting the Bitcoin network is not very great.

     – Paul Hoffman Feb 12 '21 at 07:15
  • Also, relating to your argument that other major governments would not stand idly if the Bitcoin network were to be attacked. They did nothing regarding Hong Kong either. This was a blatant disregard for a treaty established between China, Hong Kong and GB and the world did nothing. Why would they come to the aid of the Bitcoin network? Surely Hong Kong's status is deemed more important than Bitcoin's? – Paul Hoffman Feb 12 '21 at 07:23
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Yes, a cartel of hashrate +50% can ignore blocks and replace them with their own. The largest proof of work defines BTC which will be under the majority's control

An example scenario for that could be when someone makes a transaction paying a 3 million in fees to the miner (unintentionally, possibly due to software error). In this case, it's very tempting for a cartel to orphan a block made by someone who is not in the cartel, (while in reality, of course this doesn't happen, since the value of 1 BTC is important to the miners).

MCCCS
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