Dave Emory’s entire lifetime of work is available on a flash drive that can be obtained here. (The flash drive includes the anti-fascist books available on this site.)
COMMENT: We have examined the techno-libertarian, Ludwig von Mises milieu-affiliated nature of the bitcoin phenomenon. Quite possibly developed by elements of German intelligence and the Underground Reich, bitcoins are not only vulnerable to “tape-painting,” but can be stolen by hackers.
In future posts, we will underscore the extreme vulnerability of this virtual currency to theft.
A disturbing, perhaps predictable development carries the Ludwig von Mises/Hayek/Hoppe/Ron Paul philosophy to a new level.
A benighted creature using the name “Kuwabatake Sanjuro” has created on online, bitcoin-funded assassination network called “Assassination Market.”
A number of thoughts come to mind in connection with this:
- “Sanjuro” was inspired to realize the project by the “disclosures” of Edward Snowden.
- The largest “bitcoin bounty” is on the head of Ben Bernanke, chairman of the Federal Reserve, to whom Snowden referred as a “cockbag” in the 2009 online posting in which he advocated the elimination of social security and a return to the gold standard.
- “Sanjuro” also has bitcoin bounties on the heads of President Obama and General Keith Alexander, the head of the NSA.
- “Sanjuro” sees his online assassination consortium as a realization of laissez-faire market theory to politics.
- We have noted in the past that the theories of Hans Hermann-Hoppe (disciple of Ludwig von Mises, student of Juergen Habermas, idol of bitcoin advocate R. Cody Wilson) explicitly reject democracy. So does the Ludwig von Mises Institute, the epicenter for the economic theories of Ron Paul and Edward Snowden. So does Peter Thiel, a bitcoin advocate and capitalizer of Ron Paul’s 2012 political campaign. Thiel is also the largest stockholder in Palantir, which appears to have developed the PRISM software at the center of the Snowden leaks. (Palantir CEO Alex Karp is also a student of Juergen Habermas.) “Sanjuro” takes this benighted philosophy to its [perhaps inevitable] conclusion.
- The endgame of libertarian philosophy does indeed appear to be “anarcho-fascism.”
- The techno-libertarians warrant serious consideration as the “neue-wandervogel.”
- In an update, we learn that the alleged mastermind of the bitcoin-funded Silk Road–the Ludwig von Mises/Ron Paul devotee Ross Ulbricht–allegedly sought the contract murders of six people–five more than originally stated. It is interesting and relevant that both Ulbricht and “Sanjuro” proceed from an anarcho-libertarian perspective, decrying slavery AND democracy, ultimately arriving at a lethal advocacy position, allegedly so in Ulbricht’s case. Again, these people are indeed the “neue-wandervogel.”
- Interestingly, Ulbricht was apparently thinking of moving to Dominica, the island nation targeted by a Nazi/white supremacist invasion known as “The Bayou of Pigs.” Ulbricht’s 2012 Presidential selectee Ron Paul was apparently involved in that gambit, along with Paul’s long-time associates David Duke and Stormfront creator Don Black.
- As “Pterrafractyl” informs us: “Whether or not Ulbricht was in a partnership with Satoshi Nakamoto, one thing is clear from this article: Ross Ulbricht had a HUGE percent of the total bitcoin supply. At least for an individual. The FBI received 144,336 bitcoins off of just one of Ulbricht’s computers, and with ~12 million bitcoins already in supply (a little over half of the total 21 million), that means Ulbricht had over 1% of the current bitcoin supply on that single computer alone. According to the researchers, 78% of Ulbrich’s bitcoins are still “buried” and beyond the FBI’s reach. So Ulbricht, alone, may have actually controlled closer to 5% of the total bitcoin supply. It’s a reminder that bitcoins have an additional built-in deflationary force: Lost bitcoins that can’t be recovered are lost for good, permanently reducing the supply of tradeable bitcoins while maintaining the overall supply officially in existence (because a lost bitcoin is indistinguishable from one that’s simply being saved). The small casual users with tiny fractions of a bitcoin in their accounts are probably the most likely source of bitcoin losses, but since we have no real idea who the large bitcoin owners are at this point you have to wonder how many more hidden bitcoin barons are going to end up either handing sizable percentages of the total bitcoin supply over to law enforcement agencies or just losing them altogether.
- In another update, we learn that the successor to Silk Road–Sheep Marketplace–has vanished taking vast amounts of its users’ bitcoins with it. The users of Sheep Marketplace, it would seem, have been fleeced!
- “Pterrafractyl” informs us of another aspect of the vulnerability of Bitcoin: “One of the interesting aspects about the bitcoin phenomena is that the more people that start using bitcoin the greater the deflationary pressure on the value of the bitcoins. That’s because there’s a fixed maximum of 21 million bitcoins that can ever exist, so the greater the demand for bitcoins the more each bitcoin will cost in other currencies. With the Chinese market now warming up to bitcoin, and all those new potential users, we might see a fascinating example of a hyperdeflationary virtual gold bubble.”
- The perils of “Bitcoinery” were illustrated when a Hong Kong Bitcoin market vanished, taking $5 million dollars with it!
- Further updating the discussion “Pterrafractyl” informs us: It would be pretty hilarious if Bitcoin, a currency cherished by haunted by hyperinflationary fears, because an object lesson in the dangers of deflation. But it’s hard to see how this lesson will be avoided if Bitcoin ever really caught on because one of the main features of the the currency is that it’s capped out at 21 million coins but you can divide each coin up into smaller and smaller pieces. Therefore, the reasoning goes, Bitcoin has defeated the inflation beast while still maintaining the scalability required to handle the volume of transactions in virtually any sized economy! Revolution awaits! And this is sort of true of Bitcoins but the victory over inflation also comes at the cost of built-in deflation correlated to the growth of the Bitcoin economy (imagine if dollars grew more expensive with the growth of the US economy). So the more Bitcoin grows in popularity the greater the deflation, the greater the payout to the earliest bitcoin investors, and the greater the temptation to keep holding onto those Bitcoins.
- Not surprisingly, it turns out that Bitcoin is highly vulnerable to selfish “mining,” which could permit knowledgeable and enterprising malefactors to corner the market.
As Bitcoin becomes an increasingly popular form of digital cash, the cryptocurrency is being accepted in exchange for everything from socks to sushi to heroin. If one anarchist has his way, it’ll soon be used to buy murder, too.
Last month I received an encrypted email from someone calling himself by the pseudonym Kuwabatake Sanjuro, who pointed me towards his recent creation: The website Assassination Market, a crowdfunding service that lets anyone anonymously contribute bitcoins towards a bounty on the head of any government official–a kind of Kickstarter for political assassinations. According to Assassination Market’s rules, if someone on its hit list is killed–and yes, Sanjuro hopes that many targets will be–any hitman who can prove he or she was responsible receives the collected funds.
For now, the site’s rewards are small but not insignificant. In the four months that Assassination Market has been online, six targets have been submitted by users, and bounties have been collected ranging from ten bitcoins for the murder of NSA director Keith Alexander and 40 bitcoins for the assassination of President Barack Obama to 124.14 bitcoins–the largest current bounty on the site–targeting Ben Bernanke, chairman of the Federal Reserve and public enemy number one for many of Bitcoin’s anti-banking-system users. At Bitcoin’s current rapidly rising exchanges rate, that’s nearly $75,000 for Bernanke’s would-be killer.
Sanjuro’s grisly ambitions go beyond raising the funds to bankroll a few political killings. He believes that if Assassination Market can persist and gain enough users, it will eventually enable the assassinations of enough politicians that no one would dare to hold office. He says he intends Assassination Market to destroy “all governments, everywhere.”
“I believe it will change the world for the better,” writes Sanjuro, who shares his handle with the nameless samurai protagonist in the Akira Kurosawa film “Yojimbo.” (He tells me he chose it in homage to creator of the online black market Silk Road, who called himself the Dread Pirate Roberts, as well Bitcoin inventor Satoshi Nakamoto.) ”Thanks to this system, a world without wars, dragnet panopticon-style surveillance, nuclear weapons, armies, repression, money manipulation, and limits to trade is firmly within our grasp for but a few bitcoins per person. I also believe that as soon as a few politicians gets offed and they realize they’ve lost the war on privacy, the killings can stop and we can transition to a phase of peace, privacy and laissez-faire.”
...
Just reading about that coldly calculative system of lethal violence likely inspires queasy feelings or outrage. But Sanjuro says that the public’s abhorrence won’t prevent the system from working. And as a matter of ethics, he notes that he’ll accept only user-suggested targets “who have initiated force against other humans. More specifically, only people who are outside the reach of the law because it has been subverted and corrupted, and whose victims have no other way to take revenge than to do so anonymously.”
Even setting aside the immorality of killing, doesn’t the notion of enabling small minorities of angry Bitcoin donors to assassinate elected officials sound like an attempt to cripple democracy? “Of course, limiting democracy is why we even have a constitution,” Sanjuro responds. “Majority support does not make a leader legitimate any more than it made slavery legitimate. With this market the great equalising forces of capitalism have the opportunity to work in politics too. One bitcoin paid is one vote closer to a veto of whatever legislation you dislike.”
Sanjuro didn’t actually invent the concept of an anonymous crowdfunded assassination market. The idea dates back to the cypherpunk movement of the mid-1990s, whose adherents dreamt of using encryption tools to weaken the government and empower individuals. Former Intel engineer and Cypherpunk Mailing List founder Tim May argued that uncrackable secret messages and untraceable digital currency would lead to assassination markets in his “Cryptoanarchist’s Manifesto” written in 1992.
A few years later, another former Intel engineer named Jim Bell proposed a system of funding assassinations through encrypted, anonymous donations in an essay he called “ Assassination Politics.” The system he described closely matches Sanjuro’s scheme, though anonymity tools like Tor and Bitcoin were mostly theoretical at the time. As Bell wrote then:
If only 0.1% of the population, or one person in a thousand, was willing to pay $1 to see some government slimeball dead, that would be, in effect, a $250,000 bounty on his head. Further, imagine that anyone considering collecting that bounty could do so with the mathematical certainty that he could not be identified, and could collect the reward without meeting, or even talking to, anybody who could later identify him. Perfect anonymity, perfect secrecy, and perfect security. And that, combined with the ease and security with which these contributions could be collected, would make being an abusive government employee an extremely risky proposition. Chances are good that nobody above the level of county commissioner would even risk staying in office.
Bell would later serve years in prison for tax evasion and stalking a federal agent, and was only released in March of 2012. When I contacted him by email, he denied any involvement in Sanjuro’s Assassination Market and declined to comment on it.
Sanjuro tells me he’s long been aware of Bell’s idea. But he only decided to enact it after the past summer’s revelations of mass surveillance by the NSA exposed in a series of leaks by agency contractor Edward Snowden. “Being forced to alter my every happy memory during internet activity, every intimate moment over the phone with my loved ones, to also include some of the people I hate the most listening in, analysing the conversation, was the inspiration I needed to embark on this task,” he writes. “After about a week of muttering ‘they must all die’ under my breath every time I opened a newspaper or turned on the television, I decided something had to be done. This is my contribution to the cause.”
Assassination Market isn’t the first website to suggest funding murder with bitcoins. Others Tor-hidden websites with names like Quick Kill, Contract Killer and C’thulhu have all claimed to offer murders in exchange for bitcoin payments. But none of them responded to my attempts to contact their administrators, and all required advanced payments for their services, so they may be scams.
...
If the system does prove to work, the launch of Assassination Market may be ill-timed for Sanjuro, given law enforcement’s recent crackdown on the dark web. In August, the FBI used an exploit in Tor to take down the web hosting firm Freedom Hosting and arrest its founder Eric Eoin Marques, who is accused of offering his services to child pornography sites. And just last month, the FBI also seized the popular Bitcoin– and Tor-based black market for drugs known as Silk Road and arrested its alleged creator, Ross Ulbricht.
Sanjuro counters that in addition to Tor, Bitcoin, and the usual encryption tools, he has “measures in place to prevent the effectiveness of such an arrest. Naturally these will have to be kept secret.”
He adds that, like an earlier generation of cypherpunks, he puts his faith in the mathematical promise of cryptography to trump the government’s power to stop him. “With cryptography, the state, or any protection firm, is largely obsolete…all activity that can be reduced to information transfer will be completely out of the government’s, or anyone’s, hands, other than the parties involved,” he says.
“I am a crypto-anarchist,” Sanjuro concludes. “We have a bright future ahead of us.”
EXCERPT: A New York judge denied bail to alleged Silk Road creator Ross Ulbricht Thursday, based in part on fresh accusations of violence: That the 29-year-old allegedly commissioned the murders of a total of six people through would-be hitmen he contacted online, four more than the two attempted killings described in prosecutors’ original criminal complaint.
Judge Nathaniel Fox said that the risk that Ulbricht might flee or present a danger to the community overwhelmed arguments that he be released on bail, citing “powerful evidence presented to us that the defendant has attempted to secure the murders of a number of people.”
Prosecutor Serrin Turner laid out that evidence in a statement to the court, saying that much of it was gathered from a Silk Road server located by the FBI as well as Ulbricht’s seized computer after he was arrested in October and accused of running the Silk Road’s massive anonymous online drug sales operation under the pseudonym the Dread Pirate Roberts. Serrin said that Ulbricht had not only sent messages to two would-be hitmen–an undercover agent on one of those two occasions–asking to have a witness and a blackmailer killed, but had followed up by ordering the killing of the blackmailer’s associate and three people who lived with him.
Mysteriously, Turner said that in none of the cases were actual victims found; In the first, FBI agents say they faked the death of alleged former Silk Road employee Curtis Greento convince Ulbricht the murder had taken place. But the outcome of the other five murders remains unexplained. Nonetheless, Turner argued, “the evidence is crystal clear that the defendant intended these murders to happen.”
Criminal complaints against Ulbricht previously accused him of ordering the killing of former Silk Road employee Curtis Green in January of 2013 for $80,000 and then paying a user known as “redandwhite” $150,000 in the cryptocurrency Bitcoin to kill a Silk Road user identified as “FriendlyChemist,” who claimed to have hacked another Silk Road vendor and threatened to release Silk Road customers’ identifying information if he wasn’t paid $500,000.
In court Thursday, Turner added four more attempted murders, saying that FriendlyChemist had implicated another Silk Road user known as “tony76.” And when redandwhite had told Ulbricht that tony76 lived with three other people who would have to be killed if they were to obtain the money and possessions in his home, Ulbricht allegedly agreed to have all four killed for $500,000 in bitcoins. “Based on the say-so of [an online assassin,] he was willing to kill three others just living with him,” said Turner.
Turner also described evidence on Ulbricht’s computer that included a log he kept of his activities that he said included the line “commissioned hit on blackmailers with angels,” implying that redandwhite may have been a member of the Hell’s Angel motorcycle gang, given its association with the colors red and white. Another line allegedly read “sent payment to angels for hit on tony76 and his 3 associates.”
In fact, Turner enumerated evidence found on Ulbricht’s seized machine that went far further in tying him to his alleged Dread Pirate Roberts identity. When Ulbricht was arrested in the Glen Park library in San Francisco, Turner said he was logged into the Silk Road under his Dread Pirate Roberts account and was looking at an administrator control page for the site as well as another page called “Mastermind” that showed Silk Road sales numbers. Turner added that he was also logged into a chat program under the handle “dread,” and his Macbook had the username “Frosty,” which he said was linked to Ulbricht’s email address in a post he’d made to a coding forum.
Remarkably, Turner also described a journal taken from Ulbricht’s hard drive that recounts the story of Silk Road’s creation. He listed details like the fact that Ulbricht had initially called the Silk Road “Underground Brokers,” but had later decided to change the name. The prosecutors’ letter to the court includes this passage:
I began working on a project that had been in my mind for over a year. I was calling it Underground Brokers, but eventually settled on Silk Road. The idea was to create a website where people could buy anything anonymously, with no trail whatsoever that could lead back to them.
At another point, he wrote that in 2011, he would be “creating a year of prosperity and power beyond what I have ever experienced before,” and added that “Silk Road is going to become a phenomenon and at least one person will tell me about it, unknowing that I was its creator.”
The journal, according to Turner’s account, also details how Ulbricht grew several kilos of psychedelic mushrooms in a lab in an “off-the-grid” cabin to have an initial product to sell on the Silk Road. In a spreadsheet found on Ulbricht’s computer, Turner said Ulbricht’s expenses and income were listed, including a line for “sr inc.” that he said listed its value at $104 million.
To support the prosecution’s argument Ulbricht represented a flight risk, he noted that Ulbricht had taken steps towards applying for citizenship in the island nation of Dominica, and had discussed moving there with friends on Facebook.
...
EXCERPT: A shady online marketplace that anonymously sold drugs and guns has virtually disappeared, leaving illegal vendors believing they’ve been scammed out of as much as $100 million.
Sheep Marketplace emerged as the go-to replacement to Silk Road, a similar bazaar shuttered by the FBI in October.
Now users of the site, which operated outside the law to begin with and dealt only in anonymous Bitcoins, fear it was a scam all along.
Shielded from authorities and using special software to access the so-called ‘Deep Web’ site, buyers could find drugs, guns, and even hit men.
Buyers would put their Bitcoins into the marketplace, where sellers would withdraw them, with all the transactions moderated by the website.
Which is where the issue first arose.
In the days before the site shut down, vendors suddenly found themselves unable to access the Bitcoins tied up in the site’s wallet.
As they complained, reports RT, they found their comments suddenly yanked from the site’s forums.
Buyers also began to see suspicious things in the time leading up to this possible scam. Some vendors, though not all, began to list their drugs and other goods at prices far lower than ever before.
Now, many believe they were being bilked out of as many of their Bitcoins—a difficult to trace form of online currency currently worth over $1,000 a piece—as possible before taking the money and running.
On Sunday, visitors to the site found a note in place of the homepage that claimed a vendor called EBOOK101 had stolen from the site’s cache of Bitcoins.
‘This vendor found bug in system and stole 5400 BTC,’ reads the brief note. ‘Your money, our provisions, all was stolen.’
However, according to a post on Hacker News, a wallet of far more Bitcoins has been traced back to the site.
Valued at $45 million, 39,918 in Bitcoins could now be in the hands of a those behind the site after scamming untold numbers of hopeful drug users and gun toters out of their hard earned virtual cash.
Or perhaps even more.
According to the Daily Dot, one Redditor claims to have engaged in a virtual chase with Czech computer programmer Tomáš Jiřikovsky, who user sheeproadreloaded2 claims is behind the site and has absconded with 96,000 bitcoins, or about $95 million dollars. . . . .
EXCERPT: Bitcoin’s price hit a record at $265 on the BitStamp online exchange, driven by wider acceptance of the virtual currency.
The digital money, which can be used to pay for goods and services on the Internet, has risen 20-fold so far this year, as trading activity has increased. Bitcoins were trading at $251.36 apiece at 6:30 p.m. in New York on BitStamp, one of the more active Web-based exchanges where Bitcoins are traded for dollars, euros and other currencies.
The rally comes a month after the closing of the “Silk Road Hidden Website,” where people could obtain drugs, guns and other illicit goods using Bitcoins. The virtual currency lost a third of its value in the days after the website was shut down. Bitcoins are becoming increasingly popular, particularly in China, said Ugo Egbunike, director of business development at IndexUniverse, an index-fund researcher.
“I thought Silk Road is going to do some damage to the price,” Egbunike said. “But with BTC China buying this up — they seem to have picked up the slack.”
BTC China is now the world’s largest Bitcoin exchange, Nicholas Colas, a ConvergEx Group analyst, wrote in a Nov. 5 report.
The virtual currency exists as software that’s designed to be untraceable, making it an attractive tender for those seeking to trade anonymously via the Web. There are about 30 transactions per minute, at an average amount of 16 Bitcoins, according to a report today by the Federal Reserve Bank of Chicago. . . .
EXCERPT: Many Bitcoin believers think that the digital currency will one day become the pre-eminent currency of the internet. They basically see it becoming the internet’s version of gold in that it’s naturally scarce, independent, virtually impossible to manipulate, and crucially suited for a digital world when money ought to be able to be moved seamlessly and at no cost.
Well here’s a tip: If you think that this is true, then never use Bitcoin in a transaction.
As more people have gotten into Bitcoin, the price has gone way up.
Virtually everyone who has ever bought anything in Bitcoin has been a huge loser, who would have been better suited just holding onto the Bitcoins instead.
Remember the pizza that was purchased for $25 in Bitcoins years back? Had the person not bought that pizza, it would be worth nearly $3 million. That purchase was a catastrophic decision, as that was probably the most expensive pizza of all time.
Of course this presents a Catch-22. How can Bitcoin become a real currency if it’s not used in transactions? And why would anyone use it in transactions if becoming a real currency offers so much more price appreciation? This contradiction is a core problem, and it’s a reason why it’s probably doomed to fail (real currencies don’t have this issue, since central banks prevent rapid price appreciation, and they mandate that the currency be used). . . .
“Hong Kong Bitcoin Trading Platform Vanishes with Millions” by Liu Jiayi; ZDNet; 11/12/2013.
EXCERPT: When ardent Chinese Bitcoin investors found that they could no longer access the website of Global Bond Limited (GBL) in the early morning of October 26, it was already too late.
One investor under the pseudonym of South American Vicuna organized an online group for the losing traders and told IT Times on Monday that more than 30 million yuan from 500 investors, many of whom sold homes to get in the virtual currency trade, could never be retrieved.
According to the Vicuna, after the GBL’s website shutdown, it left only one message, saying that the site was compromised and investors who want to get back their investment data shall transfer money to a designated account. Now all contacts are not responding, and the company office in Hong Kong is as empty as the traders’ pockets.
GBL self-proclaimed that the local government had approved virtual currency exchange back on June 8, and lured buyers in with high leverage rate and high yield. However, the too-obvious-to-ignore trading loophole in its trading system raised concerns, but the “always-winning” traders were too obsessed to get out, according to Vicuna. . . .
EXCERPT: One of Bitcoin’s big advantages is that it is decentralised with nobody in overall control. But now a simple strategy has emerged that could allow almost any group to take over, say computer security analysts.
The digital currency Bitcoin is one of the zeitgeist phenomena of our time. Since 2009, it has grown from a digital curiosity to an online phenomenon. There are now some 11.5 million Bitcoins in circulation and each one is worth over $300.
The Bitcoin system is specifically designed to overcome one of the serious flaws of previous digital currencies—the possibility of double spending; that two people could spend two copies of the same currency at the same time. It is also decentralised so that no single organisation or organised group of individuals can control the currency and prevent certain types of transactions.
But Bitcoin may not be quite as secure as everybody thought. Today, Ittay Eyal and Emin Gun Sirer at Cornell University in Ithaca say they’ve discovered a flaw that allows any organised group of Bitcoin miners to take over the currency. And they say that some groups today are already big enough to do the job.
First some background. Perhaps Bitcoin’s biggest advantage is its unique approach to preventing double spending. It does this by recording every transaction in a single log known as a blockchain. An individual account can only spend a Bitcoin if the blockchain records that it owns the Bitcoin in the first place.
This log is protected by cryptopuzzles that can only be solved by large scale number crunching. When anybody solves such a puzzle, they can record new transactions and are rewarded with a fee in the form of new Bitcoins.
Hence the emergence of Bitcoin miners. These are people who devote computing power to solve cryptopuzzles and are paid for their work in Bitcoins.
If you’re thinking of a career as a Bitcoin miner, you’ll immediately run into a problem. The cryptopuzzles are so difficult that the chances of solving one by yourself is tiny. So Bitcoin miners work together in groups so that they can solve the problems more quickly. If any one of them solves a puzzle, they all share the proceeds.
There are lots of groups to join and there’s no advantage in joining one over another. The received wisdom is that this keeps the mining decentralised.
But now Eyal and Sirer say that’s not true and have worked out how a selfish group of miners could take over the currency. “We show that the conventional wisdom is wrong,” they say.
The trick is to mine for Bitcoins but to keep the results secret. This creates a fork in the blockchain so that one half of the fork is public and the other half is secret.
The Bitcoin system has a way of resolving these kinds of forks, which occur by accident from time to time. It requires miners to join the longest fork. The transactions in the other fork are then resubmitted for resolution.
If the selfish miners make their fork longer than the public one, it becomes the chosen chain.
The problem is that the number crunching done on the fork that is abandoned is wasted. So the selfish miners end up getting more than their fair share of Bitcoins. This “enables pools of colluding miners that adopt it to earn revenues in excess of their mining power,” say Eyal and Sirer.
Having skewed the system in favour of selfish miners, other miners see that they can make more Bitcoins by joining this group. The result is a tipping point in which the Bitcoin mining system suddenly becomes dominated by a single group. And this group can exercise whatever control it likes over how transactions are recorded.
Of course, selfish mining only reaches a tipping point if the selfish group consists of a certain fraction of Bitcoin miners. Groups that are smaller than this cannot force the system to tip.
The key result that Eyal and Sirer have calculated is that the tipping threshold is close to zero zero. So almost any group could adopt the selfish mining strategy and end up controlling the system.
Eyal and Sirer have a solution of sorts. This involves a changing the system so that it chooses one fork over another at random (rather than choosing the loner one). When this choice is random, then it is harder for the selfish miners to take control.
But not that much harder. Eyal and Sirer calculate that this raises the tipping threshold to groups that control around 25 per cent of all Bitcoin mining. “Even with our proposed fix that raises the threshold to 25 per cent, the outlook is bleak: there already exist pools whose mining power exceeds the 25%,” they point out. . . . .
EXCERPT:
It was an invitation to a penny stock-style pump-and-dump scheme — only this one involved Bitcoin, the soaring, slightly scary virtual currency that has beckoned and bewildered people around the world.
While such bid ’em up, sell ’em off scams are shut down in the financial markets all the time, this one and other frauds involving digital money have gone unchecked. The reason, in no small part: Government authorities do not agree on which laws apply to Bitcoin — or even on what Bitcoin is.
The person behind the recent scheme, a trader known on Twitter as Fontas, said in a secure Internet chat that he operated with little fear of a crackdown.
“For now, the lack of regulations allows everything to happen,” Fontas said in the chat, where he verified his control of the Twitter account, which has thousands of followers, but did not give his identity. He added that Bitcoin and its users would benefit when someone steps in to police this financial wild west, and would stop his schemes when they do.
Chinese authorities drew attention to the issue on Thursday when they announced that they were barring Chinese banks from making Bitcoin transactions. The same day, the Bank of France issued its own warning about the potential risks. The news sent the price of Bitcoin tumbling, but it quickly bounced back to near its all-time high of around $1,200. . . .
@Dave
It is pretty darn unfortunate how the world continues to evolve 50 years after the assassination of President Kennedy. Hopefully the subject of this important post fails to lead directly to a future presidential assassination. Dave, in regards to your life’s work, for the times I thought to myself, that you were exaggerating, or that they wouldn’t do that, I’m sorry. Time has proven you to be ahead of the curve, right and steadfast in the face of adversity of the forces.