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<p>[QUOTE="Prime Mover, post: 2666160, member: 38783"]Aside from this going back and forth between InfleXion and I, the root of his concerns are valid questions. Both of his concerns are what beginning investors should be asking, researching, and getting answers to in order to make sound decisions with their money. That is, after all, part of the OP's original question about whether they should invest or not.</p><p><br /></p><p>I will not tell you to invest, or not to invest. I will however, as briefly as I can, answer the two main questions/concerns - the "brute force Crypto attack", as well as the "brute force 51% mining attack" - in hopes that it will at least help you understand what could be possible, and how it could affect Bitcoin and your money.</p><p><br /></p><p>1) The Brute Force Crypto attack</p><p><br /></p><p>PGP encryption and Bitcion are similar - they use the concept of a "keypair", one public that you give out, and one private that you keep.</p><p><br /></p><p>With PGP, you "sign" anything you want - lets use a typical thing like an e-mail as an example - with your private key. Say I have an e-mail recipient whose name is Joe. I give Joe a copy of my public key. When I want to send a private e-mail to Joe, I "sign", or encrypt, my e-mail message with my private key, and send it to Joe. Joe gets the encrypted message, and with the public key I gave him, decrypts it and is able to read it.</p><p><br /></p><p>With PGP, you make a single private key, and can send out your public key to anyone you want. The private key is meant to identify you now and forever to whomever you exchange encrypted information to. If someone were to have enough computing power to reverse-engineer the private key from the public address, you would be able to duplicate the private key, and unlock everything that I had from outside.</p><p><br /></p><p>It's really no different than your house front door lock. You can make as many copies of your front door key and hand them to people, but if a thief came by and was able to make a mold of the inner cylinder, he could make his own key and gain access to your house and steal everything. Very basic analogy, take it for concept.</p><p><br /></p><p>Bitcoin uses a very similar concept for transactions, with a twist. You have a digital wallet. This wallet when it's created has an initial "address keypair", with a priivate key in the wallet, and a public address that you can give anyone to make a payment. If you only ever use one wallet, and one address, its like PGP where you have only one private key, and one public address.</p><p><br /></p><p>The MAJOR difference, and what makes Bitcoin insulated from the ability to hack it by breaking the encryption, is that you can make countless new address keypair for your wallet. It is actually recommended that you do this for every single transaction you perform, as this also leads to the anonymity part. There's enough unique addresses available in Bitcoin that you could create 1,000,000 new address every second, and not run out for 2^116 years.</p><p><br /></p><p>On top of that, even if it were possibly to break the crypto, which inevitably it probably will, the best thing you could do is gain the private key to a SINGLE PERSON's wallet or to a SINGLE TRANSACTION and be able to get the bitcoins in that wallet, or spent in that one transaction. However, if the bitcoins are moved again, which again is best practice and recommended, there will be nothing to steal.</p><p><br /></p><p>So, back to the front door analogy. Bitcoins built in protocols make it so that you could do the equivalent of changing your front door locks with every single transaction you make. What good is an available door lock to a thief if it's sitting on the lawn, already replaced with a new one?</p><p><br /></p><p>2) Brute Force Mining 51% attack.</p><p><br /></p><p>As mentioned in a previous post, there's possibility of a 51% attack - where enough mining power could "take over the network". I explained a little above what could happen, but here's a better explanation - <a href="https://learncryptography.com/cryptocurrency/51-attack" target="_blank" class="externalLink ProxyLink" data-proxy-href="https://learncryptography.com/cryptocurrency/51-attack" rel="nofollow">https://learncryptography.com/cryptocurrency/51-attack</a></p><p><br /></p><p>But, even beyond that, a 51% attack of the type InfleXion is trying to advocate should fail very quickly. To understand why, a little explanation of how mining actually works.</p><p><br /></p><p>Back in 2009, any user could mine bitcoins on their home computer with a CPU or GPU (high-end graphics card). Each computer was a "node" - a full part of the Bitcoin network, which the miner used. Each node was also considered a "mining pool", basically for that user. Every miner needed to attach to a mining pool in order to "get work" to do to mine Bitcoins.</p><p><br /></p><p>Fas forward to today, and the concept of a mining pool hasn't changed, just the size and scope. Because there's so much processing power needed to mine bitcoins, many smaller miners attach to larger pools. The bigger the pool, the larger the chance of "finding a block" and getting the BTC reward. When one is found, it is proportionally distributed to the miners based on how much processing they contribute on average.</p><p><br /></p><p>While Bitcoin is "decentralized", meaning that there is no one computer, server, or person controlling it, it is NOT "distributed". This is an enormous distinction - and exactly the reason why something like Quantum Computing is for the most part marginalized.</p><p><br /></p><p>Distributed computing, such as SETI, or large-scale weather models (typical uses of current supercomputers, and one which QC would excel at as a replacement) use a "puzzle" methodology. Each computer is given a piece of the overall end goal, it works on processing it, and returns the completed puzzle piece back. It then grabs another puzzle piece to work on. Once all the computations are done, all answers given, and all pieces returned, your work is done, it's been completed.</p><p><br /></p><p>Bitcoin is NOT a puzzle-piece based end game. It is a competition. It is completely "client-server", in that a server gives everyone (the miners) a piece of work to do, and when it's done the miner responds with an answer. If the answer is correct, that miner wins, gets the reward, the block is processed, and you move on.</p><p><br /></p><p>The major difference is that ALL MINERS work on the SAME problem. Each miner is trying to solve the same exact block with the same exact calculations, and eventually one miner gets lucky.</p><p><br /></p><p>It is logical that if you brought a faster miner to the party, your chances of finding the answers and getting the rewards are obviously greater. This is to a degree true, but there's also technical things built into Bitcoin to introduce variance and luck to mitigate it slightly.</p><p><br /></p><p>However, that being said, if you brought so much processing power to the party, you could garner a higher share.</p><p><br /></p><p>Except for one thing - PROFIT.</p><p><br /></p><p>Miners are greedy and selfish, they want to solve the blocks and get the rewards.</p><p><br /></p><p>If someone brought a nuclear weapon to a gun fight, it would be found out quickly. Being a distributed system, it would self-regulate.</p><p><br /></p><p>Because miners need to funnel through a smaller number of mining pools, anyone with that much power would be found out quickly, and back to being selfish and self-regulating, the mining pools supporting the nuclear weapons would be blacklisted, and no one would accept any solved blocks from those addresses. They're in essence diffusing the bombs at the source.</p><p><br /></p><p>I've left a lot out technically, as this post has become too long already.</p><p><br /></p><p>However, at the core of it, there are many reasons why a simplistic set of attack theories would fail today, and would also fail tomorrow. More computing power will arise, as it has already, and failsafes will kick in and adapt as they come in.</p><p><br /></p><p>I hope this helped at least some understand better a little more about Bitcoin as a technology, and the things that help keep it from falling to some of the technical and social challenges present today.[/QUOTE]</p><p><br /></p>
[QUOTE="Prime Mover, post: 2666160, member: 38783"]Aside from this going back and forth between InfleXion and I, the root of his concerns are valid questions. Both of his concerns are what beginning investors should be asking, researching, and getting answers to in order to make sound decisions with their money. That is, after all, part of the OP's original question about whether they should invest or not. I will not tell you to invest, or not to invest. I will however, as briefly as I can, answer the two main questions/concerns - the "brute force Crypto attack", as well as the "brute force 51% mining attack" - in hopes that it will at least help you understand what could be possible, and how it could affect Bitcoin and your money. 1) The Brute Force Crypto attack PGP encryption and Bitcion are similar - they use the concept of a "keypair", one public that you give out, and one private that you keep. With PGP, you "sign" anything you want - lets use a typical thing like an e-mail as an example - with your private key. Say I have an e-mail recipient whose name is Joe. I give Joe a copy of my public key. When I want to send a private e-mail to Joe, I "sign", or encrypt, my e-mail message with my private key, and send it to Joe. Joe gets the encrypted message, and with the public key I gave him, decrypts it and is able to read it. With PGP, you make a single private key, and can send out your public key to anyone you want. The private key is meant to identify you now and forever to whomever you exchange encrypted information to. If someone were to have enough computing power to reverse-engineer the private key from the public address, you would be able to duplicate the private key, and unlock everything that I had from outside. It's really no different than your house front door lock. You can make as many copies of your front door key and hand them to people, but if a thief came by and was able to make a mold of the inner cylinder, he could make his own key and gain access to your house and steal everything. Very basic analogy, take it for concept. Bitcoin uses a very similar concept for transactions, with a twist. You have a digital wallet. This wallet when it's created has an initial "address keypair", with a priivate key in the wallet, and a public address that you can give anyone to make a payment. If you only ever use one wallet, and one address, its like PGP where you have only one private key, and one public address. The MAJOR difference, and what makes Bitcoin insulated from the ability to hack it by breaking the encryption, is that you can make countless new address keypair for your wallet. It is actually recommended that you do this for every single transaction you perform, as this also leads to the anonymity part. There's enough unique addresses available in Bitcoin that you could create 1,000,000 new address every second, and not run out for 2^116 years. On top of that, even if it were possibly to break the crypto, which inevitably it probably will, the best thing you could do is gain the private key to a SINGLE PERSON's wallet or to a SINGLE TRANSACTION and be able to get the bitcoins in that wallet, or spent in that one transaction. However, if the bitcoins are moved again, which again is best practice and recommended, there will be nothing to steal. So, back to the front door analogy. Bitcoins built in protocols make it so that you could do the equivalent of changing your front door locks with every single transaction you make. What good is an available door lock to a thief if it's sitting on the lawn, already replaced with a new one? 2) Brute Force Mining 51% attack. As mentioned in a previous post, there's possibility of a 51% attack - where enough mining power could "take over the network". I explained a little above what could happen, but here's a better explanation - [url]https://learncryptography.com/cryptocurrency/51-attack[/url] But, even beyond that, a 51% attack of the type InfleXion is trying to advocate should fail very quickly. To understand why, a little explanation of how mining actually works. Back in 2009, any user could mine bitcoins on their home computer with a CPU or GPU (high-end graphics card). Each computer was a "node" - a full part of the Bitcoin network, which the miner used. Each node was also considered a "mining pool", basically for that user. Every miner needed to attach to a mining pool in order to "get work" to do to mine Bitcoins. Fas forward to today, and the concept of a mining pool hasn't changed, just the size and scope. Because there's so much processing power needed to mine bitcoins, many smaller miners attach to larger pools. The bigger the pool, the larger the chance of "finding a block" and getting the BTC reward. When one is found, it is proportionally distributed to the miners based on how much processing they contribute on average. While Bitcoin is "decentralized", meaning that there is no one computer, server, or person controlling it, it is NOT "distributed". This is an enormous distinction - and exactly the reason why something like Quantum Computing is for the most part marginalized. Distributed computing, such as SETI, or large-scale weather models (typical uses of current supercomputers, and one which QC would excel at as a replacement) use a "puzzle" methodology. Each computer is given a piece of the overall end goal, it works on processing it, and returns the completed puzzle piece back. It then grabs another puzzle piece to work on. Once all the computations are done, all answers given, and all pieces returned, your work is done, it's been completed. Bitcoin is NOT a puzzle-piece based end game. It is a competition. It is completely "client-server", in that a server gives everyone (the miners) a piece of work to do, and when it's done the miner responds with an answer. If the answer is correct, that miner wins, gets the reward, the block is processed, and you move on. The major difference is that ALL MINERS work on the SAME problem. Each miner is trying to solve the same exact block with the same exact calculations, and eventually one miner gets lucky. It is logical that if you brought a faster miner to the party, your chances of finding the answers and getting the rewards are obviously greater. This is to a degree true, but there's also technical things built into Bitcoin to introduce variance and luck to mitigate it slightly. However, that being said, if you brought so much processing power to the party, you could garner a higher share. Except for one thing - PROFIT. Miners are greedy and selfish, they want to solve the blocks and get the rewards. If someone brought a nuclear weapon to a gun fight, it would be found out quickly. Being a distributed system, it would self-regulate. Because miners need to funnel through a smaller number of mining pools, anyone with that much power would be found out quickly, and back to being selfish and self-regulating, the mining pools supporting the nuclear weapons would be blacklisted, and no one would accept any solved blocks from those addresses. They're in essence diffusing the bombs at the source. I've left a lot out technically, as this post has become too long already. However, at the core of it, there are many reasons why a simplistic set of attack theories would fail today, and would also fail tomorrow. More computing power will arise, as it has already, and failsafes will kick in and adapt as they come in. I hope this helped at least some understand better a little more about Bitcoin as a technology, and the things that help keep it from falling to some of the technical and social challenges present today.[/QUOTE]
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