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Debunked: "Fast transactions using 0-conf were never safe in Bitcoin. Satoshi added Replace-by-Fee himself and said we shouldn't use unconfirmed transactions."

In the Bitcoin design — today implemented in the form of Bitcoin Cash — the blockchain is used to "confirm" or "timestamp" whichever transaction sent by the same party came first. This prevents cheating, which can otherwise be done by replacing a transaction going to a merchant with one going to another or back to the payee themselves. A transaction waiting in line to be timestamped is called 0-conf and can be used to facilitate instant transactions at lower fraud rates than credit cards.
The incentives needed for the above mode of operation is derived from Proof-of-Work, which in combination with protocol and client settings creates the positive pull needed to ensure that it is always more likely that nodes will only accept the first transaction that they saw and record it in a block as soon as possible. Like everything in Bitcoin it can never be fully guaranteed, but it can be considered "reasonable certain", which is also what we see in practice.
Sources 1, 2, 3, 4
Replace-by-Fee being enabled by default in Bitcoin Core clients made 0-conf in particular much less secure on its chain, because the change of expectations that it brought in practice changed the "first seen" rule to a "highest-bid-until-it-gets-into-a-block" rule.
It did this by making it much more likely that a payee marks his transaction for potential later changes to the recipient field in the form of a replacement transaction with increased fee, in turn complicating the receiving process for merchants and making the nodes (solo-miners and pools) that run the timestamping service less strict with the first seen rule in general.
Some have claimed Satoshi invented this form of RBF and that it was present in Bitcoin from the start. These are actually complete lies. Satoshi never supported such a feature. He once had something vaguely similar in mind, but removed it to improve security. In a forum post he also explained that a replacement transaction must be the exact same as the original transaction except with a higher fee, which would of course not in any significant way allow tempering with the order in which transactions were accepted by the network.
Sources 1, 2
Bitcoin always had 0-conf. The first seen rule is essential to Bitcoin and the only way to have fast transaction speeds and immediately re-spendable coins; the security of which can then be improved on with a payment processor if one wants to or by waiting for the "confirmation" which will be "computationally hard" to reverse.
Source
Satoshi himeself was a big proponent of 0-conf payments and expected them to work fine for paying many if not most merchants. He just went out of his way to explain their drawbacks in a rather immature network and how they could be used more safely. He also did serious work to make them function as well as they could.
Sources 1, 2, 3, 4
0-conf transactions on Bitcoin Cash with 1 sat/byte or more in fees are safe enough for most use cases today, including commercial transactions. You can pay for digital goods online and have them delivered without having to wait for your transaction to confirm. With a high degree of certainty, it will eventually. Timestamping happens on average once every 10 minutes and the BCH chain being congestion free ensures it won't take days to make the transaction actually computationally hard to reverse.
In order to have close to zero risk, businesses can still wait for 1 confirmation if they so choose. Earlier in Bitcoins history it would have been more than one and over time the risk will tend to decrease as the strength of the network and the stakes of the nodes in the network itself increases. This is all Satoshi stuff.
It should be noted that Satoshi did temporarily limit the spending of such unconfirmed transactions received from a different wallet, in the reference client itself, since these — especially back then — were less secure by not yet being included in a block and passing them on too quickly actually risked breaking your wallet. This is however not a valid argument to reject the viability of 0-conf itself or to stop improving on the concept.
Source
submitted by fruitsofknowledge to btc [link] [comments]

As a philosopher and a person who is against contradictions.Why does BTC insist it is peer to peer digital cash when it is not.

I have a stake in BTC and because I've been telling everyone for 2 years to buy BTC because it is going to free the world and now I've realized this is a lie. I've by my own courage to employ my own intelligence regardless how stupid I may come off so that I may understand.
First I like to say I've put all my BTC in sigwit on my ledger nano s and been hodling and I'm STRONGLY against wallstreet and the idea of Hodling. I've been mining with 6 GPU's 5x 1070ti 1x 1080ti and Lost a lot of money in this and I've been told Bitmain is centralized and they screw people. The way I understand all of this is miners have one job and that's to find blocks and anything that is going on in a peer to peer transaction is non of their business.

I've tried to move my BTC to the Blue wallet and I'm pissed cause I have to pay 1$ on fees to sent it there. This is really expensive and a contradiction to peer to peer. Took me 2 years making minimum wage to build up to 1k in BTC and I'm really pissed cause I've lost a lot of money hodling and to even use it is what I think everyone is doing is to sell it like a stock. Actions speak louder than words and I do not see how LN and the On chain will help people who cannot afford 1$ especially people who will not be able to stay online in places like Cuba.

I'm worried because LN incentive to stay off chain and use only the second layer in the long run I believe and we all know now that LN will be centralized. Guys, if we had to go as far as to separate Church and State because even a Church can be corrupt than what makes us think LN will not be corrupt? The idea that a poor person wanting to send even .02 cents to lets say Wikileaks is no longer possible and I believe by the evidence of
https://www.blockchain.com/btc/unconfirmed-transactions
https://bitinfocharts.com/comparison/bitcoin-transactionfees.html
We will later be no longer using on chain by the defense of security and to stop Spam and spam is very ambiguous language because It is non of your business if someone wants to send .01 to anyone and their argument is "what a waste of a transaction is not an argument. If BTC ran fine for 8 years than why are we saying it can scale temporary and yet we're saying it cannot scale. I'm confused and I really disliked Tone Vays because I was watching debates between him and Rogar and Tone Vays said "I know wallstreet developers" This is NOT a good thing for BTC the idea that it is a store of value and not as digital cash is at a contradiction. I hear it will be temporary but this been this way for 2 years now and I've used the lighting and I'm NOT happy about it.

I'm really respected in my RL community and the idea that I've been pushing BTC because I hate the federal reverse I see them as the Major problem in everyday life. I do not want to get rich I just want to keep the fruits of my labor. But I see BTC is just a stock now.
submitted by TheotherVicious to Bitcoin [link] [comments]

Smilo explained — 51% attacks

Smilo explained — 51% attacks
In this article of Smilo Explained we are going to explain more about the infamous 51% attacks of the blockchain space. We decided to create a separate article on this matter since it is one of the most impactful attacks in the blockchain space and very topical over the last few weeks with several attacks happening.
https://preview.redd.it/lsnwjlmr7o221.png?width=1920&format=png&auto=webp&s=aad5525a6181288287829d89d87feb416f028f31
Some blockchain projects are more prone to 51% attacks than others, this is especially true for blockchains using the popular Proof of Work (PoW) consensus mechanism. This PoW algorithm is an economic measure to deter various attacks on the network by requiring some work from the service requester, usually in the form of processing time by a computer. However, it is possible to attack PoW blockchains when you control more than 51% of the total hashing power.
Considering this, smaller blockchains with a relatively low total hashing power combined with the PoW consensus mechanism could easily fall victim to this attack. Take Bitcoin as an example, in the first few years when Bitcoin (and blockchain) was less popular, it was relatively easy to buy more than 51% of the total hashing power and attack the network. However, due to the fact that no individual really paid attention to this flaw, Bitcoin was able to slowly grow a considerable amount of relatively decentralised hashing power over time, thus securing the network.
Nowadays, this flaw is quite well-known and due to this there is a rising amount of attackers who try to better themselves by attacking other blockchains. There are even websites giving rough estimates of the costs involved in creating a 51% attack such as https://www.crypto51.app/.
Let’s take a closer look at some of the projects which have suffered from a 51% attack lately.

Vertcoin

The first specific case of a 51% attack which we are going to discuss is the one that took place this week, the 2nd of december, on the cryptocurrency called Vertcoin. During the attack, the attackers tried to double spend the currency to better themselves.
Coinbase engineer Mark Nesbitt stated that the double spending amounted could have resulted to over a $100,000 loss on the Vertcoin network.
“Vertcoin (VTC) experienced 22 deep chain reorganizations, 15 of which included double spends of VTC. We estimate that these attacks could have resulted in theft of over $100,000. The largest reorganization was over 300 blocks deep.”
According to the Crypto 51 webapp, the attack would only cost about 125 dollar per hour at the time of the attack. With an average block time of 2m and 40s this means the attack took approximately 14 hours and would only cost about 1750 dollars.

AurumCoin

A few weeks ago, AurumCoin also fell victim to a 51% attack. During the attack, one of the few cryptocurrency exchanges who had listed AurumCoin, Cryptopia, lost more than 15 million Aurum coins (which was worth over half a million USD at the time of the attack). AurumCoin claims not to be responsible for the attack and they shifted the blame to Cryptopia, insisting it was hacked. Cryptopia, on the other hand, has not yet acknowledged that they have been hacked.

Easy prey

With a market cap of around 10 million USD, AurumCoin was definitely one of the easier targets. The attacker sent over 500.000 USD worth of AurumCoin to cryptopia to exchange them for another cryptocurrency. Once this transaction went through, the attacker allegedly used more than 51% of the hashing power to reverse the transaction as though it never really happened.
Besides, the last commit on AurumCoin’s Github originates from 2015, which indicates that the developers might have abandoned their project. Moreover, having an average hashrate of just about 80PH/s didn’t help them either. For about 800 USD per hour, one can easily rent more than enough mining power on NiceHash to attack AurumCoin’s network.

Confirmations

According to various reports, it seems like AurumCoin needed twenty confirmations at the time of the attack to send or receive any funds. So, could Cryptopia be responsible for this hack? Well, Cryptopia stated that they do not have any control over the time in which these confirmations are completed. Meaning that, Cryptopia does not seem to have any influence on AurumCoin transactions.
According to the exchange, they are unable to reverse or alter these kind of confirmations, and thus the transactions. In their support section they make the following statement;
“Cryptopia does not perform these ‘Confirmations’ or have any control over the time in which these Confirmations are completed. The Confirmations are completed by miners on the Blockchain. Transactions with higher fees will are far more likely to be added to a block first.”
AurumCoin’s case is just one of the examples which shows the negative consequences for both the coin and the exchange hosting them.

Bitcoin Gold

Bitcoin Gold suffered from a similar attack, though on a larger scale. An amount of 12.239 BTG was deposited to an account on the crypto exchange Bittrex, which was according to the online publication Bitcoinist around 18 million USD at the time of the attack.

Technical background

To go more in depth on how the attacker proceeded with his attack, the following information was posted by BitcoinGold as a statement on their website.
“The attackers address is known by this transaction: ee798dd31beda909c9ca7f843bc58b48dfb40b0f6db83ccd10e892e9c3154ce7 (Originally marked as Confirmed, now marked as Unconfirmed)
The deposit was made as part of this block #529022(Originally marked as mainchain, now marked as Orphaned. It was mined by honest miners.) and was confirmed over the course of nearly six hours on mainchain with 21 additional blocks mined, up to and including this block #529043. (Originally marked as mainchain, now marked as Orphaned. It was mined by honest miners.)
Some time after the 20th block, which satisfied the 20-confirmation requirement for Bittrex, the attacker was able to trade their BTG on Bittrex and withdraw other crypto.
The attacker then released 23 (or more) secretly mined blocks to the mainchain, superseding the existing 22 blocks, and replacing their previous transfer of 12.239 BTG to Bittrex with a transfer of those same 12.239 BTG to themselves.
Below is the new transaction (double-spend) of the original 12239 BTG, sent to their own address instead of Bittrex: 8b8ad1deb88c9b9e36c62e96ff52833d4ca1632076b1092a5848de788181aaaf
It was included in this block #529022, which was first mined by the attackers in secret and not broadcast to the network until nearly 6 hours later. When it was finally broadcast along with 22 or more other secretly-mined blocks, for a total of over 23 blocks, it established the “longest chain” and took over as mainchain, causing the previously seen blocks to become “Orphaned.”
Bittrex delisted Bitcoin Gold shortly afterwards. As a result Bitcoin Gold was forced to upgrade their proof of work to make it, according to them, a less attractive and harder to attack network, even though the possibility to become victim of such an attack still lingers. Besides, they advised all exchanges to raise their confirmation requirements to give time to react on unusually large deposits of BTG — the double-spend attacks were clear outliers in size.

Expenses for the attack

Husam Abboud, a managing partner and co-founder at Brazil-based PDB Capital, has calculated that an average investment of 200.000 USD respectively is necessary for a 51% attack on bitcoin gold.
“Bitcoin Gold, a much smaller network (1/20 the size of Bitcoin Cash network), since the fork, has switched to become ASIC resistant hashing with Equihash algorithm, — same as zCash — It is currently more secure against 51% attack from Bitcoin miners, but vulnerable to attacks from Zcash and other Equihash miners.”
As researched by Investopedia, if for example a zCash miner with +8% of Nethash would switch to mine BitcoinGold, he is already at +51% BTG nethash. This would brings the cost of 51% attack on BTG to 580 ZEC/day which equals around 200.000 USD

A common attack

Similar situations occurred this year with Monacoin and Verge among others, showing that these attacks are not uncommon. Counter measures are being taken by exchanges and networks alike such as increasing the number of confirmations required for making a transaction and ASIC resistant networks. Nevertheless, exchanges have very few defences to this attack, as no number of confirmations can make receiving deposits of the network under attack fully safe, when the attacker has over 51% of the hashing power. Some of the measures might reduce the risk of such an attack, though seem not as efficient as hoped, as even networks that have implemented them, are still being attacked.
‘As long as exchanges are willing to provide customers with assets in response to the deposit of a reversible currency, there’s no reason for attackers to stop this behavior. Expect to see more of these attacks.
Exchanges that support these assets will continue to suffer losses, with the ultimate result that exchanges will be forced to delist these assets. In such an environment, it’s hard to find a compelling argument for why these assets should have value.’
Mark Nesbitt

Smilo’s solution

The Smilo network solves this problem with its Smilo BFT+ consensus mechanism. This consensus mechanism circumvents 51% attacks by having one valid blockchain and one valid block created by one chosen speaker. Next to 51% attacks, Smilo’s consensus is also far less vulnerable to a number of other attacks, making it a saver option for both users and exchanges.
Smilo will always require more than 66% consensus with the Smilo BFT+ algorithm, a node will never add a block to his chain when this block has been declined. Moreover, even when more than 66% of the nodes approve a block, but Node A declined the block, Node A will not add the block to his chain, nor will the follow up blocks add this block to the chain.
All Smilo Clients (like the API, full wallets, etcetera) are able to verify both blocks and transactions, providing a two-factor authentication for light clients. Clients can validate if it is connected to “Good actors” or “Bad actors”, depending on the blockchain hash, and therefore decide to send a transaction to a Good or Bad actor.
Since Smilo BFT+ Blacklists ‘Bad actors’, each Bad Actor will become an orphan/bad chain (fork). Besides, considering the fact you need 10.000 Smilo to act as a node, an attacking entity needs to own an immense amount of Smilo to start with, which makes it impractical as it will prove a great financial loss for the attacker. This makes Smilo 99.9% secure against sibling attacks.
For example: 250 nodes are securing the network: - 84 nodes are ok! - 166 nodes are bad! 166 * 10.000 = 1.66 million Smilo (>66% of the actors)
Even if the attacker pulls it off to create a bad block, the 84 good nodes will not add this block (because it is invalid). The next speaker in line (or the third, or the fourth, or the fifth) will create a correct block which will be added to the nodes. Since our full-clients validate nodes and blocks by themselves, they will not send any transactions to the wrong fork. This results in a fork which will only survive for as long as the bad actors are turned on.
Be part of the Smilo hybrid blockchain movement!
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submitted by Smilo-platform to SmiloPlatform [link] [comments]

What is cryptocurrency: NASDACOIN – the money of the future?

The transaction is known almost immediately by the whole network. But only after a specific amount of time it gets confirmed.
Confirmation is a critical concept in cryptocurrencies. You could say that cryptocurrencies are all about confirmation.
As long as a transaction is unconfirmed, it is pending and can be forged. When a transaction is confirmed, it is set in stone. It is no longer forgeable, it can‘t be reversed, it is part of an immutable record of historical transactions: of the so-called blockchain.
Only miners can confirm transactions. This is their job in a cryptocurrency-network. They take transactions, stamp them as legit and spread them in the network. After a transaction is confirmed by a miner, every node has to add it to its database. It has become part of the blockchain.
For this job, the miners get rewarded with a token of the cryptocurrency, for example with Bitcoins. Since the miner‘s activity is the single most important part of cryptocurrency-system we should stay for a moment and take a deeper look on it.
With Nasdacoin's cryptocoins wallets you can save your digital wealth. The interface is simple and you can easily switch between wallet balances, as well as allowing you to exchange between several cryptocurrencies throughout the exchange.
We offer online and offline wallets so you can also do the mining. The Nasdacoin Platform has a powerful structure designed to withstand current market demand and is working to be the most complete and fastest tool on the market.
Enter and enjoy the new currency of the moment. Access Now: https://nasdacoin.io/
submitted by nasdacoin_official to u/nasdacoin_official [link] [comments]

[Guide] How to start using Bitcoins

Introductory video
In the past few weeks, interest in the online cryptocurrency called Bitcoin has increased dramatically, largely due to its rapidly rising price. While it is relatively simple to use once everything is understood, the initial set-up is admittedly daunting and fairly complex. Given that Bitcoin is remarkably useful as an online transaction tool, I hope to clear up some misunderstandings and outline how to quickly and safely start trading with Bitcoins.
How do Bitcoins help me?
Before explaining how to get started, I’ll briefly summarize why Bitcoin is so attractive for traders:
Alright, cool. I’m on board. So what do I do now?
If you’ve decided to buy Bitcoins, the first step is to choose a wallet. A number of options are available, each with their own advantages. I personally recommend blockchain.info’s wallet, since is easy to create and for the most part hassle-free, while also providing additional security and advanced use features. If you intend to store a large quantity of Bitcoins, however, it may not be ideal for you. If you live in the United States, Coinbase may be your best bet--though you'll need to provide personal information in order to fully utilize its features.
Note that if you are buying a significant amount of Bitcoin, you should not use an online wallet: look into downloading a desktop wallet client to store your bitcoins. They are much more difficult to set up safely, but are the most secure storage method if the proper steps are taken.
Now that I have a wallet, how do I buy Bitcoins?
Unfortunately, here’s where things get a tad complicated, and many people shy away after experiencing difficulties. The primary reason why it is hard to buy is that it is almost impossible to buy Bitcoins using credit cards, PayPal, or any other method that can be charged back. In addition, nearly all exchanges and vendors require some form of identity verification prior to selling; depending on the website, this process may take up to several days. If you anticipate that you will need Bitcoins for a trade in the future, start buying them in advance! Below are a few of the more popular sites to buy Bitcoins internationally; please keep in mind that they all have different verification and funding processes, so you should research which one best meets your needs.
Finally bought my Bitcoins! How do I spend them?
Once you have your wallet set up, but you want to transfer your Bitcoins to another account, simply ask the other person for their Bitcoin Address (it should look like a string of random characters; here is mine, for example: 1GEKaHGoauYSoEHzGj3TRL9tFqrtNA9oUt). The Bitcoins should arrive in the new wallet immediately; as the seller, however, it is important to remember to check that the transaction was confirmed on Blockchain.info (a transaction that can still be reversed will say "Unconfirmed Transaction!" in red).
Of course, use a middleman when buying or selling virtual items for Bitcoins. There is no dispute process: once you send the Bitcoins, they are gone. There is an escrow (middleman) service called BTCrow, which could be cool if someone wants to experiment with it, but I have personally never tried it, and cannot recommend it as I do not know how their dispute process works.
Closing notes:
There's quite a bit more information out there, and I highly recommend researching extensively before committing any money to something this new and potentially unstable.
submitted by AONomad to Dota2Trade [link] [comments]

TERMS AND CONDITIONS

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Cashfinex USER AGREEMENT And Terms Of Usess
This Is A Contract Between You And Cashfinex, ("Cashfinex"). By Signing Up To Use An Account Through Cashfinex.Com, Or Any Associated Websites, APIs, Or Mobile Applications (Collectively The "Cashfinex Site"), You Agree That You Have Read, Understood, And Accept All Of The Terms And Conditions Contained In This Agreement, As Well As Our Privacy Policy And E-Sign Consent.
GENERAL USE
  1. Basic Cashfinex Services.
1.1. Eligibility. To Be Eligible To Use The Cashfinex Services, You Must Be At Least 18 Years Old.
Your Eligibility To Access Certain Cashfinex Services Also Depends On The Country In Which You Reside.
By Accessing Or Using The Cashfinex Site, You Represent And Warrant That You Have Not Previously Been Suspended Or Removed From The Cashfinex Site.
You Further Represent And Warrant That You Will Not Be Using This Site For Any Illegal Activity, Including But Not Limited To Illegal Gambling, Money Laundering, Fraud, Blackmail, Extortion, Ransoming Data Or The Financing Of Terrorism, Or Other Violent Activities.
1.2. Cashfinex Services. Your Cashfinex Account ("Cashfinex Account") Encompasses The Following Basic Cashfinex Services: One Or More Hosted Digital Currency Wallets That Allow Users To Store Certain Supported Digital Currencies, Like Bitcoin Or Ethereum ("Digital Currency"), And To Track, Transfer, And Manage Their Supported Digital Currencies (The "Hosted Digital Currency Wallet"); Digital Currency Conversion Services Through Which Users Can Buy And Sell Supported Digital Currencies In Transactions With Cashfinex (The "Conversion Services");
The Risk Of Loss In Trading Or Holding Digital Currency Can Be Substantial. You Should Therefore Carefully Consider Whether Trading Or Holding Digital Currency Is Suitable For You In Light Of Your Financial Condition.
  1. Creating A Cashfinex Account.
2.1. Registration Of Cashfinex Account. In Order To Use Any Of The Cashfinex Services, You Must First Register By Providing Your Name, An E-Mail Address, Password, And Affirming Your Acceptance Of This Agreement. Cashfinex May, In Our Sole Discretion, Refuse To Allow You To Establish A Cashfinex Account, Or Limit The Number Of Cashfinex Accounts That A Single User May Establish And Maintain At Any Time.
2.2. Identity Verification. In Order To Use Certain Features Of The Cashfinex Services, Including Certain Transfers Of Digital Currency, You May Be Required To Provide Cashfinex With Certain Personal Information Which May Include But Not Limited To, Your Name, Address, Telephone Number, E-Mail Address, Date Of Birth. In Submitting This Or Any Other Personal Information As May Be Required, You Verify That The Information Is Accurate And Authentic, And You Agree To Update Cashfinex If Any Information Changes. You Hereby Authorise Cashfinex To, Directly Or Through Third Parties Make Any Inquiries We Consider Necessary To Verify Your Identity And/Or Protect Against Fraud, Including To Query Identity Information Contained In Public Reports (E.G., Your Name, Address, Past Addresses, Or Date Of Birth), To Query Account Information Associated With Your Linked Bank Account (E.G., Name Or Account Balance), And To Take Action We Reasonably Deem Necessary Based On The Results Of Such Inquiries And Reports. You Further Authorise Any And All Third Parties To Which Such Inquiries Or Requests May Be Directed To Fully Respond To Such Inquiries Or Requests.
  1. Hosted Digital Currency Wallet.
3.1. In General. The Hosted Digital Currency Wallet Services Allow You To Send Supported Digital Currency To, And Request, Receive, And Store Supported Digital Currency From, Third Parties Pursuant To Instructions You Provide Through The Cashfinex Site (Each Such Transaction Is A "Digital Currency Transaction").Cashfinex Reserves The Right To Refuse To Process Or To Cancel Any Pending Digital Currency Transaction As Required By Law Or In Response To A Subpoena, Court Order, Or Other Binding Government Order Or To Enforce Transaction Limits Cashfinex Cannot Reverse A Digital Currency Transaction Which Has Been Broadcast To A Digital Currency Network. The Hosted Digital Currency Wallet Services Are Available Only In Connection With Those Digital Currencies That Cashfinex, In Its Sole Discretion, Decides To Support. The Digital Currencies That Cashfinex Supports May Change From Time To Time. If You Have Any Questions About Which Digital Currencies Cashfinex Currently Supports, Please Visit Www.Cashfinex.Com. Under No Circumstances Should You Attempt To Use Your Hosted Digital Currency Wallet Services To Store, Send, Request, Or Receive Digital Currencies In Any Form That Are Not Supported By Cashfinex. Cashfinex Assumes No Responsibility Or Liability In Connection With Any Attempt To Use Cashfinex Services For Digital Currencies That Cashfinex Does Not Support.
3.2. Digital Currency Transactions. Cashfinex Processes Supported Digital Currency According To The Instructions Received From Its Users And We Do Not Guarantee The Identity Of Any User, Receiver, Requestee Or Other Party. You Should Verify All Transaction Information Prior To Submitting Instructions To Cashfinex. In The Event You Initiate A Digital Currency Transaction By Entering The Recipient's Email Address And The Recipient Does Not Have An Existing Cashfinex Account, Cashfinex May Or May Not Email The Recipient And Invite Them To Open A Cashfinex Account. If The Designated Recipient Does Not Open A Cashfinex Account Within 30 Days, Cashfinex Will Return The Supported Digital Currency Associated With The Transaction To Your Cashfinex Account. Once Submitted To A Digital Currency Network, A Digital Currency Transaction Will Be Unconfirmed For A Period Of Time Pending Sufficient Confirmation Of The Transaction By The Digital Currency Network. A Transaction Is Not Complete While It Is In A Pending State. Funds Associated With Transactions That Are In A Pending State Will Be Designated Accordingly, And Will Not Be Included In Your Cashfinex Account Balance Or Be Available To Conduct Transactions. Cashfinex May Charge Network Fees (Miner Fees) To Process A Digital Currency Transaction On Your Behalf. Cashfinex Will Calculate The Network Fee In Its Discretion, Although Cashfinex Will Always Notify You Of The Network Fee At Or Before The Time You Authorise The Transaction.
3.3. Digital Currency Storage & Transmission Delays. Cashfinex Securely Stores All Digital Currency Private Keys In Our Control In A Combination Of Online And Offline Storage. As A Result, It May Be Necessary For Cashfinex To Retrieve Certain Information From Offline Storage In Order To Facilitate A Digital Currency Transaction In Accordance With Your Instructions, Which May Delay The Initiation Or Crediting Of Such Digital Currency Transaction For 48 Hours Or More. You Acknowledge And Agree That A Digital Currency Transaction Facilitated By Cashfinex May Be Delayed.
3.4. Third Party Payments. Cashfinex Has No Control Over, Or Liability For, The Delivery, Quality, Safety, Legality Or Any Other Aspect Of Any Goods Or Services That You May Purchase Or Sell To Or From A Third Party (Including Other Users Of Cashfinex Services). Cashfinex Is Not Responsible For Ensuring That A Buyer Or A Seller You May Transact With Will Actually Complete The Transaction Or Is Authorised To Do So. If You Experience A Problem With Any Goods Or Services Purchased From, Or Sold To, A Third Party In Connection With Digital Currency Transferred Using The Cashfinex Services, Or If You Have A Dispute With Such Third Party, You Must Resolve The Dispute Directly With That Third Party.
3.5. Cashfinex Vault. You May Elect To Use The Cashfinex Vault To Store Supported Digital Currency. The Cashfinex Vault Allows Users To Set Withdrawal Time-Delays And/Or To Require The Electronic Approval Of Multiple Individuals Designated By The User Before Transfers May Be Completed. Cashfinex Cannot Restore Encrypted Private Keys Or Otherwise Recover Private Keys Which Are Not Within Cashfinex's Control. If You Use The Multisig Vault You Acknowledge That Cashfinex Is Not Responsible For Transferring, Safeguarding, Or Maintaining Private Keys And/Or Digital Currency Associated With The Vault. If You And/Or Co-Signing Authorities Lose, Mishandle, Or Have Stolen Associated Digital Currency Private Keys, Or If Your Co-Signers Refuse To Provide Requisite Authority, You Acknowledge That You May Not Be Able To Recover Associated Digital Currency, And That Cashfinex Is Not Responsible For Such Loss.
3.7 Advanced Protocols. Unless Specifically Announced On Our Website Or Through Some Other Official Public Statement Of Cashfinex, We Do Not Support Metacoins, Colored Coins, Side Chains, Or Other Derivative, Enhanced, Or Forked Protocols, Tokens, Or Coins Which Supplement Or Interact With A Digital Currency Supported By Cashfinex (Collectively, “Advanced Protocols”). Do Not Use Your Cashfinex Account Or CASHFINEX SITE Account To Attempt To Receive, Request, Send, Store, Or Engage In Any Other Type Of Transaction Involving An Advanced Protocol. The Cashfinex Platform Is Not Configured To Detect And/Or Secure Advanced Protocol Transactions And Cashfinex Assumes Absolutely No Responsibility Whatsoever In Respect To Advanced Protocols.
3.8 Operation Of Digital Currency Protocols. Cashfinex Does Not Own Or Control The Underlying Software Protocols Which Govern The Operation Of Digital Currencies Supported On Our Platform. In General, The Underlying Protocols Are Open Source And Anyone Can Use, Copy, Modify, And Distribute Them. By Using The Cashfinex Or CASHFINEX SITE Platforms, You Acknowledge And Agree (I) That Cashfinex Is Not Responsible For Operation Of The Underlying Protocols And That Cashfinex Makes No Guarantee Of Their Functionality, Security, Or Availability; And (Ii) That The Underlying Protocols Are Subject To Sudden Changes In Operating Rules (A/K/A “Forks”), And That Such Forks May Materially Affect The Value, Function, And/Or Even The Name Of The Digital Currency You Store In The Cashfinex Platform. In The Event Of A Fork, You Agree That Cashfinex May Temporarily Suspend Cashfinex Operations (With Or Without Advance Notice To You) And That Cashfinex May, In Its Sole Discretion, Decide Whether Or Not To Support (Or Cease Supporting) Either Branch Of The Forked Protocol Entirely. You Acknowledge And Agree That Cashfinex Assumes Absolutely No Responsibility Whatsoever In Respect Of An Unsupported Branch Of A Forked Protocol.
submitted by justvisuals to CashFinex [link] [comments]

[Discussion] Buying and Selling CSGO Items with Bitcoin

Note: flair is not my account, this is my profile
Recently I have gotten a lot of questions about Bitcoin as an option for the CSGO trading community. I decided to piece together some of the points I have made to people into a little guide of sorts. Any questions or suggestions for improvement just ask away, as this is an early draft(v2 dec27).
Don't want to read this guide? Then just Get bitcoin TODAY!
Introduction: What is Bitcoin (BTC)
Bitcoin is a cryptocurrency which allows you to transfer money internationally almost instantly with no fees* and without any chargeback risk.
Aside from domestic bank transfers and Western Union, there is no other way to transfer money without any reversal or chargeback risk whatsoever. This makes Bitcoin an incredibly important tool for merchants of digital goods like CSGO items to receive payment without any concern of accounting for scammers/chargebackers.
Bitcoin is a peer-to-peer system that uses a public ledger called a "blockchain" in order to record all transactions, which are conducted by solving different puzzle-like "blocks".
In the blockchain there are addresses, each one has a corresponding private key which is used to access an address in order to send funds. All addresses can be publicly accessed to view balances and transactions. Thus, all on-blockchain activity is kept on record.
Most users do not maintain a raw unencrypted copy of the private keys to their addresses. Instead we use something called WALLETS, which you use a normal password to access and which contains all the addresses and private keys you have generated, so that you can easily send funds that you have with a normal password. Wallets can either be OFFLINE (stored only on your computer) or can be stored with a THIRD PARTY online service.
The peer to peer nature means that there is no central regulatory authority of bitcoin, so there is no way to recover lost private keys that aren't backed up anywhere, and there's a controlled mechanism... a defined algorithm for how bitcoins are created and introduced (through mining).
Getting Started
Because of how intimidating the technical details of BTC can be, it's best to start with a user-friendly hotwallet (an online service that lets you simply use your email and a normal password to access your different bitcoin addresses). Two popular ones are blockchain.info and coinbase these are Western-based services that are highly respected. Using these types of services allows you to be certain that you won't lose your money just because you have lost your private key to an address you made, because you sign up with your email address and password and they will be able to send you your password if you lose it...so as long as your email is safe, your bitcoin are safe in the online wallet. This will increase your insecurity as well though because youre trusting your private keys with an online provider, but for just getting started you should just ease into it, make a wallet, and try transferring coins around, creating new addresses, etc.
When you create an account at a bitcoin wallet service you will have one address, and it can be helpful to generate QR codes to easily send money physically since the address is a long series of characters. See picture here .
Once you have this address, you're immediately ready to receive bitcoins! Just give someone this series of characters or the QR code corresponding to it to somebody and the can send you bitcoins!
And once you have a positive balance, you can also send bitcoins. Doing so is as easy as just logging into your wallet and entering somebody else's BTC address.
Now, in order to use Bitcoin you need to...acquire Bitcoins! Aside from selling things to get Bitcoin, this can be done using different sources of funds to buy them, here are some suggestions and options:
  1. Credit card -- Circle and TruCoinoffers to US and some non-US based consumers the opportunity to buy bitcoin using credit card. In general though, due to VISA/Mastercard monopoly allowing chargebacks, this is not a common or recommended way to acquire bitcoins.
  2. Paypal Localbitcoins offers to everyone worldwide the opportunity to buy bitcoin using paypal. Read their FAQ about how the escrow system operates. Similar to (1), there's still a chargeback issue that makes this method less than optimal, but you can acquire them this way.
  3. Bank transfer this is probably the easiest, most common, most drama-free way to do it. Sign up with one of the exchanges (BTC-E, Bitstamp, Coinbase, etc.) and deposit money with them by sending a bank transfer. Most developed country banks will have an easy secure online form to initiate wire transfers using the SWIFT payment network. Once the transfer clears (a day or two?), you will be able to buy and sell bitcoin instantly with the exchange, because they will credit your account and store the dollars/euros/whatever for you...and this will come in handy when addressing certain downsides of bitcoin...
Downsides of Bitcoin
Immediately we should get out of the way the well-known issues with BTC:
  1. Volatility of value. Bitcoin's value in dollar, euro, etc. is highly susceptible to violent fluctuations. This can be problematic for merchants who have to pay bills and taxes in fiat currency. SOLUTION: But luckily it's not an issue because you can make an account at BTC-E, Coinbase or Bitstamp or other well-known exchanges which allow you to sell bitcoins into Dollar or Euro IMMEDIATELY. Thus, if you sell CSGO items for Bitcoin you can sell the Bitcoin instantly into Euro, Dollar deposits on exchange sites, where they will be stored in stable government fiat. So basically you will only be holding any bitcoins you get for minutes or even seconds, because as soon as the transfer lands you can sell it safely into cash stored at exchange. This removes all uncertainty from receiving bitcoins for csgo items being sold...for individuals who do not wish to store any bitcoins and be exposed to the price fluctuation risk.
  2. Double Spending/Transaction Confirmation Wait Time. See this quick guide When making a Bitcoin transaction from one address to another, the transaction will appear INSTANTLY in the destination address as "pending". ALL BITCOIN TRANSACTIONS SHOULD BE DONE WITH THE BASIC MINING FEE (0.0001 btc...a miniscule amount that most wallets will cover themselves) which will guarantee confirmation of the pending transaction within minutes. Technically this means Bitcoin transactions are not "fee-free" if you want to get a confirmation of a transaction within minutes, but in practice it is in fact fee because Coinbase and Blockchain for example cover this fee, which is $0.03 at current market prices. After 10 minutes on average, the transaction will receive 1 Confirmation, and the risk of someone doublespending becomes exponentially lower. After 3 confirmations it is technically "fully final". UNCONFIRMED TRANSACTIONS WHICH ARE SIMPLY "PENDING" SHOULD NOT BE CONSIDERED FINAL! SOLUTION: Wait 10 minutes or so for confirmations of the transaction after you initiate the payment (if you have included this mining fee which like I said most wallets already cover), or do an "offblockchain" transaction which confirms instantly on a site like Coinbase. It is generally considered safe to send sold items after 1 Confirmation, because the amount of technical knowledge and the necessity of a rogue mining unit it takes to double-spend an address' balance is so high that the buyer will not be able to exploit it anyway. This is more of a THEORETICAL concern than a major practical concern. I have sold many items for bitcoin and I always just wait for the 1st confirmation which is sufficient. There are no known cases of someone who has double-spent a balance with 1 Confirmation when paying the mining fee.
  3. No regulation, no accountability. You can either see this as an issue or a benefit. Bitcoin is a tool that can be utilized for good or for bad. That being said, you can lose lots of money by misplacing or losing a private key to an address you have or getting hacked. While this is mitigated by using online wallets that will store the private keys to your addresses and allow you to recover them by using your email, that increases the insecurity of your funds, because sometimes wallets and exchanges get hacked. Thus, in the end, you are the one who is fully personally responsible for your funds. No banksters, no government cronies to back you. SOLUTION: Get comfortable with bitcoin and be smart about diversifying to different addresses and being secure with how you store your keys.
Conclusion
Bitcoin is an excellent tool and the only true solution for sellers to COMPLETELY ELIMINATE ANY chargeback risk when selling items for real money. For buyers it offers the opportunity to use a peer to peer system that avoids banks and government intervention to purchase digital goods. Like with any real money transactions, for full security you need a middleman to serve as escrow to verify that items do not get sent until the payment arrives.
Resources
[1] Coindesk has good information, such as a list of trusted Exchanges that they compile their Bitcoin Price Index for. Visit them here: http://www.coindesk.com/price/bitcoin-price-index/
[2] LocalBitcoins is a great place to acquire or sell bitcoins using an escrow system. You can even buy using paypal here. Visit them here: http://www.localbitcoins.com
[3] BitcoinTalk is a forum with lots of people answering common questions, visit them here: http://www.bitcointalk.org
[4] Coinbase is a good place to buy and sell bitcoins. http://www.coinbase.com
[5] For traders, Bitfinex is a great source, go here : http://www.bitfinex.com
[6] And finally, OKCoin is a growing place to trade coins, http://www.okcoin.com
submitted by theswapman to GlobalOffensiveTrade [link] [comments]

What happens when an N of M transaction never gets confirmed? Can the money be respent or does it sit in limbo?

Let's say that Alice agrees to pay an online teacher Bob for today's math class. They do this by publishing a "2 of 3" transaction of 1btc from Alice -> Bob with a mediator Eve.
Alice and Bob, however, get in a fight. Alice feels that Bob's lesson today was very underprepared, and she doesn't agree that it was worth 1btc. They go to Eve to settle the dispute.
However, Eve has disappeared. If Alice never agrees to send the 1btc to Bob, what happens to the 1btc? Does it stay forever in limbo? Or at some point, can Alice respend this 1btc?
Edit: To find out about N of M transactions, and other contracts that are built into Bitcoin, see http://www.youtube.com/watch?v=mD4L7xDNCmA
Nevermind. This is closed. I found out that each bitcoin transaction has a lock time, and if this is set to anything other than 0, then an unconfirmed transaction will eventually reverse itself.
submitted by lurbqburdock to Bitcoin [link] [comments]

Global competition with Bitcoin confirmation time.

Hello. I'm Russian and live in Russia, Ufa city. I found out about Bitcoin since its early 2010 development, and I was highly skeptic all the time until 2013 when I quit all the other projects to start working only with Bitcoin.
And biggest part of my skepticism always was confirmation times. I hated that it takes too long time. Now I'm not hating, I'm just taking it as a fact. But today I wanted to pay my rent with local currency on LocalBitcoins and it took 1 hour only to top up my account. Ridiculous part of this that its not the first time LocalBitcoins process my transaction during the whole hour.
Of course I received "Unconfirmed balance" in 22 seconds after I sent my money from blockchain.info. I understand the whole process & much more technical details about blockchain protocol. I understand why it happens. But waiting 1 hour for transaction to fill my account on LocalBitcoins is way too much. That was the moment, when I got that feeling "we have to do something about it..."
Let me tell you my vision about the whole technology, and how I see everything: - Bitcoin is the only sound money, I'm keeping all my money in Bitcoin, and I refused from all fiat since the beginning of 2014. - The whole payment systems in Russia is built upon "irreversible logics". Even Visa/MasterCard in Russia works irreversibly. This is our national standard. And I like it. For security reasons Visa/MasterCard during any online transaction asks SMS confirmation, that's the way it makes the payments irreversible and in MasterCard this feature is called SecureCode.
Why do I love irreversible payment systems? * Because this gives much more precise logics for escrow services like LocalBitcoins.com. And LocalBitcoins.com for Russians are really an island in the middle of desert, because it lets Russians to exchange money without permission, because if you can send something online immediately - that sets new standard of Escrow-services - LocalBitcoins work flawlessly upon such systems, and here's what you can do with LB: ** Exchange to BTC -> QIWI, QIWI -> BTC (100,000 cash accepting ATMs) ** Exchange Sberbank (our largest bank) to BTC; BTC to Sberbank ** Exchange WebMoney (our largest irreversible payment system) to BTC; BTC to WebMoney ** Exchange Yandex.Money (2nd largest irreversible payment system which soon is gonna be totally integrated to Sberbank) to BTC; BTC to Yandex.Money
So as you can see irreversible payments changes the whole payment landscape & gives citizens opportunity to exchange without governments disrupting such exchanges. Because government usually don't control the destination of personal payments bellow $500 (that's the case in Russia).
Why I'm explaining all this? Because before Bitcoin in Russia we already had perfect products with exact logic Bitcoin needs: QIWI, Sberbank, WebMoney, Yandex.Money. And these payment systems would be perfect if Bitcoin was directly integrated to this services, this would solve all the problems. Russian would never accept any chargebacks, because there's high fraud-rate in our country, and everybody would be doing chargebacks.
Even though QIWI, Sberbank, WebMoney, Yandex.Money isn't blockchain based technologies, they at least have immediate payments with immediate confirmation times (the next second you're already having your payment in your wallet/credit card, because Russians really hate to wait!).
And I want to ask experts here, what you would do if you would develop service like LocalBitcoins.com but specifically oriented for countries who have banned Bitcoin, but has irreversible payment systems like in Russia? How would you make such service more comfortable for users, the way the users wouldn't care about confirmation time & get the payments immediately?
And do you think governments that will want to ban every single Bitcoin transaction has any ability to try to shut such systems too? How technically will they be able to achieve it if they wouldn't wanted to close all those convenient USER 2 USER payments inside those systems (QIWI, Sberbank, WM, Yandex.Money).
P.S. In Soviet Russia, transaction reverses you.
submitted by 3534933 to Bitcoin [link] [comments]

[PSA] Guide on how to start using Bitcoins

Introductory video
In the past few weeks, interest in the online cryptocurrency called Bitcoin has increased dramatically, largely due to the rapidly rising price. While it is relatively simple to use once everything is understood, the initial set-up is admittedly daunting and fairly complex. Given that Bitcoin is remarkably useful as an online transaction tool, I hope to clear up some misunderstandings and outline how to quickly and safely start trading with Bitcoins.
How do Bitcoins help me?
Before explaining how to get started, I’ll briefly summarize why Bitcoin is so attractive for traders:
Alright, cool. I’m on board. So what do I do now?
If you’ve decided to buy Bitcoins, the first step is to choose a wallet. A number of options are available, each with their own advantages. I personally recommend blockchain.info’s wallet, since is easy to create and for the most part hassle-free, while also providing additional security and advanced use features. If you intend to store a large quantity of Bitcoins, however, it may not be ideal for you.
Now that I have a wallet, how do I buy Bitcoins?
Unfortunately, here’s where things get a tad complicated, and many people shy away after experiencing difficulties. The primary reason why it is hard to buy is that it is almost impossible to buy Bitcoins using PayPal or any other method that can be charged back. In addition, nearly all exchanges and vendors require some form of identity verification prior to selling; depending on the website, this process may take up to several days. If you anticipate that you will need Bitcoins for a trade in the future, start buying them in advance! Below are a few of the more popular sites to buy Bitcoins internationally; please keep in mind that they all have different verification and funding processes, so you should research which one best meets your needs.
Finally bought my Bitcoins! How do I spend them?
Once you have your wallet set up, but you want to transfer your Bitcoins to another account, simply ask the other person for their Bitcoin Address (it should look like a string of random characters; here is mine, for example: 1GEKaHGoauYSoEHzGj3TRL9tFqrtNA9oUt). The Bitcoins should arrive in the new wallet immediately; as the seller, however, it is important to remember to check that the transaction was confirmed on Blockchain.info (a transaction that can still be reversed will say "Unconfirmed Transaction!" in red).
Of course, use a middleman when buying or selling virtual items for Bitcoins. There is no dispute process: once you send the Bitcoins, they are gone. There is an escrow (middleman) service called BTCrow, which could be cool if someone wants to experiment with it, but I have personally never tried it, and cannot recommend it as I do not know how their dispute process works.
Closing notes:
I started writing this guide over six months ago, but it didn't seem like too many people were interested in Bitcoins after their price crashed at the end of April. Recently many people have been asking how they work and how to invest in them, so I figured it would be a good time to finish this. Bitcoins are a very curious and exciting currency system, and though I am a zealous supporter, I urge everyone to be careful when investing.
To all the other experienced Bitcoin users out there, if I missed anything, please let me know and I'll edit/expand as necessary.
Originally posted in dota2trade, but who knows, maybe you guys find this useful or at least interesting. :)
submitted by AONomad to tf2trade [link] [comments]

A Look At The 51% Attack And Other Risks On the Bitcoin Network (More Information in the Comments Section)

Synopsis: In this post, we will go over the major risk on the Bitcoin Infrastructure, what kind of solutions have been suggested, and the flaws (if any) of those solutions.
The 51% Attack – The Problem/Risks
The 51% Attack is based on the premise that, as Bitcoin users, we want no one user to hold 51% of the power on the network. I believe everyone can agree that would be quite the pickle if it were to occur. When we refer to power, we are referring to processing power, which, as most people reading this should know, controls the flow of money, the ability to verify transactions, and other things.
Let’s go back a bit and review a few of these basics though. When any machine (which will be henceforth be referred to as a node) applies its processing power to mine, it is doing virtual work, attempting to find a hash which matches up to the algorithm, set at a particular difficulty. As any network grows, the amount of malicious users will too, which is the basis of our problem. If a user (we’re assuming he/she is a neutral entity at this point) controls that much power, we run a few risks.
  1. The user could have found a way in which to maximize the node’s return on investment (ROI), which generally factors in both time and power. This maximization means that the user has found a way to compute multiple hashes at once (thus attempting to take care of multiple transactions at once). This also means that said user wouldn’t receive fees for the transaction though, so the efficiency of this is questionable.
  2. The more malicious route means that the user mines empty blocks, and then refuses to process transactions while mining against only his blocks. I’m assuming (because there seems to be little I could find on the technical side of the attack, for good reason) that this involves a blockchain rewrite, and then the user targeting his/her clients to work on only those blocks which he/she modified, but as for specifics, I do not know. I will research this further and probably post a follow-up that more accurately describe what would happen during this sort of attack. If the user were to mine against just their own blocks though, and not attempt to create any new ones, the Bitcoin network would essentially stop. There is also a variant where a single user can inject a massive amount of hardware into the network quite suddenly, they can bring the production of new blocks to its knees.
  3. This could also be a botnet that does not wish to deal with the hassle of constantly sending all of the current transaction information to its zombies. This would be more for coding simplicity rather than for financial gain. (This point is directly copied from Privacy Online News, as I can’t really think of a simpler way to put it). (List lovingly butchered from Privacy Online News)
The 51% Attack – The Actual Risk/Solutions
An attack of this sort would be questionably efficient, and becomes more difficult by the day, here’s why: users. Other users are constantly battling to be more efficient, as they upgrade their own nodes with new GPUs, CPUs, addons like the ones from Avalon or Butterfly Labs, and modified settings. The efficiency of an attack of this sort is questionable since the Bitcoin’s code places odd restrictions on a user who has pulled off an attack likes this, due to its failsafes, cryptography, and other features. This is a list of such limits, brought to you by the Bitcoin Wiki.
This [51% attack] allows him [the user] to:
Reverse transactions that he sends while he’s in control. This has the potential to double-spend transactions that previously had already been seen in the block chain.
Prevent some or all transactions from gaining any confirmations
Prevent some or all other miners from mining any valid blocks
The attacker can’t:
Reverse other people’s transactions
Prevent transactions from being sent at all (they’ll show as 0/unconfirmed)
Change the number of coins generated per block
Create coins out of thin air
Send coins that never belonged to him
As you can see, there are certainly some risks to a user gaining this kind of control, however the common concerns of them stealing from others, creating coins, and playing with other people’s money simply aren’t possible. It is mentioned later in the article that it is possible to change historical blocks, however the difficulty increases exponentially as you go back, and it becomes impossible past the last checkpoint. Solutions have been mentioned over time, including one (implemented by Solidcoin 2.0) that requires at least one user with a balance of at least a million Solidcoins to be working on every other block. The logic behind this is that a user with that much invested in a system would be very unwise to try to devalue a currency which he/she has so much invested in.
I’m personally not a fan of this one, for one reason in particular. To combat the problem of not having enough coins in the beginning, the SolidCoin 2.0 dev team introduced “…10 accounts of 1.2 million [that] were created in the genesis block. These are special accounts that cannot be spent on the network, effectively making them “Null accounts used for special purposes”, until SolidCoin does have real millionaires.” I understand that these coins are unable to be spent on the network, but who controls these accounts? Who decides when there are enough SolidCoin millionaires? What happens if some of these people lose their money, what then happens to the network? These questions and more are raised in my head, and if a SolidCoin dev wishes to have a statement added in, feel free to contact me.
As put forward by blogger Gavin Anderson of GavinTech, “[The solution is] Something like “ignore a longer chain orphaning the current best chain if the sum(priorities of transactions included in new chain) is much less than sum(priorities of transactions in the part of the current best chain that would be orphaned)” would mean a 51% attacker would have to have both lots of hashing power AND lots of old, high-priority bitcoins to keep up a transaction-denial-of-service attack. And they’d pretty quickly run out of old, high-priority bitcoins and would be forced to either include other people’s transactions or have their chain rejected.”
This solution does sound like a fairly good one, although it does leave us still vulnerable to the attack, albeit for a fairly limited amount of time.
User David Schwartz on Stack Exchange mentions this: “…As a longer-term solution, there have been proposals discussed to reject reorganizations that invalidate suspiciously large numbers of blocks such as four or more. The problem with these proposals is that under unusual circumstances (such as if a disaster partitions the Internet for half an hour), the network can permanently split with each side rejecting the other side’s block chain as a suspicious reorganization.
Essentially, the client would have to go to a “lockout” mode if this happened and reject all transactions until some mechanism to find the real block chain could be implemented. (It could submit all transactions to both chains and consider only transactions accepted in both as confirmed!) One proposal uses a central authority to pick the real chain. This is an area where there is room for innovation.”
Schwartz's solution does sound like less of a risk, but a lockout mode sounds like it could very potentially disrupt a lot of the Bitcoin traffic. Also, it mentions a “central authority” which in a decentralized digital currency, is a bit of a foreign concept.
If there are any other major solutions you’d like me to add to this list, let me know.
submitted by totallygeeky to Bitcoin [link] [comments]

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