China can destroy Bitcoin? Prudence, instead of FUD, part 1


A study by Kaiser et al. explores various attack vectors, which could be exploited by a government against Bitcoin. At various Points in the Bitcoin Ecosystem read, a pure apocalyptic Interpretation. But what exactly is being discussed in the study, and what has that to do Antpool?

A column by Dr. Philipp Giese

A spectre is rising in the crypto-forest. China, it is said, “have the skills and a strong Motivation to destroy Bitcoin”. It is the anxious question, “whether the Chinese government could destroy Bitcoin”.

That the virtual leaves of the forest cited the study in dramatic tones, is understandable. “The Looming Threat of China: an Analysis of Chinese Influence on Bitcoin” is a worrying title. In the Paper, Ben Kaiser, Mireya Jurado and Alex want to display Ledger, how strong is the influence of China on the Bitcoin Ecosystem is and what it can teach vectors China against Bitcoin.

The market, in the last time so sideways on the road was that the volatility of the Bitcoins with the Fiat currencies measure , reacted promptly and fell by five percent. Concerned, many are wondering if bitcoin’s existence is from the good of China-dependent, and investors are watching Bitcoin with concern. From such fear FUD often develops – Fear, Uncertainty, Doubt –, a crippling feeling that can brake an entire Community.

To get out of this anxious to break out of the vicious circle of brooding and panic, helps to enlightenment. In times of worry, it is always best, the primary source of self-study, and also this critically. The foreign exchange is the much-quoted Mantra DYOR – Do Your Own Research. Those Research we want to do in this series of articles together. We go from the Paper and look at the current Situation in the network. We begin with an analysis of the mining of empty blocks, and finally go on the attack vectors.

As the subject is quite bulky, we have to treat the entire topic in several articles. In this article, we look at the Motivation that had Chinese Mining Pools 2015 to 2016, as they have increasingly mined empty blocks. This Information is important as we look in order to the current strange phenomena to Antpool. In the next article we will consider then the Paper discussed attack vectors in more detail.

Empty blocks on the Bitcoin Blockchain – laziness, or attack?

With a view to Mining Pools, the Paper presents the Obvious: A majority of the Hashrate is divided among Mining Pools, their management in China sits. Considerably more exciting is the investigation of the empty blocks is: mid-2015 to early 2016, the number of the empty blocks from a rose to two percent to around five percent. The authors were able to show that these empty blocks have been propagated in the first line of Chinese Mining Pools in the network. While BTCC do not need to face this accusation, have him stand Antpool, BW Pool and F2Pool.

As with transactions, transaction fees are coming, the question is why someone would mine empty blocks. The pure Block Reward is still considerable, on the other, the Great Firewall of China comes into play here. China has launched Internet censorship is not only a turning point in the freedom of its citizens, but also leads to inefficiencies in data exchange with the Rest of the world.

The larger the data packet is, the longer the Transfer takes, to give Compounds outside of China. Mining is a competition in which the Miner of the first mined and the network accepted block wins. As a loophole in the Bitcoin consensus of the Chinese Miner will be able to optimize the Propagation of their blocks: It simply sends out blank blocks. Thus, Jihan Wu, at least in 2016, had no Problem at all:

@sysmannet sorry, we want to continue mining empty blocks. This is the freedom given by the Bitcoin protocol.

— Jihan Wu (@JihanWu) March 1, 2016

With the implementation of the Bitcoin Improvement Proposal BIP152 block propagation is largely independent of the block size, so that Miner from China, the incentive should have empty blocks to the mines.

Empty blocks in 2018 – Sponsored by Antpool

All the blocks are now so full? Hardly. The Mining of empty blocks is not a Problem from the old days. Only recently it was in the Bitcoin network, a few empty blocks. A sample analysis of all blocks between 544287 and 545286 shows that the empty blocks are quite a Problem:

Within the last week, almost ten percent of the blocks were mined with less than 100 kb. Certainly, one could argue that currently, the Mempool is empty, but on the other hand, the daily number of transactions amounted to during the entire last week, on average, about 200.000 transactions, what runs per Block to about 1,400 transactions. There is also no periodicity, which could correlate with a lower Transaction.

The transparency of the Blockchain makes it possible to analyze more precisely which Mining pool to send these blocks. In the following figure, all of the Pools, which takes into account more than ten percent of the blocks, the blocks under 100kB or the blocks over 500kB, respectively, are:

Not just China, but especially Bitmains ant colony mine empty blocks, and the statement of Jihan Wu remains faithful.

Concretely, one can say that nearly 30 percent of the Antpool mined blocks were empty. Really relevant blocks, the block size is over 500 kB, has Antpool a relatively small proportion.

To summarize: in order To reward and retain certainly a little bit of control over the network, sends Antpool significantly more empty blocks in the System and the use of a loophole in the consensus.

Why Antpool is doing this? Moreover, one can only speculate. Is that Antpool is part of Bitmain. With an IPO, a blessed company has known a war of dimensions of cash in Bitcoin to Cash, so you can ask the question whether you want to damage with empty blocks, the efficiency of the Bitcoin network. Whether China or Bitmain are behind it, is pure speculation.

Be Your Own Bank – keep Track of Bitcoin and draw your conclusions

Further Details of the Papers, all preceded by an analysis of the presented attack vectors is the subject of a second article. At the conclusion of this analysis of Antpools behavior in the Bitcoin network is only at the ideological core of Bitcoin: Be Your Own Bank! Neither China, Bitmain still Antpool are Supreme beings, the goings-on in the Bitcoin-network-before the eyes of all hidden play fast and loose. The Bitcoin Blockchain is transparent, everyone can watch what your doing. As in the analysis above shown, we can observe all the behavior of Antpool and the other with Argus eyes.

And it doesn’t have to stick with it: How the User-activated Soft Fork , in the last year showed a broad consensus Mining Pools in the knees. You should remember that Antpool or other Mining Pools to continue in spite of a large TRANS-action volume of empty blocks mines, one can, similar to BIP148, a Protocol amendment in the Full activate Nodes, the empty blocks are not accepted anymore. That should do enough of a Full Node Hoster, would be empty blocks quickly no longer a Problem. Actually a good incentive, his own Full Node set up, or?



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