What stopping a state level attacker from filling bitcoin blocks with standard but washed transactions, always paying a higher fee than everyone else. This seems significantly cheaper than trying to disrupt mining. Has an analysis of the cost of this ever been done? 🤔
Discussion
I’ve talked about this before. I can try to find the note.
TLDR is that fees are set at the margins and you couldn’t outbid every single legitimate transaction, plus you’d have to spend an ungodly amount of Bitcoin in the process which would accelerate Bitcoins growth.
If by “disrupting mining” you mean making every single miner insanely profitable and capable of building more hash/infrastructure, then I suppose you’d succeed. It would be annoying for those who had planned on low fees, but it would be a net benefit to the network.
By disrupt mining I was just referring to the theoretical attack where a state actor prints an unreasonable amount of money to buy mining hardware and 51% attack to stall mining. Seems like that would be much harder and more expensive than tx washing.
To me attack is interesting because it’s the extreme example of inscriptions: they are spending an insane amount on fees to outbid standard transactions. If they found a sustainable way to do this, bitcoin would become useless as a way to transfer value. Although it seems at this rate they are more likely to go broke.
The great thing about Bitcoin fees is that they are native to the network and denominated in Bitcoin, so there isn’t a true sustainable way to permanently pay for blockspace. You could have a stack as big as Saylors, and you’d still be eventually outbid and run out of Bitcoin to waste.
was just thinking this.
Honestly, the crazies inscribers were spending 7btc/block to clog the chain, and still it was perfectly usable if you were prepared, meaning already onboarded on LN or rich enough lol
7 BTC / block is 300000000 millions usd /day, even for a state it’s not cheap to spend 1 Billion every 3 days, for something as meaningless as Bitcoin (for them).
The most (rightfully) frightened politician right now, is the awful Warren and she doesn’t grasp the basis of Bitcoin yet.
Yes, that would be really hard. Pretty much impossible for all but 3(ish) countries, and soon to be zero.
If they want to short term clog the network, it would make more sense to print money to pay fees, but that’s functionally just printing money to buy Bitcoin with extra steps. We would be really close to winning if they tried something like that, and the hash rate would explode upwards.
I think they might’ve already figured out that it’s in their interest to hold Bitcoin instead of playing these silly games. The US had said they were going to sell all their Bitcoin last year, but that never happened.
Also, the state attacks things in much more subtle ways. “Divide and conquer” type strategies and psychological operations. We’re yet to see if those could be effective. I could see them trying to create two competing camps within Bitcoin, maybe “custodial holders” versus “sovereign holders” or something like that.
It’s easier for the government to buy a billion $5 wrenches.
Cheaper with respect to.. I suspect state actors have fewer sats to spend over time compared to other resources like energy, computation, and guns.
I guess some major miners could colude to fill blocks with inscriptions or normal txs, inscriptions are cheaper though, and raise the fee rate for everyone else and they would not be losing money they would be paying themselfs.
I fail to see how any state would think it's a good idea to spend bitcoin on spamming the network instead of holding bitcoin(if they ever choose to acquire it in the first place). also whatevee negative effects caused, if this actually happened, would literally only be high fee rates, which would make plebs unable to move bitcoin in the short term, in the long term this will lead to more investment/research in L2 and L3 as well as more bitcoin mining hash rate and better mining gear. so overall an "attack" of this nature would just be a W for the network while the state would have printed loads of money, inflating their own currencies supply and negatively affecting their own citizens.
PROBABLY WOULD COST $5-$10 BILLION PER YEAR DEPENDING ON WHAT FEE RATE THEY CHOOSE TO DEFEND.
THAT MONEY WOULD GO STRAIGHT INTO MORE MINING INFRASTRUCTURE. NOT A BAD DEAL.
MY THOUGHTS EXACTLY. THEY WOULD ONLY BE ABLE TO DEFEND AS LONG AS THEY REMAIN SOLVENT PAYING HIGH ENOUGH FEES TO OUTBID ALL OTHER TRANSACTIONS.
NOT LIKE THEY CAN CONTINUALLY PRINT MORE BTC TO PAY FOR THEIR EVER INCREASING FEES.
when you have thermodynamic money, trying to find attacks is like trying to violate the law of conservation of energy.
and in bitcoin which means the state needs to buy the corn and can't sell it
The state subsidy must be offset by taxes at least to the level of the fee premium to censor.
https://github.com/libbitcoin/libbitcoin-system/wiki/Censorship-Resistance-Property
Finger in the air: 6BTC in fees per block for 'very high' fees.
144Ă—6Ă—365 = 315K BTC per year.
The issue for such an attacker is not the nominal cost in USD, at least initially. It's that this amount of continuous buying might end up being good for Bitcoin's price, supporting 'hodl' mindset/strategy instead of undermining it.
Which has its logic. Bitcoin would be proving its usefulness :)
I also totally understand that this logic is *extremely* shaky.
Meanwhile, the actual reason I've never found this scenario worrying is because bureaucracies will never commit to actions like this, actually buying btc in bulk. They are much more likely to try to attack miners, which is why mining centralization has always felt like the biggest danger to be wary of.
good point
If I was the fiat printer I’d contact big pools directly to offer them to pay in USD in order to clog the chain with fake txs, so no need to buy BTC.
The only struggle being to convince miners to be rewarded in usd but most of them would definitely agree with that sadly.
Good point, and notice that this risk also points in the direction of mining centralization being the ultimate weak point.
I think you’re right.
Censorship resistance is a function of fees. Watch this:
Was just curious which attack could be sustained the longest 🤔
yo mamma attack?
The attack itself isn't sustainable because it forces the adversary to become a participant in the market. The adversary needs to acquire bitcoin (pushing the price up) and then fund miners with high fees (encouraging more hashpower to come online).
The only truly sustainable attack is to mine empty blocks.
12:54
great video!
They wouldn't bother, they would just say "bitcoin is illegal to own hur hur"
Probably the fact that the state isn’t a monolithic malevolent entity. At worst it’s a set of competing malevolent forces competing for their own scams and grifts.
Some in the US seeing this as some sort of plan will push back and say that those billions should go to current war machine cause because their buddies need a few billion in top.
Others will want to see the money go to a more conventional method of stripping people of their freedoms.
Fortunately they cannot do this forever since it's paid for in money they cannot print