1/ In order to manipulate min feerate for each block, you have to make that block a *single-transaction block*, meaning you'd be giving up tons of fees by excluding other txs. And you need to do that consistently for at least 51 out of 100 blocks. That costs a lot of money.
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Replying to @hugohanoi @hrdng and
2/ That’s kinda like Antpool mining empty blocks, but doing it more consistently & on a much larger scale. If mining cartel can truly do this we have a bigger problem than fees: the miners have completely taken over the network & can impose artificial block limit on the users.
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Replying to @hugohanoi @hrdng and
3/ 51 single-transaction blocks out of 100 means that the total available block space would be effectively cut in half.
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Replying to @hugohanoi @hrdng and
4/ But the kicker is that the benefits of this manipulation (which again costs a lot of money) would go directly to the your mining competitors.
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Replying to @hugohanoi @hrdng and
5/ Since the other 49 blocks would be mined by other miners, not you. You’ll be spending a lot of money just to line your competitors’s pockets and weaken your own cartel. Makes no sense.
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Replying to @hugohanoi @hrdng and
6/ This attack, if carried out, can also be easily spotted on the blockchain.
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Replying to @hugohanoi @hrdng and
Hugo Nguyen Retweeted Charlie Lee [LTC ⚡]
7/ It also can be easily mitigated, as Charlie has pointed out, as long as SPV clients don’t use the same rule for estimating fee. Min feerate is only a fee signal, it’s up to each SPV client how to interpret it.https://twitter.com/SatoshiLite/status/949802676056834048 …
Hugo Nguyen added,
Charlie Lee [LTC ⚡]Verified account @SatoshiLiteReplying to @hrdng @jimmysongBut you are assuming every SPV client follows the same rule. That would be silly as it becomes easily exploited as you are showing. I would guess some SPV clients use last 200 blocks, some use last 1000, and some use last 100 but fallback to 1000 if fees seem high, etc.1 reply 0 retweets 0 likes -
Replying to @hugohanoi @hrdng and
8/ In conclusion, I think this attack is unrealistic, easily spotted, and easily mitigated against.
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I think it's unlikely, but not unrealistic. My main point was that I think the risk of this attack, or more clever variants, means that SPV clients would be better off using existing semi-centralized fee estimation services rather than the miner-curated minimum block fee info.
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I would argue that it’s easier to manipulate these centralized fee estimation services than to manipulate min feerate consistently over X blocks- where X is a large number :-)
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Btw, there is no reason SPV fee estimation can’t get smarter. “Median over X blocks” is just the naive algorithm. Charlie already mentioned another one like having a fallback.
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Replying to @hugohanoi @hrdng and
If you want to get fancy, you can do anomaly detection / cluster analysis over a large distribution of min feerates. Given enough blocks, this kind of analysis should produce a fee estimate not too far off from a full node’s estimate.
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