DEAL: For $25 - Add A Second Phone Number To Your Smartphone for life!Use promo code SLASHDOT25.Also, Slashdot's now on IFTTT.Check out the new SourceForge HTML5 Internet speed test!× How China Took Control of Bitcoin Slashdot reader Rick Zeman quotes the New York Times: In its early conception, Bitcoin was to exist beyond the control of any single government or country.It would be based everywhere and nowhere... Yet despite the talk of a borderless currency, a handful of Chinese companies have effectively assumed majority control of the Bitcoin network.They have done so through canny investments and vast farms of computer servers dispersed around the country...there are fears that China's government could decide, at some point, to pressure miners in the country to use their influence to alter the rules of the Bitcoin network.The government's intervention in 2013 suggests that Bitcoin is not too small to escape notice.ASICBOOST, a mining innovation criticized by Bitcoin core developer and co-founder of Blockstream Gregory Maxwell on April 5 via the Bitcoin developers mailing list, could be why Bitmain is blocking the technical solution favored by the Core developers, segregated witness (segwit).

Maxwell originally identified the miner as “Mainstream ASIC manufacturer”, but Bitcoin journalist Kyle Torpey later outed the Chinese based miner which produces 80 percent of the industry’s mining equipment as the alleged culprit.Maxwell’s contention is that segwit, which is incompatible with ASICBOOST, would undermine Bitmain’s profitability.Bitmain founder Jihan Wu contends there is no relationship between Segwit and ASICBoost.ethereum machine priceHe has been a staunch opponent of Segwit.bitcoin mit amazon kaufenIn a statement replying to the contentions, the company likened Mr.bitcoin kunstMaxwell’s allegations to “smear campaigns,” and assured it had never used ASICBOOST on Bitcoin’s mainnet, only its testnet.move bitcoin wallet between computers

Bitmain’s patent was published in January 2016 and has been known since that point.It holds a second patent for the technology in China.Bitmain added: “Our ASIC chips, like those of some other manufacturers, have a circuit design that supports ASICBOOST.However, the ASICBOOST method has not been used by us on the mainnet.” Mr.Maxwell didn’t believe Bitmain’s comments, calling the post “Bullshit” in the comments section.bitcoin kurs usd“Due to a design oversight the Bitcoin proof of work function has a potential attack which can allow an attacking miner to save up-to 30% of their energy costs (though closer to 20% is more likely due to implementation overheads),” wrote Mr.ibm bitcoin blockchainMaxwell to the Bitcoin developers mailing list.“There are two major ways of exploiting the underlying vulnerability.One obvious way which is highly detectable and is not in use on the network today and a covert way which has significant interaction and potential interference with the Bitcoin protocol.

The covert mechanism is not easily detected except through its interference with the protocol.” Maxwell contends ASICBOOST can block the implementation of segregated witness.“Exploitation of this vulnerability could result in payoff of as much as $100 million USD per year at the time this was written (Assuming at 50% hash-power miner was gaining a 30% power advantage and that mining was otherwise at profit equilibrium),” estimates Mr.“This could have a phenomenal centralizing effect by pushing mining out of profitability for all other participants, and the income from secretly using this optimization could be abused to significantly distort the Bitcoin ecosystem in order to preserve the advantage.” Mr.Maxwell claims he reverse engineered the ASIC chips – though many doubt this claim –  and learned that it holds “an undocumented, undisclosed ability to make use of this attack” and that he has conclusive evidence that ASICBOOST has been implemented into Bitmain’s hardware design.

The authors of the SegWit proposal made a specific effort to be compatible with all mining systems and even changed the design at one point to accommodate mining chips with forced payout addresses, according to Mr.“Had there been awareness of exploitation of this attack an effort would have been made to avoid incompatibility – simply to separate concerns,” he adds.“But the best methods of implementing the covert attack are significantly incompatible with virtually any method of extending Bitcoin’s transaction capabilities; with the notable exception of extension blocks (which have their own problems).” Bitmain, whose bitcoin mining pool Antpool holds 17 percent of the network’s total hashing power as of the time of writing, defended the invention of ASICBOOST.“We can legally use it in our own mining farms in China to profit from it and sell the cloud mining contracts to the public.This, however profitable, is not something we would do for the greater good of Bitcoin,” Bitmain wrote, seemingly admitting that the advent has some negative implications for Bitcoin.

If Bitmain shouldn’t be deployed on the mainnet for the greater good of Bitcoin, then why shouldn’t it be stopped?Roger Ver, Bitcoin Unlimited’s loudest backer, was unusually quiet during this period and did not publicly mention ASICBOOST until April 11th.“I agree with the #ASICBOOST inventor,” he eventually .“It’s a non-issue, but many Core supporters are trying to use it as a political tool.” Roger Ver is working with John McAfee on a major bitcoin mine in Washington State with hardware supplied by Bitmain.Bitmain’s hardware has recently come under criticism of potential malware that could allow Antbleed to control miners purchased by individuals remotely.Some researchers contend it is uncertain whether the covert variant is being used.Bitmain contends, in their above-linked blog post, that they designed the chips and hoped that soon they would be able to use them overtly.Bitcoin Unlimited proponents contend ASICBOOST is compatible with the Bitcoin features important to them, such as bigger blocks, thin blocks, and flexible transactions.