Researchers Locate Flaw In Bitcoin Protocol 191
An anonymous reader writes "Researchers at Microsoft Research and Cornell identified a potential flaw in Bitcoin's transaction propagation. In a recent paper they show how miner nodes in the Bitcoin network have an incentive not to relay transactions to the rest of the network, and propose to implement a scheme that rewards nodes [PDF] for relaying messages."
Irresponisble headline (Score:5, Informative)
Only a small fraction of bitcoin nodes (e.g. 1%) are mining nodes, and they all relay transactions as relaying transactions is very cheap to do. The problem they're describing clearly does not exist. If it did someday turn out to be an issue you can address it by users handing their transactions directly to various miners, you don't need some crazy complicated reward scheme.
It's also not news— their contribution isn't insight on incentives but a complicated sibyl resistant reward scheme for trees (which the bitcoin network is not) which requires doubling the cost of forwarding a transaction every two hops it takes. (By making every node perform a great many additional cryptographic signatures and checks in order to track the reward)
Re:Yes but (Score:4, Informative)
stability comes from the size of userbase. More users = greater inertia.
Either way central banks have no problem with playing dirty. Imagine having tons of swiss francs and losing 8% in a matter of seconds as it happened early September when they announced pegging to euro.
Re:Yes but (Score:2, Informative)
BitCoin is a proof of concept, not a currency.
Re:And what's the Bitcoin Forums response? (Score:4, Informative)
Not to mention "engaging in a constructive discussion with one of the original authors of the paper, who hopped in and thanked people for their interesting comments".
Mod parent up.
Re:Doesn't really make sense (Score:4, Informative)
They are making other miners potentially miss out on transaction fees but it doesn't improve their chances of winning the block and therefore getting the fee and there is no way they can know what transactions other miners have picked up through other routes via the network.
If it hurts the other guy and it doesn't hurt you then there is an incentive not to forward any more transactions than you have to. If it hurts you and other guy at the same time then you can do it selectively, any time it will hurt him more. If everyone were altruistic, you'd be right. They aren't, so you aren't.
Re:I'm starting to want to work at Microsoft Resea (Score:4, Informative)