No this has not been debunked. Game theory suggests the opposite.
Indeed, there are tired and repeated arguments. Often these arguments suffer from a lack of imagination. I’m going to argue that the attack is far from debunked, and respond specifically to a couple of the points in the above post.
First, the defense that is suggested is inadequate. The suggested defense (assuming for the moment that 51% hashrate is available to the adversary) is that nodes could simply run “invalidateblock” to all the offending blocks, and the network would continue its merry way, ignoring the bad blocks produced by the nation-state.
The rest of the network would rightfully see the empty blocks as an attack on the network, identify it as such and not accept such blocks.
This is very easy on any full node implementation. There’s an RPC command called “invalidateblock” which essentially says “do not accept this block or any block that builds on top of it”. The entire branch that the nation-state attacker worked so hard to create can be invalidated by any node with that single command.
This defense is very much un-Bitcoin and a non-trivial thing. Today, Bitcoin consensus has a very simple rule: “Longest Chain is Correct.” Any deviation from this opens up a Pandora’s box of everything that Satoshi tried to avoid. The alternative is “Longest Chain is Correct Except When Said Chain Contains Block That Clearly Should Be Invalidated As Determined By Some Nodes Who Agree” is not really viable. It seems like a simple rule — invalidate empty blocks. But do you invalidate a block with 3 transactions? How about 8? What if it has 250 transactions, none of which move more than a sat?
For the minority of the hash power that’s getting their blocks overridden by the empty blocks, they would clearly want to run “invalidateblock” as otherwise they would make no money. From a game-theory perspective, a large portion of the network is economically incentivized to enter a new minority consensus. In other words, a decentralized subset will form against the clearly centralized majority because of economic incentives.
The problem here is that we are now in no man’s land. There is no clear rule that determines “against the centralized majority.” The “game-theory” only works if there is a Schelling Point, and the adversary has taken away the Schelling Point. Schelling Points work because they are unique. We’re way beyond decentralized Bitcoin and into a situation where smart people have to get together and make decisions and write clauses and debate scenarios and decide the best way to move forward to protect us from the adversary and you have to trust them and sometimes they argue — this is all is very familiar, right?
So if we restrict our attention to the “empty-block” attack vector, narrowly defined as literally mining only empty blocks, I suppose you could defend such an attack. But I would assume whoever is behind the attack has a little bit of imagination and could alter it.
OK. So now let’s move on to the question of whether the hashrate could be acquired. Could a nation-state, let’s say the US or China, obtain 60% of the hash rate? Here’s where the game theory is important and this point is often missed by people who want to dismiss the attack: The attack is all about signaling, having the biggest wallet, and signaling a willingness to use it. Few Understand This.
It’s estimated that the US taxpayers have spent $2 Trillion on the Iraq War. For what even? Because Saddam Hussein was apparently enough of a threat to warrant that. Certainly, North Korea is as much of a threat as Saddam was. Now if the US decided that Bitcoin was propping up North Korea’s nuclear program, and wanted to hamstring them a little bit, they could put 5% of the Saddam budget into attacking Bitcoin. That’s $100 Billion. What could $100 Billion do to attack Bitcoin? (To be clear, North Korea is certainly not the only reason why the US would attack Bitcoin, it’s simply one scenario. Use your imagination — keeping in mind we spent $2 Trillion to take out Saddam.)
Given all of these realities, a nation-state would have to weigh out these scenarios and determine if it’s worth it. Even with unlimited money, which they don’t have, and majority control of new mining equipment manufacturing world-wide, which is highly unlikely, the probability of failure, that of a decentralized minority forming, is really high. Make no mistake, a failure of this magnitude would be a massive black eye to their reputation and prestige at home and abroad. This is the sort of humiliation that government officials avoid at all costs
OK. Was the Iraq War a black eye? How about Vietnam? I think we’ve learned the opposite thing. If the US spends $50 Billion and fails to beat Bitcoin, the US isn’t going to accept defeat. The US will keep plowing ahead throwing money at it for at least a decade.
So when the US decided to take down Bitcoin, the first thing they are going to do is say that they are going to do it. Next, they methodically acquire the hashpower on the open market.
First, the US will offer way above premium for any new mining equipment. Now the producers of this equipment have a decision, one that is very familiar to game theorists: Defect or Cooperate.
If you defect (that is, cooperate with the US) you are rewarded handsomely and will be able to convert your fab into something else with all the extra capital you have. Your other option is to Cooperate, that is, circle the wagons with the Bitcoin crew. But this is a frightening option. If others in the Bitcoin community defect and you’re passing up lots of easy money from the US, you may be in an ocean of regret a few months down the road when the US prevails and you’re left with nothing. So the game theory is easy — you get out, you get out first, and you get paid well.
Similarly, the US will buy any older mining equipment, including what is no longer profitable. Go to eBay and hit “Buy it now” on every Antminer. Now the smart people will throw their Antminers on eBay, price it 5 times above market value, collect their winnings, and walk away. Again, it’s game theory. You Defect or Cooperate.
Finally, the US purchases a ton of Ethereum and declares the intention to continue to do so. This serves two purposes. First, by making a flippening seem inevitable, Bitcoin loses its unique position and is much more vulnerable as speculators will dump Bitcoin for Ethereum. Second, they can use smart contracts to pay miners to produce garbage blocks, in Ethereum. So if you still have mining capacity, you can keep your machine and hash blocks that are not going to help the Bitcoin blockchain. If the US pays more reward than the Bitcoin block reward, well, it’s game theory and incentives, as I’ve discussed before. If you were a miner and I offered you $1,000,000 of Ethereum to produce a hashed block at the same difficulty level but not compatible with the Bitcoin blockchain, would you pursue that or would you continue to pursue the block reward? Especially once you see that the Bitcoin ship is sinking. You will salvage any value you can get.
If the US decided they are going to take down Bitcoin, we’re looking at an extended Prisoner’s Dilemma situation where those that Defect and help the US make out quite well, while those that don’t are left out. This is Game Theory.
I would recommend the classic text “The Strategy of Conflict” by Thomas Schelling if you haven’t read it.