On Tue, Dec 31, 2013 at 01:14:05AM +0000, Luke-Jr wrote: > On Monday, December 30, 2013 11:22:25 PM Peter Todd wrote: > > that you are using merge-mining is a red-flag because without majority, or > > at least near-majority, hashing power an attacker can 51% attack your > > altcoin at negligible cost by re-using existing hashing power. > > I strongly disagree on this isolated point. Using the same logic, Bitcoin is > vulnerable to an attacker at negligible cost by re-using existing hashing > power from mining Namecoin. Any non-scam altcoin is pretty safe using merged > mining, since any would-be attacker is going to have it in their interests to > invest in the altcoin instead of attacking it. It's only the scam ones that > want to pump & dump with no improvements, that are really at risk here. > > The rational decision for a non-scam altcoin, is to take advantage of merged > mining to get as much security as possible. There are also some possible > tricks to get the full security of the bitcoin miners even when not all > participate in your altcoin (but this area probably needs some studying to > get > right).
You assume the value of a crypto-currency is equal to all miners, it's not. Suppose I create a merge-mined Zerocoin implementation with a 1:1 BTC/ZTC exchange rate enforced by the software. You can't argue this is a scamcoin; no-one is getting rich. There's a 1:1 exchange rate so the only thing you can do with the coin is get some privacy. But inevitably some miners won't agree that enabling better privacy is a good thing, or their local governments won't. Either way, they can attack the Zerocoin merge-mined chain with a marginal cost of nearly zero. OTOH if the Zerocoin scheme was implemented by embedding ZTC transactions within standard Bitcoin transactions - even without any attempt at hiding them - the attackers would need a 50% majority of hashing power to succeed. Of course potentially slow confirmations is a trade-off, but that's likely a perfectly OK trade-off in this case. -- 'peter'[:-1]@petertodd.org 000000000000000f9102d27cfd61ea9e8bb324593593ca3ce6ba53153ff251b3
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