The paper, “Cooperation among an anonymous group protected Bitcoin during failures of decentralization,” is interesting and valuable work, including the team’s discovery of a new way of tracking Bitcoin activity through a mining data stream dubbed the “extranonce.” But it is also highly technical and nuanced, and the topics it touches on, including Bitcoin security, privacy, and distribution, are highly contentious.
The paper finds that for long stretches between January 2009 and February 2011, one miner on the nascent Bitcoin network had the opportunity to conduct a “51% attack.” By virtue of controlling a majority of the network’s mining power , that miner would have been able to double-spend coins or even take bitcoin from other users.
The discovery that early bitcoiners cooperated even when they had a chance to cheat may seem unremarkable on its face.
Its primary goal, instead, is to “study responses to a social dilemma in a group of anonymous individuals.” In this case, the social dilemma was how to build a system vulnerable to attack in its early stages.
So early Bitcoin is a useful case study of human behavior under particular game-theoretical conditions, but a better understanding of the Bitcoin system was not the researchers’ primary goal.
This helps explain why, while the team is composed largely of mathematicians and computer scientists, many of them work on research problems in genomics, biology, and medicine.
In experimental repetitions of an eight-player Centipede game, the researchers found that players displayed “high levels of cooperation,” even when the incentive to steal was high and they were anonymous to other players.
But the new method has fairly limited utility, and according to the researchers, isn’t a game-changer on its own even within the limited sphere of transaction graphing.
“If all we did was add in the extranonce, which is quite error-prone, it would be completely impossible to reconstruct the early bitcoin community,” Aiden told CoinDesk.
Because the earliest bitcoiners relied on Bitcoin clients for both mining and wallet functions, and because mining on a home computer or gaming rig was economical for much of the study period, a wide variety of early users may have generated extranonce data.
But in the years since, mining has almost entirely migrated to specialized mining machines, known as ASICs , run at industrial scale by professional mining companies.
On the other hand, the extranonce may very well be a threat to a handful of very early miners, particularly any who have worked to conceal their identity over the long term.
As the researchers detail, they are able to connect identities to wallets through public posts or other disclosures, usually instances where a user posted their own Bitcoin address publicly.
“Now, obviously bitcoin has been through extensive changes since 2011! So some forms of data leakage may work less well now, and some may work better.
An early passage does seem ripe to be plucked out of context to misrepresent their stance, however.
4, 2010, a miner described as Agent #2 had “enough resources to perform a 51% attack during several 6+ hour long windows.” This would have made it trivially easy for such a miner to to double-spend tokens, or even to reorganize the chain to give themselves all the bitcoin then existing.
Agent #2 continued to process transactions normally, even at a moment when they could have done pretty much whatever they wanted.
For much of the period under study, bitcoin literally had no economic value: “Bitcoin Pizza Day,” the first known monetary transaction using bitcoin, took place in May 2010, two-thirds of the way through the study period.
Furthermore, such an attack was unlikely to actually earn an attacker that much money: even after bitcoin gained economic value, news of a 51% attack could have led to people seeing bitcoin as a failed experiment, destroying that value.
While there may be some sort of alliance or more complex tactics that could lead to a successful 51% attack, they would require Herculean effort.
The researchers do use some terms that could lead superficial readers astray.
Pareto is often cited in social science research on income and wealth inequality in society.
The citation seems at first glance to implicate Bitcoin in this dynamic.
But the significance of the finding is unclear, since real-world human beings even across a large geographic area are often separated from one another by six relationship links or fewer.
Those tiles are positioned in the circle in a clockwise direction according to the time when those agents mined their first bitcoins.
Similarly, the above chart of mining output during Bitcoin’s first two years may appear to highlight concentration of mining among a small set of actors – including Satoshi themselves.
Though it’s easy to miss, the chart is actually a timeline moving clockwise starting from Satoshi’s big red block of coins mined between January and July of 2009.
In the current environment, Bitcoin and blockchain technology are frequently demonized by powerful voices who either don’t comprehend its promise – or comprehend it all too well and want to stop it.
The researchers have also gone to at least some effort to exploit Bitcoin’s centrality to their research to get more attention for it, as shown by coverage in the New York Times ahead of the paper’s publication.
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