Shift Money 2019: Why Economic Feasibility Can Lead to Bitcoin Collapse | Alexey Malanov (Kaspersky)

Conference: Shift Money 2019

Year: 2019

Get your tickets for Infobip Shift 2023 at https://shift.infobip.com/ https://twitter.com/InfobipShift Shift Money is a Financial Technology Conference, which purpose is to explore new ways to disrupt the world of Payments, Insurance, Lending & Blockchain. Learn more at https://money.shiftconf.co/. Everyone knows about the "Attack 51%"" on Proof-of-Work blockchains. However, not everyone knows about the rules of regular adaptation of mining difficulty in the Bitcoin network. Based on these rules, we will consider the strategy of miners, which allows to increase profits, but at the same time reduces the overall network hashrate and resistance to "Attack 51%". We will show that the use of this strategy is beneficial to each miner individually, but it is disadvantageous to all as a whole. This is a classic "Tragedy of the commons" situation. We will consider the reasons why miners still do not apply the described strategy, and when they will start to do it.