From the guy who's read more about Bitcoin than anybody else, you know, this is a guys take episode. What is up crew? Welcome back to the crypto. Cana me with guys Swan. I have got us a guys take episode today. I wasn't even sure what I was going to do or if I was going to get an episode out today, but all this stuff kind of blew up out of out of nowhere and I spent all morning reading and trying to dig it dig into all this stuff about the 51% attack on be cash and I just I'm sorry. I had to come back here I had tons of stuff to do but I had to come back here and try to scramble together an episode for you guys to explain what I figured out in the process of this because this is just a really bizarre situation and it happened like four or five days ago apparently like like it happened during like right during the fork and it was a it was it seems to be that it was quite a while before they even figured out what was going on. Or that this actually happened that it pretty much happened it quote unquote in secret like nobody knew that this was going on except for the to a couple of parties actually involved but from everything I can tell there was a two-block reorg which was a purposeful. We are going to censor transactions or sensor a specific transaction 51% attack against be cash and it was Two minors apparently btcd top actually possibly had enough hash power than to just do it alone. And I can't there are mining pool. So I can't see how they would be like asking their users at all for like there's no way they sent out an email real quick. If you're like us your you okay with us doing this and then BTC.com also clearly they were collaborating on this to respond to what was it? Centrally the stealing quote unquote of segue coins. So it requires a little bit of background first segment coins. The the way this egg wit soft work occurred the way it remains compatible on the network is by basically putting in a essentially a blank signature on the transaction in the really really old clients on the network, which is an anyone can spend signature which basically Is just sending Bitcoin out to the network says first person to grab it can grab it and the so and segment signatures themselves are actually allocated to a different spot. They're just not included in the specific data of that and they are hashed separately. But what it means is that because signatures could actually be modified without making them invalid like wouldn't change any of the information about the transaction, but you could change the transaction ID. so it made an attack Vector referred to as malleability where you could post a transaction you could basically give someone a transaction with a certain receipt number and they could watch the network to make sure that receipt number didn't show up and there was a trick malleability which allowed them to change the signature which modified the receipt number but made the transaction exactly the same it didn't change any of the details in the transaction so they could publish it and you Be able to see because you had the wrong receipt number think of it like getting a refund at Target twice by because they just you know, check off that. Okay, we've already refunded this receipt based on the receipt number and then you can bring the same receipt in with a different receipt number and then they check and there's no check mark because it's got a completely different receipt number. So it's sort of like that in the Bitcoin transaction since it did not mean that you could double spend coins or anything but what it did did mean is that if anybody was accepting a nun confirmed transaction or the attack was used against Mount gox and what they were doing was they were using the transaction ID simply to verify withdrawals from Mount gods and this whoever the attacker or attackers were we're modifying the transaction ID using this little Quirk and withdrawing multiple times from Mount gox Knox would keep checking the the quote unquote transaction number and be like, okay, there's No withdrawal from this account yet. So withdraw again withdraw again, so they just kept doing it. So it shows this is kind of the one of the risks of not running a full node, you know, there are little things that you can exploit if you don't have all of the data of the chain, but segue fixed this B CH Bitcoin cash back in 2017, when they Fork the first thing they did was removed segue, but think about it the transactions are pretty much the same the keys the signatures all The other stuff is compatible with bch from Bitcoin. So tons of people make the mistake and continue to do so apparently from some services or some wallets actually sending Bitcoin cash to segue IT addresses, which means that on bch own Bitcoin cash Network. Hopefully this isn't confusing for anybody who's not very familiar with all this stuff. But the Bitcoin cash Network sees these transactions as anyone can spend they See the signature that's actually locking the coins, which is the segment client, which is only on the Bitcoin Network. So essentially since 2017, there's been a significant number and at times growing number of coins that were accidentally sent to quotes egg would addresses which meant that anybody could access them on bch. Nobody actually owned them on that Network and there's is possible. That they were like replayed on to the bch network, but I'm not sure how long there was they actually implemented a replay protection at some point, but I can't remember if it was right at the beginning or if it was actually just a little bit when they like when they fix the Ed a problem that they had. I can't remember exactly so it's possible that some of these are actually replayed where somebody made a transaction on bitcoin and then they, you know, copied it and posted it to be CH but regardless a bunch of coins were locked up in these. One can spend well not locked up the opposite of locked in anyone can spend addresses on be cash and I can't determine whether or not this was actually on purpose because the the details of it actually a couple of things I read on it actually made it seem like this something called clean stack which was implemented on the PCH May. Made the Segway coins Uhn spendable basically locked them up. Whereas otherwise anyone could just grab them because they're just, you know, open addresses it just like throwing Bitcoin out into the courtyard and just seeing if everybody goes and grabs them and but at some of the things that I read kind of made it seem like this was just unintentional that they were using clean stack for something else, but I actually can't confirm. So but this recent hard Fork the May 15th, work to implement schnoor signatures on VCH actually was removing clean stack or changing it so that these segments coins were actually spendable again, which means that a minor could actually just scooped up all of these coins as soon as the hard Fork went through but there was a bug they had been sitting around in the Bitcoin ABC client for a long time and someone had been obviously people were somebody was aware of it and had been waiting for a good opportunity to exploit it and they took the hard Fork recently as just their Prime opportunity. So the first thing that happened was that Bitcoin ABC started getting a bunch of invalid transactions in their mental and as far as I can tell what this bug did was it allowed a minor to put they were referred to as poison transactions in The things that are read by the Bitcoin Dev, I mean the bch day of they were referred to as poison transactions, but they were invalid transactions that were allowed into Bitcoin ABC's mempool, but they wouldn't be allowed in a block added to the chain. So anybody who had this bug was trying to include transactions into blocks that would make an invalid block because the process of validating the transaction wasn't thorough or we had a bug to exploit so immediately where they were getting a lot of empty blocks and I think it was just BTC top. That's let me read in this article it at least BTC top possibly another minor immediately started mining it the blocks and this was so that they could continue producing blocks because the poison transactions were making it impossible to produce blocks unless they figured out how to make sure they work. Including those they had to talk to the devs to make sure that those transactions got evicted from the mempool so they could continue back with normal operation. But I found another in my on my hunt for this stuff on Bitcoin exchange guide.com. They were talking about there's been concerns very recently because BTC top had over fifty one percent of the hash Power by themselves. They had a total of they maxed out at 54% I think was the highest that they got so essentially they could have done a 51% attack entirely by themselves. Of this is about to come into play with what exactly happened but in the confusion this unknown minor exploited the the bug to get the poison transactions included in the moon pool. And at the same time. Well, I take that back. I don't think they know if it was the same person but it seems to make perfect sense that this is what they were trying to do. They were trying to create a bug that was making it so other miners could not produce proper blocks and then included the seg wit now that segment was unlocked with the hard Fork the all the segments coins that accidentally sent coins. They could snatch up the Segway coins to their own addresses. But apparently BTC top and BTC.com were either expecting that this might happen or they were preparing to recover the segment coins themselves because they responded immediately. They had to be watching this live when it hit they were watching those segment addresses and then solve that somebody was producing they were already producing empty blocks to get around the bug and then they as soon as they noticed the segment coins being Spent they started they agreed. They that was the other thing too is that it seems like there's no other way that they didn't have some private channel that they were just actively in and sitting in waiting for this because their response was incredibly fast and they were right ready with the exact action that they did which was to reorg those two blocks and remove the transactions because all the Reddit threads are talking and saying I could not actually Confirm this from anywhere with BTC dot top or BT c.com. This is simply Reddit consensus is what they were saying on Reddit, but that BTC top and BTC come were working together to attempt to recover those segments coins to it there to their rightful owners, and that maybe they had been working with an exchange and or users. I I have no idea that's just the Assumption and I have no idea how they found who the rightful owners of All these coins are or if maybe they only sent some that were specifically to an exchange. I have no idea that seems like a stretch but we'll give him the benefit of the doubt that this was a an honest move by BTC top and BTC.com, but I don't think it makes it any less scary as to the consequences of this but what they did is they immediately decided to reorder the chain and they removed two blocks BTC top and BTC come in. Injunction remove these two blocks took out the segment transactions that this unknown minor were trying to scoop up and then put their own transactions in spending the exact same coins and plus a bunch of others. And this this is a this is what you can find details about. They've got the exact block numbers and everything on the honest dot cash post by one of the it is not loading for me. It's the website down or something. I'll know I didn't save this. I hope you didn't get taken down. I don't know. I can't get to the I can't get to the conversation. Now. It's like a developer goes through the whole thing explaining what happened and gives the block number two. I'm going to be so pissed. I need to save this site as soon as it comes back up. All right. Well, I see if I can hunt this thing down. Let's hit our sponsor real fast and we'll jump back in. For anyone who has a podcast anchor cannot be beaten particularly for trying to get off the ground their entire platform is free. This includes unlimited hosting both in audio that you upload and how much your listeners download. I have uploaded an incredible library of audio now and I've never paid anchor a dime. In fact, they connect me with other sponsors and have run an ad consistently on my show. So they've paid For exposure to my audience that's really hard to beat even if we ignore that I can record directly in the app or my browser. I don't need any other software. If I don't want it I can edit at sound effects clips and they automatically published to all of the top podcasting platforms. I never had to do a thing. So if you were thinking of starting a show or already have a podcast, there's no better platform out there check out anchor by downloading the app or go to Anchor dot f FM today All right, I can't get it. I can't get it the website must be down. There be I don't think it looks like honest doc cash is actually down. All right. I've got a couple of screenshots of it. I don't think I have the whole thing then anyway, he tried to figure out what was going on because he solved something funky was happening. But apparently it took a number of hours to actually figure out what happened to those two blocks and why he was seeing two different transactions are two different sets of transactions spending the exact same seg what UT EXO's when they were unlocked after the fork. Obviously, he's trying to figure out what's going on with the empty blocks and the unintentional split between the Bitcoin ABC client and the other thanks to the poison transactions that were going on. So and he says like quote it took hours to understand unknowns. 528,000 80 2698 block spent a few segments coins. You can run get Block on it and see five blocks later five blocks later. BTC tops the same didn't invalidated that block spent those same and Other segments coins that's motive. They were returning those coins again. I don't know. I don't know how but this is what everybody's saying. So somebody probably has that information somewhere. They were not alone BTW si.com had invalidate block to they built on that chain. So they were building on the same chain. I believe miners had an online meeting with ABC developers to talk about the fix. I assume they use this open channel to coordinate a reorg to revert the unknowns transactions this A 51% attack the absolute worst attack possible. It's there in the white paper. What about minor and developer decentralized and unsensible cash when only only when convenient Unknowns actions are doubtful BTC top recovered coins for the owners recovering is better, but they were late the Bitcoin Community does not condone the censorship of transactions quote-unquote much less a 51% attack. So he's the only one that I found that seems to be a lot of people seem to be really reluctant about it and they were just kind of not I just I was reading about this and we were talking about it last night at the meet up and I was just like, how is nobody posts it about this is this I was just not getting around because this developer is here is like I can't believe we have set this precedent and I appreciate that that guy seems really concerned about it. But what essentially happened if we take them at whatever word or information there is that says they were returning the coins to the minors. I mean or excuse me to the rightful owners, which I hope is the truth because that's the only good outcome that you can have from this but that alone to minors in secret in some that channel and without any trouble decided to take it upon themselves to mine a different chain and remove blocks with someone else's transaction and replace it with their own transaction and some people seem to be celebrating this that did on the BTC forums that like Jay Jonathan tomb entomb them the if I'm not mistaken, he and his brother were behind the Bitcoin Club. Asik client way back when during the like 2015 or 16 when everybody was making their own client Bitcoin classic the coin unlimited Bitcoin ABC Bitcoin to bitcoin 9.7. Whatever the heck it was. I don't know there were so many and the two men brothers. I believe were behind Bitcoin classic but he's now a developer for bch, but he says the orphan blocks did not violate any concern official consensus rules. But they did violate a common-sense rule. You can call it an attack. If you want. I'm going to call it justice. So he's saying that because there was this unspoken quote unquote agreement that I don't know. I guess these coins that didn't have any lock on them. We're not going to be taken. I don't know why they thought that wasn't going to happen. I'm gonna guess I guess some people at least I realized that that was going to happen and they were trying to race to make to make themselves do it for them to you know, to send it back to the rightful owner quote on quote. But here's here's another comment of Thiago from rbtc says how can it be just if it was not what the majority of honest miners agreed on it's a very dangerous precedent if we start allowing individual entities to arbitrarily Is a reorg next thing we know we might be seeing the feds mining Farm enforcing their inflation chain or Mastercard orphaning blocks that offended their so-called moral standards Etc. And I think that's a completely legitimate concern. Like that's the thing that you're just immediate like, how did this how is it that just these miners are just picking out which transactions they're like basically get to say who gets to transact and who doesn't and to him Jonathan to him comes in says, how can it be? Because it prevented a theft. It doesn't matter if the theft is performed by a majority or a minority theft is theft I agree. I don't think it has anything to do with whether or not this 51% attack was a good idea. Yes, it was theft but you're violating the rules of the system you're undermining the whole concept of any kind of security that this thing has when two minors can just have a private conversation be like, well, let's let's let's get these guys out of here. We don't we don't like this transaction. Listen, let's have their coins quote. If it was not what the majority of honest miners agreed on and he says a supermajority of the hash rate did agree on it. They just didn't consult you first. They didn't have time to so he's saying that these two mining companies or hashing power people are a super majority and this is perfectly okay. He's totally defending this and I'm just like, how are you not Little bit concerned of what your what is happening here like this seems ridiculous. And then he's got is a very dangerous precedent. If we start allowing individual entities to arbitrarily enforce a reorg. Yes, allow question mark the only ones who have any say here are the miners themselves. Are you suggesting that minors should try to Orphan the blocks of miners who try to Orphan the blocks of miners. There are a lot of antisocial things that minors can do but BTC dot top and BTC.com showed is that miners who do antisocial things on bch will often get punished by the rest. You might not be happy about that, but I certainly am so yeah, I can't I can't believe that that's his take on this that he could be that unconcerned with. Security in the immutability the actual protocol and the fact that incentives are not aligned that they genuinely could have just stolen the coins for themselves. We don't know I have not confirmed one way or the other. I want to give them the benefit of the doubt and say that they've done the right thing and return the coins, but that seems like a ridiculous task. Like how are they going to figure out who all the coins are is it is are we talking about one address because they're talking about many it sounds like How the hell are they going to find and confirm the rightful owner of all of them? So I don't know but this seems like a ridiculous response and it's only that one other developer, which I can't get to the can't get to the damn article man. I should have saved that page. I'm gonna be so pissed if this thing has just been pulled down now. Oh, okay saving it right now save page as all right, so it's not gone honest. cash bch 51% details So I've got it in case it goes down. Maybe it was just a bunch of people were going to the website now, and and I think it's also like he's judging certain transactions is antisocial. What if they're wrong? Like what if it's me, we don't know anything about the unknown mean the unknown minor obviously he was probably trying to just steal the Segway coins for himself. But again, nobody knows that's just an assumption made and we're going to complete. Reorganize the whole chain over over an assumption that they just valued their own obtaining of those coins, which obviously they believe is honest because it's them who doesn't think that they are honest themselves and invalidating someone else's transactions on the issue. So everybody else seems to be at least quiet about it. A lot of people do seem to be a little bit concerned. Earned and maybe they're just trying to pass it off or they're nervous about it because the conversation was just weird. Some people were trying to applaud it and some people like really so I don't think everybody is bought into the fact that this is just wonderful news. But again, it's been like four or five days and nobody else was talking about it. And this is exactly what I talked about and what so many people warned about about endless hard Forks. these are bugs that got put into previous hard Forks that are now being exploited and because they're trying to make all these changes and it hard Fork is an attack Vector it immediately turns everything into a political a social media consensus and removes the one objective thing the power of Bitcoin by removing that consensus from the protocol from the protocol from the proof of work to just some Um social consensus and it destroys the Lindy effect because as soon as you hard Fork the consensus rules, it doesn't matter how minor it's it destroys the fact that there's any security because you've altered the rules which are the foundation of whether or not the whole network works and you can say this like, oh, well, if it's a minor change, then you haven't lost the Lindy effect segment 2 x was really minor change. It was supposed to be only a handful of lines of codes. That's what everybody argued. Over and over again is that it's not even a difficult hard for because just like eight lines of code and they still managed to screw it up. They couldn't produce blocks. They had an off by one bug in the tiny amount of code that they changed would segment to X and the simp the sheer fact that they altered the consensus rules in as simple as they thought they were going to do it. They still screwed it up. It destroys the Lindy affect any kind of survival. You've had over the the last six months of last 10 years, whatever it is when you hard Fork is out the window, you're starting from scratch and it has obviously turned bch into a huge political mess and it appears that a private Communication channel between two minors basically decides what gets in a block and what doesn't and I just can't believe that this was not just massive news and there's there's at least like Is concern about it in the Reddit post? I'll read something that actually highlighted in the thread that quote where we are. So now that both plans have been foiled bottle of data as an unwanted side effect of these events the BTC dot top and BTC.com quote partnership has been exposed. So what do we do with this new revelation is a question that we probably have to discuss they work together with someone who wanted to return the segment coins and avoided a theft. They use their combined hashing dominance to avoid a theft. I applaud them for that from a moral perspective. This is defendable and my suspicion that we have more backing for bch, then you can see with your eye by following hash rate charts is now being revealed as true again, but the Dilemma bch has is revealed again as well. We need more of the sha-256 hash rate cake because we actually do not want that any entity in this. Base has more than 50 percent Ash power. So at least their understanding the problem with this, but I just they're in a they're in a fight because they keep breaking the protocol and they keep changing the consensus rules and they can't sustain their just hard for working there. They're shooting themselves in the foot every time they do this. It has clearly turned into a huge mess of political and social media organization rather than Census around a set of rules and now they have to fight and argue over whether these miners are good guys or bad guys and whether they've done the right thing or the wrong thing when the protocol should Simply Be incentivize the market should be able to mature to prevent this type of thing from happening at all. Each simply shouldn't be possible if somebody steals the coins because of a bug or because they screwed up with the signatures or whatever that that Should be just as final there is no the Bitcoin protocol should not care. There should be no subjective decision-making over who has a honest transaction and who has a dishonest transaction if they screwed it up because of a bug it should stay there. That's what immutability means that's what decentralised censorship resistant means and I think the trade-off of just throwing that out the window is way way more costly and way more destructive than letting someone steal some coins that were essentially already lost maybe in the tiniest tiniest of since the the better thing happened for the people involved in the people who had lost their coins, but I think absolutely the wrong thing happened in the sense of Are We building something secure in different or are we just doing the same crap that we've always had the same political mess and we're just Making it into a network where a couple of miners just say what the rules are and who gets the who gets to make transactions and who doesn't that doesn't solve any of our big problems despite the fact that their reorg may have solved a small problem. So that is essentially the whole mess as far as I can tell I did tag a bunch of people in the bottom of the post to Hope. Awfully like Masari crypto, and I'm sorry that I owe Nick Carter didn't X research a bunch of errands on Werdum. I wanted to see if like Daniel goleman. I want to see if these guys could maybe dig a little bit deeper because I can't you know, I'm not going to be able to look in the block explorers and do a lot of the stuff that I'm sure they could so hopefully and hopefully we'll have something specific written really long thought. Out thing discussing this entire thing in depth that hits a little bit more details and maybe clarifies or correct somewhere that I'm wrong. I'm sure I'm wrong about something here. I was scrambling to put all of this together and again is all from Reddit. So that's take that as you will but I just thought it was really important to get out quickly so that everybody knew because somehow this has been sat quietly four days and four five. Days and nobody knew I can't believe I seem to be the first one to be talking about this. So with that I guess we will close this episode out. Hopefully maybe we'll be able to read something specific on the show that really hits the details but that is essentially what I discovered in what I tried to sum up in into the the Twitter thread on the Bitcoin cash 51% attack. All right, guys, this has been a guys take episode if you would. To support the show. You can always go to crypto Kana me dot life. I've got a Bitcoin address a QR code in the side to side bar there and I've also got a lightning tip jar and this show runs on donations. So if anybody can donate or would like to support the show and appreciates the work I'm doing I would very very much like to appreciate it. And the other thing you can do obviously a shared around with everybody know that's a great way to help out the show and help me grow. Row this audience. So thank you guys for listening. I'm on anchor and all the stuffs Please Subscribe. You can find me on Twitter at the crypto Kana me and until next time this has been a guys take episode. I'm guys Swan and you're listening to the crypto Cana Me podcast until Monday. Take it easy guys.
In a crazy conversation from last night's meet-up, I learned of discussion of a purposeful re-org, a 51% attack, on the #BCH chain by 2 miners. After a few hours scrambling to pull details together this morning, this is what I've discovered so far. Don't miss this Guy's Take episode all about the #Bcash 51% attack! 