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It is said that a Bitcoin miner attacker with enough CPU power to outrun the entire network is better off mining honest bitcoins - which is not correct since by creating a false block chain the attacker already wins the coinbase on the way, just like he would if he behave honestly.
Actually, an honest miner has all the incentive to defraud by adding to his block transactions that cancel his own 'real' transactions.
Or am I missing something?
EDIT- and maybe an answer
Let me give an example, lets say Alice owns a very big pool (big pools had known to create up to 6 blocks in a row), also Alice buys something from Bob for 1 bitcoins every 10 minutes.
Alice could try to do double spending of each of her payments (by passing the same bitcoins to herself) and use the second transactions in the block she is mining.
Note that this is all completely legit.
If the pool solves the proof-of-work, then her 'real' txs will be canceled - Bob can wait 10 minutes to see if the transaction gets confirmed or not, but it might not be enough in the case that there was a fork.
Conclusion:
A owner of a big pool can try to create doublespends but he will win his btc back only in rare occasions when:
- there was a fork
- Bob didn't check the fork, and didn't wait enough time (e.g. 1 hour) to see if the transaction was confirmed
- The good that Alice bought is not associated with any physical address (so that Bob cannot find Alice and claim for his money).
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This scenario is referred to as a [tag:majority-attack], and what you're referring to is described in the Bitcoin-Whitepaper in Section 6: Incentives.
– Murch – 2016-06-26T13:41:09.8671The full quote is "If a greedy attacker is able to assemble more CPU power than all the honest nodes, he would have to choose between using it to defraud people by stealing back his payments, or using it to generate new coins. He ought to find it more profitable to play by the rules, such rules that favour him with more new coins than everyone else combined, than to undermine the system and the validity of his own wealth." – Murch – 2016-06-26T13:49:12.267
I'ts not what's the question is about: 1. any miner can do the fraud - it helps to have more CPU though (e.g. a owner of a big pool), 2. the white paper present a choice - but you can do mining and try to fraud at the same time - actually you have an incentive to try to do this fraud if you are a miner, it might work every rare occation an it's legit – Elia Weiss – 2016-06-26T14:12:48.607
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Ah, you mean, you are trying to doublespend by keeping the doublespending transaction secret and only include it in blocks that you discover? I think then you may be describing a Finney attack.
– Murch – 2016-06-26T14:18:57.420This question would be improved if it were asked openly and the attempted answer were to be moved to the answer section as a separate post. – Murch – 2016-08-26T12:01:00.377