5
'A' has got 1BTC legitimately. He sends out a transaction to transfer that one bitcoin to 'B' with a 1BTC transaction fee added on. (i.e. a bad request.)
'C' is a miner who cares nothing for integrity of the bitcoin system and only cares about winning blocks and selling the BTC he gets as soon as he can.
What incentive does C have to pass on the free 1BTC and not include A's transaction when putting the next block together?
12
Any block that contains an invalid transaction will be considered invalid as a whole, and every other peer/miner will reject it. A miner must check that every transaction included in a block is valid, otherwise there is a high risk that all the hard work required to solve the block is just being wasted.
Any miner who disobeys the validity requirements (by considering some invalid block as valid, or some valid block as invalid) will be completely disregarded by the rest of the network, defeating the point of any mining activity.
Note: Sending 1BTC with a fee of 1BTC is a perfectly valid transaction (even though it might be a mistake by A). Of course, doing that, A must own 2BTC and give them away, or the transaction can't possibly be valid.
2
If a miner includes a bad transaction (in your example, a person sending more BTC than they actually have), then the block will not be concidered valid by other bitcoin nodes and miners. That means the block will not be built upon by the blockchain, and the miner will lose out on the 50 BTC generated from that block.
You are right. If a large group of people agreed to change the rules, it would just fork the blockchain and normal people would ignore the forked chain. – Erv Walter – 2011-09-11T14:15:18.067
You seem to be thinking of an attacker with a log of computing power, but that kind of attack has nothing to do with invalid blocks.
Actually, such a transaction would still be spending '1BTC', with 'B' receiving 0BTC – qdot – 2011-09-13T11:09:17.377
I see, the fee is subtracted from the value being sent? I've edited the question to make it clear the fee is added to the initial 1BTC. Thanks. – billpg – 2011-09-13T12:56:00.023
3Could you point us in the right direction regarding why you consider this transaction 'bad'? It doesn't make much economic sense, but assuming signature checks out.. it is a valid way to spend money.. – qdot – 2011-09-10T13:05:59.527
'A' would be spending 2 BTC, but he only has 1. – billpg – 2011-09-10T16:48:01.577