For the thousandth time, having 50% doesn't really help your attack chances all that much compared to having 49%. And even if you do have that much, the worst an attacker can do is double spend their own coins. No one can take your bitcoins or anything (at least, not the ones with many confirmations).

The best attack a pool with >50% could do is begin going backward in the block chain to rewrite it. During that time, no one in the pool would be getting paid, so people would be like, WTF. The network hash rate would drop by half so more people would be like WTF. Sooner or later the plot would be revealed and people would switch pools. No big deal. End of story.

On top of that, the pool owner probably has a heavy investment in bitcoins. If he screws with bitcoins he is just hurting his investment. Who would do that? He could probably make many, many times more continuing to run his pool correctly then he could get from a few hours of double spends followed by a crash.

The only real effect a >50% attack can have is mucking up bitcoin. And it only lasts as long as the 50% remains in control of an attacker. A pool isn't going to have that for long.

Where did the original post go?

EDIT: Ah, it is back.

ATTENTION!
http://www.youtube.com/watch?v=J61wuSKSryE

There is a possibility of terrorists assaulting airports checkpoint and causing a big fricking huge massacre of civilians because the TSA doesn't give the fuck about REAL security.

True, but it doesn't mean it's going to happen.

You know, as long as they are up on that chart, that is proof that they are using their resources productively. I'd be more suspicious is deepbit suddenly dropped to a small sliver, that could mean that they are diverting hashing power to an attack.

But then again, we don't know how big deepbit is besides what they productively do. Perhaps they are three times that large and are using the rest to mount a long term attack. And in the meantime, they are paying off their miners with their own funds.conspiracy theory

My point is, the chart is useless. If someone were attacking, they wouldn't be on the chart. If they are on the chart, they aren't attacking.

It might be a good idea to go with a less alarmist title.  This is a situation that might warrant asking miners switching to a different pool, but to say the security of bitcoin was nearly breached is an extreme over reaction and false.  The pool operator does not control the hardware of the members of the pool.  If the operator started monkeying with the transactions in the blocks it created...or tried to withhold some blocks in order to effect a double spend, I think it would get noticed in short order and the pool operator would find themselves swimming alone very quickly.  In fact, if the pool participants would simply announce any blocks they find directly on the network, it would eliminate the attack where the operator could withhold blocks in order to double spend.  There was also a proposal a while back for a way to operate a pool, but still allow the decision regarding which transactions go into a block to be controlled by the mining participants, not the operator.  And that would completely eliminate any issue with a powerful miner.

Still, it is good to encourage people to switch pools.

It's the miner's job to verify the block chain. This is the main nerve of Bitcoin, and it's not affected by locally encrypted files or auditing of services.

If the motive of a pool operator is to discredit Bitcoin rather than profit, this attack would do much more damage than a few exchange rate swings. We've seen how BTC Guild usage recently exploded, so it's not unthinkable that future pools will be able to gain mass network share. If profit is the motive I guess it would be a lot easier to just keep a few blocks now and then without announcing it to the users. And I suspect this is already happening.

What i think would be useful is if someone with the right set of skills and resources would monitor Deepbit and Slush, and figure out how much of their power comes from botnet participation... 

BtcGuild was big until they supposedly decided to ditch a botnet and got DDOS'd. It will be interesting what size it will be once it comes back.

Perhaps, on basis of that, we'll be able to make some wild guesses regarding how much of Deepbit is actually botnet power being stolen from unsuspecting internet users... 

Graph doesn't have a title.