The Curious Case of Bitcoin’s “Moby Dick” Spam and the Miners That Confirmed It


Curious Case of Bitcoin
Curious Case of Bitcoin

The scaling debate has dominated the Bitcoin area for well over two decades now. As a central issue, Bitcoin’s one-megabyte block size limitation was frequently insufficient to include all transactions on the community. This ultimately resulted in the replacement of the block size limitation for a block weight limit through Segregated Witness, allowing for as many as four megabytes of trade data. And a group of Bitcoin firms intends to set up a hard fork to double this by November.

However, there’s reason to believe the”catastrophe” may have been fabricated, at least partly. A recent study by”LaurentMT,” the programmer of blockchain analytics tool OXT, in cooperation with Antoine Le Calvez, creator of Bitcoin statistics source p2sh.info, shows that the Bitcoin network has had to take care of a load of spam trades throughout the previous couple of years. Now, in a three-part site article series dubbing the junk strikes”Moby Dick,” their findings suggest that several major Bitcoin mining pools might have had a hand in this.

“Six or seven pools have played a major part in stuffing blocks with spam trades,” LaurentMT explained. “And graphs display what seems like a coordination between these pools”

The Spam Situation

The concept of”spam” from the context of Bitcoin is sometimes disputed. Differentiating between”good” and”poor” trades can be controversial on a network made for permissionlessness innovation and censorship-resistant payments.

However, there’s little doubt that certain trades serve no other purpose than to material the Bitcoin network and blockchain. LaurentMT and Le Calvez more specifically define spam because transactions that ship a great deal of tiny fractions of bitcoins to plenty of different outputs (“addresses”). These kinds of transactions can not feasibly have been utilized to create actual payments, whether they do pose a significant burden on the Bitcoin network: all nodes will need to receive, validate, transmit and (at least temporarily) store all this data.

The analysts found the Bitcoin system has seen many transactions that match this category: almost three gigabytes worth of data inside a two-year interval, including up to more than 2% of the total size of the blockchain, or the equivalent of about a month’s worth of normal Bitcoin usage.

“We found there have been four waves of’fan-out transactions’ through the summer 2015,” LaurentMT informed Bitcoin Magazine, speaking to the transactions that create lots of outputs. “We believe the first two waves have been spamming users and services. The third and fourth waves rather mostly shipped the fractions of both bitcoins to addresses controlled by the attackers themselves.”

These four waves of spam are comparatively simple to detect, as sudden bursts of transactions clogged up the Bitcoin network for short intervals. In some cases these spam attacks were even announced as”stress tests” or”bitcoin giveaways.”

What is more interesting about LaurentMT and Le Calvez’s evaluation is that both focused on the second half of the mystery. Virtually all the fractions of bitcoins which were delivered to all these different addresses have gradually been re-spent back to flow since. All these”fan-in” trades weren’t as obvious since the initial waves of junk — but were similarly problematic.

And, LaurentMT clarified, blockchain analysis indicates that most of this spam can be monitored down to one or two things:

“We’ve identified two pockets that seem to have played a fundamental part in the attacks. They’ve financed long chains of fan-out trades during summer 2015, and they aggregated the dust ”

The analysts also suggest that the perpetrator(s) of this junk may have been customers of the Canadian exchange QuadrigaCX. But that’s where their investigation stops.

The Mining Pools

Perhaps what’s more interesting is that used this junk to fill Bitcoin cubes: Bitcoin mining pools.

The junk outputs, generated by the first four waves of fan-out trades, had been starting to move since fall of 2015 — sort of. Whoever controlled these speeches were broadcasting transactions to devote these presses on the network. But for a long time, miners didn’t incorporate these”spam broadcasts” in their blocks; the transactions were dismissed.

Up until the second half of 2016, that is.

Or, they had yet another motivation to fill blocks with these transactions — maybe regarding the block size discussion,” LaurentMT suggested.

For more hints, LaurentMT and Le Calvez looked for notable events that happened around the time of their mining pools’ sudden change of heart. In their research, they did find some correlation with”odd” occurrences. The next has been a rumor about a group of Chinese pools planning to end their cooperation with Bitcoin Core: that the Terminator Plan.

Obviously, something noteworthy happens in Bitcoin just about every single week.

“An alternative explanation could be that the various mining pools embraced new mining policies for entirely different reasons. I tend to believe political motives are somewhat more likely… but that’s only a personal opinion.”

Bitcoin Magazine reached out into the seven mining pools question. The only mining pool willing to comment on the problem was KanoCKPool, which denied being involved with any sort of manipulation or coordination, stating it only confirms”all trades out there.”


UPDATE: Following publication of the article (and on studying the comment from Kano CK Pool), LaurentMT pointed out that Kano CK Pool, together with 1Hash and Bitclub Network, would be the only pools that had been confirming some of those junk trades even before the second half of 2016, signaling that the pool could be telling the truth.

He said that the pool has always confirmed any paying trade, and denies that HaoBTC (or Bixin) has taken part in almost any coordination across mining pools.

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The Curious Case of Bitcoin’s “Moby Dick” Spam and the Miners That Confirmed It

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