When spinning up a few hundred data-gathering Bitcoin nodes prevented some breadwallet users from transmitting bitcoin transaction, a minor panic quickly erupted about the Bitcoin compliance startup Chainalysis and their supposed sybil attack on the Bitcoin network. Chainalysis CEO Michael Gronager joined us for a discussion of what happened and what role transaction monitoring will play in the future. We dove deep into the tension between the desires for user privacy and the requirements to achieve integration into existing financial services. Topics covered in this episode: How Chainalysis’ nodes caused problems for breadwallet What damage a large scale sybil attack could really do to Bitcoin The role transaction monitoring will play to achieve Bitcoin integration in existing systems Why transaction-related blockchain analysis does not threaten Bitcoin’s fungibility The best way users can protect their anonymity Episode links: CoinDesk: Chainalysis CEO Denies Launching Sybil Attack Bitcoin Talk Discussion Reddit: A Bitcoin Compliance Startup is Sybil Attacking the Network Reddit: Chainalysis versus Mycelium Story Inside Bitcoin Article This episode is hosted by Brian Fabian Crain and Sébastien Couture. Show notes and listening options: epicenter.tv/070

Is Bitcoin secure from attacks that could destroy the currency? To a large part, this is determined by how expensive it is to carry out an attack and by the potential profits the attacker could generate. Ideally, an attack is so expensive to carry out that no profit-driven attacker would engage in it. But in this episode, Brian argues that the cost of attacking Bitcoin will likely decrease in the future and the ability to short Bitcoin and thus benefit from an attack will increase dramatically. Topics covered in this episode: How an attacker would need to go about shorting bitcoin How the kamikaze mining pool could be used to bribe miners to join the attacker Why all profit-driven miners will have an incentive to join the attack, whether or not they believe it will succeed Why the block halving in 2016 could be an exceptionally dangerous time for Bitcoin, since an attack would be cheap to execute and likely to succeed How a gradual decrease of the block reward, instead of the 4-year halving rhythm would reduce risk Episode links: Bitcoin Development Mailing List Thread - Death by halving This episode is hosted by Brian Fabian Crain and Sébastien Couture. Show notes and listening options: epicenter.tv/068