As Bitmain mines coins in secret: the story of the developer SiaStats

Hakkane (Salva Herrera) is an independent developer of blockchain and owner SiaStats.info that site, which is a reliable real-time statistics on the blockchain Sia. Hereinafter in the first person.

I often imagine blackany like a crystal tower. Bright, attractive features of the landscape, towering over the fields of cryptography, data science and Economics. Inspiring, but also intimidating anyone who get close to them. Solid, but completely transparent. Book transaction records available to the public and has been confirmed by every full node on the network. Each user can track the tools that jump from one address, or a smart contract on the other. The block chain does not need referees or regulators, as the rules for their work respected by each node. The process and results transparent and visible to each participant.

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and "asik"

Unlike the block chain working on the algorithm for Proof of Work, whom they serve, the ASIC manufacturers don't usually provide the same level of transparency. An unknown number can see available to them for self-mining, unknown dimensions of batchas (parties) that they sell (so that no one can evaluate their profitability, which ends with the saturation of the market when the miners have nothing to earn), or a secret mining prior to release of equipment – that's what most often criticize manufacturers ASIC hardware. The latter is especially alarming.

Mining is a competitive process in which all the miners are divided between a fixed reward per block, in accordance with their hasraton. When the blockchain creates a new generation of ASIC, his first owners extract the most profit as quickly bypassed the previous generation ASIC or GPU/CPU that replace. The Maini independently and without releasing the equipment for some time, ASIC manufacturers can enjoy their privilege (and profit) exclusive. In other words, they gain a market advantage by competing with their own customers.

Therefore, despite the fact that the blockchain is the paradigm of transparency, for the last 2 years between cryptocometary and manufacturers had too many graters. The world leader "Asimov" Bitmain recently conducted campaign, as he put it, "radical transparency" and "dialogue with the cryptocurrency community". 25 July 2018, the blog Bitmain has a record in these words:

"a zero tolerance Policy against "secret hash". [...] Bitmain himself unfairly accused of this practice. Bitmain appreciates transparency and fair competition. We oppose this practice and support the long-standing policy of intolerance against her."

This statement is, however, strongly correlated with how Bitmain behaved in the network Sia in the end of last year. This article must provide evidence from which it becomes clear that Bitmain secretly obtain Siacoin during the two months preceding the presentation of his miner, and did not hesitate, and other dishonest methods. Since readers may not be familiar with the context, I think it's important to talk about the events and violations in the community of Sia and the blockchain caused by Bitmain and miners Sia performance.

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Bitmain got to Sia

If I were to describe the appearance of Bitmain in the community of Sia in a few words, I would say that it was like a "bull in a China shop". Without any warning, January 17, Bitmain announces Antminer miner A3 network Sia and opened sales. The first batch was sold for a couple of minutes.

In principle, for the community that shouldn't be a problem. But six months earlier, the kernel developers Sia established a subsidiary for the production of ASIC Obelisk and opened pre-orders for what was supposed to be the first ASIC for network Sia. Many developers and community members participated in pre-sales. Bitmain just announced that the A3 was the first to hit the market, for many months before the Obelisk, and to deprive him of his expected profit. The last ingredient of the drama was the announcement that the miner had hidden Obelisk ability to work on an alternative algorithm, and that the fork network Sia will allow him to stay afloat, but will make the Bitmain miners are useless if Bitmain will threaten the Sia network. Many members of the community, coders and moderators advocated the fork. Among those who bought the A3 from Bitmain were also members of the community, coders and moderators. Meat.

I remember those days as the most stressful experience I have experienced in the field of blockchain. As the moderator of the official black & white channel, I was dealing with a split community, but concealed his own feelings or put them aside. A once peaceful and friendly community ceased to discuss the terabytes of stored data, contracts, and new features, and started a civil war with all the lawsuits and death threats. To forcat or not to forcat? Any choice will divide the community. Any choice will lead to the loss of important members. Some left the project before the final decision. In the end, decided not to hold a fork. The echo of this decision is still wandering in the community.

Aggressive commercial policy Bitmain didn't help. While Bitmain has stated (and continues to claim) that sells one miner in one hand, the truth is that it was never enforced: after the sale of the first batch A3 immediately appeared pictures of basements, scored A3, and even checks on the sale of many copies. Although Bitmain also States that not parencymal market, analysis of the growth increments can see in the network Sia shows that in the first batch were about 13 000 miners (0,81 TH/s a piece), and inthe second – 20 000. Subsequent batchi Bitmain imposed on the shipment of another manufacturer, Innosilicon, so you can calculate their sizes is not possible. But there is no reason to believe that they were less. And in principle 33 000 miners in the first two sets was enough to dissolve the ROI buyers Bitmain A3, who began to complain that their expected ROI lasted for 6 months or more.

In the end, Bitmain killed the profit their own clients flooding the network with a large number of miners than could withstand macroeconomics network. Hash rate continued to rise after each batch, due to miners Innosilicon. Of course, ROI supporters Obelisk is also destroyed.

Well, if you put aside of excitement in the community, the emergence of ASIC without warning could have a devastating effect on the functionality of the blockchain. Without a proper algorithm the complexity adjustment (DAA) of the drastic increase in hash rate yet could provoke the inclusion of thousands of blocks until the next adjustment of difficulty. Contracts file storage in the network Sia measure time in units that can trigger the expiration of some contracts because the tenants will not have time to extend them and lose your data. We were lucky that optimized the DAA was represented by only a few weeks before the announcement of Bitmain. Nevertheless, this illustrates the danger of sudden ASIC implementations.

One day with the release of A3, Antpool – mining-pool Bitmain has opened a branch for a network of Sia, becoming the sixth known pool in the network Sia. In the early days of the pool's API showed a very small number of employees (less than 100) and heraty about 5% of the network. By March the number of employees has grown to several thousand, and hash rate has increased to 20% of the network, where it remains to this day. All this information was recorded SiaStats and can be accessed on the website. Such a gradual increase Hasrat, whether it is true, we could compare with the ideas about hidden Bitmain mining because the pool of organically grew after the first shipment of miners.

However, it should be noted that the Sia community found in the November-December sudden spikes can see, followed by a bunch of blocks mined by pools unknown: to 25% of all blocks. Prior to that, the percentage of unknown pools remained below 5%. Some community members suggested that it Bitmain, other – Baikal. Time has shown that these units produced Antpool.

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do Not attempt to hide their activity on the blockchain

Despite reports of "transparency" from Bitmain, the fact is that Antpool is the most unfair and non-transparent mining pool on the stage, Sia:

the For the extracted blocks do not have signatures. the Majority of pools in Sia use the same address fees per block and the standard message data field in an arbitrary unit. These two variables allow researchers blockchain to uniquely identify the pool nominal blook. Antpool instead used more than 2600 different addresses, and random data in the extracted blocks is an encrypted string every time a new one. It does not allow independent verification of production units.

the rejection of the reporting units. In the absence of a signature, the researchers must believe all the claims Antpool on its website. To the current date Antpool said only 687 units. Their list of declared components includes several gaps of a few thousand units. Given the hash rate (about 20% of the network), such gaps is statistically impossible, and therefore they refuse to report many of its units.

Fake claimed blocks. Their list of notified blocks includes the blocks which no doubt produced other pools. For example, blocks 155407 and 152847 belong F2pool is supported by the fact that the reward per block was paid publicly known mining address F2pool.

Fake stated hash rate. SiaStats registration daily average hash rate of each pool. And keep track of the % of each pool's mined blocks. We have no reliable information about the Antpool blocks, for obvious reasons, but even if we assume that all the blocks mined "unknown", Antpool belong (do not belong, but suppose), % blocks does not match Hasrat. If the end of March they reported 19% can see, the total number of blocks Antpool and "unknown" corresponds to about 14%. It superplague chance that 4-month period of time simply can not be.

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…but do not forget that the blockchain is transparent.

Even if Bitmain/Antpool trying to hide their activity, this does not mean that it is not reflected on the blockchain. Not so long ago I have developed an open blockchain-Explorer with good analytical skills and methodology of the search blocks obtained Antpool even in the absence of confirmation. The need for this tool due to the SiaStats aim to provide transparency for the miners Sia: if Antpool increasing its percentage of the extracted units, the community the Sia should be aware of. If there is a new hidden pool, you need to separate it from Antpool to determine its size. Network of Sia may not be safe if the community is in the shade and the pool will rise to 51% hash rate yet a secret.

In this methodology there is nothing beyond science, it just is based on the movement Siacoin wallets Antpool.

To understand how this works, let's begin with, such transactions. The blockchain Sia, like many others, the wallet consists of multiple addresses, and each address includes several "output" (output), which should be fully spent during the transaction. If Alice is a mining pool, mining 7 blocks at different addresses with the award 100 SC each, she will have a purse with 7 addresses and one output100 SC in each of the locations. If Alice wants to send 650 SC Bob wallet Sia collects 7 conclusions sent 650 coins to Bob and creates a new output with 50 coins that will be sent Alice back to the new address. In the real world, the reward for a block is never round and contains a lot of digits after the decimal point (included Commission), while sent people amounts usually round. Returns the new address is easy to detect, and addresses can be linked in one wallet, if you examine the blockchain.

The wallets have another feature: defragmentation. When Alice receives payment for blocks when she will have a lot of scattered insights, the wallet will automatically combine them all into one output on the new e-wallet. This will help Alice in the future. But it also means that all the input addresses, together with the resulting address output associated with the same purse to the outside observer.

The address of the mining pool is also easy to distinguish from addresses of miners joining the pool. Payments to pool the miners are sent in the case of multiple conclusions, so we can see when the coins leave the purse pool. These payments also include one of the remaining amount, which is returned to the purse pool. But we can't be sure that this is his address until it is merged in the defragmentation process with other well-known addresses in the pool. It is also easy to determine when the pool sends coins to the exchange.

The Inverse analysis of the extracted blocks allows you to find the secretly mined blocks.

The Last block, which we were able to track at Antpool is 132204 and extracted November 17, so Bitmain mined Siacoins secret exactly 2 months.

Using an automated script SiaStats found more than 2,100 new units, which Antpool is not reported. These blocks were added to the database SiaStats and new units automatically were added when payments began to return to address on Antpool. Remarkably, the oldest block that we can track at Antpool, dated 17 November, which means Bitmain mainil Siacoin secret exactly 2 months (Antminer A3 was submitted on 17 January). In total, using exclusivity Antpool collected 488 units.

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Bitmain pays for the manufacture of ASIC through a secret hashing

In total for two months was secretly produced 550 units, which represents 85 million Siacoin the awards for the unit. According to CoinMarketCap, price Siacoin in November-January was varied from 0.5 to 11 cents. The maximum historical price of the SC was reached on 6 January, 11 days before the announcement of Bitmain. Given the time when it sold its deposits, the company has received from 0.4 to 9 million dollars just from the secret of mining. According to some estimates, development of A3 Bitmain cost of $ 10 million. This means that the cost of developing the ASIC could be covered simply by hidden mining during those 2 months. This is in addition to 74 million dollars in profit, the proceeds of the sale of the first two batchas (2300 bucks apiece and 33 000).

Sorry, I didn't have these tools and experience in January, so I can share this information when it was needed. This information will not change the situation in the community of Sia, but will be valuable in itself.

Big mistake Bitmain is that he's hiding in the crystal tower, believing that nobody would look inside. Surprisingly, this manufacturer ASIC decided to say that it is not mainit coins in secret, when the evidence of this lie is obvious on the blockchain. Fortunately for us all, crystal clear.