It is often asserted (for example, in the Bitcoin white paper [22]) that a cartel can double-spend Bitcoins. In a strict sense, this is true: a cartel can spend

It is often asserted (for example, in the Bitcoin white paper [22]) that a cartel can double-spend Bitcoins. In a strict sense, this is true: a cartel can spend a Bitcoin by paying it to a player Alice, receiving goods or services, and then shifting the consensus choice of history to a branch where that coin is instead paid to a different player Bob. However, we argue that double-spending by a cartel has a limited payoff. Bitcoins have value because people are willing to trade them for goods and services. If players were unwilling to accept Bitcoins for trade or unwilling to spend Bitcoins for fear of having their payments nullified, the value of Bitcoins would diminish significantly as players lost confidence in the system. Worse, because players are encouraged to generate a new identity for each transaction and because identities are not linked to any side information, players cannot easily determine whether a proffered payment is coming from the double-spending cartel or an honest user. Thus, a rational player should refuse to accept any payments when there is a significant threat of double-spending. As a cartel must outmine the entire Bitcoin network and thus outspend the entire Bitcoin network for as long as it would remain a cartel, we believe it is very unlikely that a cartel could double-spend enough to recover the cost of the attack. An interesting facet of mining cartels is that they can censor certain transactions. The cartel can choose to ignore any transaction it does not want appended to the log. Further, the cartel can choose to treat any blocks appended by others to the log as forks which it will not attempt to extend. Thus, other players will naturally also abandon these transactions, possibly even consciously if the cartel announces that certain transactions (or transactors) are disfavored. https://www.cs.princeton.edu/~kroll/papers/weis13_bitcoin.pdf https://www.cs.princeton.edu/~kroll/papers/weis13_bitcoin.pd...