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But it can absolutely be easily manipulated by a government. Governments have the resources to pump/dump coins, buy huge amounts of mining hardware, etc. Even a

by api 9y ago

But it can absolutely be easily manipulated by a government. Governments have the resources to pump/dump coins, buy huge amounts of mining hardware, etc. Even a smaller nation state could, if it wanted to waste the money, launch a 51% attack against Bitcoin or any other cryptocurrency by just buying enough mining hardware. Beyond direct manipulation you have the ability of competent intelligence agencies to execute mass cyber attacks. "Code as law" is pretty dangerous when code is so vulnerable. Other well-heeled organizations can do these things as well: corporations, hedge funds, organized crime, ... People seem to think that currency manipulation and other financial games were invented in the 20th century with modern fiat currency. The price of gold absolutely was manipulated in the past in a variety of ways: secret hoarding, spoofing reserves, false transactions, etc. Every currency or medium of exchange has been manipulated. In many ways central banking and fiat currency was invented to defend against many types of market manipulation by non-state or foreign state actors (as well as against undesirable emergent behaviors in markets). I once read someone talking about US vs. China trade and Chinese currency manipulation state that for the US to abolish the Fed would amount to "unilateral disarmament." We would suddenly have no coherent way to defend ourselves against other nations armed with the ability to manipulate their own currencies (and ours!).

sl33k_ 9y ago
Actually, no. Current estimates rate the cost of a 51% attack at approximatly 4.656.671.184$ for hardware only which is not a sum which even large countries will have easy (and certainly not unnoticed) access to. This estimate is based on the current hash rate at 14.975.580.960 GHash/s and the fastest mining hardware available which is the AntMiner S5+ at ~2300$ with a hashrate of 7.722 GHash/s. That means you'll need about ~1.939.340 AntMiners which will consume 3436W each. At an electricty cost of 0.05ct/kwh (this is china, US is at about ~0.20ct/kwh) this gives you an additional cost of ~7.996.185$ per day not factoring in any labor/location costs and most notably no cooling costs which will be high with this kind of high performance asic. This estimate only holds true though if you buy every bit of hardware yourself, in reality its probably more practical to simple coerce big mining pool owners to work for you, but thats another problem :) edit: relevant xkcd: https://xkcd.com/538/ https://xkcd.com/538/

by api 9y ago

sl33k_ 9y ago

Actually, no. Current estimates rate the cost of a 51% attack at approximatly 4.656.671.184$ for hardware only which is not a sum which even large countries will have easy (and certainly not unnoticed) access to. This estimate is based on the current hash rate at 14.975.580.960 GHash/s and the fastest mining hardware available which is the AntMiner S5+ at ~2300$ with a hashrate of 7.722 GHash/s. That means you'll need about ~1.939.340 AntMiners which will consume 3436W each. At an electricty cost of 0.05ct/kwh (this is china, US is at about ~0.20ct/kwh) this gives you an additional cost of ~7.996.185$ per day not factoring in any labor/location costs and most notably no cooling costs which will be high with this kind of high performance asic. This estimate only holds true though if you buy every bit of hardware yourself, in reality its probably more practical to simple coerce big mining pool owners to work for you, but thats another problem :) edit: relevant xkcd: https://xkcd.com/538/ https://xkcd.com/538/