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> It effectively establishes a billion dollar bounty for any party who can rewrite enough blocks to erase it. To do what exactly? Nobody can redirect the tran
by lawn 7y ago
> It effectively establishes a billion dollar bounty for any party who can rewrite enough blocks to erase it.
To do what exactly?
Nobody can redirect the transaction to themselves and the best they can do is erase it. 51% attacking the network will cost you a lot, and you won't actually win anything in your attack.
Even if the owner of the coins is the attacker, you can only win by double-spending the transaction by reversing a payment to someone else. Of course if we're talking about such a large transaction you should wait for more confirmations, making the double-spend attack so much more difficult to pull off.
Anything you would get in return, like a bank transfer or parts of a city, would have a much longer settlement time. Being afraid of your Bitcoin transaction being reversed should be the least of your worries.
- Waterluvian 7y agoBeing able to erase a billion dollars gives you a colossal amount of power to blackmail the owner of that billion dollars.
- ijpoijpoihpiuoh 7y agoYou can't erase the bitcoins, just the transaction. If you did that, they'd still be in the source wallet.
- lawn 7y agoWith only six confirmations it's extremely hard (in practice impossible) to reverse, which happens in around an hour. Just wait a few hours, or even a day, and the risk is basically non-existent. There are a million other things to worry about at that point (including someone hitting you with a wrench until you send them money). The transaction now has 572 confirmations. Nobody will ever reverse that.
- qroshan 7y agoIf the liquidity is enough, 1) Short Bitcoin to the tune of several Billion dollars. 2) Do a 51% attack and essentially prove it's worthlessness. 3) Profit
- perseusmandate 7y agoIf you have amassed enough hashpower to be able to do the 51% attack you have far more to gain economically from continuing to mine for the network than to somehow short it (impossible to find a counterparty for a transaction that large) and then have billions of dollars of hardware that is now worthless
- imtringued 7y agoAlso if multiple parties attempt to mount a 51% attack then they will have to compete with each other which makes the attack impossible.
- james-mcelwain 7y agoAre the sort of places willing to sell options on BTC the sort of places that would honor such a contract if the price went to 0?
- lonelappde 7y agoSuch is Bitcoin's continuing rediscovery of all of finance, now including the 2008 Global Financial Crisis.
- jotakami 7y agoContracts are established between market participants; the issuer is just a facilitator. LedgerX options are fully collateralized so you could certainly reap the entire value if you bought a put and the price dropped to 0. Liquidity is not very deep though, so you wouldn’t be able to buy much. Margined products (such as Deribit’s options) would probably be force-closed long before the price hit 0.
- james-mcelwain 7y agoI feel like LedgerX bragging that they are both an exchange and a clearing house does not inspire confidence in their risk management department, although I'm sure the bright minds at the SEC have done their due diligence as they always do.