A peer has no way of knowing which 'network' is real. Since there is no proof of work, it is effectively free to generate any number of alternate histories or

A peer has no way of knowing which 'network' is real. Since there is no proof of work, it is effectively free to generate any number of alternate histories or blockchains (this is known as 'costless simulation'). It becomes trivial to generate the longest chain. This is a real problem, and some PoW currencies like NXT have proposed solving it by using an out-of-band solution like asking friends or trusted nodes whether you are on the right root blockchain. This defeats the very purpose of a decentralized currency. If you're going to trust a core set of nodes, just use a centralized database with M-of-N access control.