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For example, if the rest of the world adopts BTC as the world's reserve currency, the USA would HAVE TO purchase crazy amounts of BTC, and defend against a 51%

For example, if the rest of the world adopts BTC as the world's reserve currency, the USA would HAVE TO purchase crazy amounts of BTC, and defend against a 51% attack by investing into mining. Meanwhile, the USA could try to preempt this future, but only the USA is incentivized to have USD be the world's reserve currency. As such the USA would need to threaten every other country in the world to stop using BTC, but its not clear if that causes BTC adoption to drop, or the Streisand Effect to kick in. And ofcourse, "mutually assured destruction" stops any large country from employing too large a threat against any other large country.

ben_w 6y ago
Would any nation allow itself to be in a position where a coalition of the willing could perform a 51% attack on their currency? Because if not, only one country could use BTC or anything with the same mining algorithm.
- yazaddaruvala 6y ago
  If we are talking about a coordinated aggressive action to cripple the economy of a non-superpower nation, like today it requires a superpower to protect it. If we are talking about a coordinated aggressive action to cripple the economy of a superpower nation, you're basically triggering "mutually assured destruction". As such its most productive to assume that doesn't occur.
  - ben_w 6y ago
    The first nation to adopt it would be vulnerable immediately, without any real risk to other nations performing a 51% attack. Why anyone out themselves in harm’s way like that?
    - ben_w 6y ago
      Now it is too late to edit, I see an annoying spelling mistake. Should be “put themselves”, not “out themselves”.
    - yazaddaruvala 6y ago
      Yeah, that is an interesting question. Probably best to ask Coinbase, Tesla and Square. I don't have a good answer for you. The bad answer is this: Risk isn't inherently a deterrent. If the reward is perceived to be high enough, there will be a first adopter.

ben_w 6y ago

Would any nation allow itself to be in a position where a coalition of the willing could perform a 51% attack on their currency? Because if not, only one country could use BTC or anything with the same mining algorithm.

yazaddaruvala 6y ago
If we are talking about a coordinated aggressive action to cripple the economy of a non-superpower nation, like today it requires a superpower to protect it. If we are talking about a coordinated aggressive action to cripple the economy of a superpower nation, you're basically triggering "mutually assured destruction". As such its most productive to assume that doesn't occur.
- ben_w 6y ago
  The first nation to adopt it would be vulnerable immediately, without any real risk to other nations performing a 51% attack. Why anyone out themselves in harm’s way like that?
  - ben_w 6y ago
    Now it is too late to edit, I see an annoying spelling mistake. Should be “put themselves”, not “out themselves”.
  - yazaddaruvala 6y ago
    Yeah, that is an interesting question. Probably best to ask Coinbase, Tesla and Square. I don't have a good answer for you. The bad answer is this: Risk isn't inherently a deterrent. If the reward is perceived to be high enough, there will be a first adopter.