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Realistically this falls apart almost immediately, when you try to assemble the political will to actually ban Bitcoin. While you can talk about governments bei
by andrewla 6y ago
Realistically this falls apart almost immediately, when you try to assemble the political will to actually ban Bitcoin. While you can talk about governments being willing to spend money on the drop of a hat, this just isn't realistic. Spending billions to combat magic internet money when prescription drug prices are sky-high? Spending billions to combat magic internet money when we don't even have enough to fund the programs that we are operating now?
If somehow you managed to muster the political will, the assumption that the cost structure could remain fixed is also laughable. As critics are quick to point out, Bitcoin uses a large amount of energy. Enough energy to mine 100 blocks ahead would require 100 times that energy, and that's assuming that the energy use stays constant, where it would clearly not do so. That amount of energy expended on the effort would be sufficient to substantially affect global energy markets, which would in turn affect the Bitcoin price.
The most you could hope for would be to bring up a mining operation that would be competitive with the rest of the network, and thereby throttle on-chain transactions. Bad news for you, ban-fans; the network is already severely throttled, and the price doesn't seem to be bothered much by it.
- bryanlarsen 6y agoChina could do this unilaterally.
- tom_mellior 6y agoAnd the fact that they haven't done it yet indicates that they are not interested in doing it. Why would they? Mining a large part of the world's Bitcoin means lots of foreign money flowing into the country.
- bryanlarsen 6y agoChina has taken quite a few anti-bitcoin measures: https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory#China https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country...
- tom_mellior 6y agoFair point. But there seems to be consensus that there is still a lot of mining going on there. And China is in a optimal position to suppress it, if they really really want to.
- andrewla 6y agoMaybe. They could substantially cut into mining capacity, but the degree is hard to isolate because miners do not generally publish location information. They could probably unilaterally take down some 30 - 60% of the mining power, and redirect it towards empty blocks, but once again, that would be a capacity constraint. If they then chose to create more mining power to reach 100x (as the article proposes) of existing mining capacity they would likely find that beyond their means without stressing their economy to the breaking point because of the energy requirements. And as the price varied it's not clear that mining capacity would not grow in other places to reflect the increased price. And this is putting aside the idea of political will, which is still something that even an authoritarian state has to deal with -- there are factions inside the CCP that would be happy to take power if the current leadership was damaging the economy through a useless fight against magic internet money, even if they phrased it in capital-flight terms.
- bryanlarsen 6y agoThey certainly don't propose 100x, they propose the capacity for $100M/day, which is 11x, but they only propose the capacity for 11x. They don't run it 24/7, but only in spurts, dramatically lowering the power requirements.
- hbrav 6y ago> Spending billions to combat magic internet money when prescription drug prices are sky-high? I mean that's a rational objection, but I'm not sure it aligns well with US government spending policy. The US is planning to spend $5B per year on missile defence, which has so far not had a very high kill rate in tests. Maybe $5B for a 30% chance of shooting down a nuclear-armed missile that has a 5% chance of being launched is actually a good deal - I'm not saying that's wrong. But large defence spends to guard against strategic what-ifs is quite common for the US.