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What if Buffett just wants to see the world burn and doesn't care about getting the money back out? Or if a nation state or the central banks see it as an exis

What if Buffett just wants to see the world burn and doesn't care about getting the money back out? Or if a nation state or the central banks see it as an existential threat, they could consider it the cost of doing business? Maybe $30B to take out Algo or Solana and destroy trust in all PoS networks? That's a rounding error for them.

ertian 5y ago
It's a temporary state, until the PoS coin market cap gets too large to be attackable. Bitcoin's market cap is in the 1T range now, Ethereum is close to half that. Buffet couldn't do a thing against a PoS coin that large, and it would be a serious commitment and risk even for a nation state. Buffet could take down some random smaller coin, maybe, at the cost of most of his personal fortune, but if he did so the world would not burn. It's _possible_ that a government might choose to attack a random small coin just to discredit the notion of PoS cryptocurrencies, but it's hard to picture a government gaining consensus to do it, and it would be obvious to knowledgeable onlookers that larger coins are immune (or anyway, much better protected), so the resulting disruption would probably be temporary.
- bitcurious 5y ago
  PoS encourages centralized exchange-held staking, which means that there are only a handful of failure/pressure points. In other words, a government doesn’t have to buy 66% of the stake - merely compel the exchanges.
  - yellowapple 5y ago
    > PoS encourages centralized exchange-held staking Not when the protocol actively encourages decentralization by cutting off staking rewards to larger pools, like what Cardano does (as one example). Sure, the exchanges can (and probably do) run multiple pools, but so can anyone else, and for far less expense than is required for mining.
EthanHeilman 5y ago
> Or if a nation state or the central banks see it as an existential threat, they could consider it the cost of doing business? Maybe $30B to take out Algo or Solana and destroy trust in all PoS networks? That's a rounding error for them. While you are correct that burning $30 billion dollars to destroy trust in PoS blockchains isn't that much money, I disagree that such an action would actually destroy trust in PoS blockchains. We have seen serious attacks on a number of blockchains, Ethereum for instance had enormous amounts of money stolen or destroyed via weaknesses in the blockchain. Yet Ethereum is still going strong. Bitcoin suffered 51% attacks that were used to perform double spends and Bitcoin is more valuable than ever. It might be cheap to burn $30B to destroy a blockchain, but what if you burn $30B and the blockchain recovers 12 hours later.
- PretzelPirate 5y ago
  > Ethereum for instance had enormous amounts of money stolen or destroyed via weaknesses in the blockchain. These weaknesses weren’t due to consensus failures or protocol failures, but bugs in applications running on Ethereum. If Ethereum’s protocol allowed arbitrary funds to be stolen, that could certainly cause a loss of trust.
  - wizzwizz4 5y ago
    You overestimate the amount that people “investing” in crypto actually care about what it is. If my friends are anything to go by, anyway.
    - PretzelPirate 5y ago
      Most investors don’t care at all and blow off things like “the blockchain you’re using requires this fully centralized component”, but many players in the ecosystem that enable the speculation we see now, do care about protocol safety. If the Ethereum protocol was shown to be unsafe, they’d publicly promote safer alternatives and push their users to move.
  - EthanHeilman 5y ago
injidup 5y ago
If you have 30 billion, and the motivation, then there are more entertaining ways of making the world burn than hacking somebody else's Ponzi scheme.
irq-1 5y ago
Everyone gets paid! > Proof-of-Stake attacks aren't about having 51% of the CPU that overwhelms a Proof-of-Work system, but about having 60-70% of the _value_ in the network. If a nation buys 2/3 of the coin and destroys the network, investors (as a whole) take a 1/3 loss. Then they can (re)start another PoS coin. Ironically the nation would be up against the old saying that the market can stay irrational longer than you can remain solvent.
- yellowapple 5y ago
  Hell, they might not even take a loss at all. A nation-state-level actor trying to buy a majority of the monetary supply would represent a substantial increase in demand and therefore price.
- inter_netuser 5y ago
  ...or gradually alters consensus to pad their pockets at the expense of smaller stakeholders. congrats, you've reinvented central banking and plutocracy.
manbart 5y ago
They wouldn’t need to spend money to ‘destroy the blockchain’, just legislate against it. For example, what would happen to the value of crypto-currencies if the US government simply banned them outright for entities within its jurisdiction, and also made it so if any foreign entity touches cryptos they get cut off from the US financial system (similar to how ‘sanctions’ work today). I imagine the destruction would be near total.

ertian 5y ago

It's a temporary state, until the PoS coin market cap gets too large to be attackable. Bitcoin's market cap is in the 1T range now, Ethereum is close to half that. Buffet couldn't do a thing against a PoS coin that large, and it would be a serious commitment and risk even for a nation state. Buffet could take down some random smaller coin, maybe, at the cost of most of his personal fortune, but if he did so the world would not burn. It's _possible_ that a government might choose to attack a random small coin just to discredit the notion of PoS cryptocurrencies, but it's hard to picture a government gaining consensus to do it, and it would be obvious to knowledgeable onlookers that larger coins are immune (or anyway, much better protected), so the resulting disruption would probably be temporary.

bitcurious 5y ago
PoS encourages centralized exchange-held staking, which means that there are only a handful of failure/pressure points. In other words, a government doesn’t have to buy 66% of the stake - merely compel the exchanges.
- yellowapple 5y ago
  > PoS encourages centralized exchange-held staking Not when the protocol actively encourages decentralization by cutting off staking rewards to larger pools, like what Cardano does (as one example). Sure, the exchanges can (and probably do) run multiple pools, but so can anyone else, and for far less expense than is required for mining.

EthanHeilman 5y ago

> Or if a nation state or the central banks see it as an existential threat, they could consider it the cost of doing business? Maybe $30B to take out Algo or Solana and destroy trust in all PoS networks? That's a rounding error for them. While you are correct that burning $30 billion dollars to destroy trust in PoS blockchains isn't that much money, I disagree that such an action would actually destroy trust in PoS blockchains. We have seen serious attacks on a number of blockchains, Ethereum for instance had enormous amounts of money stolen or destroyed via weaknesses in the blockchain. Yet Ethereum is still going strong. Bitcoin suffered 51% attacks that were used to perform double spends and Bitcoin is more valuable than ever. It might be cheap to burn $30B to destroy a blockchain, but what if you burn $30B and the blockchain recovers 12 hours later.

PretzelPirate 5y ago
> Ethereum for instance had enormous amounts of money stolen or destroyed via weaknesses in the blockchain. These weaknesses weren’t due to consensus failures or protocol failures, but bugs in applications running on Ethereum. If Ethereum’s protocol allowed arbitrary funds to be stolen, that could certainly cause a loss of trust.
- wizzwizz4 5y ago
  You overestimate the amount that people “investing” in crypto actually care about what it is. If my friends are anything to go by, anyway.
  - PretzelPirate 5y ago
    Most investors don’t care at all and blow off things like “the blockchain you’re using requires this fully centralized component”, but many players in the ecosystem that enable the speculation we see now, do care about protocol safety. If the Ethereum protocol was shown to be unsafe, they’d publicly promote safer alternatives and push their users to move.
- EthanHeilman 5y ago

injidup 5y ago

If you have 30 billion, and the motivation, then there are more entertaining ways of making the world burn than hacking somebody else's Ponzi scheme.

irq-1 5y ago

Everyone gets paid! > Proof-of-Stake attacks aren't about having 51% of the CPU that overwhelms a Proof-of-Work system, but about having 60-70% of the _value_ in the network. If a nation buys 2/3 of the coin and destroys the network, investors (as a whole) take a 1/3 loss. Then they can (re)start another PoS coin. Ironically the nation would be up against the old saying that the market can stay irrational longer than you can remain solvent.

yellowapple 5y ago
Hell, they might not even take a loss at all. A nation-state-level actor trying to buy a majority of the monetary supply would represent a substantial increase in demand and therefore price.
inter_netuser 5y ago
...or gradually alters consensus to pad their pockets at the expense of smaller stakeholders. congrats, you've reinvented central banking and plutocracy.

manbart 5y ago

They wouldn’t need to spend money to ‘destroy the blockchain’, just legislate against it. For example, what would happen to the value of crypto-currencies if the US government simply banned them outright for entities within its jurisdiction, and also made it so if any foreign entity touches cryptos they get cut off from the US financial system (similar to how ‘sanctions’ work today). I imagine the destruction would be near total.