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That would be true if only the US was using the dollar. Given the number of countries using the dollar as their reserve currency, value could collapse quite a

That would be true if only the US was using the dollar. Given the number of countries using the dollar as their reserve currency, value could collapse quite a ways without the US doing anything. It's not likely, but neither is a 50 + 1 attack on bitcoin given the amount of computing power currently tied up there.

Retric 5y ago
That’s less significant than you might think as US GDP is almost 1/4 of global GDP and foreign countries don’t keep that many USD on hand. Aka even in global terms US GDP is vast. Also, Bitcoin has significantly more vulnerabilities than just a 51% attack or a crash as nodes need to be connected to the internet and therefore can at least in theory be hacked. What exactly happens after that point is anyones guess, but it could easily be worse than a traditional 51% attack.
- ByteJockey 5y ago
  > That’s less significant than you might think as US GDP is almost 1/4 of global GDP and foreign countries don’t keep that many USD on hand. Aka even in global terms US GDP is vast. Sure, but the value of the dollar (like everything else) is in how easy it is to get (supply). The US GDP is not a measure of the supply of dollars on the market, it is a measure of how often those dollars are exchanged. > Bitcoin has significantly more vulnerabilities than just a 51% attack or a crash as nodes need to be connected to the internet and therefore can at least in theory be hacked. That's fair, if we're including implementation vulnerabilities, it does expand the potential problems quite a bit. The post I was responding to was specifically about a 50 + 1 attack. Though if we include these, we should probably also expand physical currencies' problems to include counterfeiting in that case.
  - Retric 5y ago
    > Sure, but the value of the dollar (like everything else) is in how easy it is to get (supply). The US GDP is not a measure of the supply of dollars on the market, it is a measure of how often those dollars are exchanged. The US GDP directly translates into the amount of taxes paid. Suppose a 50% drop in the value of USD happens. If nothing else happens taxes increase by 100%, and people need to acquire more USD which drives the value of the currency up. You might wonder about economic hardship, but historically that causes deflation. +/- 2% per year without printing money is easy, but there is a reason you don’t see huge swings without the government printing money. > counterfeiting An issue for any physical currency but electronic currency actually operates independently. Trying to counterfeit large quantities of cash is therefore surprisingly difficult even for nation stale level actors. A great fake bill can get passed around, 10 billion in fake bills which is still a trivial amount would trip up various monitoring systems.
    - ByteJockey 5y ago
      > If nothing else happens taxes increase by 100%, and people need to acquire more USD which drives the value of the currency up. Oh definitely. I did not mean to imply that taxation in USD does not have a modulating effect (and if I came across that way, I apologize). I'm just trying to say that you can have some pretty wide swings even with that. > but there is a reason you don’t see huge swings without the government printing money. You don't generally see it, no. Mostly because other countries use the dollar as a store of wealth, and they don't want to tank the value that they've squirreled away. I'm bringing it up as a hypothetical with the same likelihood as a 50 + 1 attack on bitcoin. China, for example, seems to hold ~2 trillion in USD (~60% of 3.5% trillion total reserves).[0] I assume most of this is held as digital assets, as there's only ~2 trillion physical dollars in circulation.[1] Dumping that much on the market would cause some pretty wacky inflation (as well as destroy China's stability). In a similar vein a 50 + 1 attack on bitcoin would allow an actor to give themselves all of the bitcoins, but would also destroy the value of those bitcoins because nobody is going to trust the network after that. Both of these attacks are really only useful if you value hurting other actors more than you value your own resources/your own sense of self-preservation. [0]: https://en.wikipedia.org/wiki/Foreign-exchange_reserves_of_China https://en.wikipedia.org/wiki/Foreign-exchange_reserves_of_C... [1]: https://www.uscurrency.gov/life-cycle/data/circulation https://www.uscurrency.gov/life-cycle/data/circulation
    - lionhead 5y ago
      >The US GDP directly translates into the amount of taxes paid. Suppose a 50% drop in the value of USD happens. If nothing else happens taxes increase by 100%, and people need to acquire more USD which drives the value of the currency up. ? GDP is produced and denominated in USD, domestic taxes are paid in USD. How does a drop in the relative value of USD compared to a foreign currency influence domestically paid taxes in any way?

Retric 5y ago

That’s less significant than you might think as US GDP is almost 1/4 of global GDP and foreign countries don’t keep that many USD on hand. Aka even in global terms US GDP is vast. Also, Bitcoin has significantly more vulnerabilities than just a 51% attack or a crash as nodes need to be connected to the internet and therefore can at least in theory be hacked. What exactly happens after that point is anyones guess, but it could easily be worse than a traditional 51% attack.

ByteJockey 5y ago
> That’s less significant than you might think as US GDP is almost 1/4 of global GDP and foreign countries don’t keep that many USD on hand. Aka even in global terms US GDP is vast. Sure, but the value of the dollar (like everything else) is in how easy it is to get (supply). The US GDP is not a measure of the supply of dollars on the market, it is a measure of how often those dollars are exchanged. > Bitcoin has significantly more vulnerabilities than just a 51% attack or a crash as nodes need to be connected to the internet and therefore can at least in theory be hacked. That's fair, if we're including implementation vulnerabilities, it does expand the potential problems quite a bit. The post I was responding to was specifically about a 50 + 1 attack. Though if we include these, we should probably also expand physical currencies' problems to include counterfeiting in that case.
- Retric 5y ago
  > Sure, but the value of the dollar (like everything else) is in how easy it is to get (supply). The US GDP is not a measure of the supply of dollars on the market, it is a measure of how often those dollars are exchanged. The US GDP directly translates into the amount of taxes paid. Suppose a 50% drop in the value of USD happens. If nothing else happens taxes increase by 100%, and people need to acquire more USD which drives the value of the currency up. You might wonder about economic hardship, but historically that causes deflation. +/- 2% per year without printing money is easy, but there is a reason you don’t see huge swings without the government printing money. > counterfeiting An issue for any physical currency but electronic currency actually operates independently. Trying to counterfeit large quantities of cash is therefore surprisingly difficult even for nation stale level actors. A great fake bill can get passed around, 10 billion in fake bills which is still a trivial amount would trip up various monitoring systems.
  - ByteJockey 5y ago
    > If nothing else happens taxes increase by 100%, and people need to acquire more USD which drives the value of the currency up. Oh definitely. I did not mean to imply that taxation in USD does not have a modulating effect (and if I came across that way, I apologize). I'm just trying to say that you can have some pretty wide swings even with that. > but there is a reason you don’t see huge swings without the government printing money. You don't generally see it, no. Mostly because other countries use the dollar as a store of wealth, and they don't want to tank the value that they've squirreled away. I'm bringing it up as a hypothetical with the same likelihood as a 50 + 1 attack on bitcoin. China, for example, seems to hold ~2 trillion in USD (~60% of 3.5% trillion total reserves).[0] I assume most of this is held as digital assets, as there's only ~2 trillion physical dollars in circulation.[1] Dumping that much on the market would cause some pretty wacky inflation (as well as destroy China's stability). In a similar vein a 50 + 1 attack on bitcoin would allow an actor to give themselves all of the bitcoins, but would also destroy the value of those bitcoins because nobody is going to trust the network after that. Both of these attacks are really only useful if you value hurting other actors more than you value your own resources/your own sense of self-preservation. [0]: https://en.wikipedia.org/wiki/Foreign-exchange_reserves_of_China https://en.wikipedia.org/wiki/Foreign-exchange_reserves_of_C... [1]: https://www.uscurrency.gov/life-cycle/data/circulation https://www.uscurrency.gov/life-cycle/data/circulation
  - lionhead 5y ago
    >The US GDP directly translates into the amount of taxes paid. Suppose a 50% drop in the value of USD happens. If nothing else happens taxes increase by 100%, and people need to acquire more USD which drives the value of the currency up. ? GDP is produced and denominated in USD, domestic taxes are paid in USD. How does a drop in the relative value of USD compared to a foreign currency influence domestically paid taxes in any way?