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> In private discussions I have heard three counter-arguments, none of which I accept I think this article skips the most compelling (to me) counter argument.

> In private discussions I have heard three counter-arguments, none of which I accept I think this article skips the most compelling (to me) counter argument. If there’s a 51% attack, the currency loses all value. Nobody will want to trade Bitcoin or use it as a currency once this attack is exploited. So a 51% attacker is disincentivized to perform said attack because doing so would make the prize lose its value. Now I write this, I suppose if your worry is a government trying to destroy Bitcoin, then that’s exactly how to do it…

JumpCrisscross 4y ago
> a 51% attacker is disincentivized to perform said attack because doing so would make the prize lose its value North Korea and Russia heavily use crypto. If either does something super stupid, the Congress could create a credible commitment to repeatedly launching attacks on their payment networks, including Bitcoin. This isn’t some far-fetched threat.
- pcthrowaway 4y ago
  I think the U.S. would be reluctant to do so (although I'd love it if they did), because they hold several billion dollars of bitcoin
  - JumpCrisscross 4y ago
    > the U.S. would be reluctant to do so (although I'd love it if they did), because they hold several billion dollars of bitcoin And billions more in private losses. It should be something we’re reluctant to do. But things break in war.
    - pcthrowaway 4y ago
      Devaluing bitcoin reduces the incentive to mine it, which I consider a net positive all around
DennisP 4y ago
One approach would be to just rent the hardware, and short the coin.
- JumpCrisscross 4y ago
  > short the coin Unacceptable counterparty risk and scale limits.
  - deleted 4y ago
    [deleted]
  - SilasX 4y ago
    Even when buying puts on a regulated exchange like LedgerX, which custodies all the cash that would pay out on the bet?
    - JumpCrisscross 4y ago
      > a regulated exchange like LedgerX, which custodies all the cash that would pay out on the bet Bitcoin crashing would take out LedgerX. At that point, you’re an unsecured creditor. There is also legitimate question to them paying out a massive short after something like this.
      - SilasX 4y ago
        The exchange is not long Bitcoin, and it holds (edit: typo) all trader assets separately from its own, so no, a crash in bitcoin wouldn’t “take out” LedgerX. You’re just making stuff up now.
        JumpCrisscross 4y ago
        > exchange is not long Bitcoin, and it hold me all trader assets separately from its own, so no, a crash in bitcoin wouldn’t “take out” LedgerX It would take Herculean effort for any crypto business to survive, well, crypto wiping out. Deposits would become worthless, cash would be pulled, credit would vanish as would investment. If markets don’t take them out, their banks and regulators will. It’s the crypto equivalent of Treasuries defaulting.
paulgb 4y ago
You're right that the article doesn't address that counter-argument, but the suggested means of profiting from the attack is immune from it: > A successful 51% attack, indeed even a credible threat of such an attack succeeding, would almost certainly sow fear and uncertainty in a wide range of public markets. An attacker could leverage this because they would have a certain amount of control over when news of the attack broke, so they could (for example) take a short position on a portfolio of financial stocks before launching the attack.
- JumpCrisscross 4y ago
  > take a short position on a portfolio of financial stocks before launching the attack This is subject to detection and reversal. FX, credit and rates, on the other hand, could be massively exploited in a risk-on trade.
  - humanizersequel 4y ago
    >This is subject to detection and reversal Why would it be reversed?
    - JumpCrisscross 4y ago
      > Why would it be reversed? Massive short placed right before a sudden financial disaster? It may not be reversed, but it will definitely be frozen and investigated.
- alex_suzuki 4y ago
  I think one could argue that there are probably easier ways to manipulate a market than a 51% attack on Bitcoin.
- ghiculescu 4y ago
  If someone tried to buy 10s of billions of dollars of Bitcoin shorts, who would take the other side of that deal?
dllthomas 4y ago
A 51% doesn't get you coins, it lets you spend coins twice. Imagine: 1) borrow a bunch of BTC, 2) use it to buy stuff you want, 3) 51% attack to fork the chain and reverse your spend, 4) pay back the borrowed BTC What does it matter if the price of BTC falls through the floor afterward? Of course depending on what you buy, what your lender knows and cares about, and more, you might still face repercussions that make it unreasonable to expect to benefit, but that's enforced outside of BTC rather than by BTC, relying on the systems BTC proponents often explicitly distrust.
- ghiculescu 4y ago
  Okay sure. At best you can do that once, ever. So you’d better buy something worthwhile.
  - checkdrain 4y ago
    [dead]
  - dllthomas 4y ago
    Yeah, "ideally" the cost of the attack can be paid with borrowed BTC; otherwise, it would certainly have to be a very large haul to be worthwhile.
- anonymouskimmer 4y ago
  You can already spend coins twice, it's just that one of the addresses you send the coins to ultimately won't get them. So people have to wait some time to ensure the transaction fully processes before they can give you the goods in full confidence that they have received payment. At some point, if cryptocurrencies become more established, it might be financially beneficial for one blockchain if another blockchain becomes non-viable.
  - dllthomas 4y ago
    The point of a 51% attack is to destroy any such thing as "fully processes".
latchkey 4y ago
> I suppose if your worry is a government trying to destroy Bitcoin, then that’s exactly how to do it… Andreas Antonopoulos - 51% Bitcoin Attack https://www.youtube.com/watch?v=ncPyMUfNyVM https://www.youtube.com/watch?v=ncPyMUfNyVM
- pcthrowaway 4y ago
  Did you read the article?
  - latchkey 4y ago
    Please don't comment on whether someone read an article. "Did you even read the article? It mentions that" can be shortened to "The article mentions that".
animal_spirits 4y ago
I think this is not a realistic worry for potential attackers. If someone gets control of 51%, there will be a lag time for when people start to truly believe that the currency lost its value. So there will definitely be a huge value gain for any attackers that manage to pull this off.
lisper 4y ago
> a 51% attacker is disincentivized You missed this: "An attacker could leverage [a market crash] because they would have a certain amount of control over when news of the attack broke, so they could (for example) take a short position on a portfolio of financial stocks before launching the attack."

JumpCrisscross 4y ago

> a 51% attacker is disincentivized to perform said attack because doing so would make the prize lose its value North Korea and Russia heavily use crypto. If either does something super stupid, the Congress could create a credible commitment to repeatedly launching attacks on their payment networks, including Bitcoin. This isn’t some far-fetched threat.

pcthrowaway 4y ago
I think the U.S. would be reluctant to do so (although I'd love it if they did), because they hold several billion dollars of bitcoin
- JumpCrisscross 4y ago
  > the U.S. would be reluctant to do so (although I'd love it if they did), because they hold several billion dollars of bitcoin And billions more in private losses. It should be something we’re reluctant to do. But things break in war.
  - pcthrowaway 4y ago
    Devaluing bitcoin reduces the incentive to mine it, which I consider a net positive all around

DennisP 4y ago

One approach would be to just rent the hardware, and short the coin.

JumpCrisscross 4y ago
> short the coin Unacceptable counterparty risk and scale limits.
- deleted 4y ago
  [deleted]
- SilasX 4y ago
  Even when buying puts on a regulated exchange like LedgerX, which custodies all the cash that would pay out on the bet?
  - JumpCrisscross 4y ago
    > a regulated exchange like LedgerX, which custodies all the cash that would pay out on the bet Bitcoin crashing would take out LedgerX. At that point, you’re an unsecured creditor. There is also legitimate question to them paying out a massive short after something like this.
    - SilasX 4y ago
      The exchange is not long Bitcoin, and it holds (edit: typo) all trader assets separately from its own, so no, a crash in bitcoin wouldn’t “take out” LedgerX. You’re just making stuff up now.
      - JumpCrisscross 4y ago
        > exchange is not long Bitcoin, and it hold me all trader assets separately from its own, so no, a crash in bitcoin wouldn’t “take out” LedgerX It would take Herculean effort for any crypto business to survive, well, crypto wiping out. Deposits would become worthless, cash would be pulled, credit would vanish as would investment. If markets don’t take them out, their banks and regulators will. It’s the crypto equivalent of Treasuries defaulting.

paulgb 4y ago

You're right that the article doesn't address that counter-argument, but the suggested means of profiting from the attack is immune from it: > A successful 51% attack, indeed even a credible threat of such an attack succeeding, would almost certainly sow fear and uncertainty in a wide range of public markets. An attacker could leverage this because they would have a certain amount of control over when news of the attack broke, so they could (for example) take a short position on a portfolio of financial stocks before launching the attack.

JumpCrisscross 4y ago
> take a short position on a portfolio of financial stocks before launching the attack This is subject to detection and reversal. FX, credit and rates, on the other hand, could be massively exploited in a risk-on trade.
- humanizersequel 4y ago
  >This is subject to detection and reversal Why would it be reversed?
  - JumpCrisscross 4y ago
    > Why would it be reversed? Massive short placed right before a sudden financial disaster? It may not be reversed, but it will definitely be frozen and investigated.
alex_suzuki 4y ago
I think one could argue that there are probably easier ways to manipulate a market than a 51% attack on Bitcoin.
ghiculescu 4y ago
If someone tried to buy 10s of billions of dollars of Bitcoin shorts, who would take the other side of that deal?

dllthomas 4y ago

A 51% doesn't get you coins, it lets you spend coins twice. Imagine: 1) borrow a bunch of BTC, 2) use it to buy stuff you want, 3) 51% attack to fork the chain and reverse your spend, 4) pay back the borrowed BTC What does it matter if the price of BTC falls through the floor afterward? Of course depending on what you buy, what your lender knows and cares about, and more, you might still face repercussions that make it unreasonable to expect to benefit, but that's enforced outside of BTC rather than by BTC, relying on the systems BTC proponents often explicitly distrust.

ghiculescu 4y ago
Okay sure. At best you can do that once, ever. So you’d better buy something worthwhile.
- checkdrain 4y ago
  [dead]
- dllthomas 4y ago
  Yeah, "ideally" the cost of the attack can be paid with borrowed BTC; otherwise, it would certainly have to be a very large haul to be worthwhile.
anonymouskimmer 4y ago
You can already spend coins twice, it's just that one of the addresses you send the coins to ultimately won't get them. So people have to wait some time to ensure the transaction fully processes before they can give you the goods in full confidence that they have received payment. At some point, if cryptocurrencies become more established, it might be financially beneficial for one blockchain if another blockchain becomes non-viable.
- dllthomas 4y ago
  The point of a 51% attack is to destroy any such thing as "fully processes".

latchkey 4y ago

> I suppose if your worry is a government trying to destroy Bitcoin, then that’s exactly how to do it… Andreas Antonopoulos - 51% Bitcoin Attack https://www.youtube.com/watch?v=ncPyMUfNyVM https://www.youtube.com/watch?v=ncPyMUfNyVM

pcthrowaway 4y ago
Did you read the article?
- latchkey 4y ago
  Please don't comment on whether someone read an article. "Did you even read the article? It mentions that" can be shortened to "The article mentions that".

animal_spirits 4y ago

I think this is not a realistic worry for potential attackers. If someone gets control of 51%, there will be a lag time for when people start to truly believe that the currency lost its value. So there will definitely be a huge value gain for any attackers that manage to pull this off.

lisper 4y ago

> a 51% attacker is disincentivized You missed this: "An attacker could leverage [a market crash] because they would have a certain amount of control over when news of the attack broke, so they could (for example) take a short position on a portfolio of financial stocks before launching the attack."