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That's potentially true if someone is trying to profit off 51% attacks. But the true worst-case scenario is one where a coalition of governments decided to use

by phire 3y ago

That's potentially true if someone is trying to profit off 51% attacks. But the true worst-case scenario is one where a coalition of governments decided to use 51% attacks as part of a plan to kill bitcoin. They don't need to invest in mining equipment, they could just declare bitcoin as illegal and seize the biggest mining operations. It would take maybe 10 coordinated raids to grab more than 51% of rigs. Then they turn their seized mining farms towards mining a chain that rejects all transactions. Nobody would be able to move their bitcoins, other mining farms wouldn't be able to sell their coins and they would shut down from the combined threat of no revenue and potential future raids. When combined with raids on the major exchanges to eliminate off-ramps, the value of bitcoin would crash as everyone rushed to liquidate. And once the value of bitcoin crashes, it's much easier to continue the 51% attack, they would be able to shut down most of their rigs and leave them in reserve. You couldn't switch to a clean fork, as the government miners would just follow the fork, make their empty blocks look valid with spam transactions.

oersted 3y ago
Agreed, that's an extreme but reasonably plausible scenario. In general, I don't think there's much you can do on this earth that could resist such a coalition. I guess some encryption could hold even if the whole world agreed to break it, so there might still be a gap for an absolutely indestructive currency. Of course, excluding aliens or future generations with sufficient technology, or total data erasure somehow. Or our extinction, but it's not a fault of the currency if there's no one to give it value. You don't even need to get that far, perhaps you don't even need 51% of miners. A much lower percentage of people loosing faith in the value of the currency, or just agreeing not to value it, or just realizing it's not actually very useful, would be enough to kill it. Most of the value of crypto is speculative anyways, when the bubbles burst, the actual real utilitarian value of the currency that is left is small enough that it just gets crushed with the momentum of the bank run. That's a much larger threat in practice, and it has happened to a lot of crypto over the years. Just throwing some thoughts out for the sake of conversation, this has already been endlessly discussed much more thoroughly for nearly two decades. I'm not even much into crypto, it's just fun to think about the possibilities.

by phire 3y ago

oersted 3y ago

Agreed, that's an extreme but reasonably plausible scenario. In general, I don't think there's much you can do on this earth that could resist such a coalition. I guess some encryption could hold even if the whole world agreed to break it, so there might still be a gap for an absolutely indestructive currency. Of course, excluding aliens or future generations with sufficient technology, or total data erasure somehow. Or our extinction, but it's not a fault of the currency if there's no one to give it value. You don't even need to get that far, perhaps you don't even need 51% of miners. A much lower percentage of people loosing faith in the value of the currency, or just agreeing not to value it, or just realizing it's not actually very useful, would be enough to kill it. Most of the value of crypto is speculative anyways, when the bubbles burst, the actual real utilitarian value of the currency that is left is small enough that it just gets crushed with the momentum of the bank run. That's a much larger threat in practice, and it has happened to a lot of crypto over the years. Just throwing some thoughts out for the sake of conversation, this has already been endlessly discussed much more thoroughly for nearly two decades. I'm not even much into crypto, it's just fun to think about the possibilities.