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Shouldn't the takeover risk be priced into a new cryptocurrency? If coin price > mining cost / 2, it becomes worth it to acquire 51% of mining capability so yo
by sigil 13y ago
Shouldn't the takeover risk be priced into a new cryptocurrency?
If coin price > mining cost / 2, it becomes worth it to acquire 51% of mining capability so you can vote the other 49% to yourself, no?
But then again, once you have 51% control and everyone knows it, the value of those coins quickly goes to zero. As is probably happening with Auroracoin as we speak.
- wmf 13y agoIn other words, the price of any new cryptocurrency (that uses an existing algorithm) should be zero, since a 51% attack is nearly certain.
- sigil 13y agoWell not zero, just below half the mining costs, right? As long as it's below that, you still lose more taking over the new cryptocurrency than you gain. And that's also not taking the price drop post-takeover into account, which affects how much the attacker could actually cash out. But yeah, it would seem that miners of new cryptocurrencies should expect to lose money initially.
- rblatz 13y agoThat is ignoring people who do it for the lulz or to prevent competing coins from popping up.
- skj 13y agoWell, not quite - the 51% attack is not free. There is some value that makes the 51% attack too expensive, and game theory, yadayada.
- deleted 13y ago[deleted]
- sirsar 13y ago> If coin price > mining cost / 2, it becomes worth it to acquire 51% of mining capability so you can vote the other 49% to yourself, no? No. The most powerful thing a 51% miner can do is roll-back transactions. The currency goes back to the spender, not to the miner.
- sigil 13y agoBut you can doublespend whatever coins you've got, and reject all other transactions, so the effect is the same. (You're right though, I phrased that incorrectly with "vote.")