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But you don't actually mean "You could just as well throw out all the expensive cryptographic stuff, send them your transactions and let them manage them in an

But you don't actually mean "You could just as well throw out all the expensive cryptographic stuff, send them your transactions and let them manage them in an Excel sheet and hope they will not abuse your trust." You think you mean this, but you simply don't. It's a nice ideal but none of it is true. The broken system we have, where 51% decided not to abuse their power, works. A trivial replacement without any cryptography relying on the honor system demonstrably (and obviously) doesn't. That is not an insignificant difference. While you would like the cryptography to be provably secure, it simply isn't (51% control-by-one-group actually happened), and it wasn't a disaster. It was still far better than the alternative. The world is not black and white.

danbruc 12y ago
The original point was that lowering the hash rate is dangerous. As it turns out it is even dangerous at the current hash rate and distributions of this hash rate seen in the past. There have already been at least attempts of abuse. And again, the idea of Bitcoin is to remove the need of trusted entities. If you accept entities with more than 50 % of the hash rate, this idea is just gone. You have to trust them. Nobody says it can not work, but there is no guarantee that it will work. And I did of course not seriously suggest to use a spreadsheet or even a shared spreadsheet. I set up a server here at home and write a bit of code that collects Bitcoin transactions and updates balances in my database. This is as secure as Bitcoin with me having more than 50 % of the hash rate. If I am a nice guy everything is fine, if I have a bad day you are screwed. Okay, not exactly but close enough. And to finally come back to lowering the hash rate - if you make 50 % of the hash rate as cheap as 10 million Dollars any larger company or almost any state could just buy a few pieces of hardware and destroy Bitcoin. They would just have to generate empty blocks as fast as possible. You will have a hard time moving your coins to an exchange to cash them out. And even if you manage to do that, Bitcoins won't be worth anything in that scenario. Everybody just lost almost all of their money and this is just what Bitcoin was supposed to prevent.
- logicallee 12y ago
  So what is their incentive to do so? (That causes them to actually do so)? You are insecure because anyone can just kill you with a rock when you're not looking. So what - nobody is going to do so.
  - danbruc 12y ago
    A really rich kid may just do it just for the lulz. A state may do in order to fight tax evasion, money laundering or drug sells. A bank or somebody like PayPal may do it to get rid of a competitor. And destroying Bitcoin was only a random example, somebody could as well blackmail you to pay a high fee to get your transactions processed. Or they could just double-spend coins for financial gains. There is a endless number of scenarios. But actually this is all not really important. One of the main intentions of Bitcoin is to remove the need to trust a bank or a state. With more than 50 % of the hash rate in more or less a single hand you now have to trust a random guy on the Internet. And even if the mining pool owner and all the miners are perfectly good people, there is now still a single target for an attacker. If I understand the internals of a mining pool correctly, there is a central server collecting transactions and handing out work items to the miners. If somebody gains control over such a system, he may be able to do bad things without anybody even noticing for some time.

danbruc 12y ago

The original point was that lowering the hash rate is dangerous. As it turns out it is even dangerous at the current hash rate and distributions of this hash rate seen in the past. There have already been at least attempts of abuse. And again, the idea of Bitcoin is to remove the need of trusted entities. If you accept entities with more than 50 % of the hash rate, this idea is just gone. You have to trust them. Nobody says it can not work, but there is no guarantee that it will work. And I did of course not seriously suggest to use a spreadsheet or even a shared spreadsheet. I set up a server here at home and write a bit of code that collects Bitcoin transactions and updates balances in my database. This is as secure as Bitcoin with me having more than 50 % of the hash rate. If I am a nice guy everything is fine, if I have a bad day you are screwed. Okay, not exactly but close enough. And to finally come back to lowering the hash rate - if you make 50 % of the hash rate as cheap as 10 million Dollars any larger company or almost any state could just buy a few pieces of hardware and destroy Bitcoin. They would just have to generate empty blocks as fast as possible. You will have a hard time moving your coins to an exchange to cash them out. And even if you manage to do that, Bitcoins won't be worth anything in that scenario. Everybody just lost almost all of their money and this is just what Bitcoin was supposed to prevent.

logicallee 12y ago
So what is their incentive to do so? (That causes them to actually do so)? You are insecure because anyone can just kill you with a rock when you're not looking. So what - nobody is going to do so.
- danbruc 12y ago
  A really rich kid may just do it just for the lulz. A state may do in order to fight tax evasion, money laundering or drug sells. A bank or somebody like PayPal may do it to get rid of a competitor. And destroying Bitcoin was only a random example, somebody could as well blackmail you to pay a high fee to get your transactions processed. Or they could just double-spend coins for financial gains. There is a endless number of scenarios. But actually this is all not really important. One of the main intentions of Bitcoin is to remove the need to trust a bank or a state. With more than 50 % of the hash rate in more or less a single hand you now have to trust a random guy on the Internet. And even if the mining pool owner and all the miners are perfectly good people, there is now still a single target for an attacker. If I understand the internals of a mining pool correctly, there is a central server collecting transactions and handing out work items to the miners. If somebody gains control over such a system, he may be able to do bad things without anybody even noticing for some time.