The 51% on p2pool would not be an issue.
All that means is that they would get to pick the criteria for transactions included in 51% of the blocks found by the pool. If I'm PETAMINE I'm going to want the juicy transactions just like any other miner...
I'm just trying to understand the technical reason behind this. I've heard a lot of people say "the share chain is vulnerable to a 51% attack just like the block chain", as a reason not to put a lot of hashpower...is it just misinformation?
Well lets follow eleuthria's example, lets assume someone has an absolutely horrible connection, solves a share just behind, or the same time as someone else, but their node hasn't received the new share to the chain. They now enter a race and the next share solved is the one that creates the chain and orphans the other share. They have a 50% or better chance of solving that share and forcing the network to accept their share as the valid one. Now this could result in them finding a higher share % than they would normally have.
Now let's same someone is trying to do this intentionally, if they had 50% or better of the network hashrate, they could more or less reject all shares that aren't theirs, effectively increase everyone else's Orphan/DOA shares and taking a much larger % of the shares that were solved.
Effectively, P2Pool is subject to all the downfalls of the bitcoin network, but it's a much smaller network, that if you could get all of the current hardware to work properly on, you could more easily take 51% or better of the network's hashrate since our hashrate is only 600TH/s. Let's say for instance cex.io wanted to hide their network hashrate, if they could get their miners to work on our network, they could effectively mine on P2Pool. Making the difficulty skyrocket and they could modify the code with the sharechain to only accept their shares, they rendering everyone else's work effectively useless, while making it impossible for the small to midsized miners to mine on it.
