How much money does it need to kill Bitcoin? Let's try to figure out.
In this paper, the key attacking method is hashing power attracting attack. 51% attack is the final kick after winning the hashing power attraction war.
The attacking mode is similar to Doge vs Litecoin.
Newly-mined Bitcoin is 3600BTC/day, this worths about 2 million USD. If an Altcoin’s daily new coin value is over 2 million USD, then it’s capable of attacking Bitcoin.
(1) if the new Altcoin halves every month, then the total market value of the new altcoin will be 2million x30x2 = 120 million, only 1/ 60 of Bitcoin; if a month’s attack fails, hashing power will halve in the second month, and price needs to be doubled, then the total market value will amount to 2 million x30x3 = 180 million, only 1 /40 of Bitcoin. Any market maker in the stock market has this amount of money.
(2) we need to consider miners’ choice when the new mine value of a new altcoin exceeds Bitcoin. Will Bitcoin miners turn to mine the new altcoin instead of Bitcoin?
If miners do, Bitcoin is dead. On the flip side, because the issue amount of the new altcoin is diminishing quickly, the miners may not have long-term rewards if they mine this new coin.
If miners stick to Bitcoin, it will be difficult to cover the cost of mining and they may lose money.
If I have old secondhand mining machines, I will definitely choose to mine coins with a higher rate of return. This way, all out-dated mining machines will mine the new altcoin;
New miners usually do not think about long-term interests, they only want to get their investment back as quickly as possible, so they will also choose to mine the new altcoin.
Worst of all, the market maker of the new altcoin can choose to purchase large quantities of mining machines, because he will buy out the newly-mined coins of the new altcoins anyway. If mining can get the mining machine investment back, it will actually cost him nothing if he mines by himself.
So, we come to a pessimistic conclusion: if the new market maker is fully prepared, the hashing power of the new coin will certainly exceed Bitcoin within one month.
(3) we need to consider the panic in the market once the hashing power of Bitcoin is exceeded.
Take Litecoin as an example, it’s hashing power has been exceeded for more than one month, but the price only dived slightly, no collapse.
But Bitcoin is not Litecoin.
Bitcoin has ultra-low turnover rate while Litecoin has ultra-high turnover rate.
Bitcoin has a lot of profit-making positions, while most Litecoin’s buyers are caught on top of the hill .
Bitcoin is the leader of cryptocurrency, while Litecoin is just one of many altcoins.
So, once Bitcoin’s hashing power is exceeded, a large number of "zombie Bitcoin" will be waked up , because the holders’ belief in Bitcoin has been shaken. In order to keep the fruits of victory, they would choose to sell. As long as they sell, the price will dive sharply, once this happens, more "zombie Bitcoin" will join the selling, the big panic of the market will probably lead to 10 times devaluation of Bitcoin. Once devaluated by 10 times, it hashing power will shrink by 10 times as a consequence.
(4) if the hashing power of Bitcoin is exceeded, will it be under a 51% attack?
Once the hashing power of Bitcoin is exceeded, all miners will lose hope, and they will choose to mine other coins with high returns. They will naturally choose "smart mining pool" which is, in fact, just a way of buying hashing power to do whatever it wants.
So, let’s see what needs to be done to launch a 51% attack against Bitcoin.
The purpose of the attack is to KILL Bitcoin rather than make profit through false trading.
So the most effective means of attack is empty blocks, that is, confirm no transactions.
Long time of blockage of transaction will inevitably cause panic among Bitcoin holders.
if the hashing power of smart mining pool or mining machines owned by the market maker is three times the hashing power of Bitcoin , then the market maker can launch a 51% attack , 2/3 is used for the attack , 1/3 for the new altcoin’s maintenance .
The time of the attack can be infinitely long, so Bitcoin holders will inevitably collapse. And its price is bound to collapse consequently.
(5), after Bitcoin is killed, how does the new market maker make profit?
When Bitcoin becomes history, the market still needs democurrency, and it can only choose this new altcoin. So a lot of people will buy in. Because 180 million USD is only half the market capitalization of Litecoin, the market maker is bound to make huge profits!
Sixth, will the new coin be killed by newer comers?
Bitcoin is easy to be killed because it has no market makers; its power is not concentrated.
But new altcoin (let’s call it altcoin A)'s market maker has a large number of mining machines and a lot of altcoin A in hand.
So if a newer coin (let’s call it altcoin B) is created, it is almost impossible to exceed altcoin A in hashing power because of the following 3 reasons:
-1. Altcoin A's market maker has a large number of mining machines, that’s a lot of hashing power.
-2. if altcoin B’s reward is high, altcoin A market maker can buy the hashing power with a higher price, and the money can be obtained from the sale of altcoin A. But altcoin B’s market maker will have to spend more and more money to buy hashing power, all with his own money.
-3. Altcoin A's market maker can invent altcoin C to compete for hashing power.
Even if the hashing power of altcoin A is exceeded, the price will not fall because most altcoin A are in the hands of the market maker. But for altcoin B, because it’s newly-invented, the price will certainly be much lower than altcoin A. So long as altcoin A survives the first two times of halving of altcoin B, the market would no longer accept altcoin B .
So, if a “newer altcoin” wants to kill the “new altcoin”, the market maker will probably have to pay 10 times the price, about 2 billions of capital. And from the perspective of game theory, if a “newer coin” can kill the “new coin”, the newer coin can also be killed by late comers.
Conclusion: killing Bitcoin is absolutely feasible, the cost is only 180 million USD, and the killer will make huge profits.Any tycoon wants to have a try in this century gamble? If you succeed, you will shoot to fame and stamp your name on the page of history!!
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