I have "discovered" a serious flaw in NXT. The IMF exists to stop the opposite attack on fiats, eg. massive short selling. CfB says this attack is well known, but I didn't know about it and so maybe you don't know about it either. I was told to post it publicly, so here it is:
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I have come up with non-standard attack, call it financial attack.
Short term, this "attack" would be considered as fantastic by most NXT'ers and it consists of simply buying up all the NXT. Crazy, expensive?
Consider you are large govt with fiat of trillions of dollars, billion dollars is lunch money. They can easily win the "war on NXT". What happens if large scale accumulation of NXT occurs with $10 billion budget. How much of NXT will be left?
All accumulated NXT can be destroyed by sending to genesis acct permanently crippling NXT market. Or it can be converted to many darkNXT accts so nobody would even realize it is happening. I am assuming if we started seeing a lot of NXT being sent to genesis acct, we would notice, but so far no darkNXT detection is implemented. Without realizing, 90%+ of NXT could be destroyed with $10 billion.
Actually at $10 NXT, who wouldn't sell their NXT, so how much NXT will survive a financial attackers $10/NXT bid, especially if it was done cleverly to avoid detection? 1% left? Maybe even less. With .01 precision, smallest increment will be 10 cents even without any more price increase. NXT would be useless for microtransactions, until support is added for microNXT.
James
P.S. Solution is to not destroy NXT when sent to genesis acct, just have it automatically put into community fund. Also, PREVENT darkNXT at the protocol level. I guess evil financial attacker could simply destroy their key though so even with darkNXT fixed, there is no solution to this attack.
I agree with taking precautions on preventing darkNXT, however, I disagree on solution to sending to genesis account. A community fund is still too centralized. I think that any nxt sent to genesis account should be put in the next block fee. And the account that sent the nxt to genesis account would be prohibited from forging that particular block. This would discourage anyone from sending to genesis account, if that is our goal.
On darkNXT, there is no real solutions. Any government or corporation could buy the majority of Nxt and just sit on it, and that would essentially limit commerce. The only solution would be to increase divisibles, so that even with 100 Nxt, the currency would survive..
