Topic: Once Bitcoins become a serious threat ... - page 3. (Read 2850 times)

Wrong, wrong, wrong.

With 51% they can destroy bitcoin, they can happily stop bitcoin with that. They control everything. They can go back months in the blockchain, rewrite all that and yes, they CAN spend your coins, if your coins were mined in the blocks that they reverted.

Of course not - since PayPal is part of the banking empire. Part of the Dark Side.

Anyone who says 51% "can't do much" is delusional or anti-FUDing. Anyone with 51% can refuse to add blocks from other miners which will cause other miners to drop out and give them even more than 51%. They can either create an effective monopoly to control the price of transactions or they can decide to drop transactions for whatever reason (and perhaps all of them, making the network useless). And of course they can double spend at will, though anyone doing this is probably a lot more interested in breaking bitcoin than making a few bucks.

lol @ "banks haven't attacked paypal"

Well two counter points.

You say ONCE Bitcoin becomes a serious threat.  If/when that happens tx volume and thus revenue for miners will likely be significantly higher.

This illustrates why ASICs are necessary.  The banks can only kill bitcoin "on the cheap" using a more efficient technology.  Once the "good miners" have that there is no cheap option just pure brute force.

The combination of those factors means if Bitcoin is every successful enough that banks need to attack it (hint: banks haven't attacked PayPal) the costs would likely be in the billions. 

They can destroy trust.

Basically it's: "currency = trust".

Without trust, there's no currency.

When trust is gone, this happens (beer becomes pretty expensive *g*):


(Zimbabwe Dollar)

Well,right now at 17.67 Thash/s capacity (per BitcoinWatch.com) that means about 700 of the BFL BitForce FPGA mini rigs are all that are needed to achieve 51%.  If that much equipment was available (except it isn't), at $15,295 each only a little over $10 million would be needed to achieve 51%.

But what they can do with 51%?  Not much.

They can omit transactions from the blocks and they can go back some blocks and double spend transactions sent to them.  That's the extent of it.  They can't spend my coins.

So who can they double spend against?  Orders placed with online merchants for physical delivery requires a physical address.  It is not good for business if you are a bank and get caught doing something like this, so that's out.  So what businesses that are left for double spending against are the exchanges.  But exchanges have AML limits that cap the per-day withdrawal, even for trusted accounts.  

So for the attack to do damage would require the control of a lot of non-verified accounts.  I suspect the bigger exchanges would sense something is up if all of a sudden a lot of non-verified accounts were to suddenly request withdraws all at once.

A double spend attack might do damage to some exchanges and possibly harm those who had funds held at certain exchanges if those exchanges become insolvent as a result.  So the exchanges would learn and implement better detection to impose stricter withdrawal limits when the hash rate rises rapidly.  Or whatever.  But the banking industry wouldn't "kill bitcoin" as a result.

Now if they gain 51% and are not accepting new transactions in any blocks, then that would be disruptive.  It would be a shame if they went through all that work and an economic majority of the Bitcoin economy decided to hard fork and the algorithm was made to include one extra step, such as adding one more operation  e.g., sha256(LShift(sha256())) and that rendered those ASICs completely useless.

This is a temporary vulnerability anyway.  ASIC designs from more than one vendor are being worked on.  Once we get past wide distribution of ASICs, then there is no longer the risk of some vastly more powerful technology available to an aggressor attempting to thump what the free market has achieved.  (at least not until quantum computers arrive).

long story short: Once BTC is considered a serious threat it won't be peanuts anymore to kill it. For now we are under the radar and probably for a while longer.

Once Bitcoins become a serious threat to the "banking industry", wouldn't it be easy for them to kill Bitcoins? E.g. spend some peanuts (e.g 20 million $), design some advanced ASICS - and take over 51% of the network.