The state-level actors will mine it themselves, subsidized by their tax payers.
That doesn't exactly sound like an attack to me. More like an endorsement! Unless it's not Bitcoin they're mining.
Yes, that's when some of the state-level actors internalize that the only way to win the game is to be in the game playing. But it won't go straight to that, and not all state-level actors will be Bitcoiners all of a sudden. There will be attacks, and it will come in stages.
I believe we're seeing the first stage with all the senate inquiries in the United States.
I'm just curious how they could leverage an attack effectively. It's hard to imagine them pushing a political hard fork attack, especially given how impotent those attempts have been in the past. So what's left, attacking via regulation, prohibition?
The US has senate hearings about Bitcoin every time the market has a bubble. What's different this time?
It's more serious this time. The state-level actors are learning that Bitcoin can separate money from state, and it's growing.
I believe the attack will be done politically, it will be regulatory, it might involve character-assasination of some of the Core developers/contributors, all of them together.
theymos articulated it better than anyone.
https://www.reddit.com/r/Bitcoin/comments/cedkch/rep_patrick_mchenry_theres_no_capacity_to_kill/eu1xn7f/
Good points by the Representative and the first two hosts, but overconfidence is the biggest mistake you can make on anything. We're not living in a storybook, and we are not destined to win.
In the US I think it's very likely that someday soon a little provision will be tucked into a must-pass bill at the last minute requiring reporting all BTC holdings via FBAR. After that, while there's currently no momentum whatsoever for it, it'd be a fairly simple matter to someday say "turn over your bitcoins, which we know you have, or go to jail" (or "we can prove you have bitcoins, but you didn't report it, so you go to jail").
The push for regulation increases constantly, worldwide. Each regulation is a reduction in freedom and a weight around the BTC economy's neck. In the end, it's not unimaginable that someday BTC will technically not be restricted for end-users, but all legally-operating on-ramps and off-ramps will be forbidden from transferring BTC to/from non-KYC wallets, not even trustless wallets. People who stay within this legally-acceptable area would be using something no better than (and with no competitive advantage over) fiat in bank accounts.
It's not unimaginable that LN nodes, even though trustless and not holding any user BTC, will be harmfully regulated. And the same could be true of other methods of scaling, most of which have centralization trade-offs. (Including on-chain scaling, where the centralization trade-off is the reduction in the distribution and economic power of full nodes.)
If one of the biggest governments really wanted to destroy Bitcoin's value as a free economy at any cost (which seems very unlikely, but isn't impossible), they'd offer billions of dollars in subsidies to domestic miners, but also legally require that these domestic miners only mine transactions that have been approved by some government entity. Then when they had enough such miners, they'd also require that the miners only extend chains which fall under this regime, essentially doing a (illegitimate) softfork into a centralized coin. Bitcoin is not ruled by miners, so this wouldn't be the end of BTC, but it'd be extremely problematic, and perhaps the end of mainstream BTC.
Satoshi said, "Yes, [we will not find a solution to political problems in cryptography,] but we can win a major battle in the arms race and gain a new territory of freedom for several years." He didn't say that BTC can endure direct assault by major governments and come away completely unscathed; it can't. We should try to prevent the nightmare scenarios I mentioned (and others), hope for the best, but prepare for the worst. It's true that governments will never be able to completely stamp out cryptocurrency, but at some point oppression could reach levels where all BTC usage and development would have to move deeply into the shadows, which would greatly reduce Bitcoin's ability to impact the world. (At that point, BTC would hopefully become a small part of a wider revolution, and not just a fading remnant of freedom.)
