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0 pointsmikeblackson4y ago0 comments

One more thing that's overlooked, the nodes control the Bitcoin network, not miners. In the face of a 51% attack, consensus would be reached that banning malicious miners is in the interest of the majority of node owners.

They would fork Bitcoin and the Fed would burn a ton of money with very little to show for it. The miners they bribed would pile into the non-Fed controlled fork using the Fed funds they received. The network may actually grow after this kind of attack is successfully sidestepped purely from the Streisand Effect and the corrective action proving what people theorized about the difficulty of censoring the bitcoin network.

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michaniskin4y ago

But that's just turtles all the way down. The Fed can mine that forked chain even more easily than the original one.

When one actor has a money printer they can use the permissionless, decentralized nature of the bitcoin network as a weapon. It's a vulnerability they can exploit.

mikeblacksonOP4y ago

Regardless of how much money can be printed, no government has enough resources to attack a perpetually moving and atomizing target.

As long as governments debase the currency to carry out this attack, they are also continuously creating more reasons for variations of Bitcoin to exist.

michaniskin4y ago

This "perpetually moving target" will need funding to operate. The Fed will always be able to afford to lose more money than the private sectors can afford to lose. Remember that the government doesn't need infinite resources, they just need more resources than the private sector can muster.

This is something the Fed does all the time, this is exactly how they distort the economy to set interest rates and bond yields. They have been 51% attacking the bond markets for decades, and all the bond shorts who thought "they can't possibly keep printing at this rate" lost their shirts.

mikeblacksonOP4y ago

All these coins are funded by the people that adopt them, funding is not an issue for projects that solve the issues Bitcoin does. These projects exist because there is demand for the solutions they offer, attacking any single network does nothing to limit that demand.

I disagree with the 2nd part too, the idea that the Fed does anything tech related with a higher level of competency than the private sector has not been proven to me.

The idea that a centralized closed network that's severely hampered by operating restrictions can beat a well designed adaptable open network in the long run is a joke.

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michaniskin4y ago

Also consider that the price of crypto is determined by people's expectations of future price; since it pays no dividends the only way to make a return is to sell it or rent it out. What effect do you think this "perpetually moving and atomizing target" would have on investors? How would a rational investor price this completely unpredictable asset? Clearly there would be a discount for risk, like a shitcoin.

mikeblacksonOP4y ago

That is irrelevant because the main point is, the attack will be unsuccessful. People will pay a premium for a coin/payment network that defeated the Fed and proved its censorship resistance.

How long can the fed fight a few hundred million (soon to be few billion) people?

In the war of attrition, this small group of people with incentives that are not aligned with the majority of the humans on this planet will lose, it's just a matter of time.

I expect Bitcoin will destroy/neuter most central banks in your lifetime.

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michaniskin4y ago

What prevents the Fed from operating as many nodes as they need to overrule the "honest" node operators?

mikeblacksonOP4y ago

If fed nodes run a different version of bitcoin that permits censorship, they will not be in control of the forked chain.

michaniskin4y ago

OK, now you're talking about inventing a new altcoin that introduces censorship, governance, and control. This has already been done a number of times, and they all failed.

Bitcoin is the ultimate fiat in that it's not backed by anything tangible. The bitcoiners will say that the intrinsic value of bitcoin lies in the value the network provides, eg. facilitating uncensorable, permissionless transfers across borders. It is definitely not a given that a new coin without this utility will be a success. I'd bet against it given the history of altcoins that have attempted to do it.

michaniskin4y ago

Oh, I think i didn't understand your comment, sorry. In the scenario laid out by the article the Fed runs the same software as any other miner, they simply ignore transactions that are not depositing bitcoin into their wallet, they refuse to record those transactions in the blocks they mine.

This is completely compatible with the bitcoin network, any miner can do that today without forking the chain. However, if the Fed had say 85% of all hash power it would be extremely expensive for any other miner to mine a block, so the Fed would gain complete control over the network over time.

j / k navigate · click thread line to collapse

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michaniskin4y ago

But that's just turtles all the way down. The Fed can mine that forked chain even more easily than the original one.

When one actor has a money printer they can use the permissionless, decentralized nature of the bitcoin network as a weapon. It's a vulnerability they can exploit.

mikeblacksonOP4y ago

Regardless of how much money can be printed, no government has enough resources to attack a perpetually moving and atomizing target.

As long as governments debase the currency to carry out this attack, they are also continuously creating more reasons for variations of Bitcoin to exist.

michaniskin4y ago

mikeblacksonOP4y ago

I disagree with the 2nd part too, the idea that the Fed does anything tech related with a higher level of competency than the private sector has not been proven to me.

The idea that a centralized closed network that's severely hampered by operating restrictions can beat a well designed adaptable open network in the long run is a joke.

1 more reply

michaniskin4y ago

mikeblacksonOP4y ago

That is irrelevant because the main point is, the attack will be unsuccessful. People will pay a premium for a coin/payment network that defeated the Fed and proved its censorship resistance.

How long can the fed fight a few hundred million (soon to be few billion) people?

In the war of attrition, this small group of people with incentives that are not aligned with the majority of the humans on this planet will lose, it's just a matter of time.

I expect Bitcoin will destroy/neuter most central banks in your lifetime.

2 more replies

michaniskin4y ago

What prevents the Fed from operating as many nodes as they need to overrule the "honest" node operators?

mikeblacksonOP4y ago

If fed nodes run a different version of bitcoin that permits censorship, they will not be in control of the forked chain.

michaniskin4y ago

OK, now you're talking about inventing a new altcoin that introduces censorship, governance, and control. This has already been done a number of times, and they all failed.

michaniskin4y ago

j / k navigate · click thread line to collapse