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Comment by nostrademons | Hacker News Reader

You don't need a DoS attack under the assumptions of this project. It's already assumed that you control ~80% of hash rate, so you execute a 51% attack that mass double-spends coins and destroy all confidence in the integrity of the currency. Poof, nobody uses it.

Note that China already controls ~65% of Bitcoin hash rate, so if they wanted to execute this right now, they probably could.

That they haven't is one reason I'm bullish on cryptocurrency, and specifically Ethereum and Stellar, and it's entirely separate from why many other Bitcoin bulls are bullish on cryptocurrency. You don't need proof-of-work to secure a blockchain. You only need game theory: as long as each participant has more to gain from allowing Bitcoin's continued existence than destroying it (and they can't subvert or destroy it in a way that will be invisible to other market participants), it will continue to exist. China gains no benefit from destroying Bitcoin; they can just continue to let it exist and tax all the Bitcoin miners in China, generating revenue for themselves and their citizens and continuing to be a thorn in the side of dollar hegemony.

This also implies that proof-of-stake (if done right) is just as good as proof-of-work, which'll solve the energy issues associated with Bitcoin. And it means that cryptocurrency adoption, if it happens, isn't going to be because it's particularly good: rather, it'll be because the U.S. has destroyed the dollar. There's value in cryptocurrency simply in it being an alternative that's readily available, so that civilization doesn't stop if the U.S. does end up miscalculating and hyperinflating the dollar.

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> Note that China already controls ~65% of Bitcoin hash rate, so if they wanted to execute this right now, they probably could.

When you say "China" do you mean like an actor that can make coordinated decisions? Or just a geographic region? I'm asking out of curiosity because yeah there's a lot of miners in China across many geographic regions but I never saw any evidence that they even talking to each other, even less coordinated enough to agree on making a decision as drastic at attacking the Bitcoin blockchain.

I think the concern is that the authoritarian Chinese government can exercise an awful lot of influence when they are inclined. For a supposedly decentralized system it's an awfully big risk.

The question is whether CCP has sufficient control over them. If it does not yet, it might consider working on that. OTOH I like the game-theoretic argument: they don't need to.

A better question to ask is: 'is the effort worth the gain?'

Is the theater of starting the process worth the concessions I can win?

It's not bluffing if you're willing to do it. But it's a lot cheaper if you don't have to follow through.

China is scary because of the big risks they're willing to take. Like giant earthquakes or drowning Shanghai if their hydro power system has the failure that western civil engineers have predicted.

I'd make a wild guess that when parent is talking about 'control', they mean that if a miner is located within China, the Chinese government has the ability to put a gun to that miners head and tell them what to do.

With that kind of control, they could just put a gun to anyone's head and ask them to start mining bitcoin and do it the way they want them to. It wouldn't have to depend on how many bitcoin miners are in China at the moment.

Fortunately, it is immensely more difficult for the Chinese state to exercise its monopoly on force outside of Chinese borders.

It's a lot easier to point a gun to someone's head and say "Switch your equipment over to the network pipe that we give you" rather than point a gun to someone's head and say "Build a datacenter, secure an extremely large source of power, buy a few thousand Bitcoin mining boards, hook them all up in this extremely technical way, and then switch it over to the network pipe we give you."

The gun in the head strategy works best when you're only asking your populace to do simple things. For complex, technical tasks, the usual response is "Oops, I can't concentrate while you've got a gun against my head", and then you can shoot them but that's not going to help your task get accomplished any quicker. (This is also why working conditions at say Google or Apple tend to be pretty good, and why Soviet scientists were treated relatively well even if the rest of the population wasn't.)

Relatively well is, well, relative :)

https://en.wikipedia.org/wiki/Sharashka

I'd wager the way China would exert control on miners there would be to regulate their access to electricity.

And exert that control in subtle ways. "We know you, we watch you. You can do what you are doing because we permit it. When we come asking for a favor you won't think twice"

Even easier to put a backdoor on the newer miner boards.

You can't just ask a random person to mine Bitcoin (well you can't, it just won't do much). It needs to be someone who has the mining hardware. So how many miners there are (specifically, how much mining hardware there is) matters.

China would benefit more by confiscating all hashrate & hoarding all of the BTC for themselves before announcing that BTC is their national currency and driving BTC price to millions per-coin.

It's just as farfetched and unlikely, but anti-Bitcoiners just keep theorizing about a hostile China takeover crashing BTC price as if it's feasible, without considering the inverse.

Because China has already announced DCEP as their national crypto. So the chance of them making btc their currency is basically none while China has already cracked down on btc in various ways in the past. They could in theory use btc as some kind of reserve or exchange currency, but not sure why they would need to when everyone has to bend to their will to trade with them.

The rest of the world can just use a forked BTC, then. (Or use one of the already established alternatives.)

No need to bother with a gun. Just threaten to take 100 points off their social credit score or ban them from WeChat.

The implication, that no other nation-state may use force to assert control of a strategic economic resource, is in contradiction with both history and common sense.

GP is ipso facto calling out lazy casual racism, but framed constructively because they’re better at it than me.

Uh, no, other countries don’t have 65% of the hashing capacity. The USA could put a gun to miners heads, but it wouldn’t give them 51%, so there’s no point.

Uh-huh. The agencies of, let’s say, the US federal government, or the Kremlin, or similarly those of governments in the UK, France, Germany, all have no history of overseas intervention or onshore direct action to preserve economic interests. Got it.

if 51% of hash power were located in the US, the statement would have been about the US. it is not something special about china that makes this the case, only the fact that it is a sovereign state with the means and will to control activity in its territory, just like every other functioning state. one could also make the case that china might be more likely to intervene in such a way in the economic affairs of its subjects than a liberal democracy, but that is a secondary argument.

No, China is not a person with a single will. The assumption/assertion that the mining equipment may as well all be sitting under MSS guard in Beijing is horsecrap.

It does have a person that can enforce his single will pretty well, though.

In any case, you can follow it like this:

* Nations desire to control strategic resources

* Bitcoin is one such strategic resource

* To control Bitcoin, you need more than 50% of the network

* China has 65% of the network

* China can control Bitcoin

For small scale miners in China it might be a different story.

However, if Xi Jinping decided to crush Bitcoin for whatever reason large scale mining in China, which is well past 50%, would quickly do what he wanted. As such he has de facto control over Bitcoin, though I personally doubt it’s something he would do.

why do you expect that? you're talking about tens of thousands of individuals and companies, all themselves invested in bitcoin, being asked (through no existing command or enforcement mechanism) to essentially destroy their own personal wealth. even assuming the chinese state could achieve compliance from 77% of the existing hardware, it would optimistically take several days. the only way around that stumbling block would be to mandate centralized control of the miners, which would be impossible to keep secret and would also inspire some sort of reaction.

the idea that every miner in china will jump when xi says is pure fantasy.

Remember, China is a country with concentration camps, so they (the CCP) clearly have the ability and desire to do extreme things and convince their people it's the right thing or that it's not happening.

and america has the largest prison population in the world. we still have plenty of people that don't immediately comply with whatever the president says at any moment.

yall act like china is populated entirely by robots. it's a complex society just like anywhere else.

If the US sends an army to China in order to seize their mining rigs, then Bitcoin is the least of our problems.

For all we know, the NSA has a ton of secret miners it could switch on suddenly to launch a 51% attack. Prove me wrong .

(ok this is the stuff of conspiracy theories but it's still a possibility, isn't it?)

Well I guess the question is, if the US govt (or any other superpower) felt it was in their interest to take over / destroy the blockchain, would they be able to?

It seems to me if Bitcoin got to be of huge strategic importance to global finance, countries like the US would start to build out that power. The idea that the economy of say the US was at the mercy of other foreign governments would probably not sit well.

This applies to all large powers just using the US as an example.

Casual racism?

The Chinese government has 100% power to do whatever they want. If they want to kill you on an invented charge and send the bill for the bullets to your parents, they can do so (and have done so).

Yes Western governments can use force to intervene with private companies and have done so in the past, but it's unusual for them to do that because people and companies have rights and they can contest the action in court. That's nothing compared to what China can do with no recourse, see Alibaba or the Canadian Michael's for a recent example.

You cannot pretend that the two are similar situations, and doing so is whataboutism. It has nothing to do with race and everything to do with the difference between a free country and a totalitarian country.

The Chinese government is not China any more than the US government is America or the Kremlin is Russia.

Having a go at authoritarian demagoguery and secret police is one thing, have at it.

But doubling down on the casual false equivalence between a people, a country, a government, and a person, just reinforces the point.

Oh, and when you find a free country, do let me know. I haven’t seen one yet. So far, from Australia to Zimbabwe, all governments coerce and murder their citizens.

The OP was not taking about the Chinese people, he was taking about China the Chinese government. It was very clear to me reading that, I'm not sure why you're all confused.

It is no better an assumption than assuming the OP is a man.

Again with the false equivalence. You're just doubling down on being wrong. I'm out of this conversation.

I’m doubling down on identifying the fundamental category error of all casual bigotry, so this was a useful and interesting conversation for me.

Too often it seems like the more precision matters, the easier it is to choose the wrong word.

In this context IMHO the choice of words matters quite a bit. I do my best to never write “China” if I’m in fact referring to the entity commonly identified as “CCP”.

(I understood OP’s point though, probably because I used to make the same mistake—perhaps still inadvertently do with some other countries.)

The wumao and supporters of the CCP have been pushing this racism nonsense for a while now to try to divert criticism against the CCP. It’s unfortunately very common.

I have seen people doing this and it's deeply annoying to reframe criticism of the CCP as racism. Not everything is about race. I'm deeply annoyed by how much race is becoming a thing in general - that seems like it's going to end up being counterproductive to ending racism. I'm not going to go so far as to say it's purposeful by the CCP. But it could be.

Calling out casual bigotry does not equate to sticking up for dictators.

On the other hand, calling racism "nonsense", in any context, that's some Oswald Mosley shit.

The difficulty with this alleged "clarity" is there is no single entity called "the Chinese government" either.

See also:

Using "China" but assuming .hk and .mo are included

Using "China" but assuming .hk and .mo are excluded

Using "China" to mean the area administered by the ROC

Using "China" to mean the area administered by the PRC

Using "China" to mean the area claimed by the ROC

Using "China" to mean the area claimed by the PRC

Using "China" to mean any area historically associated with the rule or influence of the Xia, Shang, Zhou, Qin, Han, Xin, Wei, Shu, Wu, Jin (1st/2nd), Sui, Tang, Wu Zhou, Liao, Song, Yuan, Ming, or Qing dynasties and their associated interregna and feudal periods.

Using "Chinese government" to mean the CCP, but not the State Council, the NPC, or the PLA

Using "Chinese government" to mean the CCP, the State Council, the NPC, and the PLA

Using "Chinese government" to mean Xi Jinping.

Using "Chinese government" to mean the KMT or DPP.

Using "Chinese government" to mean any and all the above, except the KMT, DPP, or PFP.

Using "mainland China" to try to be more specific (it still isn't, and now you've started a war)

Using "Greater China" to name your regional offices. Looking at you, Apple. (no such thing, it's a western fabrication, like General Zuo's chicken)

Referring to the Chinese language (which one?)

Referring to Chinese characters (hanzi? kanji? jiantizi? hanja??)

Referring to "Chinese food" (this is like categorizing haggis with paella)

Referring to "Chinese people" as though it's one ethnic group

Calling anyone who you think looks Chinese, Chinese.

New Zealand? Denmark?

"The mountains are high and the Emperor is far away".

Neither mining pools (who practically have the actual power over transaction inclusion an ordering) nor the miners are cooperating. I'm also certain the CCP wouldn't be practically able to locate and control all of them that easily.

The emperor is only a few tens of milliseconds away, no matter where you are in China.

I'd assume their intelligence services are identifying miners now while the miners don't have incentive to hide. If China wanted to strike at bitcoin they could do it in one fell swoop.

All the small dams or whatever power generator they are using are state owned property, hell even all the available internet access, and since they are the biggest supplier of money laundering vehicles and aids the capital outflow that the party hates to the bone, you better assume that they all have tabs being kept on already.

Hypothetically how long would it take the country that produces most of the computing hardware in the world to simply direct all their factories to build mining ASICs as quickly as possible while not exporting any more GPUs? Of course everyone would know what comes next but I am just curious.

Even in Western countries, if draconian anti-cryptocurrency laws were passed and even slightly enforced, it would kill, or at least force into regulation, large-scale mining operations.

That's not how China works.

Same thing that a lot Chinese people thinking of the West. Like anything is coordinated behind thing, led by US, and followed up by the developed countries.

Thanks for calling out this mental bias.

We are talking about China. There is a supreme actor who gets to make coordinated decisions if they so choose.

> rather, it'll be because the U.S. has destroyed the dollar. There's value in cryptocurrency simply in it being an alternative that's readily available, so that civilization doesn't stop if the U.S. does end up miscalculating and hyperinflating the dollar.

Even before Bitcoin, we had plenty of other alternative currencies that could have replaced the dollar. I’ve been reading headlines speculating about the dollar being replaced by other currencies as long as I can remember, before Bitcoin existed.

To your point: If Bitcoin somehow did become an alternative world currency and USD was out of the running, wouldn’t that create great incentive for China to crash Bitcoin prices and drive everyone to use their national currency?

I’m not happy with the current rate of inflation, but I think it’s also clear that true hyperinflationary scenarios aren’t likely in modern countries. As much as we like to criticize governments (often rightfully so), it takes orders of magnitude more incompetence and malice for a government to enter hyperinflation. It’s not something that is stumbled upon by accident.

US monetary dominance is up for grabs. This doesn't mean the US is necessarily supplanted as the world reserve currency, but it does mean lots of trade may dedollarize to some extent. My bet is there will be two major currency zones. Dollar/Euro in the West + Middle East + India, Renmimbi in the East + Australia + Africa.

Given the explosion of debt to GDP in the west vs the east, I see no way the Renmimbi will not continue to appreciate against the dollar, and I fully expect Chinese monetary dominance to increase with the government's continued annexation of Hong Kong.

BTC will probably dominate in countries were currency value is routinely destroyed (developing nations, Russia, the US and Europe to some extent) but as only as a back channel currency: I doubt any major commodity market or trade is ever going to be priced in BTC.

This is just silly, US military dominance is not anywhere close to up for grabs. They US might not have total dominance anywhere on earth anymore due to asymmetric weapons, but in a big fight the US is far and away the biggest dog still. It is not that it is not close, it is not even close to being close.

Edit: You may have misread. I said US /monetary/ dominance not military. Nonetheless, there is a thesis that military dominance dictates monetary dominance, which I do not subscribe to. Below is why.

The idea that the US can use its military to reassert financial dominance in the modern age is silly especially after having exported near all manufacturing capacity to China.

US aircraft carriers are worthless in the pacific. They haven't accomplished anything significant in the South China Sea. Hell, even more aggressive annexations like that of Crimea were never blocked.

Modern warefare is no longer physicial. It's economic and online. If anything the information economy in the US and the West are more at risk from espionage, information manipulation and other attacks given the value of the intellectual assets are far greater and that China has a vice grip on communications. Additionally, our supply chain is incredibly dependent on the East. As local demand picks up and the region can afford to be less dependent on the US, they can afford to cut off supply chains with mild consequences compared to what the US would face.

Good luck with your guns.

Arguably, US military has been successful so far in keeping the world's oil priced in USD. But yes, the world is changing.

This is less true than it used to be. The US is unlikely to sail a carrier through the Taiwan strait again to intimidate China.

> BTC will probably dominate in countries were currency value is routinely destroyed (developing nations, Russia, the US and Europe to some extent)

I’m not a fan of the current inflation in the US, but the idea that the US currency is being destroyed has been blown out of proportion online. People like to quote M1 money supply as if it’s the only measure of wealth, while ignoring that investors weren’t keeping investments in cash in the first place. Inflation drives up the value of assets, by definition.

"If Bitcoin somehow did become an alternative world currency and USD was out of the running, wouldn’t that create great incentive for China to crash Bitcoin prices and drive everyone to use their national currency?"

It would, but there's no guarantee that if people left Bitcoin they would end up in RMB. More likely they'd jump to another cryptocurrency, or to Euros. People tend to distrust the last party that fucked them over.

I could see a dangerous situation if China let Bitcoin thrive for a generation, let all the other currencies wither on the vine through normal market mechanisms, and then decided to exercise their national control over Bitcoin. That's basically the Amazon strategy - make your product so appealing that all the other retailers go bankrupt, and then jack up prices once there's no alternative and a whole generation assumes you're the normal way to buy things. (Come to think of it, that's kinda the U.S. dollar strategy now.) But that's a generation off, so naturally I'm not thinking of it, and I doubt very many others outside of HN are either.

How would a hyperinflation on the US dollar cause civilization to stop?

In any case, crypto trading since 2017 has been nothing but people buying and selling imaginary ticker symbols on unregulated exchanges.

For example, XVG and ETC has been subject to successful 51% attacks more than once and every time the price was hardly affected. And each time the "solution" to deep chain reorg involved the exchanges freezing all trading while developers rushed to add a hardcoded checkpoint. Once the "correct" version of history has been manually restored, everybody sing kumbaya and goes back to paying real cash for monopoly money.

Crypto need no proof of anything (PoS is still vaporware - debate me if you want), other than a shared delusion of value headed by the bucket shops.

> PoS is still vaporware

Why is that? Aren't Cardano and Polkadot PoS as they claim or doesn't it work?

No PoS algorithm has yet managed to solve the Nothing-at-stake problem, nor are they any more resistant to the abovementioned kind of hostile takeover by the nation state player compared to PoW.

I can't speak for every PoS coin out there but Cardano/Ouroborous explicitly assumes partial synchrony which is arguably never a good idea for a supposedly permissionless blockchain.

So PoS is vaporware because it hasn't solved a problem where the miners can act against their economic best interests and mine a fork?

How does "there's a theoretical issue, and also it shares a problem with PoW" follow from "PoS is vaporware"?

> So PoS is vaporware because it hasn't solved a problem where the miners can act against their economic best interests and mine a fork?

Not exactly. The point of "nothing as stake" attack is that you can pull off the attack while having... "nothing a stake".

Except the trust of the currency itself, as if you're attacking a currency you have a lot of stake in, you reduce the value of your stake because you attacked it.

I'm pretty sure short selling crypto is still a thing. Loss of stake is jut another cost of business.

There are no miners in a PoS chain, and PoS participants technically have nothing to lose through double forging. There are myriad different ways to find and punish the bad actors in such a situation. I don't claim to know about all of them, however they all make the same assumption you made that staked validators are rational people who look after their interest on the blockchain. But what if they are not rational, or worse, could make gains by disrupting the chain?

This is far from a solved problem, and this is the reason why PoS coins exist mostly on the fringe and ETH is taking very slow baby steps towards a ETH2. Nobody is certain that PoS will stand the test of time and my prediction is that it never will.

One might argue that they don't have to worry about anything judging from how well exchanges has been able to coordinate with the developers to pick a side whenever a major fork is spotted. But then it calls into the question whether we actually need a blockchain when a couple of interested party are the ones who gets to decide which fork is valid.

Nothing-at-stake problem is solved with slashing & inactivity leaks.

> PoS is still vaporware - debate me if you want

Tezos has a fully working Proof of stake system, and there are others. Feel free to share whatever you're on about, but I have a feeling "the debate" will be an exercise in goalpost moving.

Baseless accusations aside, please see my reply elsewhere in this thread for a response.

Isn't calling currencies that people are already transacting hundreds of millions of dollars in volume on daily "vaporware" a baseless accusation?

> How would a hyperinflation on the US dollar cause civilization to stop?

The dollar is the value used to denominate world debt via the IMF. It's also (partially related to this fact) the "mattress currency" of a lot of nations... Nations hoard US dollars to back-stop their own economies, since if their currency starts to tank, they can use dollars to pay their international debts.

A worthless US dollar would have wide-ranging international currency disruption.

But then the IMF actually uses a basket of currency: https://en.wikipedia.org/wiki/Special_drawing_rights

(which has some similarity to the original libra proposal from FB)

Every now and then I get the impression that crypto currency advocates have seriously and repeatedly underestimated and/or misunderstood the complexity and scale of real-world economics.

> For example, XVG and ETC

Try using projects that aren't "shitcoins" as an example

> In any case, crypto trading since 2017 has been nothing but people buying and selling imaginary ticker symbols on unregulated exchanges.

You can trade regulated BTC futures. (Regulation by itself isn't much of a feature. But it can be a good indicator to see how well something is integrated into mainstream finance.)

> [...] other than a shared delusion of value headed by the bucket shops.

You shouldn't dismiss the original bucket shops like that.

> China gains no benefit from destroying Bitcoin;

Citation needed on this one I'm afraid. If nothing else, a currency that the Party cannot control would be A Problem. China did not have much economic benefit in halting the ANT IPO, yet it did not go through all the same. There _might_ be a benefit in allowing bitcoin to continue to exist of course, if they think it advances their cause more than it hurts it. But as soon as that calculus changes, it seems quite likely that the big mining corps (with as you say at the moment of speaking about 65% of total hash rate) will receive some "friendly invitations" (from unfriendly people with guns) to stop their business operations.

Why haven’t they destroyed it then?

In an elegant tautological argument: because at the moment it does not advance their causes to do so (yet).

Frankly, because it’s not as much of a threat as the popular narrative suggests. They may actually benefit from being able to use cryptocurrency for their own ends, either by using it directly or using the public ledger nature combined with their surveillance powers to get insight into transactions.

Regardless, the attacks described here require large concentrations of mining power. In theory, the best way to attack it would be to wait for (or even encourage/subsidize) your country to become the geographical leader in mining operations.

Or even better: Wait for companies in competing countries to start holding BTC on their balance sheets and consumers to put their investments in BTC. Now you have a kill switch for part of the balance sheets of competing countries.

I personally doubt this is happening, but I’m sure it’s being considered as an attack scenario.

If anything, a government might even like a public ledger of all transactions. Sure, you can sell in person, and then it's about as secretive as cash.

This is the Turkey Fallacy.

No, I'm actually asking for ideas for why they haven't destroyed it yet.

Better stuff to do ?

It's not inconceivable (to me at least) that at some point in the future it would be politically or personally beneficial for the leadership of a totalitarian government to do something that is economically costly to it's citizens (in this case we're talking about damaging bitcoin, but it could be anything).

I think at least part of the reason is because they own it. Per https://www.statista.com/statistics/1200477/bitcoin-mining-b... 65% of all bitcoin mining is in China, this means majority of newly minted coins are in China, but also they can launch 51% attack at any time.

They may be using it to track people attempting to move money out of the country.

Cryptocurrencies aren't very anonymous.

1. If you watch the market - it dumps each time when it's 9AM in China. The moment the miners wake up, they sell the BTC. It creates an inflow of foreign currency into China.

2. Traceable currency.

3. Soft power / control of narrative? Bitcoin seems to symbolize people's loss of faith in fiat system, and their governments.

If they executed a 51% attack, it will most likely result in a hard fork. Every full node would be able to tell where China branched off. We'll have BTC and BTC-China, with their individual markets. Keep in mind that while China has the bulk of miners, the majority of reachable full nodes are in North America.

> China gains no benefit from destroying Bitcoin

Right now they don't, no. But to my mind Bitcoin being subject to the whims of a major world power is a big knock against it, given that it aims to be a currency alternative. I don't want such an alternative to subject to any kind of geopolitical mood.

Yes. Much like mutually-assured-destruction with WMDs, we need to try to keep China to <50% of the mining pool, otherwise they can do as they wish with it.

Maybe the US government doesn't mind that? Maybe they hope it will die, and send everyone flocking back to the dollar?

Yea I can't see a power like China controlling bitcoin to be a good thing. I also can't see myself maintaining a substantial fraction of my wealth in a unit of value subject to the whim of a totalitarian government.

It's not inconceivable (to me at least) that leaders could decide it's personally beneficial to them (or politically beneficial) to damage Bitcoin, even if it cost a ton of their tax payers money.

No power controlling Bitcoin is a good thing (at least for Bitcoin). That's true for China, who could force its miners to do what it wants, as it is for the US, which could make it arbitrarily hard to transact or hold BTC (and which also has the habit if imposing sanctions on other states' entities).

Given China’s political structure, wouldn’t it just take one participant (President Xi) to wake up and decide “party over” if it became politically favorable to do so?

Yeah, correct.

Even if you do control 51%, it would be a big long term capital and operational expense to do so, so you'd probably want to play nice rather than destroy what you've built.

Besides, even if you attack it, a new network will just spring up again, possibly with a different mining algorithm, making your old mining gear obsolete.

Also, in PoS, another last resort "nuclear option" defence strategy would be to slash the nodes that attack the network through a hard fork. It's a "nuclear option" because in theory it's unlikely to happen, only used a deterrent.

"Slash" here means to confiscate and burn their staking deposit on the new network. (The old one will continue to operate where the arrackers reside, thus a "fork")

I'm not so sure. If you don't need proof of work to secure a blockchain, then why is the free market of Bitcoin consensus continuing to expend huge amounts of capital to stick with it as its sybil resistance mechanism? If it wasn't considered a value destroying move, the transition away from PoW would've happened already no?

It has, in new cryptocurrencies. Virtually all cryptocurrencies launched since 2017 are proof-of-stake: Cardano, EOS, Stellar, Polkadot, Tezos, TRON. Ethereum is in the process of a very expensive and painful transition from proof-of-work to proof-of-stake.

The reason you haven't seen this in the global cryptocurrency industry is because of network effects and adoption curves. Most programmers would probably agree that C++ is archaic and that the software industry has moved on to newer languages like Rust, Go, Kotlin, ES6, etc. Why then do Microsoft, Amazon, Apple, Google, etc. all rely on large quantities of C++ code? Because they were founded in the last millennia, when C++ was basically the only alternative for what they were trying to do, and have deeply enmeshed ecosystems and value chains that are all dependent on their existing C++ codebase. Throw it out and you throw out the $5T+ in value they've built. They couldn't have built that up without the 20 year head start they have, but if you're founding a tech company now, you're pretty dumb to use C++.

Similarly, Bitcoin has built a whole ecosystem of miners, speculators, traders, exchanges, payment systems, wallets, etc. Throw proof-of-work out and you throw all that out, and along with it your advantage over Ethereum, Cardano, Stellar, etc.

> if you're founding a tech company now, you're pretty dumb to use C++

All us unreal engine using indie developers must be pretty dumb then. It’s true that programming in c# in unity is easier, but the end result of the c++ is a prettier game with more things happening at once at a higher frame rate. More grass, more characters, more animations, more AI nuance, more physics interactions, lower system requirements during a gpu shortage, etc

try rust.

> and along with it your advantage over [PoS chains]

You're assuming that PoW is better than PoS.

> If it wasn't considered a value destroying move, the transition away from PoW would've happened already no?

I think there's a conflict of interest issue here that would prevent such a move even if it would be worth it - the miners clearly have an incentive to keep the current PoW mechanism, as without it they're left holding a bunch of expensive useless tech. And without the miners willing to go along with a move from PoW to PoS, at best you're going to get a split between the PoW and PoS chains rather than a clean shift from one to the other and just create a mess, which isn't ideal for anyone.

The attack scenario is an adversarial nation state who is not motivated economically and is intent on sabotage of the network.

I don't understand what you're getting at, I was pointing out why Bitcoin hasn't moved to PoS even if it may actually be better.

You're right, I totally misread what you said.

I think the answer to what you actually said is; miners don't control consensus on the network - it's not up to them, it's up to fullnodes/users who can change the ruleset whenever they want.

You're good :)

And I agree to a point, but miners are the ones that effectively run the network, and there aren't actually all that "many" of them. Without the existing miners willing to contribute the existing network would fall apart. PoS is an interesting situation because it technically makes the miners unnecessary, but obviously the miners are going to say "no" and just keep going with the existing Bitcoin. It would just create another Bitcoin Cash situation effectively, which is a lot less appealing than if everybody switched to PoS and left nobody using the old version.

Miners don't control the price. If a PoS coin became valued, they'd be leaving free money on the table to ignore it. And if Bitcoin became devalued, the mining rate would drop to match (otherwise they'd be spending in excess of the reward on electricity)

Miners don't control the price but they control the upgrade. Why would the miner vote (with their hashpower) to upgrade to a PoS consensus and kill their business?

They don't control the upgrade: new miners can simply come in to take the free rewards on the new coin if the existing ones refuse to do it.

All that matters is the market's valuation of the currency: it would be irrational for miners to do anything except expand until their costs nearly match the reward.

I think I agree with you and think there's a parallel to other conventional currencies.

Controlling the hash is similar to controlling a central bank - you've got the power to trash your currency, but that's coupled with you probably having the most to lose if you do so.

You could maybe do something stupid short-term - Say you own a controlling amount of hash, but a fraction of the currency. You could seize the currency, but by doing do you devalue it all. Who in their right mind would buy a seized bitcoin from you for any price, knowing you could seize it right back?

Currency equivalent would be the Fed suddenly stating a dollar was worth half-as-much as it was before (compared to some external thing) and compensating all US citizens by doubling their dollar earnings. As a dollar earner/spender you'd notionally be unaffected.

Dollar debt the US owed would be halved - Yay!

However the effect on non-US dollar holders would be cataclysmic - "You made half my money vanish, you might do it again, I don't want to ever hold US dollars again" and bricks of your currency is being used by children worldwide to build forts.

The entire selling point of BTC is that it's outside of conventional government control. If proved otherwise, it's without value.

More realistically, "Chinese Miners" aren't the government. They're miners, who happen to be in China, due to cheap power costs. At the first whiff of any meddling, their ASICs going to be on a plane and plugged into the Hoover Damn or Iceland's geothermals.

> More realistically, "Chinese Miners" aren't the government.

I think that's largely the point, other comments are appealing that somehow the Chinese govt has a lot to lose by seizing control of bitcoin, but in reality they probably just have no reason to yet, it beggars belief that an authoritarian government would allow private citizens to control an important currency on their own soil. My own take is that they are letting it run because of the shadow of doubt it is casting on the USD.

> ASICs going to be on a plane and plugged into the Hoover Damn or Iceland's geothermals

A little simplistic to think non-negligible percentages of the hash pool would turn themselves off, relocate internationally, completely disrupt the difficulty rate, put themselves at a massive disadvantage and subject themselves to an unknown foreign government who might be completely hostile toward them. More pertinently the CCP might "meddle" with their ability to fly out of the country as they have done with countless dissidents already.

My point was that the only reason mining is concentrated in China is cheap power.

If country X had cheaper power than china, than the majority of mining would be in country X.

Will Bitcoin even be that decentralized in 50 years? The miners control the network, and most mining is done by big companies now and their data centres. If it’s like other companies, won’t they gradually acquire one another until there is only 1-2 companies controlling almost the entire future crypto economy? The scale of the computing power we are talking about is not something that individuals can compete with

I've posted here before about it. I'm of the opinion that it currently is not decentralized. There is such a shortage of hardware that can be competitive right now and there are only a few organizations that can get their hands on them. I think this problem is just going to get worse when the manufactures start to realize it doesn't make sense to sell any of their miners at all.

Agree, the electricity for the mining is even more centralised. That really is the point of control on this whole thing.

Electricity is a big deal even without crypto. Look at Texas right now - people have more to worry about than their mining rigs being offline

How do you account for “let the world burn”-type actors in this scenario though? It seems this pulls at the key misunderstanding around crypto and blockchain in general — it can’t sanitize the endpoints.

If any human party has the power to defraud, manipulate, or commit any other nefarious act (as you imply China does), the system is vulnerable.

This is why proof of work provides some level of resilience—you have to be nefarious AND have access to massive compute resources to do harm. China has the compute resources, but not the incentive. A proof of stake power broker may have the incentive and not need the compute.

> so you execute a 51% attack that mass double-spends coins

51% attacks don't double-spend coins. It just means you get to control which blocks are accepted, it doesn't mean you can violate the rules.

Double-spending doesn't change the rules, it changes where coins get sent, so you can rip-off the original recipient.

"double spending" as a technical term means double spending within the blockchain.

I wonder if at some point Bitcoin might become important enough that nation states will work together to ensure that no one state has more than a 51% hashrate as a matter of national security.

This will happen

Sarcastic?

Basically btc might get too big to fail... then they may have international laws in place?

> You don't need proof-of-work to secure a blockchain. You only need game theory

Some people just want to watch the world burn. - Alfred from The Dark Knight

> China gains no benefit from destroying Bitcoin; they can just continue to let it exist and tax all the Bitcoin miners in China, generating revenue for themselves and their citizens and continuing to be a thorn in the side of dollar hegemony.

That's making a lot of assumptions which I don't think there are good grounds to assume. For instance, that Bitcoin tax revenue is something the Chinese government cares enough about for it to affect its decision-making, or that Bitcoin is a "thorn in the side of dollar hegemony."

I think the reality is that Bitcoin (and cryptocurrency in general) is a niche thing that isn't nearly as important as its fans like to think it is, so there's little for a state-actor to gain by making the effort to disrupt it.

"You only need game theory: as long as each participant has more to gain from allowing Bitcoin's continued existence than destroying it (and they can't subvert or destroy it in a way that will be invisible to other market participants), it will continue to exist."

The CCP doesn't allow Chinese citizens to own Bitcoin as far as I know - however they allow mining because it's generating revenue.

And of course, Bitcoin's continued existence by the "army of HODLers" is a non-brainer when you join an MLM - everyone who has adopted it will push for its price to go up (or return to the prior buy price) so they can realize a profit - until the latest adopters are left holding the bag.

CO2 emissions is probably why I'd do it if I were the Chinese government frankly.

Environmental virtue signaling compared to other co2 emission sources in China.

You vastly overestimate the command and control capability of China. China and Chinese people are not a Borg.

How? Their whole apparatus has been built for that

Keeping your head down and actively agreeing with governmental policies are two different things.

As things are now, people from authoritarian countries are really, really good at the former.

I thought that while there's data now, the sample is _extremely_ skewed to Chinese hashers:

https://news.bitcoin.com/65-of-global-bitcoin-hashrate-conce...

> Note that China already controls ~65% of Bitcoin hash rate, so if they wanted to execute this right now, they probably could.

That's not correct. Most pools are in China, but the majority of the hash rate is generated in the USA.

> That they haven't is one reason I'm bullish on cryptocurrency, and specifically Ethereum and Stellar

I'm curious why you are bullish on those 2 specifically?

>> Stellar.

Lol.

> Stellar

kek

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