Quote from: toz on February 21, 2013, 07:06:49 AM

Quote from: Cubic Earth on February 21, 2013, 07:03:01 AM

Here is the argument: A higher difficulty makes a 51% attack on the network harder to achieve. Since that is widely recognized, a higher difficulty makes people more confident in the long term viability of bitcoin, which leads to more hording and acceptance, and THAT drives up the price.

That makes no sense. You could equally well argue that ASICs coming out makes it easier to attack Bitcoin because the cost to achieve a 51% attack goes down. This is perfectly cancelled out by people who buy the ASICs raising the difficulty. The net effect is that the difficulty to attack the network is driven by the price, not the other way around.

An attacker could be buying ASICs for all we know.

I agree the threshold for attacking the network is primarily an economic one - how much it would cost to get to 51%. The point you are missing though, is that ASIC's technology has been around since before bitcoin got going, and it has been know from the early days of mining that ASIC's would be the final word on efficiency (in both watts and $$ per GH/s). If an strong adversary, lets just call him 'Uncle Sam', had decided to attack the network previous to ASIC development and adoption, they would only need to invest in their own ASIC research and manufacture. A few thousands of chips later, they would own the network.

In short, there was always a fear that the first person out with ASIC's could bring down the network easily. Now the only way is to make a whole shitload of chips, and the number (cost) required is growing by the day. There is not another foreseeable shortcut, except perhaps quantum computing, and that is why it is harder to attack now than pre-ASIC.