Quote from: christop on April 06, 2013, 12:57:54 AM

It would be feasible for a large government to build ASICs to take over more than half of the network hash rate,

What I'm trying to say is it's not just feasible, it can be done very easily.

Quote from: christop on April 06, 2013, 12:57:54 AM

but what would they gain from it?

They would gain nothing for now, only because bitcoin is nothing for now.
However, If Bitcoin continues to grow, Bitcoin will be something at some point, something that actually could do some damage to real world economy.

Quote from: christop on April 06, 2013, 12:57:54 AM

In any case the Bitcoin economy would likely collapse

If people lose faith on Bitcoin, It will fall all by itself. = DOOMED
However, If people don't lose faith on Bitcoin, government will kill it at some point. = DOOMED

That's my point that there is no hope.

Quote from: christop on April 06, 2013, 12:57:54 AM

Other cryptocurrencies that may be better at resisting this type of attack than Bitcoin could pick up where it left off. Litecoin, for example, is designed to be difficult to implement on an ASIC.

I don't know nothing about other crypto-currencies. But I can guess some.
Other currencies which give same freedom(discard some or all transaction from the block that he cracked) to miner are all vulnerable and the total destruction might be easy.

If there is no FPGA or ASIC(no faster way to mine), one who want to destroy crypto-currency do not need to build a special machine because regular supercomputer can do the job.
Top notch supercomputers usually have 10~100k of CPUs+GPUs or 200+k of CPUs. So, If someone managed to rent multiple top-notch supercomputers (which is easily possible for some government),
He will have more than a million CPU and a few hundreds of thousands of GPU. There is no way to match these kind of processing power.

For example, before ASIC hit the network, total network hashrate remain 10-15TH/s range. It can be achieved with 16~25k of 7970.
In other words, If other currency's managed to attract same number of miner as bitcoin, their combined hashrate cannot stand a chance in the battle with a group of supercomputers.