Quote from: kjj on June 10, 2011, 10:31:11 AM

It isn't easy because of the gigantic amount of resources necessary for the attack. For example, you could not purchase enough hashing power today to do the attack, because it does not exist in the world in purchasable form. I would even say that there is only one government in the world that would even have the potential ability to confiscate enough hashing power by sending armed troops into peoples houses and stealing their video cards. Someone would notice that. It would require months or years of gathering resources, all while the network is growing, and even a slow acquisition would likely be noticed.

And it isn't useful, because your payback for spending all of this time and money gathering hashing power is the ability to turn back a few transactions. What possible transaction would you reverse that was worth your 50 million dollar investment? Keep in mind that as the value of future transactions grows, so will the cost of doing the attack. Right now you would need to own roughly a quarter of all existing bitcoins, and spend all of them within the attack window, to beat the cost of your investment. That ratio will probably change somewhat in the future, but the attack will never make sense unless you already control a non-trivial fraction of the bitcoins in the world, and can find enough victims to accept all of them in a short period.

The reason we dont come to the same conclusion is not because of technical disagreements regarding Bitcoin, but instead because of the assumptions we are making about the nature, the resources, and the goals of the attacker. If you are interested, you can read this thread from the beginning to understand what the scenario I am considering is, and why I think it is a probable scenario. But to summarize, I am considering a very wealthy attacker, for example a banking cartel, one or more central banks, one or more big governments. Add to this lots of organization, and preparation. And finally a strategic, not financial goal.

The people who issue and control the money are the most powerful group in this planet. They are worth trillions. Money is their fundamental power source. You take away that power from them, and they will react. Bitcoin could be a revolution that changes the way the monetary power is distributed in the world. Wars have been fought for the control of Money.

You are assuming the attack is done to gain a direct financial gain in terms of bitcoins. You also assume the attacker would use the installed base of 3D gaming cards. In the scenario I am considering, this is not the case. This attacker could buy or build 10 factories of hashing hardware in China, could design his own hashing hardware and software, could pay the best programmers and engineers on planet earth, spend months, or even a couple of years preparing the attack. More easily, they could end up buying the majority of the miners in the market, or putting them out of business by predatory competition. They could sustain the attacks for days, months, or years. For the attacker in this scenario, the price does not matter, they can operate below cost. For all practical purposes they have unlimited financial resources. If they fall short, the just print more money to buy more things.

One mistake I have read, is saying that Bitcoin is as resilient as Napster, by being p2p. We cannot equate Bitcoin with Napster. Napster has no single point of failure; it is truly decentralized information and decentralized functionality. In Bitcoin, on the other hand, we have a defacto centralization on mining power. You mess with mining power and you render the system useless. It doesnt mater that the user base is decentralized, if we cannot assure mining stays decentralized and honest. As I am trying to point out, the dependence on miners is the weakest link, and the single point of failure of Bitcoin right now, if we consider the possibility of attack from the establishment.

Anyone else sees the logic in my arguments, or shares my concern for this scenario?