Quote from: JoelKatz on April 28, 2013, 07:39:24 PM

Quote from: myrkul on April 12, 2013, 11:01:33 PM

Even if a 51% attack happened, it wouldn't do much, nor last long (as the other miners could simply buy cheap hardware and knock him back under 51%).

They could, but would they? If they feared the 51% would continue, they'd have no assurance of any return on their investment. If the price falls, some existing miners might be discouraged and stop mining, possibly faster than new mining could be added, especially when it wasn't profitable in the short term.

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It's more profitable to play by the rules, than to try and subvert them.
See: https://en.bitcoin.it/wiki/Weaknesses#Attacker_has_a_lot_of_computing_power

That assumes that their profit comes from Bitcoin rather than a competitor (which could even be conventional fiat currency). Consider, for example, a future time when Bitcoin prices are high but the block reward is low enough that mining isn't all that profitable. If someone shorts Bitcoins (perhaps even by investing in a competitor, which could even be something like Western Union, PayPal, or Visa), they might actually find it profitable to launch a 51% attack.

One thing that helps Bitcoin resist this kind of attack is that it can't be mined efficiently with general purpose hardware. This means that miners probably won't stop mining at the drop of a hat because they can't sell their mining hardware to someone who is going to do something else with it anyway or use it for something else -- they will have to try to keep Bitcoin healthy event if that means short term losses otherwise their expensive mining hardware is just scrap metal. And it also means that an attacker has to invest in hardware that they can *only* use to mine Bitcoins. They can't rent general purpose hardware to attack the network at a low cost. Coins that use ASIC-unfriendly mining schemes are much more vulnerable to this kind of attack than Bitcoin is.

ASIC's are tremendously beneficial to the future of cryptocurrencies. The fact that bitcoin lasted long enough to herald in ASICs is a great accomplishment for all future cryptocurrencies that will compete on the basis of which economic protocol is most efficient.

That said, once the hashrate matures we cannot simply rely on the fact that ASIC miners will not stop mining. The hashrate must double every two years, otherwise the monetary barrier to a double spend become smaller and smaller.