Post
Topic
Board Bitcoin Discussion
Re: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws)
by
BldSwtTrs
on 09/02/2014, 11:18:18 UTC
Bitcoin Take Over Threats

  • Coming $Trillion(s) bubble burst will demand world government intervention & cooperation [1] (Bernie Madoff is so much smaller)
  • Selfish mining attack confirmed by skeptics
  • Those who were anonymous lose it ex post facto, when tax & law enforcement attack a.k.a. "coin taint" the numerous non-anonymous [2]
  • 51% attack because mining is concentrated in a few pools
  • 51% attack because mining is ASICs concentrated and ASICs foundries could be purchased with unlimited fiat. Note also ASICs can't be re-purposed as PCs can, i.e. each ASIC only works for a specific coin design.
  • 51% attack because mining is not funded with perpetual debasement (new coins) to remain proportional to market value, instead transaction fees can not scale to market cap because even debit cards & ACH charge a flat-fee not a percentage of transaction value. Thus the world's rich (denominated in coin) grow more wealthy relative to the income of the miners.
  • Non-zero transaction fees allows cartel take over via Transactions Withholding Attack
  • Pools can be attacked with Share Withholding Attack fixable with oblivious shares
  • Blockchain requires increasingly powerful full clients as scale to billions of transaction, thus more centralization and vulnerability to 51% attack.
  • Superior altcoin
So basically barring the first and the last, all the threats you are listing are related to the Proof of Work mining. Despiste what you are saying, I think Proof of Stake mining address these problems.

The first threat - government cooperation - is highly speculative and I prefer put my money on Bitcoin rather than on this eventually.

So it's boils down to: will Proof of Stake overtake Proof of Work. The market will decide. The only thing investors have to do is hedging by capturing the same portion of the PoS coin supply that they have in Bitcoin (Bitshares and NXT being the most serious PoS coins from my point of view)