Is 51% attack a double-spending threat to bitcoin?
My answer: No!
My argument: By definition, bitcoin is
a solution to the double-spending problem:
Abstract. A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to prevent double-spending. We propose a solution to the double-spending problem using a peer-to-peer network. The network timestamps transactions by hashing them into an ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work.
The way Satoshi puts it in the very first line of the white paper, as a solution, bitcoin is
immune against, rather than
resistant to, double-spending. Double-spending makes digital cash absolutely worthless because of its potential to suffer from unregulated inflation. Bitcoin is safe against such inflation inherently and it is not because of PoW on top of or game theory behind bitcoin. In its most vicious (and ignorant) way of malfunctioning, a majority of hash power could defraud single users and won't be able to create bitcoins out of nowhere.
Misinterpretation: A majority of hash power collided is claimed to be a double-spending threat to bitcoin because of the sole power of chain-reorgs that let them defraud users. Yet it is not a proper classification of this threat as such practices are bound by cost/incentive tradeoffs according to the game theory employed by bitcoin.
My take (which is a surprise somehow):
Unlike what is said ever and ever, one could put
trust in miners as long as there is proof that:
- Miners are not inflating the supply illegally,
- The costs involved in defrauding him/her (personally) are orders of magnitude higher than the assets in stake.
This is the fundamental principle behind a hierarchical sharding scheme which I'll propose later.