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:
Quote from: Satoshi-Nakamoto-THeWhitePaper
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) by re-org attacking the bllockchain are orders of magnitude higher than the assets he/she has put in stake.
51% attack on bitcoin is not a threat, due to a collusion of good will by the majority holding 51%.
By that definition every coin ever called shitcoin is as secure as bitcoin, if the majority holders colluded on the side of goodness.
But playing Devil advocate, this also means 51% attacks on bitcoin with double spends are guaranteed if the colluding 51% ever turns bad.
So say bitcoin is immune implies that the 51% majority always stays good,
I wish I had such a rosy outlook on human nature, but the odds are at some point they will turn bad,
unless history has been frozen and no one told me.
FYI:
The flaw with the analogy is simple, we are trusting a 3rd party not to screw us over when their interests shift,
if we actually could trust the powers that be, we could trust banks and we all know we can't trust banks.
