Shower thought. What if Bitcoin switched from POW to POS, and all of the world Central Banks' in the world printed enough fiat currency to buy 51% of the coins, then controlled the network.
What would "cost" more, the cost of printing enough fiat currency to buy > 51% of "POS Bitcoin" coins, or the cost of printing enough currency to have > 51% hashing power in the Bitcoin network?
So first i would start looking at the costs to produce more fiat. -> it’s basically 0 and there’s no limit on how much can be created, but it doesn’t mean an attack like this is easy.
So i think the difference in terms of an attack comes down to:
- In PoS:
1. If they buy half of all coins in a short amount of time, then the chain would likely just be reset to before the attack and it was printed for nothing, also the price of the coins would increase dramatically because of the huge demand(but they have unlimited money to buy more so it wouldn’t stop it), basically the sellers would keep their coins and the fiat.
2. I think a smarter and more likely scenario would be the central banks accumulating coins in secret and over a long period of time. They could spread everything over many staking pools or just keep their coins in secret till then. Like this they could gain control over the network without anyone noticing. It would be hard to reset the chain, because it could affect years worth of transactions. And this attack is basically free or could even make the central banks money, depending on what their goal is.
- In PoW:
The limit here is on how much hardware can be produced and the energy, organization, time and expertise required to run them.
It doesn’t matter how much money they have, because the supply of miners is limited by real world resources and production, money cant overcome this limit directly. Also there’s real world supply chain management going on, so it would be hard to buy them in complete secret over the years and to get more than everyone else at the same time. Also it will take real energy to run the miners, which is a limited resource again, they can’t just take the population’s energy for this, without getting into serious trouble, imagine millions of people energy bill exploding or being shut off. So they would need to build new facilities just for this and again it’s hard to hide this and the network could already notice. It will also take a lot of coordination, hiring and innovation to build all this and keep it functional(which the government is terrible at).
In the theoretical case they can overcome the resources, energy, organizational and time constraints(which comes at a huge cost):
The network could just switch to a different mining algorithm and all this effort was for nothing and would render everything they did useless.
So i think it’s obvious which attack is cheaper and more effective.