Circling back a bit, because I just noticed I never got around answering:
Either way, as interesting as I find this whole discussion to be, there are probably cheaper and more effective ways to sway the market in one way or another.
Imagine what you could do with even the low end of $6 billion. That's 17 times the budget of Avengers: Endgame, except it's a whole cinematic universe about crypto (tacky, I know, please don't do this). 8 stadiums like the crypto.com arena, except the crypto-community builds and owns it, instead of merely sponsoring it. Provide UBI for a small town of 1,500 people (named after the cryptocurrency of your choice), each receiving a yearly income of 50k over a lifespan of 80 years.
Or, you know, just buy a handful of politicians.
I believe either of these would probably more effective than attempting a 51% attack on Bitcoin.
I'm sure that you are right to some extent, but then again, by that logic, the Ethereum investors, as well as Bitcoin investors, should then all pursue these ventures and make their fortunes double in no time.
1) Who says they aren't? (buying politicians, I mean)
2) Bitcoin and Ethereum investors haven't used their money to attack each other's network either. That is to say, I said these examples would be probably cheaper and more effective than the attack scenario you describe. They're still bad ideas, just slightly less bad.
Hm, maybe you are right..! It actually does sound quite simple when you put it like that.
It sort of brings into question why we bother so much with consensus mechanisms at all, then, but still...
Because in the end you still need consensus on where the coins of a transaction should end up.
... Yeah, so maybe a mitigation strategy could simply be to add to the protocol: 'If a chain is the result of a reorg that has allowed double spending, then it should be regarded as invalid.' Could that work?
No. Double spends are not detectable on a protocol level. They also don't need to be. But they are pretty obvious to outside observers, e.g. non-adversarial miners that could then direct their hashrate accordingly or exchanges that would ignore the double spends until matters are settled.
Ideally you should then also roll out an update where miners can vote to declare any new contentious chain invalid.
... Well, but then in theory, we still have the problem that 51% of the miners might be compromised, if voting is distributed according to PoW. So the voting power still has to distributed some other way, doesn't it..?
PoW
is the voting power.
But any merchant, exchange, counterparty that an adversary would transfer coins to can just ignore whatever looks like a double spend. In the end the coins will end up either here or there. If an adversary gains nothing in return (e.g. by exchanging coins for another currency or goods and services), all they do is send their own coins in circles.
Put differently, the moment you start a 51% attack, your adversarial transactions will likely get detected and ignored (again, outside the protocol. on the protocol level the coins will end up either here or there, but that doesn't gain you anything if your counterparty doesn't honor your transaction).
The moment you're not running a 51% attack... you're simply a miner that
could spell trouble. But you're not actively hurting the network itself.
In the end it would be just like that Bank Heist sketch by Key & Peele:
https://www.youtube.com/watch?v=jgYYOUC10aMEdit:
How about this: The vote in such a case is not distributed to the miners, but rather to the investors, who pay the miners (and other bitcoin owners) for their coin. Could this principle be enough to prevent a hard fork?
There's already a mechanism for that, though maybe not as you imagine: A hard fork resulting in two separate coins, with the market deciding which coin is the more valuable one.
The more extreme example of this may even sound familiar to you: Abandon all principles of decentralization and somehow kludge a rollback. Not something I'd personally like to see, but amazingly even coins that pulled tricks like this have done pretty well.
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One last thing, maybe it's been brought up before, but it seems rather relevant:
At the heart of the attack scenario you describe is the assumption that Bitcoin and Ethereum investors are mutually exclusive groups with purely adversarial incentives.
I don't think that's the case.
While most investors will be more exposed to one coin than the other, I'm pretty certain that almost everyone in crypto has a stake in both coins, especially whales. Accordingly I don't think any one side would have much of an incentive to strike the other, even assuming that an attack in either direction were feasible.