As more governments consider deploying Bitcoin reserves, the chance of attacks from Nation-state level cyber actors will keep increasing

For example, if the US introduces a large Bitcoin reserve, China may want to attack Bitcoin not just for profit, but simply to make the US look weak. The cost of the attack would be far smaller than the damage caused by the attack.

Bitcoin cannot defend against such a large-scale 51% attack if China spends $15-25B over the period of 5 years redirecting its massive manufacturing force to outbuild the rest of the world in mining supply. They can also buy up mining rigs from mining companies going out of business and from other companies over the period of many years. The longer they wait, the smaller Bitcoin's security budget will be relative to the amount of damage that can be caused due to the block subsidy halvings. The longer they wait, the easier it will be to cause more damage.

The point of a nation-state attack is to undermine confidence in Bitcoin by severely disrupt block production and causing a severe price crash. By simply spending as little as $20B in manufacturing resources, they could cause 100x of damage at $2T. This would make any competing nations holding Bitcoin reserves look weak and possibly experience citizen unrest.

There are many cost-efficient methods of disrupting block production

• Continuously mine empty blocks or blocks with useless spam transactions. This is still very profitable since the block subsidy is currently ~98% of the block reward. Transactions fees are negligible. The energy cost is covered.
• Only allow for extremely high priority fees to the point where no one wants to use the network except for desperate whales looking to fire-sell. The attacker can manipulate a market crash.
• Engage in selfish mining to lock out other mining pools and make more profit. Any attacker with 60% of the total mining power could reorg the blockchain and take 100% of mining rewards. That would increase their revenue by ~70% and increase their profits by much, much more.
• Withhold blocks: An attacker doesn't have to constantly produce blocks. They could slow down their block production, using withholding attack strategies to only broadcast blocks whenever a competing miner gets a block in. This would reduce the cost of attack as more miners drop out due to unprofitability.
• Keep reorging the blockchain and cause chaos. Many exchanges would shut down deposits and withdrawals.
• Threaten to double-spend across wrapped Bitcoin bridges or restaking side chains. Exchanges would not know how to react, and they would likely shut down trading.

There isn't an easy way to prevent such an attack

• If the Bitcoin community tries to fork without changing Bitcoin's consensus protocol, the attacker would just follow them to the new chain and continue attacking.
• If Bitcoin changes to a new mining protocol, then that would piss off all existing miners, reset its security, and undermine confidence in Bitcoin
• The Bitcoin community could decide to switch to a more secure protocol like PoS that protects against such attacks, but it could take a year of development and testing. Ethereum took 5 years. Bitcoin would need to start yesterday.

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What are your thoughts on how to protect Bitcoin from nation-state level threat actors?