Quote from: TT on March 18, 2012, 02:15:26 PM

If it is possible for any single player to manage to amass that much computing power relative to the rest of the network, it seems to me that the whole proof-of-work concept is invalidated, fundamentally. We're just back to human webs of trust relations. Those who then claim that bitcoin has been hacked would be right to do so...and perhaps it would be best to abandon the block chain concept altogether.

Having said that, I believe it is possible to modify the proof-of-work algorithm to make it less likely to favor people with a particular type of specialized hardware.

The proof-of-work is very good for stopping internal attacks... It however provides no natural defence against attacks that are externally financially motivated.

It is completely reasonable that the internal bitcoin community can decided what miners they trust, and weigh their blocks more than of blocks from unknown miners. Such a defence is called a web-of-trust, and it provides a different quality of security to a proof-of-work.

Since the proof of work is to defend against internal attackers anyway there is no problem in using a different type of defence to defend against externally motivated attackers.

So a proof-of-work is already secure enough to secure against internaly motivated double spends, why would an external 51% attack completely dis-credit it?
That is akin to saying Something getting defeated by an attack that it wasnt designed to defend against, means that the original design was faulty? - No it just means that the attack was out of specification.