When reading about bitcoins, I came across the 51% attack concept. This is something that any entity with enough money can do.
An entity with enough money can do a lot (but not anything). Go fishing, buy icecream, fly into the orbit,
burn the money, start a war...
If Bitcoins really become a dominant force and threaten any of the major currencies, is it not possible that they would launch a 51% attack and control or destroy the bitcoin system?
I've seen this concern many times, but never seen a satisfactory explanation as to how exactly Bitcoin would threaten anyone or anything more than any other technology. After some struggle, the automotive industry is starting to embrace the electric car. The Internet is embraced by even most totalitarian regimes and corporations (for perfectly rational reasons), just like the printing press was embraced. If Bitcoin is a robust, effective, and disruptive technology, more smart people will recognize it than deny it - regardless of their ideological background.
The concern here is that it is not just disruptive, it can threaten government control of money at which point they can consider destroying it. The purpose of this discussion is to see what can be done to prevent such a thing instead of just sitting and convincing ourselves that such a thing would not happen.
As for the ease of >50% disruption (I wouldn't call it an attack) - hash rate, ASICs, etc. have nothing to do with it. Network security is simply determined by the total investment in Bitcoin mining. Assuming most miners use best available technology, and the same best technology available to a malicious entity, this malicious entity would need to invest at least that much money to claim >50% of the network. Current estimates are on the order of several tens of millions of USD. While this would disrupt validation of new payments, it would also become obvious to everyone. My coins would be perfectly safe, even if I am temporarily unable to spend them. I am not qualified to discuss counter measures, but I imagine the community could quickly set their nodes to only accept connections from known honest miners and nodes as a temporary fix.
Thanks for providing the suggestion. This can indeed be one way. What else can be done?