Not true. A malicious 50% miner can cancel any transaction it wants, not just fix doublespend. Assuming the transaction was sufficiently recent (the more hash power they have the more such a transaction can be in the past).

So they can "unspend" their own bitcoins, as follows : use 51% of your hash power to create a parallel blockchain, which is not published. Include all transactions, except the one you used to buy a TV. Put something else in it's place. Keep doing this until the TV is shipped/arrived. Then publish the parallel blockchain. Boom. Unspent.

Parent's point is that if BitFury did that, then nobody would trust Bitcoin anymore, thus crashing the price.

If BitFury resolved a single doublespend transaction differently from the "main" blockchain, people would(/should) realize that it now has the power to cancel transactions, and stop trusting bitcoin ASAP. At that point you can no longer trust the blockchain, since you can no longer know you're looking at the "true" blockchain, and not a fake one that has been presented to you to make you do something (e.g. pay someone real money).

In any reasonable person's version of "wait X blocks for confirmation" (currently mostly 3), X would be infinite.

>Parent's point is that if BitFury did that, then nobody would trust Bitcoin anymore, thus crashing the price.

If they make good money from it, why would BitFury care about bitcoin's long-term outlook?

they make money by mining bitcoin, if the value drops then their return, even if they sell all BTC immediately, would be affected. They just spent $100m on a new mining facility so to trash bitcoin would be to write off that investment. They cannot make good money by screwing over bitcoin without screwing themselves over.

Best case scenario is that at the end of the effective life of this DC BitFury decide to doublespend their coins to allow them to spend all bitcoins once, however by that time their relative % of the network will be less than 50%.

>They cannot make good money by screwing over bitcoin without screwing themselves over.

Why not? Surely this is more a lack of imagination on your part, rather than a hard fact?

Observation is that pretty much nothing crashes the price of Bitcoin.

* During the transaction spam DDOS attacks, the price went up even though it was literally unusable.

* The present price seems sustained by something that looks very Willybotish running between OKCoin and Huobi. https://www.reddit.com/r/Buttcoin/comments/3vnjgk/what_drive...

The remaining American Bitcoin traders are certainly gullible enough to keep buying and trading a 51%-compromised coin. (I mean, there are people who still think Paycoin could make a comeback.) But American traders are a sideshow - all the action is in China (miners, actual traders). So the question would be: will Chinese speculators keep gambling on a 51%-compromised coin?

(And of course the MMM ponzi buyers, whose judgement is sufficiently bad that they wouldn't even understand the problem.)

maybe people will trust bitcoin more if you put the right spin on it (bitcoin is now regulator-approved, etc.).

The attack you just described is semantically identical to a "double spend".

It's not necessarily 'irrational'. A 51% miner could profit from Bitcoin's downfall, or by threatening others, or even by bluffing an attack. See, e.g., the Goldfinger Attack in https://www.cs.princeton.edu/~kroll/papers/weis13_bitcoin.pd....

Stupid question: if control of 50% of the hash power is so unimportant, why does Bitcoin rely on hash power anyway? Why not simply have a consensus system without proof-of-anything?

If you remove proof-of-work, then the question then becomes: what else do you measure consensus by? A few other crypto currencies have tried other metrics but they all aim to for the same thing: removing the need for human trust.

Well, consensus between whom? How would you do distributed, anyone can participate at any time, byzantine consensus but still prevent Sybil attacks?

I think the reason is because then there would be no way for new coins to be mined and given to those who are rewarded for ensuring the security of the network.

>The only special power of a 50% miner is to consistently resolve double-spend attempts in its favor.

No, this post, and the handy table inside, explains the various attacks possible at different percentages of the hash rate:

http://hackingdistributed.com/2014/06/16/how-a-mining-monopo...

Short first hope the exchanges don't fold and run it into the ground with double spends. Alternatively just attack it because you feel scared about it but I do t believe anyone in power is since it is not going anywhere