A better approach by any government could be to declare it as illegal (just like drugs). By doing so, they can't eliminate it, but just curtail demand.
(edit: A win if the goal was to ban cryptocurrencies.)
Exchanges are a de facto part of every cryptocurrency protocol, you cannot avoid exposure to their downside risk even if you never put a single coin on any of them.
http://www.zerohedge.com/news/2017-12-08/bulgaria-government...
It's in the government's interest to lop off the head of its biggest existential threat.
Also, Satoshi presumably passed his coins to his heirs. Who controls 6% of all wealth? I wonder.
Governments will need to become active miners to destroy it. And unlike miners, they won't care whether they can mine faster than everybody else. Their objective is to ruin BTC.
All the miners do is accept transactions into a block. We don't trust any given machine to validate that there were no double-spends. For that, each client would have to check the entire history before accepting payment. So, how would mining the blocks cause double spending to take place?
Don't bitcoin miners have to SIGN their blocks? If so, then broadcasting two different histories would quickly be discovered.
I guess the only thing they can do is make a bitcoin fork, something that is possible anyway, by enough miners agreeing.
Perhaps they can alternate the two forks length growth, making the clients thrash and re download the two forks over and over.
Basically, the longest chain is considered correct. And it has to work that way. It's why BTC is sybil-resistant.
So the attack is to get >51% of the hash power together, then mine in secret, creating a perfectly valid longer chain with a different tx history.
Publish it, and watch the world burn.
you're asking the wrong question. mainly because bitcoin mining is done with ASICs and not general purpose computers. I would be surprised if the bitcoin network hashrate isn't higher than all the general purpose computing power in the world combined (converted to double SHA256 hash rate).
An organized, worldwide campaign against BTC, complete with double-spends, would flatten the price.
I wonder if it's still feasible? Eventually it will be too hard to mine, but perhaps not yet.
A benefit of this attack is that once executed, other miners will switch away from BTC. Meaning BTC won't be able to spring up again: no one will be able to get more than the ~90% hash rate the government controls.