Exactly.
One critical, related vulnerability that I haven't seen people discuss:
Right now, every new block gives miners about (12.5 new BTC + 3.5 BTC in fees) * $15,000 = $240,000
So miners are making a quarter million every ten minutes.
That incentivizes massive capital expenditure on mining hardware and massive electricity burn.
If the price drops significantly -- or Lightning Network etc solve the scale challenges, and transaction fees come down -- or in June 2020, when the block reward halves -- any combination of those may lead to a future where it's uneconomical to mine again, except in places where electricity is unnaturally cheap.
When that happens, tons of mining equipment will fall idle. The network difficulty will adjust down, and in the immediate term Bitcoin will continue as normal.
But now there's a big pool of latent hardware left over from the bubble, which can be activated at any time.
This may break assumptions about the cost of attack. If, say, a Chinese mining group owns tons of hardware that is no longer economical to operate continuously, there's nothing stopping them from shorting BTC and then doing a "spawn camp" repeated 51% attack.
(If you already own enough hardware, then such attacks are pretty cheap--you only have to burn tons of electricity a few times, for a few minutes each time.)
Two new developments:
- Vast investment in mining hardware due to the bubble.
- Liquid BTC markets, including futures and shorting.
Say that the world's miners accumulate so much hardware that it costs $1m / hour in electricity to run it all. At current prices, they'd still be making a profit! But if that changes, datacenters in China will go dark, BTC difficulty will go down, lots of hardware will sit unused.
So if one group ever finds itself sitting on a ton of no-longer-profitable mining hardware, they could take a large short position and then attack the network.
Betcha that kid totally would think it's worth it, tho... Arriving to school in a monster truck would be a dream come true. :)
(Not that I disagree with your point...)
The moment the transaction fees and block rewards go down, the very expensive Prof of Work mechanism will weaken and future transactions are unprotected.
Proof of Stake can offer the same protection mechanism without needing to finance a huge value destruction operation.
And to those saying that the electricity is not wasted because it protects the block chain: If a mechanism exists that works without throwing away electricity, then that's definitely wasted.
It's like saying my monster truck doesn't waste gas because it carries a child to school.