Do we really need to run a power station just for Bitcoin?

Re:Do we really need to run a power station just for Bitcoin? by Retric on Tuesday November 19, 2013 @12:20PM (#6762652)

The fundamental problem with bit-coin is anyone willing to pay for twice the current mining costs can double spend and destroy the currency. As such there is no way even 100 billion in mining can protect 10 trillion in value. QED: the long term viability of bit-coin as a cheap world wide currency is impossible.

Anyway, the secret service and possibly the FBI one run anti counterfeiting operations so it's slightly higher than that. Beyond that, I think there is a fair amount of diplomatic operations that support the USD but it's still far far cheaper to run relative to value than bit-coin right now.

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Re:Do we really need to run a power station just for Bitcoin? by rfugger on Tuesday November 19, 2013 @12:39PM (#6762811)

A 51% attack only gives you the ability to double-spend coins you already control. It doesn't give you the ability to crack the private keys of others. So there is no straightforward economic incentive for a 51% attack unless you own a huge amount of Bitcoin, and thus would be hurting yourself.

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Re:Do we really need to run a power station just for Bitcoin? by Retric on Tuesday November 19, 2013 @05:18PM (#6764911)

You can double spend with wallets you own so 1BTC > 2BTC > 4BTC ... any number you want fairly quickly.

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Re:Do we really need to run a power station just for Bitcoin? by dllthomas on Tuesday November 19, 2013 @06:23PM (#6765247)

I think this is false. Double spending doesn't create coins, it screws someone who accepted a coin. My understanding of the 51% attack is that you can basically reliably snip the end from the block chain. That doesn't let you put arbitrary things into it.

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Re:Do we really need to run a power station just for Bitcoin? by Anderkent on Tuesday November 19, 2013 @12:42PM (#6762852)

But it'd be difficult to keep such an attack secret, and the value of bitcoin would zero pretty much immediately.

So the only way to make money on this attack would be to short a very significant amount of bitcoin. I don't know it that would be illegal - does it count as insider trading if you cause the value change?

So the mining costs do not have to cover the entire value of all bitcoins. They only have to be large enough to discourage political attacks, and large enough that a bet to short twice the mining costs worth of bitcoins would be noticeable.

Still, it's an interesting point that I haven't seen raised before.

EDIT: woops, other siblings of this posts are right. The protocol validates all chains before accepting the longest one as true, so you can't print or steal bitcoins even with 51%

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Re:Do we really need to run a power station just for Bitcoin? by icebraining on Tuesday November 19, 2013 @12:41PM (#6762835)

You seem to be assuming that while USD has human protections, the only thing protecting BTC is the chain. But if someone were to actually destroy 10 trillion USD, there would be social consequences as well; it's not like people would just accept it quietly.

More importantly, what gains would the attacker get to compensate an expenditure of such big amounts of money?

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