michaniskin

> Bitcoin is considered anti-fragile for a reason, it gets stronger as it gets attacked.

Please explain how bitcoin gets stronger when the Fed successfully deploys a 51% attack on it and either buys or puts out of business all the honest miners?

> Proof of work failing does not equal Bitcoin failing.

Ok, so what would equal bitcoin failing? Or is bitcoin just defined to be a success a priori?

> There are many methods of reaching consensus available in the toolbox

Are you saying that someone will come out with some new code that reuses the bitcoin blockchain, but has different characteristics?

If so then I would say there are already plenty of examples: bitcoin cash, zcash, etc. etc.

Are these altcoins really substitutes for bitcoin? Why should we expect your new altcoin that's banged out under duress to perform better than bitcoin cash has in terms of maintaining value? And even if it does, nothing prevents me from 51% attacking that one, too.

> There are many variations...

Sure, and there are already tons of altcoins putting those variations to the test. So far none of them are in the same universe as bitcoin. Also, every one of them that I have seen relies on economic incentives for security. Economic incentives are not a restraint for an entity that prints the world reserve currency.

> Good luck attacking a proof of stake hybrid that requires owning 50% of the supply, when the majority of the supply is already issued and is not available for sale.

If it's really true that there is no market for the majority of coins in a POS network then I would say that this is not a decentralized network anymore, and you are making a very strong claim when you assert that this coin will be able to serve the same purpose as bitcoin currently does. This coin is basically launched with a built-in 51% attack by design, locked in by the majority owners. It's really not so different from a CBDC.

On the other hand, if there is a market for coins in your POS world, the Fed will just buy them all. They can offer 10x, 100x, 1000x what anyone else will pay, it costs them nothing.

Finally, this is all kind of irrelevant to the article. The article merely lays out how the Fed could destroy bitcoin, not some imaginary future thing we might or might not be able to invent after the Fed 51%s actual bitcoin to oblivion.

I would give you 1,000,000 to 1 odds that 24 hours of no transactions on the bitcoin blockchain, nobody able to buy or sell bitcoin, would crash the price of bitcoin forever. What kind of person would pay $40k for such a thing. Anyone who did spend $40k of fiat to buy their bitcoin would then be out of luck, busted. That stings, and people remember the pain.

> After a few trillion dollar expended on failed attacks, the currency being issued will be debased enough to be noticeable by consumers, this "infinite money printed" argument is not thought through.

How long have the sound money people been making this tired argument? At least 50 years since Nixon put the final nail in the gold standard's coffin, but really even before that. Thought through or not, if you have been betting on the demise of fiat you've been on the losing side. After a long track record of being wrong, eventually you need to bring forth some compelling evidence that this time really is different, and I just don't see any.

As an aside, I like how weird the recursive quoting is between our two comments here, LOL.

How are they not winning? They have repeatedly exceeded even the most paranoid fears of people who value sound money. They are increasing the scope and magnitude of their interventions every day. They are continually eroding any checks or balances that were in effect historically. Sovereign debt is at levels that have never been experienced in the history of mankind, and they continue to bask in the glow of favorable public opinion. The average person is thankful that the Fed is here to save the economy from disaster. In America we have a treasury secretary who is literally a Fed chairman.

The fiat standard may be imploding, but the central banks are definitely winning. The Weimar hyperinflation, for example, did not destroy the Reichsbank; it empowered it. When the currency collapsed they did not replace it with sound money, they replaced it with new fiat of a different color with less zeroes on it. It's the same with all the other hyperinflations we've seen in the past century. The mantra of "this time is different" makes a pretty bold claim and requires some evidence to back it up.

Ok, assume I can make this 51% attack on bitcoin. I will then mine blocks all day, and I won't let anyone else make transactions on the blockchain.

Now consider that any investor who owns bitcoin can't sell it, because they can't get the transaction onto the blockchain. What is the market value of bitcoin? It's exactly zero.

Bitcoin is taken down. No follow-up work required.

They don't need to compete with a thing they can destroy. And they can destroy bitcoin with a 51% attack that is funded by their ability to print as much fiat as it takes.

> How long can the fed fight a few hundred million (soon to be few billion) people?

The same way sovereigns have since the dawn of time--divide and conquer. In the 20th century they discovered the secret, international socialism.

Give millions of people stimmys and enhanced unemployment checks. Destroy the savings of responsible, productive people so they can't afford to take risks without the promise of government bailouts. Make the people dependent on the state in every way.

Deficit spending and the money printer is the only way to fund all of these social programs the people are addicted to. Do you really believe that these millions of people hate the central banks who fund the welfare state?

They are winning. Their power increases every day, and it never decreases. They are ruthless, and I think it's reasonable to expect that they will not think twice about nuking bitcoin from orbit with a 51% attack, and print as many billions as they need to succeed.

Running a 51% attack is not rocket science. It doesn't involve inventing anything new. When they can print the money to fund it it doesn't even require a business plan. All they need to do is buy up enough hash power and they win. Come on now, if there's anything we can learn from 2020, it's that the Fed is extremely efficient at printing money to buy things to shore up their fiat monetary regime.

> funding is not an issue for projects that solve the issues Bitcoin does

Funding is far less of an issue for an attacker who has a printing press, and it's the relative level of funding that matters. In order to defend against a 51% attack the defender must be able to spend more resources than the attacker. It's the "who can afford to lose more money game", where one side can just print as much money as they need while the other side has to earn every dollar. Are you really betting on the workin' man here? I wouldn't.

> attacking any single network does nothing to limit that demand

Demonstrating that they can afford a 51% attack on any blockchain they want to attack will affect the price of all crypto. Investors will need to discount that risk. This will surely affect demand.

> The idea that a centralized closed network that's severely hampered by operating restrictions can beat a well designed adaptable open network in the long run is a joke.

Nobody is claiming that the Fed's intention is to compete with bitcoin. They only need to attack it and destroy it. Remember, they want people to be stuck using their fiat currency, they don't want to make a competing type of sound money.

> That is irrelevant because the main point is, the attack will be unsuccessful.

Is your claim here that the Fed cannot afford to buy the 51% attack? Keep in mind that they printed about 6 trillion dollars last year.

If the Fed can buy a 51% attack then they will be successful. They will demonstrate beyond a doubt that an entity with the power to print fiat can always take down a decentralized, permissionless network by exploiting those very features.

Also consider that the price of crypto is determined by people's expectations of future price; since it pays no dividends the only way to make a return is to sell it or rent it out. What effect do you think this "perpetually moving and atomizing target" would have on investors? How would a rational investor price this completely unpredictable asset? Clearly there would be a discount for risk, like a shitcoin.

Oh, I think i didn't understand your comment, sorry. In the scenario laid out by the article the Fed runs the same software as any other miner, they simply ignore transactions that are not depositing bitcoin into their wallet, they refuse to record those transactions in the blocks they mine.

This is completely compatible with the bitcoin network, any miner can do that today without forking the chain. However, if the Fed had say 85% of all hash power it would be extremely expensive for any other miner to mine a block, so the Fed would gain complete control over the network over time.

The Fed is (nominally at least) a private institution. They are not hobbled by government bureaucracy. Just look at all the things they did in 2020 that everyone would have imagined would have been impossible. All they need is the green light to do it, and the Fed can swoop in ninja style and get stuff done, as they do. There is no oversight, there are no constraints.

This "perpetually moving target" will need funding to operate. The Fed will always be able to afford to lose more money than the private sectors can afford to lose. Remember that the government doesn't need infinite resources, they just need more resources than the private sector can muster.

This is something the Fed does all the time, this is exactly how they distort the economy to set interest rates and bond yields. They have been 51% attacking the bond markets for decades, and all the bond shorts who thought "they can't possibly keep printing at this rate" lost their shirts.

OK, now you're talking about inventing a new altcoin that introduces censorship, governance, and control. This has already been done a number of times, and they all failed.

Bitcoin is the ultimate fiat in that it's not backed by anything tangible. The bitcoiners will say that the intrinsic value of bitcoin lies in the value the network provides, eg. facilitating uncensorable, permissionless transfers across borders. It is definitely not a given that a new coin without this utility will be a success. I'd bet against it given the history of altcoins that have attempted to do it.

What prevents the Fed from operating as many nodes as they need to overrule the "honest" node operators?

But that's just turtles all the way down. The Fed can mine that forked chain even more easily than the original one.

When one actor has a money printer they can use the permissionless, decentralized nature of the bitcoin network as a weapon. It's a vulnerability they can exploit.

Exactly. Also the carrot is far more effective and palatable to citizens than the stick. The US government could deploy the attack described in the article under the guise of a stimulus program, with their hands completely clean. No legislation required, the Fed would just need to print a little fiat from the money printer and everyone is happy.

The government is happy because their fiat monetary system is secure from any threat crypto poses, bitcoiners are happy because the Fed buys their bitcoin for fiat at a good rate, the miners are happy because they got to sell their assets to the Fed for a sweet pile of fiat.

The only people crying is the middle class who bears the burden of all this currency debasement. I think we have more empirical data than we'd ever need to predict that nobody who matters politically cares about the tears of the middle class.

The point TFA is making is that the US government can force holders of bitcoin to sell their bitcoins to the government. And, importantly, they can do it via the Fed (which is nominally a private institution), thereby avoiding any politically messy legislation.

The Fed can do this by launching their own bitcoin exchange and then dominating the mining of blocks on the blockchain (AKA a 51% attack). They can then prevent any other miners from being able to mine blocks, and they can configure their own miners to only accept transactions which are depositing bitcoin into the own exchange's wallet.

At this point nobody can sell bitcoin to anyone other than the Fed's exchange, at any price, because the transaction will not be recorded in the blockchain. The Fed can now set the exchange rate to whatever they want, and they can pay for the bitcoin they exchange with whatever instrument they want. They can run the money printer to buy your bitcoin with USD, they can make you accept US treasuries at a certain price, whatever makes the most sense for their balance sheet. Your alternative is to HODL and never be able to sell your coins.

Miners would not be "colluding", they would be given the choice to sell their business to the Fed and walk away with a nice bundle of money printer fiat, or try to keep mining at a loss until the Fed runs out of money. The Fed cannot run out of money because they just print it out of thin air. Any rational miner would sell their hash power to the Fed. Irrational miners will simply run out of capital and go bankrupt, and the Fed would then buy up their assets and have their hash power anyway.

A 51% attack is not just cheap, it's FREE when you have a money printer in your basement. This is the point that is hard for people to wrap their heads around. I find this ironic given the philosophical revolutionary hard money stance many bitcoiners have, yet they can't really comprehend that the Fed can buy literally anything it wants, including hash power.

To put it another way, consider that the Fed prints money to rig the entire treasury bond market and fix interest rates. Buying up 80% of the mining companies and ASICs in the world is not even a rounding error in comparison.

A 51% is not only useful for double spending, it can also be used for un-spending. The Fed would use their hash power advantage to roll back transactions they don't like (this would be any transaction that didn't originate in their own crypto exchange). This puts all the non-Fed miners out of business.

The icing on the cake is that the Fed can use its 51% attack to force Americans owning BTC to sell to them (as they won't be able to sell a bitcoin to anyone else at any price). This ensures that all that money they print goes right back into the US economy, it's just effectively an asset swap like quantitative easing. They can easily sell this to congress for its economic stimulus value.

Did you RTFA? It's like 20 lines of text, that's exactly what it explains. Any entity with the ability to print money can simply buy a dominating share of the hash power and force all the honest miners to either sell out to them or go out of business.

the network is only global and decentralized to the extent that the miners operate with a profit motive. The government that prints the world's reserve currency can afford to print more money than honest miners can afford to lose. Game over.

Simple:

1. Destroying bitcoin as a free market network would put the final nail in the coffin of crypto as an alternative to fiat.

2. They would have no obligation to buy bitcoin from anyone they don't like.

3. They can funnel a lot of wealth to the elites who own the lion's share of the bitcoin.

4. They're just printing the money. The cost to the government is zero. In fact, a 51% attack is probably cheaper than the bureaucracy required for a complex legislative effort and worldwide enforcement. Not that cheaper has any sensible meaning when you have a money printer in your basement, LOL.

5. This involves no messy legislation, no courts, at most a special purpose vehicle or two. The Fed can take it from there with their own "private" resources.

6. The bitcoin network has no legal protection against a 51% attack like this, there is no legal obligation for a miner to process any particular transaction they don't like.

Yes, you’re right about the show of hands. This is why the preservation of individual liberty is such a fundamental part of living in a just society.

If people want to isolate or be locked down they are free to do so, but one person’s fear is not a just claim on another person’s life or property. Locking other people in their homes because you’re afraid is immoral.

> Tulsa has run out of ICU beds.

So now we're in agreement. The sky is not falling, and Tulsa may have a local logistical challenge. Nothing to see here.

> Because they know their patients will die if they don't perform.

It's presumptuous to speak to what others know. All I know is that they weighed the alternatives for themselves and chose to willingly go to work instead of doing all the other things that they could have done instead.

> Its easy to build a training program when you have a $700 Billion/year budget.

Are you arguing that only a $700B/yr organization can train people to do the simple tasks that a soldier learns to do? The field manuals and training materials are all available, you can look and see for yourself that there is no secret super 700 billion dollar teaching method being used. As important as they are, these skills are not uniquely difficult to teach nor to learn. (Nevermind the fact that last year the federal government spent over a trillion dollars on healthcare, and the private sector spent even more than that, so if there is some special budgetary threshold that must be passed before workers can be effectively trained, I think we passed it a long time ago.)

> Americans won't accept raising their taxes to pay for such a thing.

Right, because we don't just assume that the solution to every problem must come from the government. There is absolutely nothing preventing hospitals from training new workers to change bedpans and insert catheters via on the job training. Well, nothing except for all the government regulations, but as they say "nobody gets a speeding ticket at the indy 500". They could do it and it would be fine.

> COVID19's job is closer to shoving catheters into people while you put them under a ventilator, setting up IV drips, etc. etc.

OK, so how many years of training is required to learn how to insert catheters and IVs and all that? The army demonstrates that anyone can learn these skills in a few days. I'm sorry, but it's just not some kind of unique magical skill set that only special people can learn.

> I'm not sure if you realize how dire the situation is right now.

I'm not sure if you do. There is no crisis, hospitals are not near capacity, there are plenty of empty beds. (Oklahoma, for example, is at 66% capacity, nothing to get hysterical about.) There is no huge difference in hospital bed utilization between today, last week, last month. Remember that giant hospital ship? The one that sat empty in NY harbor and then quietly left without treating a single patient? Excuse me for being desensitized to chicken little's alarming news.

> Nurses who test positive for COVID19 are being kept on the job because there's literally too many patients and not enough nurses.

Nobody is being "kept on the job". Nobody is being forced to work. Those nurses are volunteering to stay on the job.

Sorry, perhaps I digressed. To get back to the point:

> If a nurse quits on their job, then their patients die.

This is obviously not true, people are not dropping like flies whenever a nurse in America takes a vacation or calls in sick.

Are you seriously claiming that there is a national shortage of people who can be trained to empty bedpans, setup IVs, draw blood, and take temperatures? At any price?

If wages go up, more labor will be available, and there is no shortage.

The army needs propaganda to recruit people because it's not just a job. Soldiers don't have the right to quit if they don't like the working conditions. But many people actually sign up (or re-up) for the money, to pay off student loans, etc.

If more workers are needed to care for covid patients then the wages will rise, and more workers will switch from other jobs to perform this work. Training people to empty bedpans, draw blood, monitor diagnostic equipment, and so on is not any more complex than what people learn in a code bootcamp, and code bootcamps are doing fine.

Nursing isn't some kind of uniquely difficult occupation. If a pilot can learn to fly helicopters commercially in a year then I would propose that we can train people to do this, too.

You edited your post, so I'll reply separately to the added content here.

The difference between the military and the healthcare system is that soldiers can't quit, but healthcare workers can.

Every single healthcare worker in America is working at that job because they prefer that job to all other alternative jobs available to them. This is trivially true because if they preferred another job they could quit and take that job.

Of course, we all have stress, and nobody likes their job, and everyone gripes and complains, and everyone's bosses are slave drivers, and everyone's customers are demanding. That's why it's a job and not a hobby.

I stand by my argument that most of the work of monitoring and caring for covid patients can be performed adequately by semi-skilled workers.

I think US healthcare spending dwarfs the defense budget by an order of magnitude. Not sure what point you're trying to make there.