If 51% of US politicians all decided the value of the US dollar should become 0, then it would be so... and yet it is still a representative democracy which is a decentralized form of governance.
This is unlikely to happen, because it would be to no ones advantage. Even if they did most of the public would likely just ignore the decision.
It will cost something like $1m/hour to attack Bitcoin, but to even do that you would already need to actually convince 51% of miners to light their profits on fire for no reason.
Even under a very expensive and sustained attack the users of Bitcoin that wish it to have value would simply distribute a blocklist for the compromised nodes and carry on with the 49% that wish for the network to continue as well.
The interesting thing here is that Bitcoin isn't set in stone to forever exist exactly as it does today — it depends on the majority of miners not modifying the protocol. I'm talking about what's essentially a 51% attack, but rather than it being performed by a malicious party, what if a technical/political decision with very strong opinions on both sides had to be made? It would be like a democracy where those with the most computing power win.
But the same attack is available on other forms of currency.
Take gold, for instance. If a majority of the people who find gold to be valuable were to agree that they should value Palladium instead and stop using gold, then gold would drop in value and palladium would take over. The people who own palladium could even go around to the gold users and bribe them with some palladium to get them to go along.
Now, there is one important difference between my "gold" example and bitcoins. With bitcoin, there are two populations: the users of bitcoin and the subset of those who are miners. For a change to bitcoin, only miners need to agree -- but that's not as much of a limitation as it seems. For instance, if all the miners formed a secret cabal and agreed to blacklist all existing bitcoins and value only FUTURE mined bitcoins, then what would REALLY happen is that someone else would step in and start mining without that policy, forming a fork in the blockchain. The entire community would wind up deciding which fork to follow. So really, what you need is a strong enough majority of the miners (and those qualified to set up as miners if they wanted to) to ensure that there is no blockchain fork. This is not all that different from my "all users of gold" example.
I doubt any single party owns enough compute to perform 51% attack on Bitcoin. Not now, maybe in the future if bitcoin's popularity significantly dies, they can do that.
Yes. A 51% attack is a popular whipping boy. It's not as dangerous as it seems.
The price would tank, for sure. But your money won't be gone. And eventually when the attack dies down you'll get your wealth back.
However, it remains a very interesting way for governments to completely destroy Bitcoin. It's the only way, and they have to do it now before centralized, dedicated mining facilities come online. It would disrupt the price enough and scare away enough people that the threat BTC poses will vanish, at least for awhile. And that will discourage miners from setting up facilities, such that the governments can just beat them again if they have to.
But it's already almost impossible.
The difference is intent. It's not really much of a problem for a miner to have >51% share. They're there to make money. And Satoshi pointed out they'll probably just keep mining rather than devaluing their own wealth.
But an organized, worldwide governmental campaign against cryptos would be another matter.
You can do a 51% attack while owning zero Bitcoin. You will mine some in the process, but well under 1/5,000 of total coins.
Worldwide there are several hundred people that could afford to do this for the lulz, plus basically every government. Now, I don't think the odds are very high it's going to happen, but they are vastly higher than the odds USD's or Gold is going to become worthless.
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%
Large cryptocurrency networks like Bitcoin are extremely hard to execute a 51% attack upon due to their size. Though ultimately there's no perfect solution. As the saying goes, democracy is 2 wolves and 1 sheep deciding on what's for dinner.
Yea if you want to spend millions if not billions to 51% attack it and the public nature of bitcoin is such that everyone would know who attacked it leaving them legally liable then be my guest. There is more incentive not to attack it than there is to attack it. when will people realize this.
If a party could control the irregular tide of Bitcoin’s value rising and crashing, then it holds a means to stimulate or impoverish whatever economies rely on Bitcoin. This could be particularly attractive for parties who want to avoid formally declaring sanctions or for situations where sanctions might not be effective.
I would see a 51% attack as a nuclear option, since it could take a while for cryptocurrency users to once again believe that the network is secure, but you could imagine a situation where there is geopolitical conflict with a country, the people in that country adopt a cryptocurrency due to fiat currency collapse, and then it becomes useful to induce a cryptocurrency collapse as well.
Edit: oops, might have added this comment in the wrong place.
But the 51% attack would cost more than the value of the Bitcoin you could get by doing it, which is presumably ~0 since the only node is a museum computer.
The issue with saying how much a 51% attack "costs" is that ALL cryptocurrencies (and, really, ANY currency) is just based on the trust that the currency has "value", meaning that it would be accepted as payment for real goods and services.
A 51% attack on bitcoin would be easily noticeable. If a 51% attack was really "viable", it means that essentially bitcoin would have $0 value, because all of its value is based on the trust that the blockchain is real and verified. The community at large would essentially just ignore the rogue chain, or rather probably boost other existing resources to back it out.
Yes, that's the whole point, 51% percent of the network would never have an incentive to do that.
If they did, it would destroy the value of the currency. Self-destruction with no benefit. If people lost trust in BTC there are competing crypto-currencies/state currencies. Destroying liquidity.
51% attacks don't allow you to mine arbitrary amounts of Bitcoin. At worst they could DoS the Bitcoin network and double-spend their funds, but the recipients (their own citizens? other governments?) would find out and be pissed.
There will never be a solution to "the 51% attack" for any kind of decentralized system. No blockchain will solve that particular issue. The conjecture Bitcoin has formulated is that there is no monetary incentive to perform the attack, and if the threat model involves state level adversaries nothing is particular safe. So far, it has been demonstrated that it holds true.
When I think of political control and Bitcoin I think of people who have the power to build a consensus for a hard fork. It wouldn't really make sense for someone controlling 51% of the network to hack the network. Then all their bitcoins would be useless because everyone else would abandon the network.
I've made this comment here before, but the possibility of this happening concerns me. The 51% attack is a known potential issue of Bitcoin, but the more subtle problem is that Bitcoin is essentially a sort of democracy where voting power is proportional to computing power. The miners collectively have the power to change the way Bitcoin works, and it's up to them to not abuse that power (although Bitcoin would quickly drop in value if that power was abused).
This matters for decisions like blacklisting stolen Bitcoins, because it causes deflationary pressure, making all future Bitcoins mined more valuable. Note that about half of all Bitcoins are yet to be mined, and they will all start out in the wallets of miners.
also worst damage such a government could do would be to double-spend some coins. That is if the 51% is somehow undetected and that the rest of the bitcoin community doesn't fork the chain upon detecting such an attack.
One way to destroy Bitcoin would be to convince governments to launch a 51% attack against it.
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.
Is this really accurate? So 51% attack on bitcoin is around 100btc? Given the advantage of such an attack, won't more users want to do it? Also, won't nation states easily come in on this and attack the integrity of these coins?
This is unlikely to happen, because it would be to no ones advantage. Even if they did most of the public would likely just ignore the decision.
https://www.crypto51.app/ covers this question in regards to cryptoassets.
It will cost something like $1m/hour to attack Bitcoin, but to even do that you would already need to actually convince 51% of miners to light their profits on fire for no reason.
Even under a very expensive and sustained attack the users of Bitcoin that wish it to have value would simply distribute a blocklist for the compromised nodes and carry on with the 49% that wish for the network to continue as well.
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