It probably cost a few billion dollars to build all those banks globally. It costs a few hundred million to maintain all those banks and vaults. However, these banks and vaults can handle more than 2000x the transactions of Bitcoin in a single day (Visa on its own is 750x the capacity of Bitcoin, and Mastercard handles about twice the number of transactions as Visa), so Bitcoin would need to be at least 1/2000th the…
Fort Knox has an entire military base to secure it. That alone would use up a good chunk of your few hundred million dollar budget. I think you are vastly underestimating the cost in supporting our current financial system.
> Fort Knox has an entire military base to secure it
Fort Knox has basically nothing to do with the modern U.S. dollar financial system.
Bitcoin hasn't been useful as a currency for a long time. I don't think that's a good measure for determining how an event might affect bitcoin price.
speak for yourself, only thing I cant pay is my mortgage. I have a shift card, bought tacobell with bitcoin.
Shift isn't sustainable in it's current form. They are temporarily not charging for domestic transactions. Since there is a cost for those transactions, there will eventually be a fee per transaction.
What about state level actors, say the NSA, that consider bitcoin supplanting the US dollar as the standard medium of international currency exchange a huge threat to the world economy? (or at least their ability to control it) I think people need to be concerned that Governments, at any point of time, with their incomprehensibly huge computation power, can use it to crush bitcoin. Not only that but they can pass law…
You are not wrong to argue that state level actors are a serious threat. But fortunately, these state actors seem to have no interest in attacking crypto. It seems like the governments that matters IE the 1st world, are perfectly happy to allow people to have access to a censorship resistant method of financial transactions. This makes a certain amount of sense. The governments of the 1st world claim to care a lot ab…
Or you know, they love the idea of an immutable record that’s far from anonymous. Cash is hard to trace, a Bitcoin is easy to trace for something like the NSA. It’s a giant digital paper trail by design! Besides, Bitcoin is as likely to become a dominant currency as shells or promises. No one outside or BTC fanatics honestly entertain that idea, and only a few who do espouse it do so because they really think it’s likely. For obvious reasons hyping the currency translates directly into profit, so it’s hype all the way down.
> bitcoin supplanting the US dollar To the extent there is a legitimate threat to dollar supremacy, it is in the Chinese renminbi. The U.S. dollar is ascendant because of the huge base of American consumers, who buy stuff with dollars others then need to find investment for. Plain and simple network effects.
The RMB is not even fully convertible, it is the opposite of liquid. The US dollar is useful to countries like china is because the US government acts as a debtor of last resort, allowing them to park surpluses in treasuries.
> The US dollar is useful to countries like china is because the US government acts as a debtor of last resort
Which ultimately derives from our mammoth consumption. If Chinese consumption eclipses America's and their economy rebalances, they will have lots of Chinese consumers buying goods with renmimbi, leaving sellers offshore with boatloads of the currency to find investments for. (I consider this to be a moderate risk, and not one which would supplant the U.S. dollar but instead cause it to share the world stage.)
TL; DR Bitcoin is not a serious threat to the U.S. dollar. It promises huge profits to banks, which is why they're salivating over it.
I think you're misunderstanding the meaning behind a 51% attack? An honest network participant will accept the chain with the largest accumulated proof of work. This is necessary to resolve forks of the chain, which are a natural occurrence. A 51% attack means that the attacker can create a chain with more work than the rest of the network. The idea that you can say "we require 60%" makes no sense by itself - you hav…
You're only describing how it works with Bitcoin and other coins that are forked (git-forked) from it. Some blockchains require a higher amount of consensus to fork (blockchain fork).
Could you point to a PoW based cryptocurrency that isn't vulnerable to a 51% attack?
When Bitcoin was running up to $20,000, I tried to analyze the system and come to a personal conclusion about its equilibrium value, because I didn't want to miss out if it really was the currency of the future. I ended up not investing, because of the possibility of a double-spend attack. I think that cryptocurrency enthusiasts are seriously underestimating the importance of double-spending attacks to the economics…
Those are some really great and interesting points. However, I think there is a resource you didn't mention that combats such attacks: time. If I'm a vendor, e.g. I pay cash for bitcoin, then I can tune the amount of time the transaction is held in limbo or escrow based on the vulnerability of the network. For instance, I can decide not to finalize the transaction until I see a chain with 12 new blocks added after th…