A systematic critique of Bitcoin's value proposition

Post by ghiculescu » Wed, Apr 12, 2023, 7:04 PM UTC

dllthomas wrote: post #28

ghiculescu wrote: post #11

> In private discussions I have heard three counter-arguments, none of which I accept I think this article skips the most compelling (to me) counter argument. If there’s a 51% attack, the currency loses all value. Nobody will want to trade Bitcoin or use it as a currency once this attack is exploited. So a 51% attacker is disincentivized to perform said attack because doing so would make the prize lose its value. Now…

A 51% doesn't get you coins, it lets you spend coins twice. Imagine: 1) borrow a bunch of BTC, 2) use it to buy stuff you want, 3) 51% attack to fork the chain and reverse your spend, 4) pay back the borrowed BTC What does it matter if the price of BTC falls through the floor afterward? Of course depending on what you buy, what your lender knows and cares about, and more, you might still face repercussions that make…

Post by robcohen » Wed, Apr 12, 2023, 7:07 PM UTC

JumpCrisscross wrote: post #25

thesausageking wrote: post #18

> it means that bitcoin is ultimately not, as is often claimed, protected by mathematics or physics or even economics, but rather by the social cohesion, cooperation, and (dare I say it?) trustworthiness of the mining community This isn't a dig. Bitcoin's value does come from the community and authority of the chain. If it were just math, you could fork Bitcoin and have a competing currency that had the exact same co…

> Bitcoin's value does come from the community and authority of the chain Agree it isn’t a dig. But it’s a refutation of a common argument in favour of crypto, namely, that it’s protected by math, not custom.

Post by ddtaylor » Wed, Apr 12, 2023, 7:08 PM UTC

JumpCrisscross wrote: post #13

wyager wrote: post #10

Earlier quoted context omitted.

> commandeering a cloud or two would do. No; The ASICs are orders of magnitude faster and more efficient per dollar. Every GPU on earth couldn't touch the bitcoin hashrate.

> ASICs are orders of magnitude faster and more efficient per dollar Every supercomputer in either the U.S. or China plus its cloud resources would be able to mount a 51% attack. And this isn’t counting e.g. the NSA or GCHQ’s supercomputers, which are optimised for code cracking.

Post by TheBlight » Wed, Apr 12, 2023, 7:08 PM UTC

JumpCrisscross wrote: post #25

thesausageking wrote: post #18

> it means that bitcoin is ultimately not, as is often claimed, protected by mathematics or physics or even economics, but rather by the social cohesion, cooperation, and (dare I say it?) trustworthiness of the mining community This isn't a dig. Bitcoin's value does come from the community and authority of the chain. If it were just math, you could fork Bitcoin and have a competing currency that had the exact same co…

> Bitcoin's value does come from the community and authority of the chain Agree it isn’t a dig. But it’s a refutation of a common argument in favour of crypto, namely, that it’s protected by math, not custom.

Post by humanizersequel » Wed, Apr 12, 2023, 7:09 PM UTC

JumpCrisscross wrote: post #19

paulgb wrote: post #17

Earlier quoted context omitted.

You're right that the article doesn't address that counter-argument, but the suggested means of profiting from the attack is immune from it: > A successful 51% attack, indeed even a credible threat of such an attack succeeding, would almost certainly sow fear and uncertainty in a wide range of public markets. An attacker could leverage this because they would have a certain amount of control over when news of the att…

> take a short position on a portfolio of financial stocks before launching the attack This is subject to detection and reversal. FX, credit and rates, on the other hand, could be massively exploited in a risk-on trade.