| HN Mirror

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.

mikeblackson 1779 days ago

Regardless of how much money can be printed, no government has enough resources to attack a perpetually moving and atomizing target.

As long as governments debase the currency to carry out this attack, they are also continuously creating more reasons for variations of Bitcoin to exist.

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.

All these coins are funded by the people that adopt them, funding is not an issue for projects that solve the issues Bitcoin does. These projects exist because there is demand for the solutions they offer, attacking any single network does nothing to limit that demand.

I disagree with the 2nd part too, the idea that the Fed does anything tech related with a higher level of competency than the private sector has not been proven to me.

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.

michaniskin 1778 days ago

> 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.

They are competing with Bitcoin whether they like it or not. CBDCs are a result of Bitcoin applying pressure to central banks. As long as the money offered by central banks is censorable and heavily debased, they will be in this battle.

And no, they can't destroy something that can be forked and updated an infinite number of times. Not sure why you don't understand that its trivially easy to copy Bitcoin and build an alt. As long as that is the case, Bitcoin cannot be defeated.

If the current POW mechanism is repeatedly attacked and defeated it will adapt or projects will move to another consensus method. This is an arms race that CBs cannot win and they will burn a lot of money in process of losing, which is a beautiful thing.

Realize a successful 51% attack is just the beginning of the war, not the end of it.

*All the arguments you put forth so far are defeated by this simple flip of a consensus mechanism switch.

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.

That is irrelevant because the main point is, the attack will be unsuccessful. People will pay a premium for a coin/payment network that defeated the Fed and proved its censorship resistance.

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

In the war of attrition, this small group of people with incentives that are not aligned with the majority of the humans on this planet will lose, it's just a matter of time.

I expect Bitcoin will destroy/neuter most central banks in your lifetime.

michaniskin 1778 days ago

> 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.

michaniskin 1778 days ago

> 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.

They are not winning. The fiat standard is imploding as we speak, have you not recognized that yet? Any attack on a popular network exposes a larger audience to the fraud that central banks engage in. Hence, central banks don't survive in the sunlight.

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

mikeblackson 1779 days ago

If fed nodes run a different version of bitcoin that permits censorship, they will not be in control of the forked chain.

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.

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.