[olympus]

If we wanted to go down the conspiracy track, imagine if the NSA was behind it all. They are growing bitcoin large enough that tons of people rely on it, and also building up huge amounts of computing power in several large server farms. Then they can "switch the flip" - so to speak - and use a 51% attack to screw with the people who rely on it. While it wouldn't be very good to just crush the system as a whole (why would they have spent the effort in the first place?), they could selectively target their biggest nuisances by turning on their big building in Utah, take over the network for a few blocks and wipe out somebody's entire savings. Then they could shut off their building in Utah, and everything would chug along smoothly except for the one or two dudes they bankrupted.

[dvdkhlng]

While the "51% attack" [1] allows an adversary to control the block chain, she can only control which transactions to include and which not to include, so in the worst case bit-coin transactions can be (selectively) shut down.

Doing transactions on behalf of other users' accounts is not possible, as accounts are secured using public key cryptography (via elliptic curves) [2]. Only the creator of an account has the private key that allows her to sign valid transactions.

Nothing hinders the entity controlling the block chain to include invalid transactions that aren't properly signed, however all the other bitcoin clients in the network still verify the blockchain when downloaded, so those invalid transactions won't have a visible effect on users of the Bitcoin network.

[1] http://mineforeman.com/2012/12/10/want-to-destroy-bitcoin-i-...

[2] http://blog.ezyang.com/2011/06/the-cryptography-of-bitcoin/

[nunb]

I feel compelled to remark that they wouldn't do this just so they could flip the switch and screw over some people holding bitcoin. The NSA has easier ways of screwing people over.

Instead, as PG and others have hypothesized, the sovereign behind btc will have achieved a new worldwide currency system, that naturally, they will participate in, perhaps from a somewhat advantageous position (premined blocks etc).

The last 3 sentences of your post are a non-sequitur imho.