Bitcoin Forum

as per the title.. whats to prevent the government of a large country to designing and using an asic purely for itself? they have the resources, the amount of money is trivial (for a government), power would not be a problem as they could build a power plant just for the mine to use. ultimate goal would be to control bitcoin. and make some money but that would be trivial. they wouldnt recap the investment but thats not the goal anyway.

sure lots of up front money and time but again, a government wouldnt care, and the long term gain in controlling btc might be worth it.

only bottleneck would be fab capacity. maybe buy or build one?

the fact that no government is trying this means my thinking is flawed somehow. so whats the catch?

EDIT:  goal is to for a 51% attack on bitcoin to cause people to lose faith in crypto, thus destroying it.

EDIT 2: i used 51% attack as an example as it is a well known figure. but the government that tries this could just as easily go for 70% or some other number that allows them to roll back the blockchain by an arbitrary amount, say several days worth of blocks.

I think that it would devalue the currency of the country. People could see it as "This is better than our fiat". From the countries stand point, I think it would do more harm then good.

At this point, it's mathematically impossible to get to 51% by mining alone.  Per CoinMarketCap, 16.5 million of the 21 million have been mined already. 

Its very difficult to ger 51% of all hashrate, andpeople wont like to hear the govern are wastiong millions of dolar to buy/make asics only to destroy a currency wich the people loves.

not 51% of the coins, the goal would be to control over 51% of the hashrate. then that government could block transactions, double spend from taht point on, stuff like that. search for "51% attack bitcoin" to see what i mean.

the goal would be to destroy faith in bitcoin and blockchain based cryto currencies.. for some governments bitcoin is a threat to their fiat domination.

goal is not to promote bitcoin, goal is to destroy it by 51% attacking it. if they control the blockchain, no one will trust bitcoin anymore.

Not only because governments would have to forsake their own currency--that's debatable--but committing a 51% attack they'd be ruining bitcoin and would therefore defeat the purpose of doing it.  Of course if that was their original intent...

The fbi seized all those silk road coins.  Why would the US government need to mine anything?   That's a cynical view but it's nevertheless true.

some governments wouldnt care. since when has things that people like but governments dont like stopped the government from doing things.

might be possible in some countries to hide the mine and associated infrastructure.. very difficult depending on the country though.

one (or more) government finances it, set it up in a third world country maybe.

first of all the hashrate of bitcoin is too big which makes it a very costly attack for anyone. and also 51% is not enough, there needs to be a lot more to successfully pull it off.

secondly it won't destroy bitcoin. it will cause a temporarily issue in one block that said fork happens and as soon as it happens, everyone will be on alert and will require much more confirmation making the attack even harder.
and also eventually it will become hard and expensive enough for them to keep the attack up.

on top of it the government won't gain anything by this in the end. they've just wasted tax payers money on something useless which will disrupt the network temporarily (the effects will be less than the fear of Aug 1st).
there are easier ways to attack bitcoin like simply making it illegal :D

p.s. if government wants to disrupt anything they will do it with Monero and other anon coins not bitcoin which they can track!

yup destroying bitcoin would be the goal.

usa just prints more money if it needs it no need to mine it..

The main fact is it's impossible for any government to destroy or control blockchain.  The beauty of this bitcoin itself is decentralizing nature.If at all some one wants to control this than, the only means is shut down total Internet, which is certainly impossible task.

As they say, it works until it doesn't

They could potentially do all this but to what effect? The catch likely is it is just not worth the effort. If we don't talk about some abstract government but mean, say, the Chinese government specifically, they could just take over the mining farms which are located in their jurisdiction and get done with that (and most likely with Bitcoin too). If we talk about the US government, Bitcoin may in fact be quite helpful to them in tracking down criminals (or who they consider as criminals). Other than that, if they kill Bitcoin, they will have to kill other coins as well, then rinse, repeat ad infinitum

I can imagine a government-sponsored mining farm of an unprecedented scale being at the last stages of construction, only for Bitcoin to fork to X11 or CryptoNote. This would really be the laugh of the century.
This, besides what others have mentioned, is another reason why a government can't do this.

yes 51% may not be enough but they could easily go for 60% or whatever they need to give enough control to make it unreliable.

as for making it illegal that would be country specific. people would find ways around that.

i use bitcoin as an example as that the one with the most legitimacy and cause people to lose faith in that and they may not trust other crypto also.

good point about monero but that doesnt have enough users compared to bitcoin at the moment. most people have at least heard of bitcoin, hardly anyone outside of crypto has heard of monero. attack the most visible crypto (bitcoin), prove it unreliable and it will trickle down (i would think so anyway).

Bitcoin's current market cap is around $68 billion usd.

Countries like north korea and afghanistan are credited with having as much as $6 trillion dollars in natural resources: metals, rare minerals, etc.

$68 billion is nothing to a big government. Their foreign policy may revolve more around controlling swaths of land which contain trillions of dollars worth of resources rather than focusing on things like bitcoin which are worth exponentially less overall.

i said monero as an example and they have their users, it is not as famous as bitcoin because of its specific usage (being highly anonymous and untraceable) and that makes it good for dark market. regular users (the masses) don't care about that.

nice theory you have but in my opinion all these things will "damage" bitcoin, i do not believe any of it can "kill" bitcoin or any other crypto for that matter. that is why i said there are easier and cheaper ways of just "damaging" it with same effect.

it wont kill it but damaging it to the point where hardly anyone would use it is about the same thing. all that needs to happen is people lose faith in it. if you cant trust a transaction what good is it.

what cheaper ways are there to damage it? making it illegal may hinder it but its getting harder to do that as many countries have legalized it, even the usa recognizes it and they would have a hard time reversing that. isps could block bitcoin ports but that can be changed easily enough. block pool ips maybe. but those could be changed too.

offhand i cant think of any way to damage it really. have any examples?

true. not all governments care about crypto. some do as they cant control it. that factor makes some governments uneasy.

countries with unstable currencies dont like people moving funds to crypto. its very easy, probably much easier than moving it to precious metals for example.

All they have to do is cut off the banking to all exchanges and anyone they can link to P2P options.

That'll take out 95% of the interest. It'll survive of course but it won't be any type of large scale challenge.

Why mess around building warehouses full of hardware when it can be done with a few threatening phone calls?

that could work, definitely would hurt it. but wouldnt they need to do that for every country?

Banking is far more interlinked than politics when it comes to cross border movements. Most national banking chains would quake in their boots if the biggest operations threatened to cut them off. I doubt very many of them actually want crypto business at this point in time anyway.

Attacking the system how? do you know if a government attacks Bitcoin then we have the possibility to fork the blockchain and have a coin without the government control? then what, they will have to attack the new chain but how long could they keep burning cash just to hit a wall? there is no way for any gov to destroy a decentralized network, that's the whole point, unless they start killing every body running a node and mining, beauty of crypto currency is the same immutability. destroy one chain and another chain will pop up.

fork it how? if you change the algo so the government asics dont work the existing ones will stop working also.

No one as of today is rich enough to create create enough ASICs to control 51% of the network. Moreover in fact you need a bit more than that.

Yes hopefully our government does not give a negative response to bitcoin so they can do things that can make bitcoin deleted.

A Government could do it quite easily. Or as someone pointed out earlier in the thread, the Chinese government could march in to mines in its country and take over more than 75% of the hashrate anyway, which is a risk with bitcoin.

My view is that most Governments are simply not interested enough to do this.

I dont think its easy as you say. If you think abot the enery to be wate in this hashrate and the atual "enery crise"(coal...) the govern will not incentive/force this expensive activity only to destroy a cryptocurrency.

I said they could do it quite easily. I qualified that at the end of my post with the point that you make that they are not interested enough. Lets look at facts. The European bank is printing 60 billion euros a month - and its currency is strengthening, that means they are printing more than the entire value of bitcoin every 3 weeks or so. So why would they want to do this? But IF they did, then they would more than have the resources to do so.

According to this the US bureau of engraving and printing minted $40 billion dollars a month in 2013.

https://www.quora.com/Approximately-how-much-money-does-FED-print-in-a-month

Its been said that 90% of that is to replace currency in circulation.

Governments owning machines that can print bitcoin's entire net worth inside a month may not have much reason to be concerned.

Yes this is spot on.

For me the main risk is that so much of the network is under the jurisdiction of one government. I would like to see the spread more decentralised across countries.

The same reason why they cannot stop bitcoin because when they do that, then their currency will be limited to their own country which will not be valuable for international trade in which we all know play a dominant role in the development of any country. Aside that going that route would then mean that government is approving crypto currency which might therefore means overhauling the whole financial system. Also, the next issue of concern would be the privacy in which majority of the already exposed to bitcoin will not trade for anything else.

That's right. The price of the national currency would fall down towards other currencies and became cheaper and cheaper. Add to that nobody can even predict that this insider would be popular among citizens. And only the demand is that instrument that make the price of the new crypto-currency. What if people would prefer to stay with expansive Bitcoin rather to move on cheap national crypto? Too many if.

Your logic relies on the public losing faith in cryptocurrencies just because a government has over 51% of hashrate.

However, having 51% of hashrate certainly does not mean you can destroy the network.  An attacker can only reverse their own transactions or prevent new transactions from being confirmed.  All of people's transactions with a reasonable number of confirmations would be perfectly fine.

If a government wanted to break consensus rules, they couldn't do that either.  They'd have to fork off while the ordinary BTC users stayed on the minority chain.
I agree.  That would pretty much destroy clearnet use and the darknet wouldn't even have much faith after the price drop.

I don't really know what to say to your mindset either you don't own Bitcoins or simply say you know nothing op. If government were to do that, it would be regulated and one would have to pay taxes, what's the point of using such thing. Then again government would have full record of this and it would be suicidal to use it, what if they suspected you of cheat and they could take away all your coins.

It would be stupid for anyone to try and get control of bitcoin.  Once that happened, it would no longer be of value to people because they know they can be screwed out of their money if they use it. If people aren't using bitcoin, it's of no value to the 51% people either.

Realistically if a government REALLY wanted to take away our coins they could, they would just arrest you and torture you for the private key. Thats why some level of constitutional protection is a good thing.

Having said that this is all theoretical. I very much doubt that this would happen.

Yes, the bitcoin market is really huge. Its market capitalization reaches billions of dollars. No one is able to dominate the entire bitcoin market, the rise of bitcoin is due to the demand of the market, which is something we can not stop.

But as per my knowledge, in recently have some rumor about Russia government has spend $100 million for support community miner Bitcoin in their country for compete miner in China. This is positive signal about government in some country still interested Bitcoin and cryptocurrency.

There still seem to be a lot of misconceptions about the misnomer that is the 51% attack (https://coinjournal.net/why-a-51-attack-is-not-what-most-bitcoin-users-think-it-is/).  You do not necessarily need 51% of the hashrate to carry one out.  But at the same time, the infinitesimally small benefits gleaned from it, compared to the enormous effort required to successfully perform such an attack on Bitcoin (altcoins with considerably less hashrate are another matter entirely), generally don't make it worthwhile.  If an attacker were successful, they could, for a very short period of time, block or double-spend transactions.  But only until the rest of the network noticed that happening, then immediately forking away to a new algorithm as a result.  The attacker would have to start again, which gets costly with so much hashing power involved.  It would only be a temporary hiccup.

Maybe 3 or more years ago, this attack method might have been viable, but I think we're well beyond that point now.  I'd be prepared to revisit that assessment if someone managed to devise something an order of magnitude more powerful than ASICs and also managed to keep it to themselves, though.  Technology should never be underestimated.

For altcoins that don't have the same sort of hashing power behind them, however, it's a different story.  When it's easier to obtain the lower thresholds of hashrate required to interfere with less secure chains, the attack can be carried out more often and more cheaply, causing a continued and harassing nuisance that it may not be possible to recover from if the attacker is sufficiently determined.  But seemingly it's still not that common an occurrence despite the relative ease.  Again, this is likely due to limited incentives, with the ability to block transactions and double-spend really not being all that appealing in the grand scheme of things.

the goal of such a plan is to destroy faith in crypto, not approve it. thus preserving the existing fiat currency.

destroy crypto from the inside so to speak.

Instead on making this kind of attack or plans on destroying on Bitcoin, russia have been decided to go in mining field which is really a nice thing and about on the 51% attack on bitcoin wont really be sufficient enough considering on the hashrate its too big and even government do have the power i dont think they will jump in to this aims or goals on controlling or blocking bitcoin. Its not possible its soo damn vast.

heh. been in bitcoin since 2011. its already more or less regulated here in the usa; I claim it on my taxes.

quite happy with crypto, its paid for many vacations and toys over the years. i want to to prosper.

and the object for such a government doing such a thing is to destroy bitcoin (and thus by trickle down theory other crypto), not make its own blockchain based currency. bitcoin and crypto as it exists now can be a threat to (some) governments based fiat.

Whilst people still talk about bitcoin in terms of dollars, and how its going to make them rich, its not a threat to fiat. Its when people start valuing things in bitcoin that fiat will be at risk. The dollar remains the "gold standard".

the government that tries to attack bitcoin by gaining enough percentage of the hashrate to make it useless (my premise in the op) is not trying to make its own crypto, it is to destroy crypto in general by proving it unreliable. thus keeping their national currency as the only option.

for now that is correct.

at some point things may indeed be priced in bitcoin, at the moment its to volatile so once its settles down that could happen.

at that point fiat is in trouble. the time for a government worried enough about that to happen is to destroy crypto now (well, soonish). 

There are at least two schools of thought that say roughly the attack you describe is already in progress.

bitcoin cash could be the Chinese govt's attempt and bitcoin segwit the USG's

Exactly mate. Although Governments do not have a good record of making correct judgements on such things.

so they build it enough to be 70% or some other figure that allows them to rebuild the chain from 20 or 30 blocks back. it allows them to blacklist transactions, reverse transactions (with enough hashpower they can rebuild the blockchain back 10 or 20  or whatever blocks, nullifying any transactions they want in that time frame).

point would be to have people lose faith in bitcoin. if no transaction can be guaranteed until days/weeks later because the government mine can roll it back that far who will trust it?

yeah thats kinda what led me to post this tread.

bitcoin is still in its infancy and is fairly vulnerable at this point. and i want bitcoin to succeed.

it will. it's a pretty bonny baby by now, with parents, family, guardians/godparents and a whole village all around.

it's some of these adults in the analogy that cannot thrive.

I think some governments (especially ones in open societies/countries) could easily find (or may have found) a way around this.  The use of Private Companies or intelligence Agencies would be the easiest options

and thereby render all existing asics useless. all those existing heavily invested private mines.. just so much landfill material..

still.. might be better than having a bitcoin controlled by a government. a new asic arms race will begin.

These are just rumors

Well, those might not be quite rumors but rather speculations by some people allegedly close to Putin but regardless, it makes no sense for Russia to mine Bitcoin and compete with China (which would be a losing battle anyway). If anything, Russia would rather try to push their own crypto, but personally, I believe in neither possibility. In other words, these are most likely just empty talks

People will demonstrate when a govt spend million dollars to create Hash 51%. What is the reason a govt destroy bitcoin. And the bitcoin community will not be silent to prevent attack from the gov. Bitcoin developers are able ask million bitcoin users to mine bitcoin to stop the attact from the govt. it is proof the hardfork of BCH that fail. BCH supported by big capitalist and big media, in fact the scheme failed and after that the bitcoin price is unstopable.

The Russia mining news involves two things that are traditional indicators of crypto disaster. One is ICO. The other is Russians.

I'll believe it when I see it.

PoW change may be inevitable in the future anyway. But the thing is, PoW change are temporal solutions. It's a matter of time that an new ASIC arms race does indeed begin, leading to a monopoly again.

If we change the PoW, it must be something more creative than a mere algo change. Someone spoke about randomly changing algo to stop monopolies or something like that. We must explore better solutions and think long term.

A mere rushed PoW change should be made only if it's the only way out to survive.

Any attack would be a temporary disruption.

If the Chinese government seized mining farms and controlled over 51% of the hashing power. They could privately mine the chain and reorg massive amounts of transactions. This would cause people to lose trust in bitcoins and there would probably be a huge price crash. However we would change proof of work then fork the chain to fix it. We would suffer financially in the short term from the price crash, however long term bitcoin survives and continues to do it's thing.

So governments can never really control it, only disrupt it. Every such disruption would cost millions of dollars and would not really gain much.

But still no body mentions this, an attack with 51% hash power will need to target something substantial and valuable, since if a miner or a mining pool starts acting against the interests of the whole system other miners could abandon that chain and could start flagging every activity of the hostile party for every body to ban and block. since having so much hash power requires if not billions but almost 1 billion dollars, the success of the system will become the success of the biggest miner, they'd earn more if they stay loyal to the system and stay honest, nothing we can do other than joining the mining industry ourselves to compete even if it's a few TH/s. that's what people are doing from the start I believe, that's why Bitcoin mining costs so much and electricity usage is equal of a country using electricity.

You do have a point though on which we cant really be sure if those informations are legit or not but thinking of that theres a competition between countries i would like to know what would be the goal if they won such battle? Its a senseless thing to think off that they would fight for the spot on having the biggest mining operations. Most likely maybe they would create their own coin, but well who knows because no one do really have an idea on whats on their minds.

Maybe government has some other cheaper ways to curb bitcoin if they intend to do so or maybe they don't see it as a threat and think that government is capable of stopping it when and if they wish so or maybe government still believe that people have more belief and trust in the fiat currency created by the government itself and bitcoin is just a small part of the whole economic system of their country and can be regulated and brought under the law anytime.

I can tell you that with certainty

Personal profits are on their minds exclusively. They don't care for Bitcoin, blockchain, or whatever, all what they are actually looking for is money which they could receive as budget financing if they successfully push this idea into the budget plan for the next few years. Whether it will bring anything of substance doesn't in the least interest these dudes. All the buzz words they say with such a serious tone and pompous view are said entirely with this purpose in mind

i must of missed this rumor.. could you clarify or link to it?

you mean russian government wants to mine for itself? ie budget it out (the mining farm) and all profits go to the government?

wonder if they would make it illegal for russians to mine for themselves or use others pools. mine to the russian pool or else..

No, no, there have been some crossed wires here.  The claim is that deisik knows with certainty that the Russian government want to make profit (which is a fair assumption, I suppose).  However, deisik doesn't know with certainty how they plan on achieving that goal, but suspects it's not going to be Bitcoin.  It sounds as though deisik is saying they could conceivably allocate some of their fiat budget to investigating the possibilities and, even if nothing came of it, that research money in and of itself would still be profitable for someone (not that they necessarily are doing that research, just that they could).  

Even if there were a government planning on getting involved with large-scale mining operations, which seems unlikely to begin with, announcing such a project publicly would be a likelihood even more remote.  There isn't any real profit in a 51% attack, which is probably why no governments have attempted it.  But someone somewhere is probably spending a boatload of money in research to learn that obvious-to-us fact the hard way.

ah thanks for the correction.

as for 51% attacking (my premise) there is not real profit, its to control and kill it. would cost scads of money but what is money to a government? just print more up to kill btc and then your fiat is safe again.

If they raise inflation rates to attack BTC it would have an impact on the economy too, and they would have to explain people about it. But yeah it's a problem, governments could spend billions in propaganda and promote their forks as well bribing everyone up, so it's not only a potential 51% government funded mining operation attack, but malicious hard forks too (I suspect all of these bigger block hardforks are promoted by certain governments)

I'm curious how you could miss this (https://bitcointalk.org/index.php?topic=2075233.msg20733347#msg20733347) thread

There is also an ongoing discussion of the matter in the Russian section of the forum, and you can find it here (https://bitcointalk.org/index.php?topic=2076072.0), but you are on your own with translation. I just expressed the consensus that built up among the posters in that thread and what I myself feel like the most probable outcome of such an effort. Basically, this is how all such projects typically end up, i.e. with tax payer's money spent mostly in vain (but someone certainly ending up rich and richer)


That seems to be the whole point, i.e. nothing will ever come out of it

easy: real life  :P

thanks for the link ill read it through.

I remember this topic had already been discussed in the past

In fact, the money to be printed won't necessarily raise the inflation rates. The US government ran two (or even three) rounds of quantitative easing with inflation still being exceptionally low. How come? Because the newly printed money never entered the real economy. It was used mostly to extinguish the bad debts that came about from subprime loans which caused the subprime mortgage crisis in the US in 2008. The money itself was sterilized by financial and stock markets, so the inflation was kept on a tight rein and at its lowest levels. Basically the same would happen to money printed to kill or destroy some coin (if it ever came to that)

No, newly printed money will enter the real economy, just not immediately. Otherwise, where do you think the inflation come from? If all newly printed money does not enter the economy, then there should be deflation, not inflation. Newly printed money enter the economy in a gradual and controlled fashion, this is the job of central banks.