The US government happily spends $1 Trillion every year in bridge to nowhere projects. That's 1000 billion dollars. 100million would easily erase BTC forever, and there's absolutely zero that could be done about it. Mind you I'm ignoring any current computing clusters they might have available to compete.

Sure, it might be obvious that something is going wrong, but let's not forget who invented Tor, so if you think it will be easy or even possible to stop, think again. If the government wants to DoS BTC, then BTC will be DoSed. The developers would have to spend all their time trying to come up with some sort of counter-strategy, and development on the actual features of BTC would stop (best case scenario). However, given a few months eventually people would give up interest, and that's the end of that. Since the government can play by the rules and still do damage, there's basically nothing you can do against it.

Furthermore, timejacking attacks and similar don't even require 51%. There's some evidence that certain pool operators may be doing this already, although for the most part pool operators have refrained from causing trouble. (well, except for luke jr, and all of that noise)

Finally, at a current rate of only 80tx per block, it's totally unknown how the network will behave if/when things get really busy. It's also unknown how things will play out as the mining subsidy drops off, although already there's problems with empty blocks and botnets and such. An unreliable network is worthless to someone who wants to do business. Imagine if VISA transactions could be randomly dropped and had to be resent, or if it took an hour or 6 hours just to be sure that didn't happen. There would be no VISA. Not only that, but privacy on BTC sucks, which is one of its supposed main advantages vs centralized money. While there are a few ways privacy could be improved (that I know of thus far), an improvement in blockchain reliability would require some major changes to the protocol, and it's not necessarily obvious what would work or what wouldn't. That sort of effort isn't likely to happen unless its with another currency, or in BTC until it's much too late to fix.

I never said that cryptocurrencies were a bad idea, or that they can't work at all, just that BTC is an experiment and likely to come crashing down at one point or another.

No govt (or other entity with $1M+ budget) would build a hashing farm out of GPUs they would contract for some sASIC or ASICs.  

He wants to mine it himself, not broadcast it to other miners.

I'm guessing it's a transaction with tainted coins as input, and much less (or zero, if that's allowed) output value.  The difference between input value and output value goes to whoever mines the transaction, which D&T wants to be himself.  That way the tainted coins lose their taint (unless the taint calculation takes fees into account, of course).

Like I mentioned once or twice while wandering about on the forum, there are some -- albeit indirect -- methods.

• Control of bitcoin adoption by managing public perception via the mainstream media. Bitcoin getting too popular, too fast? Just mention Silk Road in the news and how some unlucky investor got all his coins stolen. Otherwise, keep silent.
• Is the Bitcoin community becoming too innovative and too many great ideas popping up on forums? Easy! Just pay a few trolls to derail discussions and spread FUD.
• Is the above not working and Bitcoin is still performing too well? Hire a botnet. Sell coins irrespective of cost over a protracted period to "shape" the market. Not enough volatility? Buy and sell in large bursts.

Like they say, knowledge is power. But I don't want to get too carried away in my crazy tin-foil-hattishness, so I'm open to rebuttal if any of the above is somehow impossible.

I've never seen a motorized one... they're always hand crank.  Maybe that way the customer is the one performing the mutilation and the corporation is insulated.

It is unfortunate that Stossel repeated this mis-truth that private currencies are illegal.  Though Ron Paul tends to spread this misconception as well, so he is not alone.

This is based upon an incorrect understanding of "powers" granted the Federal government by the Constitution.

In short, a "power" is basically permission to violate rights.  In the case of the power to "coin money", the power conveyed and the right violated are subtle.  It is not, as widely believed, the power to seize private property via monetary monopoly and inflationary confiscation.  That would have been in direct violation of the "just compensation" required by the takings clause in the 5th Amendment, and a general nullification of the basic right to property.

The power to coin money is simply the power to violate the usual presumption that possession equals ownership, in the limited case of "coins" minted by the Federal government.  That means that a coin, once minted by the Federal government, remains the property of the government even when placed in general circulation.  That is the reason you cannot mutilate or destroy them, and they can be seized at will (as was the case with FDR confiscating gold coins).  They are not yours.  

Nope, still not following. I'm afraid I don't know what you mean by "memory pool". What does it mean for a tx to be in the memory pool? What does it mean for a coin to be included in the memory pool without being broadcast?

AFAIK a tx not broadcast will not be included in a block, and therefore is effectively not a tx. It sounds to me like you want miners to be able to include arbitrary tx which are neither received nor coinbase into their blocks, the only purpose of which that I'm aware of would be for executing a finney attack with the cooperation of a mining pool.

We're talking about the work the pool master has to do per miner. My point is that it only has to build the merkle tree once. It can then inject a different coinbase transaction in without having to recompute the rest of the tree. (The coinbase is at the tip of the tree.)

If it becomes a serious issue, in the far distant future (assuming BTC doesn't crash before then for other reasons, and I've got a running list of them now) more BTC can be printed if needed. BTC might be recovered off of a ledger sheet from addresses that have been inactive for 100 years or more, but that's a very long time before any coins could be recovered, and by that time it'd probably be near irrelevant.

It must process the full block to produce the 80 byte header and the Midstate for each miner.

2^160 is a big number.  Even with Moore's law 80 years is not sufficient time.  I do agree that if Bitcoin remains active then eventually coins could be recovered but we are talking on a timeline of centuries or even a millennium.

The "absence of coercion", see that is what I really doubt can or will be possible anytime soon or maybe anytime at all, which makes its true implementation a theoretical exercise for me. You don't really know much about my worldview, but you are right, I don't buy into that "absence of coercion" scenario. That is an ideal.

The only purpose of miners in BTC is to include and record TX.

That is not an accurate statement.  Unless proper precautions are taken, a 0/unconfirmed race attack can be successful -- maybe 50% of the time even.
The precautions include configuring the client so that there are no incoming connections allowed and to explicitly have outgoing connections to the top miners.

I've actually been surprised that there haven't yet been reports of anyone in the marketplace forum or on the #bitcoin-otc marketplace losing their bitcoins received to a double spend race attack yet.  It takes really no technical skill -- just use the same wallet in two places and try to spend from the same coin to two different addresses.   Eventually one of those times the one seen by the recipient will differ from the one seen by the miner who eventually gets that block.


There is a variation of the Finney Attack that could defraud just as easily with a 1-confirmation as with a 0/unconfirmed though the same recommendation above (to allow no incoming) prevents that variation from becoming successful as well.
 - http://bitcointalk.org/index.php?topic=36788.msg463391#msg463391

If there's no way to regain lost BTC

@wogaut
I am an engineer not an economist, I will try explain my thoughts more eloquently.

The free market is just as theoretical as the ideals of communism (the evil twin of capitalism).

And the dollar has a fraction of 0.01, many internal accounting systems have many more digits after the coma, where's your point?
If your point is, that BTC is supposed to increase in value to the point (in a distant future) where we will be paying with mBTC or uBTC, there's a term for that, it's called deflation. So what was your point again?

 

Will be pretty funny when all these loans go bad.