that's not the point, because a pool can easily reach that number, and it was proven in the past with ghash
and anyway if all chinese farm work together and merge their huge farm in the future, for whatever reason they could easily surpass 51%...
Could you, or somebody else, elaborate on exactly what such a collection of pools would do? I always read about the "dreaded 51% attack" possibility. What exactly would happen? Some kind of double-spend thing?
Are there any nefarious actions that would go undetected for a long period of time?
My simplistic view is that if the block-chain is being improperly manipulated it will eventually get detected. If that happens then there would be a massive loss in confidence of Bitcoin and the currency would essentially collapse as nobody would trust it's "value".
Is that the most dire outcome possible?
By having 51% of the hash power, the miner can do anything he wants with the blockchain.
-they can decide if a block gets into the blockchain or gets orphaned
-they can decide whether or not a transaction gets included in the blockchain by orphaning any block that includes it
The possibilities are endless. think of the exchanger X who is known to have 10k btc in their cold storage. Miner Y has 51% of the hash power of the block chain.
Miner Y puts X's addresses on a blacklist and won't include any transactions that have anything to do with those addresses in their blocks. furthermore, they will orphan any block from other miners' if they include blacklisted transactions because, well it can. it has more hashing power than everyone else combined.
Miner Y contacts X and demands 2k btc to release the addresses from hostage status. exchanger X is forced to pay or wait until Y goes away or has less than 50% hash power.
Here's another way to profit:
short $200m worth of bitcoins.
Completely halt every transaction to be made so the btc value drops to < $1 within days
Release the blockchain and enjoy their $200m profit in their pocket
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