Hi all.
I've been on the periphery of bitcoins for quite a while and must admit, whilst quite enthusiastic I have wondered about the 51% since the beginning. My understanding is a little sketchy in places, so please point out any incorrect assumptions/analysis.
On March 12th 2013. A bug was revealed in the 0.7 software which caused a hard fork in the bitcoin chain between 0.7 and 0.8 clients. Whilst the system is designed to do this so that new forks (read, new currencies) can be created, in this instance it was undesirable. The bitcoin gurus recognised the issue rapidly and, as an excellent example of on-line collaboration between devs and traders/miners, the issue was rapidly resolved. My question, however is in the way it was resolved.
During the height of the issue, there existed two divergent forks. The 0.7 fork could be assimilated by the 0.8 clients, however, the 0.8 fork could not be assimilated by the 0.7 clients. Since the 0.8 fork had most of the hashing power, the 0.7 fork could never catch up so that it could be assimilated into the main block chain. The response to the issue was that, since most of the hashing power was on the 0.8 software, a temporary switch to majority hashing on the 0.7 version was conducted by asking the major players to downgrade their software (i.e. 51% of the network switched to the 0.7 fork.). This enabled the 0.7 block chain to overtake the 0.8 one at which point the 0.7 chain would become the main chain and the 0.8 clients switch over to it (presumably all the miners then immediately upgraded).
This is troubling though. If it was fairly straight forward for a few individuals to "agree" to switch over to a different fork and effectively take over 51% of the network (albeit in a good cause) . Then what of a government backed attempt to do the same. What is to stop a government or even an institution (read bank) putting 10,000 asic miners in a building and subverting the network to their new chain?
More over. Can anyone explain (in laymen terms) if that were to happen, what would be the effect on the current bitcoin chain and clients, the rules that the current clients abide by and the implications/impact of the 21e10^6 limit?
If it has already been answered elsewhere, my apologies, However I would appreciate some some links since I do not know my way around the board as yet.
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