Theory on Ghash situation. price manipulation.

[QuestionAuthority]

I also find it strange that one of the bitcoin developers announced selling a huge stash of their bitcoins over this whole 51% fear.  I can understand why one would do that, but why announce it?  Sounds like a joined effort to spread FUD..

He said he consulted a lawyer and was advised to announce it to prevent any possible liabilities. I'm buying that, it sounds reasonable to me.

Heh, I could see a lawyer saying something like that. But in reality there's no way you could be held liable for something like that. It's like saying I'm going to be selling half my gold because I work at a goldsmith's shop.

either way, I can't think of anything that rips away confidence in Bitcoin more than its own developers starting to split.    the good news is, next estimated difficulty change is 20%, and theres no way most of that is coming from Ghash.  we need large difficulty changes now to diversify the network.. so keep it comin'

Understand two things:

First: He is raising awareness of a very big problem with Bitcoin. The problem has always been there and we've always known it. LukeJr killed an altcoin (CoiledCoin) using a mining attack just because he could do it so we know it works. I appreciate a warning coming from a respected developer because it carries more weight and people will listen.

Second: As difficulty rises your ability to make money drops. Difficulty will keep increasing. Can it go down? Yes, but take a look at this chart to see how likely that is: https://docs.google.com/spreadsheet/lv?key=0AiFMBvXvL2dtdEZkR2J4eU5rS3B4ei1iUmJxSWNlQ0E

As difficulty increases and the reward drops small time miners will need to go to a pool that has the lowest fees to make a profit over their mining costs. This will allow anyone to take over the network that is willing to charge nothing. You might say, a government wouldn't need to run a pool for free when they could just buy the equipment and destroy the network. Yes, but why would they buy the equipment when they can just use your equipment for a lower cost? Difficulty changes, as you say, will not diversify the network. They will have the reverse effect and concentrate the network toward anyone willing to run a pool and charge nothing.

[cccarnation]

It didn't really react the last times. Ghash also never approached 50% of the hash rate, but 50% of block rewards over a timeframe of 24 hours, which is a huge difference. Ghash's share of hashing power never significantly exceeded 40%.

[ShakyhandsBTCer]

I also find it strange that one of the bitcoin developers announced selling a huge stash of their bitcoins over this whole 51% fear.  I can understand why one would do that, but why announce it?  Sounds like a joined effort to spread FUD..

He said he consulted a lawyer and was advised to announce it to prevent any possible liabilities. I'm buying that, it sounds reasonable to me.

Heh, I could see a lawyer saying something like that. But in reality there's no way you could be held liable for something like that. It's like saying I'm going to be selling half my gold because I work at a goldsmith's shop.

either way, I can't think of anything that rips away confidence in Bitcoin more than its own developers starting to split.    the good news is, next estimated difficulty change is 20%, and theres no way most of that is coming from Ghash.  we need large difficulty changes now to diversify the network.. so keep it comin'

This would only hold to be true if the new miners being brought online are not going to ghash, or are going to ghash at a lower rate then their current network share.