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Author Topic: Is this Bitcoin's achilles heel?  (Read 5660 times)
99bitcoins
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April 03, 2013, 09:12:32 AM
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So I just told my younger brother about Bitcoin yesterday and today we got to discussing in-depth about it. It's the first time he's heard of them. As you would expect he was curious and asked very thoughtful questions.

One question he asked that really intrigued me is how an entity (one with very very large amount of fiat) that wanted to destroy Bitcoin could pull it off...

He asked: Couldn't they just buy up every single Bitcoin in existence at the highest asking price?

I don't know how to answer this, but it sounds to me that may be the single biggest soft-spot for Bitcoin to me.

Chances are this has already been asked but I don't know how to find the thread so I'll just post this.

What do you guys think?
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TiagoTiago
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April 03, 2013, 09:21:40 AM
 #2

Not everyone is selling their bitcoins; if someone did buy all the bitcoins for sale at the highest prices, the value of the bitcoins of the people that didn't sell would increase a lot.

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99bitcoins
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April 03, 2013, 09:23:31 AM
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Not everyone is selling their bitcoins

At any price?
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April 03, 2013, 09:25:53 AM
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Yep, some people are in it for the long haul, and some simply wanna spend their bitcoins on stuff instead of "cashing out". And many when seeing the sudden rise in the price will wait a bit to see it rising more.

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April 03, 2013, 09:28:06 AM
 #5

Buying all bitcoins would require substantial funds. The current market cap is 1 300 000 000 USD, and the price of the coins would increase a lot as the buyer was emptying all available exchanges. The price would rise to very high levels, and the buyer would have to spend maybe 100 000 000 000 USD to buy all the coins that were available on the exchanges. Still, far from all coins are for sale.

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April 03, 2013, 09:28:42 AM
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you figured it out 99bitcoins

everyone pack up it's over
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April 03, 2013, 09:35:42 AM
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you figured it out 99bitcoins

everyone pack up it's over
I'm actually a strong believer in bitcoin don't get me wrong.
And this question has poped into my head sometime in the past but I never paid attention to it at all.
But when someone that just heard of Bitcoin mentions it, it kinda makes you ponder on it a little more than when you think of it yourself.

You can't deny however that for someone who has tons of fiat to throw around, this is way easier than the 51% attack we hear so much about (yes, this is a different kind of attack - but still effective enough to do serious harm)

I think the good thing is the fact that Bitcoin being mined slowly for the next few decades is one of the best defenses we have againt this kind of attack. At least we would have time to organize a response. If at a certain time a large portion of Bitcoin holders have not incentive to sell bitcoins for any fiat (at any price), Bitcoins should escape the reach of this attacker for good.
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April 03, 2013, 09:48:01 AM
 #8

Dude, it is not an attack, it is a buff.

(I dont always get new reply notifications, pls send a pm when you think it has happened)

Wanna gimme some BTC/BCH for any or no reason? 1FmvtS66LFh6ycrXDwKRQTexGJw4UWiqDX Smiley

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April 03, 2013, 09:49:15 AM
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At the moment there is about 40 000 bitcoin available on 'visible'  market  if they buy all of them price will sky rocket ....
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April 03, 2013, 09:57:49 AM
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Yeah, all it would do is drive the price incredibly high. It's true that if the price gets high enough pretty much everyone would sell. I can't imagine not selling them at $1million a coin...

But as long as there's even 1 Bitcoin left, the whole thing could still run. Remember, the basic unit is actually the Satoshi, which is 0.00000001 of a Bitcoin. So each bitcoin is 100-million Satoshis. If each Bitcoin is worth $1billion, then each Satoshi would be worth $10. Still manageable to run the entire economy off of 1 Bitcoin, but it becomes a hassle at that point as it would need to get divided further down. I'm sure the protocol could be adjusted to further divide it down though.

The biggest problem with that scenario is that whoever is doing the attacking is obviously anti-Bitcoin. Yet what they just did is commit a massive transfer of wealth from anti-Bitcoin individuals, to a bunch of pro-Bitcoin individuals, who now have the knowledge and the incredible wealth behind them to create Bitcoin2.0 (if each 1BTC is a Billion dollars, then literally anyone who's pro-Bitcoin is now a Billionaire). And since Bitcoin is open-source, making a Bitcoin2.0 would be trivial, and this time a hell of a lot more powerful with a bunch of Billionaires backing it.

They would have to keep going until everyone who's anti-fiat is a Billionaire. Personally, I sure hope they do that Smiley
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April 03, 2013, 09:59:36 AM
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So someone would throw a lot of fiat in Bitcoin, thereby raising its price to $1 million per coin, so everyone around here could sell half their stack and enjoy a life of leisure and luxury. How is that even a problem?

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April 03, 2013, 10:04:57 AM
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What someone with a lot of money could do, (and it would probably cost them dearly), is to pump and dump, over and over. They could jack the price up to sky-high amounts, and then dump all the bitcoins they bought, making the price incredibly unstable, and scaring everyone away.
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April 03, 2013, 10:06:19 AM
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Yeah, all it would do is drive the price incredibly high. It's true that if the price gets high enough pretty much everyone would sell. I can't imagine not selling them at $1million a coin...

But as long as there's even 1 Bitcoin left, the whole thing could still run. Remember, the basic unit is actually the Satoshi, which is 0.00000001 of a Bitcoin. So each bitcoin is 100-million Satoshis. If each Bitcoin is worth $1billion, then each Satoshi would be worth $10. Still manageable to run the entire economy off of 1 Bitcoin, but it becomes a hassle at that point as it would need to get divided further down. I'm sure the protocol could be adjusted to further divide it down though.

The biggest problem with that scenario is that whoever is doing the attacking is obviously anti-Bitcoin. Yet what they just did is commit a massive transfer of wealth from anti-Bitcoin individuals, to a bunch of pro-Bitcoin individuals, who now have the knowledge and the incredible wealth behind them to create Bitcoin2.0 (if each 1BTC is a Billion dollars, then literally anyone who's pro-Bitcoin is now a Billionaire). And since Bitcoin is open-source, making a Bitcoin2.0 would be trivial, and this time a hell of a lot more powerful with a bunch of Billionaires backing it.

They would have to keep going until everyone who's anti-fiat is a Billionaire. Personally, I sure hope they do that Smiley

Excellent reply! This actually makes a lot of sense because the last few people to stay in the game will have huge fiat reserves with which to show the attacker a taste of their own medicine. By inflating the $%&* out of the fiats by spreading it around. Etc etc.

Good one, Thanks Wink

I need to get some sleep now lol it's 5 in the morining.
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April 03, 2013, 10:36:20 AM
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Thought about this it will become infinitely harder to buy the next bit coin, so it just pushes the price up and up and up, you can throw as much money as you want in and its all ok.

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April 03, 2013, 11:05:50 AM
 #15

So I just told my younger brother about Bitcoin yesterday and today we got to discussing in-depth about it. It's the first time he's heard of them. As you would expect he was curious and asked very thoughtful questions.

One question he asked that really intrigued me is how an entity (one with very very large amount of fiat) that wanted to destroy Bitcoin could pull it off...

He asked: Couldn't they just buy up every single Bitcoin in existence at the highest asking price?

I don't know how to answer this, but it sounds to me that may be the single biggest soft-spot for Bitcoin to me.

Chances are this has already been asked but I don't know how to find the thread so I'll just post this.

What do you guys think?

No, because not every single Bitcoin is made yet. In 2140 the last bitcoin will be made.


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April 03, 2013, 02:11:21 PM
 #16

So I just told my younger brother about Bitcoin yesterday and today we got to discussing in-depth about it. It's the first time he's heard of them. As you would expect he was curious and asked very thoughtful questions.

One question he asked that really intrigued me is how an entity (one with very very large amount of fiat) that wanted to destroy Bitcoin could pull it off...

He asked: Couldn't they just buy up every single Bitcoin in existence at the highest asking price?

I don't know how to answer this, but it sounds to me that may be the single biggest soft-spot for Bitcoin to me.

Chances are this has already been asked but I don't know how to find the thread so I'll just post this.

What do you guys think?

Look up Supply and Demand.
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April 03, 2013, 03:27:42 PM
 #17

Not everyone is selling their bitcoins

At any price?

Speaking for myself, I'll always hold the private key which controls the value of 1 BTC even if the price goes to $1x10^9.  That because I will have sold others as the run-up occurred and won't need the money.  I imagine there are quite a few other geeks like me who have secret keys controlling value.


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April 03, 2013, 03:31:10 PM
 #18

Of course they can! I sell 1 bitcoin for 10 tons of gold. Oh look, i have another bitcoin, i sell this one for 100 tons of gold plus 1 ton of diamonds. But wait, i have another bitcoin here. I sell this one for a base on the moon and on mars.  Cheesy Did i say that i have another bitcoin?
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April 03, 2013, 03:39:30 PM
 #19

You now:
Quote
Oh I won't sell my bitcoins EVER
You after the giant entity offers you 1,000$/BTC:
Quote
Oh sure!

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April 03, 2013, 03:41:13 PM
 #20

Only 1000$? Nah  Smiley
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