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Author Topic: Thought Experiment: Deeper dive on a gov dedicated to shutting down Bitcoin  (Read 765 times)
dwdoc
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February 15, 2017, 10:08:21 PM
 #1


What if there were a terror attack like 9/11 financed with cryptocurrency or the US government decided that the risks to financial surveillance and tax collection posed by cryptocurrency was so high that it decided to launch a war against cryptocurrency like its war against drugs or radical Islam and was willing to spend upwards of a trillion dollars over the next several years to combat it? Couldn’t they just mount 51% attacks on every current and future cryptocurrency and freeze all transactions?
 
For example, ballpark figures to duplicate current Bitcoin network hashrate would be $600 million equipment cost and $5 million per day electricity cost.
 
Might a response be to create niche, private, “underground” non open source, restricted access cryptocurrencies? Could these gather enough network effect to have any utility without being vulnerable to attack?
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February 15, 2017, 10:24:23 PM
 #2

like its war against drugs or radical Islam and was willing to spend upwards of a trillion dollars over the next several years to combat it?

well decades later radicals still exist and so do drugs.
do you need more proof that governments cant do anything properly, thoroughly, effectively and permanently?

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February 15, 2017, 10:54:55 PM
 #3


What if there were a terror attack like 9/11 financed with cryptocurrency or the US government decided that the risks to financial surveillance and tax collection posed by cryptocurrency was so high that it decided to launch a war against cryptocurrency like its war against drugs or radical Islam and was willing to spend upwards of a trillion dollars over the next several years to combat it? Couldn’t they just mount 51% attacks on every current and future cryptocurrency and freeze all transactions?
 
For example, ballpark figures to duplicate current Bitcoin network hashrate would be $600 million equipment cost and $5 million per day electricity cost.
 
Might a response be to create niche, private, “underground” non open source, restricted access cryptocurrencies? Could these gather enough network effect to have any utility without being vulnerable to attack?

It wouldn't be far fetched to think that the government could finance an inside job terrorist attack of huge proportions in order to forever deligitimize the usage of bitcoin.

On other thand, a legitimate terrorist attack of huge proportions could be financed used bitcoins (by the terrorists itselfs, so not an inside job)

Both scenarios are possible, and both would be a big blow against bitcoin at a mainstream level most likely..
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February 15, 2017, 10:56:12 PM
 #4

What if there were a terror attack like 9/11 financed with cryptocurrency or the US government decided that the risks to financial surveillance and tax collection posed by cryptocurrency was so high that it decided to launch a war against cryptocurrency like its war against drugs or radical Islam and was willing to spend upwards of a trillion dollars over the next several years to combat it? Couldn’t they just mount 51% attacks on every current and future cryptocurrency and freeze all transactions?

This is not an unlikely possibility, especially as a result of a nuclear explosion or a new world war.

Goverments would institute new laws that no citizen is allowed to use/sell/trade/hold cryptocurrency
and doing such would be the crime itself (Likely related to terrorism or helping the enemy state weaken
your country's financial war machine). There will be no direct attacks on the network itself such as
with DOSing or 51% attacks, they will just outlaw Bitcoin outright and send people to jail for 15 or
more years if caught. That alone will cause cryptocurrencies to almost fully diminish and if still
survives, go far underground. The only need for government to spend money will then be to
locate miners, developers, and node operators and imprison them.

It is important to remember that Bitcoin only exists now because of the Western understanding
of human rights and how certain tech can help bring in new "enlightenments" to accompany and
add to those rights. In times of oppression or outright world devastation, all such ideals fall to the
way side to help win the war or whatever.

I think Bitcoin can survive such times, but it needs certain changes that helps obfuscate many aspects.

I support a decentralized & unregulatable ledger first, with safe scaling over time.
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February 16, 2017, 03:45:48 AM
 #5

your biggest flaw and any other people with similar theories flaws is that you all forget that illegal activity such as funding terrorism is not done through bitcoin and will never be done with it if you ask me.

when USD is easily doing the job done with maximum efficiency and it is accepted everywhere super easy without any trace of it nobody is going to choose bitcoin which is traceable on the blockchain.

besides if they decided to go the cryptocurrency route they will choose a coin such as monero or other anon coins not bitcoin.


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February 16, 2017, 05:19:15 AM
 #6

your biggest flaw and any other people with similar theories flaws is that you all forget that illegal activity such as funding terrorism is not done through bitcoin and will never be done with it if you ask me.

when USD is easily doing the job done with maximum efficiency and it is accepted everywhere super easy without any trace of it nobody is going to choose bitcoin which is traceable on the blockchain.

besides if they decided to go the cryptocurrency route they will choose a coin such as monero or other anon coins not bitcoin.

Your biggest flaw is assuming that the potential outlawing or potential governmental attacks on
the network would be based upon a truth or facts, such as bitcoin is being used to fund terror or other
illegal activity. You are assuming governments need a valid reason based on facts to take any action.
Though it is true that USD is the major illegal facilitator, that is irrelevant to the actual argument.

More often than not, it is fear and paranoia that leads to decisions and actions, not clear rational.
So, governments will not go out of their way to help bitcoin, but will potenitally usurp when it is ripe,
and it is fully ripe for destruction or attack during times of great upheaval either financial or other.

I support a decentralized & unregulatable ledger first, with safe scaling over time.
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February 16, 2017, 06:57:07 AM
 #7

You don't need a trillion dollars. Buy $5 million in bitcoin at exchanges off-book. Sell quickly dumping the price. Rinse. Repeat, until bitcoin is less than a penny each then take the millions of off-book bitcoin you are holding at the end and burn them all. Continue to buy for years until you've burned so many bitcoin is effectively gone.

Now, what are you going to do about the 50 bitcoin replacement coins that spring up when all the bitcoins are burned? No government can stop them all. That's why they aren't even trying. They can regulate anytime any cryptocurrency touches fiat, like they do now, and that gives them the same control they have over every commodity traded without any additional waste of govt funds. If you think governments are worried about control of bitcoin business talk to Charlie Schrem or Ross Ulbrich. Governments are fully in control without doing anything extreme.

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February 16, 2017, 07:58:12 AM
 #8

like its war against drugs or radical Islam and was willing to spend upwards of a trillion dollars over the next several years to combat it?

well decades later radicals still exist and so do drugs.
do you need more proof that governments cant do anything properly, thoroughly, effectively and permanently?


but you forgot that drugs do not have "mining", every altcoin and bitcoin that rely on pow can be disrupted easyly by a terrorist attack

this is the Achilles heel of this world, without minign you have effectively destroyed every alt, well altcoin are harder to destroy because they have gpu all over the world, not 2-3 big farm in china but still possible to cut a big hash there too
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February 16, 2017, 08:18:13 AM
 #9

This is an interesting question and i do not know what would be the outcome, since there are good arguments for both side. I imagine it to be a question of you wants it more and who is willing to put more money into the fight and willing to make cutbacks regarding his life.
But i think there is one more thing we should consider. I will stick to Bitcoin as leading Crypto.
Bitcoin is starting to get licensed and already is in some places, and that includes countries outside of the us. If those countries are not on the same page as the us, then you have created a conflict of states. That is very different to the war on drugs and radical islam. Somehow the regulation and licensing sounds not to bad now.

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February 16, 2017, 11:15:46 AM
 #10


What if there were a terror attack like 9/11 financed with cryptocurrency or the US government decided that the risks to financial surveillance and tax collection posed by cryptocurrency was so high that it decided to launch a war against cryptocurrency like its war against drugs or radical Islam and was willing to spend upwards of a trillion dollars over the next several years to combat it? Couldn’t they just mount 51% attacks on every current and future cryptocurrency and freeze all transactions?
 
For example, ballpark figures to duplicate current Bitcoin network hashrate would be $600 million equipment cost and $5 million per day electricity cost.
 
Might a response be to create niche, private, “underground” non open source, restricted access cryptocurrencies? Could these gather enough network effect to have any utility without being vulnerable to attack?

The governments of the world will not make some naive decisions against bitcoin just because that certain event happened. Its like saying that after the 9/11 attack the government will shutdown all airports around the world because it will be used by terrorists. Instead of closing the airports and ban all airplane to fly into the air,  the government has set-up strict security measures to avoid anymore attacks to happen.  In this case of bitcoin if it will be used by terrorist to fund terror attacks the government will not simply shutdown bitcoin but they will do some investigation. There are huge investment at risk if bitcoin is being banned and the government is also looking at that aspect and so the possible move for the government is that they will establish another agency whose purpose is to monitor bitcoin transactions and will create rules and policies so that bitcoin will no longer be used in any illegal and deadly activities.

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February 16, 2017, 11:23:29 AM
 #11

I think this is very unlikely to happen. If they were to ban bitcoin and other related currencies, they would only serve to hinder own technology, because suddenly ideas of block chains that the banks use would also be restricted. It would be unpopular move. (Sorry about the bad English)>
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February 16, 2017, 11:38:59 AM
 #12

it is not only unlikely but also impossible thing to do.
you can come up with so many different weird ways of kicking bitcoin around, even crashing the price as comment #7 explains but you can never kill crypto currencies like bitcoin.
and you should know government is not concerned about bitcoin price much, they are more concerned about what bitcoin and other altcoins such as monero are enabling people to do.

and if you kill bitcoin then we can fork it and start over, move to an altcoin then to another, and so on.

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February 16, 2017, 12:08:34 PM
 #13

it is not only unlikely but also impossible thing to do.
you can come up with so many different weird ways of kicking bitcoin around, even crashing the price as comment #7 explains but you can never kill crypto currencies like bitcoin.
and you should know government is not concerned about bitcoin price much, they are more concerned about what bitcoin and other altcoins such as monero are enabling people to do.

and if you kill bitcoin then we can fork it and start over, move to an altcoin then to another, and so on.
Well, shutting down the whole thing isn't impossible especially for the USA and there does exist a slight chance for this to happen, but yeah, if they killed bitcoin and other cryptocurrencies, we would start all over again, new generation of crypto coin would be born and all the ex-bitcoiners would together bring bitcoin back. And drugs are still there, radical problems still drive the government crazy so bitcoin can hardly disappear that easily.

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February 16, 2017, 12:16:01 PM
 #14

your biggest flaw and any other people with similar theories flaws is that you all forget that illegal activity such as funding terrorism is not done through bitcoin and will never be done with it if you ask me.

when USD is easily doing the job done with maximum efficiency and it is accepted everywhere super easy without any trace of it nobody is going to choose bitcoin which is traceable on the blockchain.

besides if they decided to go the cryptocurrency route they will choose a coin such as monero or other anon coins not bitcoin.

I see terrorism being funded in bitcoin easily as it becomes easier and easier to get rid of the trace of the transactions, it's going to be easy to get the coin trace obfuscated with mimblewimble and confidential transaction and so on.

So yeah I can see terrorists eventually catching up even tho it will take a ton of time since terrorists are typically dumbasses.
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February 16, 2017, 12:39:30 PM
 #15

but you forgot that drugs do not have "mining", every altcoin and bitcoin that rely on pow can be disrupted easyly by a terrorist attack

this is the Achilles heel of this world, without minign you have effectively destroyed every alt, well altcoin are harder to destroy because they have gpu all over the world, not 2-3 big farm in china but still possible to cut a big hash there too

you think that there are only 2-3 big farms? and only in china......
(facepalm)

bitfury for instance have SEVERAL physical locations for the asics, that connect via several stratums to a pool.
bitmain for instance have several physical locations for the asics, that connect via several stratums to a pool.
slush for instance have several physical locations for the asics, that connect via several stratums to a pool.
and so on

in short there are ALOT more than 20 physical locations even if stats only show 20 'pools'

those pools can be run from any location and API the header data to the MANY physical farms in seconds.
take slushpool. people think its being run in china.. but actually its run from thailand.
bitfury can be run from georgia, iceland, san Fran, etc

pools have already mitigated all the current risks. and if a new law was to be created to outlaw mining. then the asic farms in an area that is proposing to outlaw mining, can hire a truck. load up their asics and move them to another location within 48 hours. far faster than it takes government to propose, discuss and vote on a new law.

again remember there are MANY asic farms per pool. so the impact of moving these individual farms vs the overall hashrate is not much.
hitting/raiding or moving a farm WONT stop cause bitcoin to stall for 48 hours. pools will still make blocks in the average timescales we expect(~10mins(2min<->1hr)).

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February 16, 2017, 05:41:34 PM
 #16

I would much rather use that money to subsidize R&D in Silicon valley to create the ASIC killer technology and then dominate the supply and

destroy that, and then start manipulating the price by creating mini pump n dumps with the "toilet paper" money they are creating at the

moment. You can also ban all fiat to Bitcoin and visa versa conversion and prosecute everyone that accepts Crypto currencies. When that

government has done all that, people will turn against them, and vote them out in the next election.  Wink



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Rainbot
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February 16, 2017, 05:59:10 PM
 #17

There is no THE government. Bitcoin is distributed around the world.

The US gvernment has been funding terrorism by selling drugs, this is much more effective and profitable than messing with Bitcoin. Hopefully Trump will do something to bring this to an end.

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February 16, 2017, 08:50:38 PM
 #18

A simple law would be enough... not to completely kill cryptocurrencies but to make it value decrease over time. dont believe? well, every time pboc decide to have a look on exchanges like huobi and okcoin, almost every crypto bleeds... imagine now if the government decide to prohibit. "oh, but we would still use it" - sure, i agree. but the demand for bitcoins or any other crypto would start to decrease, yet, the supply wouldnt decrease, so the price would definitilly fall.

Adoption is needed, and if it's against the law it would hardly be adopted.

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