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July 22, 2018, 04:32:35 AM |
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IMO, this attack won't work in practice for few reasons:
1) Big miners are quite profitable so they are unlikely to participate. There is too much risk involved. See 4.
2) Like gold mining, production capacity is inelastic. There is no quick way to convert $1 Billion to equivalent mining Hashpower. ASICs are in very high demand so attacker will have to wait for months to get enough hardware by which time hashpower would have increased significantly.
3) Cost of borrowing is non-linear. Also, it can't be done through single market because there is max limit per account. So attacker will have to build up a huge short position over time which is likely to take weeks if not months. Any short squeeze during this time can instantly vaporize shorts within few mins.
4) Last but not the least, such market manipulation is not legal. Attacker and anyone involved will end up in prison.
Bitcoin works better in practice than in theory.
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