The attack only works if the attacker has access to an infinite supply of bitcoins (or perhaps an infinite supply of dollars to buy bitcoins).
If the attacker has finite funding, they won't be able to stop investors from funding competing cartels which undercut their prices.
Interesting. The feather fork works both ways, though it'd probably still be very, very expensive to try competing. I mean - once you establish 90%+ of total hashrate and are paying, say, 150% PPS and still making a profit, I'm not sure there's any way to compete other than by trying to appeal to users' sense of morality (in which case, they'd just use p2pool - though by force-orphaning their blocks, I don't think there'd be many willing to send that much BTC into a black hole). If Satosh mining falls below a certain threshold (maybe 80% of total hashrate), the whole thing starts falling apart, unless Satosh makes PPS payments to pools to maintain their support and has reserve funds to boost incentive.
Actually... that'd be interesting... meta-pools. So as far as ranks go... miners=barons, pool ops = dukes, meta-pool ops = kings. Then you just need an emperor. Peasants would be all users without "land" (hashpower), who aren't entitled to vote.
I wonder if there's a parallel universe where governments run pools (private pools would be criminalized), and collect taxes in the form of mining fees. When they go to war, an equivalent to the US Army's Cyber Command removes foreign citizens, governments, and corporations from the USG's whitelist. If BTC were
the global currency, this would near-immediately isolate the country economically, on top of whatever "terrorists" the world governments already prevent from using BTC.
The IMF would set global inflation rates by forking BTC. Since they have all "legal" users' compliance, they could increase or decrease supply at will. Maybe a true world government isn't far off. Ooo - my imagination's going, I think I'm ready to start outlining that dystopian book series, now.
