Bitcoin is an idea whose time has come
Having sleepless nights over your Bitcoin being confiscated by Putin?
You’re not alone. Many hold the believe Bitcoin will be taken down by all-controlling entities and Governments in power.
Will Joe Biden, Xi Jinping or our Big Tech overlords simply seize Bitcoin and leave all believers, maximalists, libertarians, cypherpunks and Nakamoto himself stand in their underwear?
For the sake of simplicity, I discern 3 ways to bring down Bitcoin.
The first way is a global power shortage. The fuse pop of the century, the Armageddon of electric earth. No Electricity, No internet, No validation of transactions. The end of Bitcoin?
The second way is a 51% attack. An entity money-powerful enough buys the majority of Bitcoin’s hash-rate and forces a double spend. The worst nightmare of the truly decentralized internet currency.
The third way is taking away Bitcoins Raison D’etre. That’s a chique French word meaning that Governments potentially turn their monetary and financial policy 180 degrees, depleting the soil on which Bitcoin grows.
I’ll go over the first 2 scenarios, giving most attention to the 51% attack. I will come back later to the third option. Also, I’ll transform the technical language needed to understand this 51% scenario into digestible blocks for non-tech people.
World Wide Power Shortage
Imagine this for a moment. A Near-Earth Object (NEO) comes racing down towards our green planet with the speed of light with a 1000 nukes destruction power. NASA happens to be awake and sends Bruce Willis attached to a SpaceX rocket loaded with more nukes to attack the Comet. Make it explode before it reaches our holy grounds. This time Bruce fails. The comet hits Siberia and in the energetic shockwave following the impact, the world’s power switch is turned off.
Ah, remember, this happened before. Massive dust and clouds of ashes obscured the earth some 65 million years ago after a six-mile comet hit present-day Yucatan. It eradicated Thesaurus Rex and other Jurassic Parc animals and most of the rest of life on earth.
Why would it not happen again?
Well, chances bad luck strikes again is 1/300.000. And when it does, who cares about a digital wallet paying your groceries with Bitcoin? All of civilization will be gone and the survivors will pay for some eatable insects in shiny rocks or shells.
The 51% Attack Explained
Lets move to a more ‘realistic’ scenario. Technically spoken. The 51% attack on the Bitcoin nodes is possible, but as I will explain very unlikely just the same.
There has been more digital money, even before Bitcoin saw the light. They all got seized, taken down or otherwise cancelled by the big hands of the Government, and behind them the people that control our FIAT money game.
Why is Bitcoin different?
The digital revolution made it possible to make money digital. To turn cash into a series of numbers, a hash-rate. It is equally simple to copy this money. Just think of how you probably copied your favourite album on a CD-Rom when you’re old enough to remember what a floppy disk is.
The founder of Bitcoin found a way to prevent this copying of digital money, alias double spend. Aldo, Cryptography was ready to ensure security and anonymity on the growing network. The other digital cash experiments didn’t find these solutions in the same manner. They still centrally controlled the amounts of their digital currency. Often stored in one central server.
This centralization made it easy for the strong hand of FIAT to take that server down or hack them or arrest the people in the building where the physical server was located. One of the best bets on digital cash, DigiCash, didn't make it as a result of non-transparency in their centralized organization causing to much conflict.
Blockchain tech solved all issues. Blockchain is a transparent, neutral and distributed system. The validation of the uniqueness of one digital string of money, a hash-rate, is now done by all the Blocks in the network. They all agree on the uniqueness of your public wallet address and your transactions. In fact, the majority (51%) agreeing is already enough.
This makes 3rd party middlemen validating money transfers obsolete. Think banks here for a moment. Think how disruptive this really is.
When you own 51% of this validating power, you own 51% of the blocks, you have become centralized again, and you can decide otherwise. You even can choose to copy your personal hash-rate of 1 billion dollars worth of Bitcoin a thousand times, creating money out of thin air again. And also eradicating the trust in the system.
Nobody would trust Bitcoin again, armies of free currency fighters will accept their defeat and walk over, with bent heads, to the FIAT camps.
The Cost of a 51% attack
There are 2 ways to perform this 51% attack on the Bitcoin network. One using money, tons of money, and one that is, astonishingly enough, for free.
The first way is to form a supercluster of miners owning more than 50% of the hash-rate. But mining costs energy, money. You need tons of computing power. You need shiploads of state of the art ASIC chips.
In the inception years of Bitcoin, this was still possible. Everybody overlooked the game shifting potential of the flagship digital currency. People that should have known where in denial, or too busy shutting down the centralized Che Guevara’s of digital money.
To form a supercluster and attack Bitcoin draws a lot of attention. The community will respond. Fast. Mining clusters is a result of simple base economics driving miners to work together for efficiency reasons.
When too much centralized mining power threatens the whole eco-system, a self-regulating mechanism restores balance. Just like nature. Around September 2018, a move towards more centralization inside the BTC mining community occurred. The 4 biggest clusters together had 53% of hashing power. The self-regulating decentralization mechanism made it reach a high level of decentralization again, partly due to the decrease of BTC value.
The bigger the network grows, the more expensive it is to 51% attack it. This research has accurate calculations for the per hour price to 51% attack Bitcoin. A current-day attack would take no less than 1.364M ASIC’s, using ~4.4 GW of power. Expressed in money this is $5.46 billion. Per hour.
So you’re China and you’re planning a 51% attack. Next problem is where to get your ASIC’s? Sorry, they’re sold out for the most part of 2021.
The last resort, according to the research, is Xi Jinping doing a free synthetic attack by taking over huge mining cluster. Some Bitcoin criticcasters claim that the current 67% mining coming from China is already state-run.
The problem here is that miners will know. And they want to protect their efforts and investments. They want their Bitcoins paid out in the next rounds of validations. There is software attached in the mining protocols that alarm the complete community when a movement towards a 51% attack is detected. Within seconds, miners switch to other mining pools, leaving the CCP with empty hands.
Imagine the established money power getting really pissed-off with Bitcoin and all the 2200 billionaires in the world fund a 51% attack.
Well. They won’t.
The majority owns Bitcoin just the same. In fact, that's another very strong argument why old money never will take down new money. They’re too heavily invested in it.
In case FIAT prints enough of itself to attack the enemy, it's worth noting that Bitcoin is more than digital money, more than a revolution.
Bitcoin is an idea whose time has come
In fact, we’re still at the beginning of its hero’s journey.
Why the Hero’s Journey of Bitcoin Only Just Started
Overcoming these hurdles will be decisive for the revolution of money to succeed
Bitcoin is a concept, a revelation, a new technology, the new language of money. When the present-day Bitcoin is taken down, the idea remains, and a new Bitcoin will be re-booted. Maybe with another name. CoinBit?
And it will be equally strong.
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