Author: Eric Voskuil 2017-11-09 18:18:17
Published on: 2017-11-09T18:18:17+00:00
The threat of a majority attack, or "51% attack," on Bitcoin has been raised in a recent discussion on the bitcoin-dev mailing list. While there is no technical mechanism in place to prevent such an attack, it is argued that miners are not incentivized to perform it as it would destroy confidence in Bitcoin and ultimately impact their revenues. However, it is noted that in practice, there exists an incentive to disrupt the market for transaction confirmation, as statism is profitable and a primary source of revenue is seigniorage. This presents a hefty incentive for those who feel threatened by Bitcoin's disruption of that privilege. The security model of Bitcoin is based on miners and merchants defending their mutually-beneficial market from the state, rather than balancing power between them. Despite broad decentralization mitigating the risk to each individual, people must be willing to defend their mines and economic nodes, which requires personal risk. Even in a highly-decentralized system, overpowering taxpayer-funded disruption of the confirmation market will require merchants to pay aggregate fees exceeding the mining subsidy expended by the taxpayer to disrupt it. The outcome of this tug of war is unclear, but those working on Bitcoin believe it is possible for individuals to prevail.
Updated on: 2023-06-12T22:05:57.006947+00:00