The US wouldn't have to lean on anyone. If the Government wanted to destroy BTC it should be trivial for the NSA to take over 51%+ of the network which then allows it to pollute the system with malicious data that would eventually kill it. (It's not even clear that this would be against any law.) I would bet all my Bitcoins that the architecture for this has already been mapped out, and perhaps even implemented.
> If the Government wanted to destroy BTC it should be trivial for the NSA to take over 51%+ of the network which then allows it to pollute the system with malicious data that would eventually kill it.
That's not how bitcoin works.
If you control 51% of the mining network (not a trivial feat, as you seem to think it is), the best you can do is either:
a) reverse your own otherwise valid tranactions (presumably the government doesn't care about defrauding its citizens -- it can do that without resorting to bitcoin hacks), or
b) slightly slow the effective transaction acceptance rate by only accepting your own (garbage but legitimate-looking) transactions. This would have to be done in some inconspicuous way such that the client authors can't reliably filter out your transaction spam with a clustering algorithm, or else a client update that rejects your spammy block chains would completely nullify the attack.
I don't see how either would "kill" bitcoin, or even have much of an impact.
Someone somewhere linked to a bitcoin information page showing how much computing power is in the blockchain, and it's an amazing amount. More than all the top500 combined. (But remembering that we're comparing non-similar computing units.)
It's an international currency, so it's interesting how all the "government will kill Bitcoin" hysteria is coming from the US. Is that a specific US thing, that people have a special distrust and fear of your government destroying everything?
The global banking system is (currently) controlled by the US Government. There's no such thing as an international currency outside their reach.
It's how the US is able to attack Iran's currency from the outside so easily and spike their inflation to the moon.
It's how when the crash occurred, the Fed was able to stabilize the global banking system by shooting hundreds of billions around the planet to international banks (from Berlin to Tokyo).
It's how the US was able to pressure the world's second largest - and fastest growing - economy (China) into floating its currency more freely and 'allowing' its value to climb.
It's how the US was able to dictate terms to the Swiss (of all people, given their history).
The fact that it's international will just make the Feds more frantic about either controlling it / replacing it / destroying it. The solvency of the US Government depends on the FRN standard, and the ability to 'print' at least $15 trillion dollars over the next 15 years. You don't think they'll attempt to kill anything that even remotely threatens that?
And to be clear, what's likely isn't that digital monetary systems will disappear, rather, that bitcoin will be usurped by official standards. The US will merely get the G30 to agree to some common frameworks and regulations, that will stuff the dollar / euro / yen / yuan into a new shiny digital box. The G30 will jump on board with glee, as they all want to control their own currency systems as much as the US does.
Excellent point. I was going by a scenario in which the Feds operated by a more normal channel, using traditional banking leverage points.
They could clearly hit it both ways as well. Come up with their own standard, regulate bitcoin practically out of existence, and simultaneously attack in a malicious manner.
One thing is certain, the US Government didn't really care whether AltaVista, Lycos, Excite, Google, Yahoo or MSN came out on top in the search wars (competing technology), but they are going to intensely care about who wins the digital monetary system competition that has just begun. We have more money, banking and finance laws on the books than any other sort, because of their desire to control money (which controls everything else).
"it should be trivial for the NSA to take over 51%+ of the network"
Should it? Where would they take that kind of computing power from? 700 petaflops? The top supercomputer in the world does 20 petaflops, for comparsion.
Not sure why you think it would be that hard with customized hardware, but let me ask the question a different way instead.
In a post-CPU, post-GPU, ASIC dominated world, what rational bitminers (other than botnets) would compete against the NSA, or any malicious attacker, who was willing to mine unprofitably? Say even below the cost of electricity, with hardware and bandwidth costs of zero.
If NSA use custom ASICs to mount a 51% attack they are injecting bad data into the blockchain, which is destroying the value of bitcoin.
But even if they don't do this, and they become part of the economy - it's easy for them to create havoc by flooding the market and devaluing bitcoin, then buying all the cheap bitcoin, then flooding the market again. Do that a few times and they'll have removed anyone but gamblers from the bitcoin economy.
