It is utter nonsense.

It looks that the guy doesn't understand how the network works when he says about "stealing" BTC, and getting 5Million BTC... It is not possible in a reasonable amount of time.

Still strikes me as re-inventing the wheel, but what features would you say could make another cryptocurrency better than bitcoin?

That's quite a clever point of view.  Indeed, if something better than bitcoin comes up, it will be great news.

I'ld like to create a community response to the post.

I set up a collaborative editing pad:
   http://meetingwords.com/GO5tVHslbz

Following is my stab at a response.  Anyone care to make it better?  I'll paste the community response on the Quora post at a later time.


Community response to:
  http://www.quora.com/Is-Bitcoin-doomed-to-fail


Is Bitcoin doomed to fail?

> 1.) Technical
> it would require ~2k CPUs for 1h to steal 5M BTC.

Let's do the math.
 - Amazon Quadruple Extra Large Cluster Compute Instance $2.10 per hour. http://aws.amazon.com/ec2/pricing/
 - That instance is 2 NVIDIA M2050s, or about 32 Mhash/s per https://www.bitcoin.org/smf/index.php?topic=1334.msg26185#msg26185

The currenty network is about 150 Ghash/s.  To get 50% of current network hashing, that means you'ld need to match that amount.
That's 4,688 of those XL Cluster instances.  Hey ... that's just under $10,000 for the hour.

Whether or not that amount of capacity is available to just spin up is unlikely however.  49.9% of the hashing strength won't be enough.

So if you take over the network, what does that let you do?

Yes, there are over 5 million bitcoins that exist, but they aren't yours to spend.  You can try to accumulate bitcoin and then double spend once you have control of the network.  Assuming you start sending those to Mt. Gox and other exchanges in hopes of double spending, its quite likely the combination of a ramp in the number of nodes plus an influx of bitcoin funding by the exchanges wouldn't go unnoticed.

Amazon is likely to be the only one likely to profit from such an attempt.

> 2.) Legal
> BTC will represent a deadly threat for a national state, and that they would react accordingly using their full moral, legal, judiciary, police, military, PR, press powers to shut down such a threat.

Governments could make trade using bitcoins difficult, that is true.  If they make it a crime to trade with bitcoins only criminals will trade bitcoins, or something to that effect is how the saying goes.

> 3) Competition
> the lock-in power of such network is extremely low, and the entry barrier for competitors is also very low

There already is competition.  Testnet Bitcoin is a live, functioning parallel currency.  Today you can mine for it, exchange it .. it even trades on Bitcoin-OTC!  But you might want to think twice.  Because it is not protected by 150 Ghash/s like Bitcoin currency is, it is rather vulnerable at this stage.  There will be competition at some point, certainly.

> 4) Community
> infiltrate the community of developers in order to push their own agendas

Bitcoin is open source and runs on open protocols.  Let the best fork win.

Another, perhaps wild idea: If we could convince a whole technology/software/hardware,etc. company (at least midsize) to do mining with their employee computers in non-working hours, this could also strengthen the network.

And on top, create some PR...

It also becomes more profitable to buy computing power to support the blockchain.  When I first heard of Bitcoin a couple months ago a coin was worth about $0.25.  At that time, I calculated the return on investment for buying a Radeon 5870 and accompanying hardware was around 3% APY.  Similar calculations with current market prices suggest 38% APY.

The exact numbers don't matter much, but as coins become more valuable honest participants are encouraged strengthen the network further by increasing their mining activities.


As sgornick mentioned above, the calculations in the original question are incorrect.  It's also important to note that mining difficulty has been increasing exponentially for quite some time.  The longer an attacker waits, the more expensive it becomes to attack the network.

Somebody correct me if I'm wrong, but all that can be done by outcoming the network computing power is double-spending, right? More precisely, rewriting recent blocks.

I think we all agree that there is no monetary incentive to do so... the costs clearly outweigh the benefits.

And even thinking on the possibility of a politically motivated action... what exactly could they accomplish with it? If they start double-spending, they would hardly remain anonymous for too long... their victims would eventually denounce it, and the sorcery would turn against the sorcerer. Besides double-spending, they could erase transactions... but still, is that worth such a big investment? Particularly in a post-wikileaks world where this action could eventually become public?

I really don't think this is the kind of thing we should worry about.

Isn't the point that it doesn't matter once he's got what he 'bought'? If two people both give him USD for the coins which is the real spend? The first I suppose, but someone is still screwed and attacker still gets money.

To limit this possibilty we can take action ourselves so by the time someone notices bitcoin it is incredibly expensive and/or difficult to accomplish.