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BTC Vulnerability? (Massive Attack against BTC system. Is it really?)

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   Hi. (I'm sorry if I don't understand any concept).
 What you think if anyone intruder will buy up bitcoin currency and erase all binary data. This way can destroy bitcoin systems. Is btc network protected against that attack?
That would be the same as an attacker buying all US dollars and burning them.  It's not an effective attack, because people only "sell" their dollars when they are getting something of equal or greater value anyway.

So, yes, it is possible that someone could buy up all or many Bitcoins and then "destroy" the private key so that nobody can ever use those bitcoins again, but it really isn't a problem because the attacker is the only one who will actually lose wealth!

The only scenario that would be at all likely would be if something like a stupid government didn't like bitcoins and thought it was a threat, so they would spend $30,000 or w/e to buy all bitcoins and "destroy" them.  That would be pretty stupid though, because another ecurrency just like bitcoin would pop right up!

I suppose if a government actually wanted to hold off these ecurrencies, they should buy lots of the currency but not tell anyone.  However, instead of "destroying" it or never spending it, they should just manipulate the market a lot while it's young (buy a ton at once, then sell way undervalue, etc).  Then, not realizing the currency was being manipulated, people would just lose faith in these types of ecurrency...

Sorry that got rambly, I'm thinking out loud here.
Or they could buy them while they're inexpensive, artificially increase their value, causing people to invest, crash the market, causing lots of people to lose their money and then repeat. Although a concerted effort might be considered fraud.
 (Hypnotically) If I run any two (or more) unique e-currency exchanger I can displace btc e-currency from it circulation.
 I seems, "truly" system must include mechanisms that protect self from any fraud activity.
 And what do you think?

2Developers and BTC-system designers: please, join to discussion
My daughter ripped a dollar bill in half earlier when she got into her mom's wallet.. It's not really worth it for me to try to get a dollar bill replaced by the treasury so I just consider it destroyed - but it's not really going to affect my budget and certainly not the economy of the United States.  There are about 65000 blocks so over 3 million bitcoins have been in circulation.  Many of them have probably been destroyed by accident when someone lost a wallet file or whatever..

If you want to buy a bunch of bitcoins (or dollar bills) from me and destroy them let me know, I can give you a good exchange rate for bulk transactions like that Smiley

For dollar bills I would charge 1.03 to make it worth my while but I will have them sent by air mail or courier depending on the distance.


I think if a government wanted to get rid of bitcoins they would just take us away in black helicopters - probably Satoshi first..
I don't think you understood my point.

It is a lot easier to arrest and lock up the prominent bitcoin users than to manipulate the market.  Like it was pointed out, a market is not just a single currency, it can be a lot of different types of currency and goods.  Trying to manipulate one end or the other would be difficult.  It is better to just get the people - fear of being arrested is much more effective than trying to shake up confidence in the currency.

Destroying a large amount of currency just causes deflation and makes the remaining currency that much more desirable - imagine if you had a pallet of gold bars in your garage and nobody else did.

Maybe you don't agree with my assessment of the situation but what you posted was far from constructive.

In response to your original post, I don't believe the situation you describe is a big risk.
I don't think you understood my point.
Ok, let's elaborate It.

You wrote:
It is a lot easier to arrest and lock up the prominent bitcoin users than to manipulate the market.

But I write earlier:
What you think if anyone intruder will buy up bitcoin currency and erase all binary data. This way can destroy bitcoin systems. Is btc network protected against that attack?

And If you try to lookup subject carefully you can find:
Quote from: user
Massive Attack against BTC system.

I don't discuss in another attack that you indicated (I understand you idea: attack to system through people).

Ok. Follow next.
Maybe you don't agree with my assessment of the situation but what you posted was far from constructive.

The main idea why I begin this thread:
I seems, "truly" system must include mechanisms that protect self from any fraud activity.

In response to your original post, I don't believe the situation you describe is a big risk.

But I think that It will be better if in design-time developers build mechanisms that decrease potential of fraudulent ability. And you?

Please, explain me if I am wrong. I want to understand you reflections.
You can't destroy them all, more will be generated constantly.  That 21 million number is not going to be reached in the foreseeable future.  As you know, the generation algorithm adjusts itself to slow the generation rate intentionally.
It is unnecessary to protect against an attack in which an attacker buys all Bitcoins and deletes their wallet.

Assuming we were all willing to sell, the attacker would just give us large amounts of cash for our Bitcoins. We could then start another Bitcoin block chain and start over from square one (only with a much larger confidence in the market, since it worked once!) and reinvest that money if we wanted.

Essentially, no matter what happens there is always the nuclear option of "starting over."

There are much more dangerous and likely attacks to be worried about.

What the OP described is called "cornering the market".  When someone tries to buy all the world's supply of a scarce asset, the more they buy the higher the price goes.  At some point, it gets too expensive for them to buy any more.  It's great for the people who owned it beforehand because they get to sell it to the corner at crazy high prices.  As the price keeps going up and up, some people keep holding out for yet higher prices and refuse to sell.

The Hunt brothers famously bankrupted themselves trying to corner the silver market in 1979:
"Brothers Nelson Bunker Hunt and Herbert Hunt attempted to corner the world silver markets in the late 1970s and early 1980s, at one stage holding the rights to more than half of the world's deliverable silver.[1] During Hunt's accumulation of the precious metal silver prices rose from $11 an ounce in September 1979 to nearly $50 an ounce in January 1980.[2] Silver prices ultimately collapsed to below $11 an ounce two months later,[2] much of the fall on a single day now known as Silver Thursday, due to changes made to exchange rules regarding the purchase of commodities on margin.[3]"

http://en.wikipedia.org/wiki/Cornering_the_market