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Mark_Friedenbach comments on [tangential] Bitcoin: GHash just hit 51% - Less Wrong
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I see a fair number of comments talking about how this is an overblown issue. There may be FUD out there, but that doesn't mean this is not a significant issue that demands attention. Large-hashpower entities are an existential threat to bitcoin.
Bitcoin's is revolutionary because it is a permission-less payment network: anyone can use it for direct, peer to peer trade with no middleman or governing body. Nobody has to ask for permission or approval. This is because the mining process acts as a distributed voting mechanism to determine acceptance and ordering of transactions. BUT, if one party controls >50% of the hash power, then it is just like having >50% of the vote in a majority-wins election. There's no longer any point in voting -- this one entity now has the power to unilaterally decide for itself which transactions go through and which do not. If you want your transaction to go through, it will only happen with their approval. Suddenly, we are back to having a middleman and all the advantages of bitcoin are gone.
Update: there's a great new post on hacking distributed covering what I just said in greater detail.
Many cryptocurrencies have been destroyed by 51% attacks. Under the hood, those currencies and bitcoin are virtually identical. The only difference is that bitcoin has a lot more riding on it and a lot more people who care. And that's really the only thing that could save it. It may be overblown to say this is the end of bitcoin, but it certainly is the end of the status quo. Something will have to change, either in the bitcoin protocol or community, if bitcoin wishes to remain afloat.
Would you have a link to a writeup of these handy? I'd like to read up on this.
(a request for info, not doubting it in the slightest)