Earlier this month (May 2019), two mining groups joined together and mounted a successful 51% attack on the Bitcoin Cash (BCH) crypto.
Perhaps you heard about this news, or perhaps you didn’t (I found out about it via this Cointelegraph article).
The reason for the crypto community’s underwhelming response might be that the motivations of the 51% attackers were ostensibly magnanimous, as they apparently hoped to prevent an unidentified, presumably malicious third party from taking a bunch of ‘up for grabs’ coins that resulted from an oddly errant code upgrade.
Or perhaps this event didn’t have the explosive fallout across the crypto community one would expect due to the fact that understanding what really happened involves a lot of obscure technical jargon (which I’ll spare you. You’re welcome.)
The conclusions, however, are unmistakable. Proof-of-work consensus mechanisms are supposed to be resistant to 51% attacks because there are so many miners.
But this attack only required two miners. And if two miners can essentially rewrite the rules of crypto, that means they – and just about anyone else – can steal or double spend as much as they like.
And this problem doesn’t only afflict Bitcoin Cash. It affects Bitcoin as well.
As one astute developer concluded (see this Twitter thread): “Bitcoin value depends upon security. If it’s not secure, it has no value.”
That’s right. Bitcoin has no value. Sell while you can, and count yourself lucky if you get anything at all for your trouble.
None of the companies mentioned in this article are Intellyx customers. Jason Bloomberg neither owns, nor plans to own, any cryptocurrency or other cryptotoken, either long or short.