US Forever stamp, circa 2015.
In Bitcoin
- A lot of ink has been spilled on the cost of a 51% attack* on the current Bitcoin ledger.
* an attack that would allow parts of the ledger to be re-written
- Most attempts to do a pure calculation of the computing power needed come up with estimates in the range of a few hundred million dollars
- Others argue with those estimates
- Others say in a few years it will be billions of dollars
- Others say that if existing miners collude it might be cheaper
- Other say that miners aren't incented to attack the chain due to the diminished value of their Bitcoin future revenue stream
- And so on
I personally think the explicit or implicit cost is well above $100M and rising, but the debate will go on for a while.
In a traditional financial ledger:
By contrast, it is extremely easy to calculate the cost of a 51% attack on a traditional financial services ledger.
In the United States, circa 2015, it is $0.49, or the cost of one 1st class stamp.
This stamp needs to be attached to a letter addressed to the CFO of a financial services firm and would have one of the following as the sender:
- IRS
- Treasury
- OFAC
- Federal Reserve Board
- FDIC
- OCC
- SEC
- A variety of state regulators in your state of choice
- A variety of three letter agencies
- A federal court
- A state court
- An insurance commissioner
I am not judging one model vs. the other as they each have their uses. But I am comfortable saying that subverting a traditional ledger is a few orders of magnitude less expensive than subverting a decentralized one.*
* What if a three letter agency sent letters to miners ordering them to collaborate to execute an attack on Bitcoin? I don't know how realistic that is but, to the degree it is realistic, it is an excellent argument for them being distributed. This is why I don't worry about stories of miners at the Mongolian border of China leaching electricity from state-owned enterprises and hurting the ROI of other miners. The more miners, the more dispersed the miners, the more jurisdictions that they operate in, the safer the Bitcoin ledger is.
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