The State vs. Bitcoin
Foreword: As with freedom and oppression, Bitcoin and State money may exist in a perpetual tug of war between ideals. Where State money relies on compulsory participation, Bitcoin offers completely voluntary entry and exit and thus represents the antithesis of State money. In this essay I will explore the mechanisms in which Bitcoin may resist State attack.
Notes to the reader:
· The term ‘Bitcoin’ with a capital ‘B’ refers to the Bitcoin network or economy, while the term ‘bitcoin’ refers to the unit of money.
· Please refer to the definitions section at the end for clarifications
Introduction
Bitcoin’s ability to resist censorship has a necessary security assumption in that honest mining is more profitable than dishonest mining [1]. For this to hold true censorship must meet adequate resistance by the honest economy to ensure that dishonest behavior and censorship is not sustainable. This may be achieved by depleting the attacker’s investment capital by either minimizing their mining reward or maximizing their mining cost. While it is not possible to prove one way or another whether dishonest mining can be overcome, we will outline some of the factors that may give honest miners an edge to resist censorship and support the sustainability of honest mining.
Bitcoin
Bitcoin is engineered money. Its design is unique in that any interested participant is able to join and leave consensus [2] on a voluntary basis without having to receive permission from any authority. It offers superior monetary properties over legacy State monies. For example, bitcoins are impossible to counterfeit or arbitrarily debase and are very difficult to confiscate. There is no other money today that offers such freedom, so it’s no surprise there are many people interested in protecting its value proposition, though others feel threatened by it.
Sound engineering must consider not just steady state conditions, but also the upset conditions. A properly designed system must anticipate the unlikely but catastrophic scenario and build in appropriate safety factors to prevent disaster. A bridge may average fifty…
