>50% crash induced by stakeholders of current financial systems

Question

This is a though I had a few days ago.

There are stakeholders of our current financial systems who would like to secure their wealth. If these stakeholders sense bitcoin as a threat to their wealth, they would want to stop it. In this case they would want to stop it with a >50% attack.

I have read the Bitcoin Papers and found the following:

The incentive may help encourage nodes to stay honest. If a greedy attacker is able to assemble more CPU power than all the honest nodes, he would have to choose between using it to defraud people by stealing back his payments, or using it to generate new coins. He ought to find it more profitable to play by the rules, such rules that favour him with more new coins than everyone else combined, than to undermine the system and the validity of his own wealth.

Since the current financial systems won't get undermined, a >50% attack still makes sense from their point of view.

1. How big are the efforts to induce a >51% attack? (DDoS / hack Pools + provide own hashing power)
2. Could the crashed BlockChain get recovered? (after implementing attack prevention code)

Answer 1

How big are the efforts to induce a >51% attack? (DDoS / hack Pools + provide own hashing power)

I don't think anyone really knows. What you would need to know is how much hashing power, either currently being used to mine or not, is controlled by a single organization that might develop malicious intent.

If a pool, or pools conspiring, suddenly started launching 51% attacks, miners would leave those pools. But by that time, some damage would certainly be done.

Could the crashed BlockChain get recovered? (after implementing attack prevention code)

Sure. In theory, all the honest Bitcoin users could agree to rewind the blockchain to a point prior to the first significant reorganization. At that point, there would be a battle to get transactions in before others get conflicting transactions in. There would be winners and losers and it would be ugly, but Bitcoin would survive.

It's not clear what the "attack prevention code" would consist of. One possibility would be to change the mining algorithm so that the attacker would have to buy all new ASICs, but so would all Bitcoin miners, so it's not clear whether you could obtain an agreement to do this.

Another possibility is a trusted central authority to issue "mining contracts". Miners would have to sign their blocks and miners who attempted 51% attacks would find their contracts revoked. This would have the unfortunate effect of centralizing Bitcoin somewhat, but at least each pool could decide for themselves which "contracts" they'll honor.

Perhaps there are better solutions out there.