It is exactly the same as a merchant stealing from his customers. He isn’t a merchant for long.
Sure, if the hash rate goes above the optimal level (e.g., in case of an attack), it costs roughly the same to the defender & the attacker, for any extra hash rate. No one disputes that. But that is *orthogonal* to the fact that there is an optimal level of hash rate.
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A “majority” attack, by definition, has to take into account this hardware cost in acquiring majority hash rate - that was previously at equilibrium.
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Budish took this hardware cost into consideration - and called it the stock cost (God, does anyone actually bother to read Budish paper?). The only difference between his & my calculation is the question of the price of prev-gen ASICs, not that the stock cost doesn’t exist!
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Budish model, while inaccurate, is still more interesting than this oversimplified economic nonsense.
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Only as complex as necessary.
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Maybe you should consider how the free market overcomes state censorship without fees. In this scenario all miners earn the same return on capital, whether censoring or not. And given that all mining and transacting would be illicit, the state has the advantage in pooled mining.
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When something becomes illicit it continues only because prices to obtain/do the illicit thing increase to offset the cost of the state attack. If this is not possible, the thing is dead. Similarly it dies if the increase benefits attacker as much as attacked (no net increase).
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Fees drive everything, including hardware investment. We *need* fees. No one disputes that.
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What you are missing by saying only current fees - negotiated at one particular moment in time - matter for security & not hardware cost, is that hardware cost is *also a manifestation of fees* - more precisely, it is the stream of future fees, discounted back to the present.
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Remind me but isn’t the whole point of PoW mining to prevent double-spending in the 1st place? If you don’t care about double-spends, why go thru all this mining trouble?