Unknown Government: How much would it cost the state to undermine Ethereum?
In recent years, the Government around the world has been increasingly fascinated by the potential of the Crypto currency such as bitcoin. Although many see them as a legitimate form of digital currency, others are more careful and even hostile to their use. But what if we imagined a scenario in which the government decides to undermine one of these popular coins? How much would it cost like such actions?
As the economist noted in his recent article “The Dark Side of Bitcoin” (1), governments secretly explore ways to use the decentralized nature of the crypto currency such as Bitcoin. One of the potential threats is that the government could try to manipulate or disrupt the network, potentially causing broad financial losses and instability.
To put it in perspective, let’s consider some hypothetical scenarios in which governments could try to undermine Ethereum. We will explore three possible cases:
Case 1: Creating “Bitcoin killer”
Imagine a scenario in which the Government was supposed to create a new crypto currency that directly competes with Bitcoin. This new currency could be designed to be more attractive to users, perhaps offering lower transactions or more advanced security features. The goal would be to take existing Bitcoin users from the platform and to a new currency.
If it is successful, it would probably include the creation of a large propaganda campaign and manipulation to promote a new cryptocurrent currency. That could include:
- Spreading false data on the benefits of a new currency
- Using social media to spread misinformation about your security features
- Offering incentives to users to switch to a new currency
The estimated cost of such an effort would probably be significant, potentially in hundreds or thousands of millions of dollars.
Case 2: Enetration of the Ethereum network
Another possibility is that the government could try to disrupt the Ethereum network by launching a series of “51% of attacks” on its basic blockchain. This would include an attempt to control more than half of the mining of the network, effectively downloading the network and making it vulnerable.
In order to perform such an attack, a group of hackers or malicious actors would have to combine their resources and trigger a coordinated effort to endanger multiple knots on the Ethereum network. The estimated cost of this operation could be in dozens or hundreds of millions of dollars, depending on the scope of surgery.
Case 3: Using a CRIPTO Currency as a tool for Social Engineering
The more invitation approach could include the use of the CRIPTO currency as a tool for social engineering and manipulation. For example, the government could try to create a new currency designed to be used along with existing systems, such as pre -paid debit cards or mobile payments.
This would require significant investment in infrastructure and marketing efforts to promote a new currency. The estimated cost of this operation would probably be significant, potentially in billions of dollars.
In conclusion, submitting the Ethereum – or any other cryptocurrency of the currency – would indeed occur with a significant financial cost for the Government. Although it is a little likely that such an event will soon be going on at any time (for now), understanding these potential risks can help us better protect our digital property and maintain confidence in the integrity of the Crypto currency.
(1) The “dark side of Bitcoin” by Economist, published on March 18, 2020.