On Tue, Jul 5, 2011 at 9:22 AM, Jon Callas <[email protected]> wrote: Good points. But nonetheless, it's a really, really cool property of the > system that you can gain by destroying bitcoins. I mean heck -- let's create > another sub-constant, H_s which is the constant that shows when it better to > destroy one than steal one. Obviously, if you have zero bitcoins, then > stealing them has some value. But heck -- what if you're sitting on a cache > of 371,000 coins. My intuition is that it's going to be better to destroy > than steal. If you're found with a stolen bitcoin, you have some 'splaining > to do. But if you silently destroy one -- then you see a market float. >
Let's assume there is a way to convince market participants that some Bitcoins has been destroyed, what would happen then? The value of the current Bitcoin supply would slightly increase, that's correct. Would market participants be willing to invest more in order to secure their liquid assets against Bitcoin assassination attacks? How the attack rate would increase/decrease? The tragedy of the commons suggests us that when both risks and benefits are socialized between the elements of the population, individuals lack the incentive to unilaterally invest in security. On the other hand, as long as the reduction of money supply increases the value of the survived assets (ie, there's demand), some elements of the population will have an incentive to attack. It would be interesting to investigate further. Alfonso -- tweets @secYOUre blog. http://Plaintext.crypto.lo.gy/
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