@joekelly100 @ChrisEspley1 saw a bunch of talking past one another in the other thread, so just want to start clean to focus on the primary question: what is the likelihood that a non-economic actor will attain the 1) motivation and 2) capability to execute Joe's 51% attack?
Once underway, there are a host of other considerations and Bayesian branches of the probability tree for this attack, but hold those for now. I assess bad scenarios for a living for the gov (from normal bad to humanity-ending bad). Left-tails of the distro very hard to analyze.
The set of non-economic actors we should consider should include the US and near-peer states (RU, CHN, EU [if it ever truly united]) as well as large megacorps who may collude with govs (AMZN, GOOG, MSFT, in US and SOEs in China). Each actor should be analyzed separately, but...
For simplicity, now considered as a type-class. Seems that for such actors, (1) is highly likely. I'd rate the chance of at least one of these actors (or in collusion with another), *seriously* considering such an attack (e.g., covert planning, budget analysis, etc.) at ~75%.
This isn't 100% because large orgs suffer from principal agent pathologies everywhere and very often fail to 1) effectively forecast future threats, 2) set related top-level strategies, 3) develop internal plans, 4) test those plans, and 5) develop implementation mechanisms.
Now assuming such an actor (or actors) *seriously* begin internal planning for such an attack, what analysis will *they* conduct as to the practical steps necessary to successfully execute it. Let's walk through how this would happen in the US, considering the NSC policy process:
National Security Staff would raise the topic at an Interagency Policy Committee (IPC) (or PCC, names change). Detailees from DoD, TREAS, ODNI, STATE, etc. would debate the issue: whether Bitcoin is a threat, to what interests, to what degree. Competing policy papers would fly...
This would take months. Internecine disputes could sink the process, a geopolitical crisis could sap attention, a loose consensus may form only to be torpedoed by staff rotations. Point is, even if the issue began to be seriously considered (75%), probability of it making to...
The Deputies Committee is maybe ~25% (maybe 1/3 of IPC issues reach consensus and make it up. Now the DC will meet and review COAs, and the same issues arise. But, having passed through the filter, the chance of the DC making a rec to the Principals Committee is higher, say 50%.
So the chance of the COA (51% attack Bitcoin) even being raised at the PC level is ~10-20%. Now, would the PC approve the COA? Who knows. Call it 50%, so we're down to 5-10% chance such an attack would be formally recommended to POTUS. Would he sign off or ask for "more options"?
Say that's another 50%, so we're down to 2.5-5% chance that POTUS would approve such an attack. So that gets our estimate for condition (1). Now comes the hard part, actually developing the capability to execute the attack, cost of which would have been part of the approved COA.
POTUS would likely have to issue an EO (or NSPM) to form an Interagency Task Force and sign a Finding as well to direct covert activities in support. DOD and TREAS would fight for "Lead Agency" role, and bicker over funding. CIA would start doing its own shit and not tell anyone.
It would take months for the Task Force to staff up with detailees and for these folks develop their own strategy and related planning documents. Contractors would sniff it out and start their capture process. The elements of this nascent operation would be massive and complex...
TREAS would have to consider risks to financial stability. State would consider diplomatic ramifications and communications with allies. DoD would have to conduct contingency planning. Most importantly, DoE would have to figure out *how* to coordinate with the energy sector...
At this point, it's likely that most #bitcoin operations would have long-duration PPA with large, multi-state utility owner-operators. Their ops would be integrated behind the meter as part of finely tuned demand-response management, baked into the grid and utilities' finances...
Seizure/re-appropriation of these privately owned assets can be done under certain emergency authorities of POTUS (principally reserved for wartime/COG situations), but any actions would be immediately challenged in court, assuming our constitutional order is functioning.
If the courts are not functioning, and if POTUS deployed federal agents on premise with CTRs taking over mining ops, he would be risking a standoff with state troopers/guard deployed by antagonistic governors, who might not take too kindly to their actions...
Meanwhile the stock price of publicly listed miners would crash (potentially bringing down a host of ETF and related financial derivatives) with CNBC Santelli screaming red faced from the NYSE floor. CNN would cut in to report on the drama...
At this point, presuming the coordinated domestic take-over has been executed (with thousands with armed federal agents and contractors at hundreds of mining sites, many co-located with major power generating facilities), comes your "signaling statement" from the WH.
Alternatively, lets say instead of physical repossession, the Feds take advantage of (presumed) consolidation of mining industry into a handful of publicly traded firms. Here, instead of force, they use $$. But this poses a problem: appropriations must be authorized by Congress.
Feds must work with appropriators (and likely several different House committees) to request the billions needed, either passing a stand-alone bill, or stuffed it into a larger package (e.g., NDAA). From the minute draft language is introduced, a big lobbying fight will commence.
Aside from concerns about "Bills of Attainder", this will activate miners and pro-Bitcoin political groups to pressure congressmen, who may not see it in their interest to support a Federal attack on the financial interest of their constituents. Where might public opinion go...?
As we've seen (with Bitcoin < $1T), it's got political juice. Seems plausible this would only strengthen on the way to $10T. But, lets assume FUD propaganda war by the State is effective and a majority favors congressional action. Funds are appropriated for gov to buy out miners.
The mechanics of this "nationalization" would be very complicated, and could go a few ways. Treasury would likely setup a special purpose vehicle to hold the assets (a la Fannie/Freddie), and would act as a monopsony buyer of ASICs and majority control of listed miner shares...
Now, one big problem is that the the PPAs miners have with utilities would likely be suspended or outright cancelled (force majeure). Why would they follow these agreements knowing the state intends to destroy the economic arrangement they've build their business around? cont'd.
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