Third question. Another great point you made about Dpos is that attacking it just makes everyone dump their coins and start a new chain.
However, when Justin Sun attacked Steem, he managed to freeze many whale accounts including yours in order to prevent dumping. Another attacker can decide to freeze every whale account who want's to leave. Since he's already centralizing the chain, why hold back? So the community doens't necessarily get richer, just small hodlers.
One way this could work is if centralizing the chain makes it a security under SEC rule or somewhere else. That would make the attacker a criminal, and the chain would get delisted from everywhere, like we saw with ripple.
So my question is, do you think that centralized coins will be regulated as securities? And I'm asking because I know there is the ongoing case with the Steem coins that Justin tried to steal. And btw when will there be an update on what Bittrex will do?
Steemit INC, owned and controlled by Justin Sun, voted witnesses froze and forcibly over 20mill STEEM. While it seems like a lot, it represents less than 10% of the supply.
An attacker could purge the entire chain. However, there comes a point where you burn the entire place down with yourself in it. The more you steal, the more bridges you permanently burn, and community members don't grow on trees. So if he was to forcibly take 50%+ of the tokens, sure, a good MM could keep you afloat for a while (cough Tron), but in the end, you'll not get many big investors.
You're 100% accurate that centralizing the network makes you a single point of failure to many government organizations worldwide, most notably the SEC. There is a court case between INC and the victims of the Steem heist later this year, which I believe will set the tone moving forward.
One note on the stealing of coins, the blowback Justin got was very big, so do not discount the more times you overtake a chain and try to steal coins, the more unpopular you get quickly. Social dynamics are huge in the age of clout chasing and cancel culture. It's not as easy to be as psycho as Justin Sun was, really give him some credit there, but you never go full Justin.
Good point. Thanks for answering everything, really appreciated.
Forgot to mention, unlike an OTC fly by night deal, to get a dominating stake would cost a lot of money, raising the price. Sure, everyone could just HODL through but lots will take profits just by proxy of the attack before any attack was known. So, either way you slice it, we will get paid from a money attack one way or another, even if the attacker decides to burn the entire place down.
Oh yeah... didn't think of that.