On The Longest Chain Rule and Programmed Self-Destruction of Crypto Currencies

TL;DR

This paper critically examines core principles of cryptocurrencies like Bitcoin, revealing vulnerabilities in their security mechanisms and proposing a theory of programmed self-destruction driven by abrupt protocol changes and economic incentives.

Contribution

It introduces a novel theory explaining how cryptocurrencies are prone to self-destruction through protocol transitions and highlights security flaws in existing blockchain implementations.

Findings

Current cryptocurrencies have poor resistance to double spending attacks.

Many alt-coins show signs of ongoing programmed decline.

Bitcoin's lack of transaction timestamps contributes to vulnerabilities.

Abstract

In this paper we revisit some major orthodoxies which lie at the heart of the bitcoin crypto currency and its numerous clones. In particular we look at The Longest Chain Rule, the monetary supply policies and the exact mechanisms which implement them. We claim that these built-in properties are not as brilliant as they are sometimes claimed. A closer examination reveals that they are closer to being... engineering mistakes which other crypto currencies have copied rather blindly. More precisely we show that the capacity of current crypto currencies to resist double spending attacks is poor and most current crypto currencies are highly vulnerable. Satoshi did not implement a timestamp for bitcoin transactions and the bitcoin software does not attempt to monitor double spending events. As a result major attacks involving hundreds of millions of dollars can occur and would not even be recorded. Hundreds of millions have been invested to pay for ASIC hashing infrastructure yet insufficient attention was paid to network neutrality and to insure that the protection layer it promises is effective and cannot be abused. In this paper we develop a theory of Programmed Self-Destruction of crypto currencies. We observe that most crypto currencies have mandated abrupt and sudden transitions. These affect their hash rate and therefore their protection against double spending attacks which we do not limit the to the notion of 51% attacks which is highly misleading. In addition we show that smaller bitcoin competitors are substantially more vulnerable. In addition to small hash rate, many bitcoin competitors mandate incredibly important adjustments in miner reward. We exhibit examples of 'alt-coins' which validate our theory and for which the process of programmed decline and rapid self-destruction has clearly already started.