Based on expert analysis from The Wolf Of All Streets, the cost of overtaking the Bitcoin network is considerably less than one might think. Specifically, it has been calculated that the cost would amount to approximately 50 basis points of Bitcoin’s market value; however, this action would effectively destroy the entire crypto market.
Assessing the True Price of a Bitcoin Attack
An expert on a recent installment of The Wolf Of All Streets put the price of a Bitcoin network takeover at about $8 billion, which works out to roughly 50 basis points of the asset’s total market value. It is a surprisingly affordable sum when one considers the size and worldwide reach of the Bitcoin network. Still, it is no small figure, yet the expert noted that there are geopolitical players with the means to make such an expenditure if they wish to cause trouble in the cryptocurrency arena for their own strategic ends.
One would not expect the motivation for this kind of investment to be direct profit; the aim is more to do as much harm as possible to the crypto ecosystem. A hostile party could very well seek to erode confidence in Bitcoin in this way. It is a technically feasible scenario, even if it does not come up in conversation often.
Market Manipulation and Offshore Derivatives
There is a certain duality to a well-executed Bitcoin network takeover: it requires the operator to take sizeable short positions in offshore derivatives at the same time. The Wolf Of All Streets features an expert who would call that out as blatant market manipulation, and for good reason; in most jurisdictions it is against the law. Yet the offshore derivatives market presents a convenient opening for those looking to profit from a fall in Bitcoin’s price.
An attacker can use these channels to short the asset and come out ahead financially even if Bitcoin is driven to zero. In this way, the combination of a network takeover with such manipulative tactics introduces fresh risk to the cryptocurrency. One need only consider that many of the offshore platforms involved are beyond the reach of regulators to see why.
The Underestimated Threat to the Crypto Ecosystem
According to the expert, there is a very real danger to the security and stability of the Bitcoin network in this scenario, one that does not get talked about enough. It is certainly no small matter to put the cost of a takeover in perspective, yet for well-resourced and motivated entities it is entirely possible to carry out.
Should an attack of this nature happen, the value of Bitcoin would be wiped out in short order, a devastating prospect for investors and one that would do considerable damage to the standing of decentralized digital assets. Given how modest the price of taking over the network is when you consider what is at stake, the crypto community ought to be having more of a conversation about it and taking steps to address the vulnerability.
Source — The Wolf Of All Streets: https://www.youtube.com/watch?v=818r1SkiOKA