Why would anyone trust bitcoin values? If the US government wanted to crash the bitcoin market couldn't they just generate a few million bitcoins themselves and then dump them?
I don't think the NSA is going to care about spending a few 10's of millions of dollars on custom bitcoin hashing hardware. Unless people don't think the NSA can outdo some fly-by-night ASIC developers.
If the US government is truly concerned about bitcoin, it won't survive long.
There are only 3600 BTC per day being generated. They can't just generate a few million bitcoins. At best they could do a 51% attack and double spend bitcoin, which would cause problems but it's been done in other digital currencies and the currencies have still survived.
If they did amass a large volume of bitcoins and dumped them on the market the market would drop but like every other drop it would probably be temporary as people love buying cheap BTC when the market crashes (look at the crash after DPR was arrested, bounced back in hours).
> There are only 3600 BTC per day being generated. They can't just generate a few million bitcoins.
They actually can. Generation speed is not adjusted real time, but only every few days. If you generate a mass very fast you can go over it. (And in fact historically it's always been over the expected number.)
No, they can't. Generation speed is adjusted every 2016 blocks, up to 4x change. Let's say the NSA outcompetes the entire network by a factor of 400000%. This gets them about 8 weeks of bitcoins in a few days, before things are slowed back down to normal rates. Not nearly enough bitcoins to cause problems with.
That much power will let them mess around with what transactions get accepted, but that's an entirely separate issue. 51% attack is child's play at this point. What do you do against an adversary that publishes 500 different block chains designed to be easily confused with the 'correct' chain?
I don't think the NSA is going to care about spending a few 10's of millions of dollars on custom bitcoin hashing hardware. Unless people don't think the NSA can outdo some fly-by-night ASIC developers.
If the US government is truly concerned about bitcoin, it won't survive long.