Bitcoin hard fork - if you want peace, prepare for war

Over the last few weeks we had a lot of people discussing Bitcoin forks. Every member of the Bitcoin community is voicing their opinions on the matter, so I figured I'd write down my thoughts as well.

Historical perspective

While the debate has picked up a lot recently, it's by no means a new problem. BIP101 proposed increasing the block size in mid-2015 and BIP-141 introduced SegWit in late 2015. Since then we had a number of projects wanting to fork Bitcoin - BitcoinXT, Bitcoin Unlimited and Bitcoin Classic. This is in addition to things like Sidechains, Liquid, user-activated soft forks, etc.

All in all, we can all agree (well, with some exceptions) that we need to expand the Bitcoin network transaction capacity. We can't really wait much longer - this was starting to be an issue in 2015, and now it has become a necessity.

Bitcoin slowing down

Bitcoin for a long while had the first mover advantage - everyone wanted to get into it, develop on top of the platform, etc. Being in the community early was really fun - seeing the first ATM launch, getting merchants on board, etc. However, nowadays it's a different story. Waiting multiple blocks to get one confirmation, paying over 30 cents in fees, etc. - that's not an ideal situation in comparison to what we saw years ago.

If nothing changes, we'll probably see a lot of the big Bitcoin companies expand or migrate to other platforms. Coinbase already doesn't want to pay the fees by themselves, Storj has moved to Ethereum, etc. With Ethereum's growing market cap, there are only so many reasons to stay with Bitcoin...

The fork

So this brings us to the fork situation. There is currently a lot going on in the community, but from what I can understand, there are two main camps when it comes to forking at the moment - those that want to activate Bitcoin Unlimited and soon, and those that want to get SegWit activated sometime this year.

When figuring out what can happen next, we have to keep in mind the scant few examples we had of contentious coin hard forks in the past.

From what I can tell, Bitcoin Unlimited is heading in the direction of activating its hard fork no matter what. It's ramping up in node and mining power count. It is likely that the node count is fake, and there have been some reports about the possibility of attacks on pools that don't signal Bitcoin Unlimited (by orphaning non-signalling blocks in a minority attack). There is also a concern with miners being blacklisted by the effective monopoly in mining ASICs if they signal SegWit.

Lastly, we need to keep in mind the man pushing for Bitcoin Unlimited adoption - Roger Ver. I'm not going to get into discussing his past or personality (there are plenty of trolls that have you covered), instead, lets focus on one fact - he's an early Bitcoin adopter, and he appears to be loaded. Being able to trade 130k BTC loaded. That's more than 4 times the amount of BTC Ethereum raised during its presale. So my guess is, that he could safely pay out of pocket to fund the forking effort, even if it doesn't make economic sense.

So because of this, I think the Bitcoin Unlimited will activate its fork sometime soon. Now, what will happen next?

The aftermath

It was interesting hearing Gavin's exchange with Matt on whether Bitcoin Core should have an opt-in flag to accept the possible fork or not. It looks like the answer for the time being is "no", which means the repository everyone considers to be the "gold standard" for Bitcoin will not accept Bitcoin Unlimited blocks, causing a fork.

If you want to keep Bitcoin network on only one side of the fork, you have to attack the other side. Whether that is a moral or legal way of handling the situation - it's up for debate. At any rate, 51% attack on the Bitcoin Core side of the fork is a possibility that has to be kept in mind. Luckily, there is "a nuclear option" to defend against something like that - PoW change. Since the vast majority of Bitcoin mining power is in ASICs, any change to the mining algorithm makes all of that hardware obsolete. This will mean that an attacker that has been stacking up on ASICs will end up with a large pile of useless hardware, but also that your honest miners will have the same issue.

So if Bitcoin Unlimited forks and tries attacking the Bitcoin Core side of the fork, it is likely we will end up with a PoW change fork and the unchanged, SHA256 fork. The SHA256 fork will either be kept alive by miners that oppose the Unlimited fork, or it will be left by the wayside as they will realise where the wind is blowing and switch over to Bitcoin Unlimited to maintain some income from their hardware.

Early on, the PoW fork would still be vulnerable to an attack. There are a lot of altcoin miners out there ready to put their CPUs and GPUs to work. Whether they will stand with the Bitcoin PoW fork supporters or be mercenaries for hire by the attackers remains to be seen.

If there is no attack on the minority fork, the Bitcoin landscape will probably be more peaceful, but also more divided. A number of exchanges have already signed a statement on the hard fork matter, and it looks like they will either be ignoring Bitcoin Unlimited, or treating it as an altcoin. So all in all, we'll have the Ethereum / Ethereum Classic scenario once more.

If a fork happens and Bitcoin Unlimited doesn't secure key supporters early on (miners, exchanges, developers, etc.), it is possible it will go the way of Elacoin. A coin needs to be traded and developed upon to stay relevant.

Preparations

Since the fork has not yet happened, there is still some time for preparations. Every Bitcoin business will have to consider the implications of the fork on what they're doing. How will customer BTC balance be handled? How will you prepare for the relay attack? What are the edge cases you need to think about?

Even working for Factom I had a discussion about this issue, and we're not holding BTC balance for our users.

Finally, every Bitcoin user will have to prepare for the fork. Whether you decide to hold onto bitcoins at a responsible exchange, keep it in your wallet, or sell it for now in hopes of buying cheap coins during the turmoil, you should make a conscious decision on what to do, or risk getting some of your coins lost in the process.

Conclusions

Bitcoin needs to address its transaction throughput sooner than leter. It is likely Bitcoin Unlimited will attempt to hard fork soon. The fork will either lead to the community being divided, or an attack on the minority chain to force everyone to switch. The attack will likely lead to another fork and an uncertain future fo the minority chain. Everyone should ready themselves for the fork.

If you want peace, prepare for war.

Contentious Bitcoin fork WILL create a split

The Bitcoin community has debated a potential hardfork to Bitcoin for over a year now. There have been various solutions proposed to change the hard cap on block size and increase the amount of transactions that can go into any single block.

Leaving aside the discussion as to which approach would be the best for Bitcoin in the long run, we can agree that there is a disagreement on the issue and any hard fork that may happen will not be as unanimous as the previous forks were. Looking at some recent examples, we can expect that any contentious Bitcoin fork will create a split in the network.

Big players can trump forks - Elacoin

Last year Steve Sokolowski shared his thoughts on a Bitcoin hard fork proposal in a forum post. Other than discussing the actual solution, Steve also shared a story of Elacoin's attempted hard fork. Apparently, it was some unremarkable Proof of Work altcoin which activity has died off after awhile. A new developer came in and decided to breathe new life into the coin by creating a Proof-of-Stake fork. A lot of people got excited for the update and the trading volume and price rose back up.

When the fork was scheduled to take place, despite the backing of the community, the developers and stakers, the fork failed since Cryptsy continued to trade the coin without upgrading their daemon. Eventually the hard fork was deemed a failure while the old coins were still being traded.

This brings to mind the famous experiments with five monkeys, a ladder and a banana. People would trade a coin in anticipation of the fork, then ignore the fork and continue trading the coin due to its increased price and volume, completely forgetting why they were trading it in the first place. Classical altcoin speculators.

This only goes to show that big players, even if they are in a minority, can trump developer forks. While a story like this is rather unlikely to happen in Bitcoin, since the coin itself has many different markets and a vast community, we could experience a different problem when a hard fork happens...

New Coke vs Coke Classic - Ethereum

Not so long ago, Ethereum has experienced The DAO debacle, wherein a large quantity of ethers were drained from a high-profile smart contract. This prompted the Ethereum developers to create a hard fork that invalidated the attack. For a few days everything seemed to go smoothly - the majority of the network supported the fork, everyone transitioned just fine and it looked like the network could put the kerfuffle behind them. Then came Ethereum Classic...

Ethereum Classic is, I suppose, an "un-fork" of Ethereum - a codebase designed to ignore the DAO hard fork and continue the network as if it never happened. Whether the developers believe that they are supporting the community that disagrees with the fork, or they just want to make a quick buck, the fact is that the classic ethers (ETC) started being traded on Poloniex, probably one of the biggest altcoin exchanges currently, and now are being actively traded on a number of other exchanges with a current market cap of $200M and 24h trade volume of $65k - forth market cap after Bitcoin, Ethereum and Ripple, and having double the trading volume of Ethereum, second only to Bitcoin...

From a perspective of any Bitcoin core developer wanting to fork Bitcoin, this is probably the worst thing that could have happened in the given situation. Exchanges supporting both sides of a fork can set a precedent of what will happen when Bitcoin is forked in any fashion short of full unanimity. Even if the unforked version of Bitcoin has 1% of its market cap, that's $94M market waiting for an exchange to take their money - it would be the 7th largest coin market, around the halfway point between Litecoin and Dash.

As an Ethereum Developer pointed out in an Ethereum Foundation Skype Chat leak - ignoring Ethereum Classic means there is no money to be made, while embracing it allows you to tap into some "vestigial value remaining from the shared chain history".

Even if any potential fork has all of the support from all of the developers and miners, there isn't much one can do to stop the un-fork, perhaps short of a Coiledcoin-esque 51% attack. Even if networks like Ethereum implemented "the bomb" (a special smart contract that prints tokens out of thin air, intended to kill an un-forked network), a developer could just create another hard fork to disable that code pretty much like the DAO was disabled...

Kill it with fire

So when all is said and done, it looks like the only way to ensure only one version of Bitcoin is around, one would need to reach an overwhelming consensus with the developers, the miners and the exchanges to support only one part of the fork. Anything short of that will create a split network with duplicate tokens being created on both tines of the fork.

To ensure the rest of the network follows suit, someone should put aside some funds and mining power to be able to execute 51% attacks on any un-fork that would start being traded at an exchange. While a 51% attack in normal cases might be in the legal murky territory, perhaps using it to enforce a hard fork might not be seen as an attack on the currency, but as a part of the upgrade process. The law might not catch up to this conundrum for years still.

Conclusions

Anything short of an unanimous hard fork to Bitcoin will most likely result in a network split where both sides of the fork. The split will most likely be motivated by short-term profit to extract some remaining value from the alt-chain. A good way to ensure no such split happens would be to divert some resources to performing 51% attacks on the minority chain and thus causing whatever exchange that tries to trade them to lose money.

Related discussions:

• "A lot of us here hate on and criticize Ethereum and Altcoins, when in truth we can learn a lot about their respective success and failures"
• "We only have one chance"
• "Failed hardfork example, Elacoin"
• Discussion on /r/Bitcoin and /r/btc

Irrational Bitcoin mining

Last week we discussed the economics of P2Pool mining with low-powered miners. One of the more interesting comments I came across while doing some research for the topic talked about the possibility of companies like 21 Inc creating a scenario where the Bitcoin mining becomes completely unprofitable for anyone that has to pay their electricity bills. Lets examine how this scenario might impact Bitcoin.

Creating irrational miners

In game theory, one generally assumes that every player in the scenario behaves rationally, that is to say - they are motivated by maximizing their own profits. In the Bitcoin mining world, every large-scale miner is rational - they care about their bottom line and profits. If it is profitable to mine, they mine, if not, they either switch to more efficient hardware (CPU->GPU->FPGA->ASIC->better ASICs), don't turn on their miners (minimizing losses), or outright buy bitcoins from the market (if they aim to accumulate bitcoins).

Since the Bitcoin difficulty is self-correcting, eventually the market weeds out the most inefficient miners until mining becomes profitable again. All in all, it's a strange mix between the tragedy of commons and an arms race that makes Bitcoin more and more resilient to attacks (a potential attacker would have to incest more money into the attack than everyone else combined).

However, earning money from mining is only one motivator a potential miner might have. Just like Google indirectly benefits from laying down Google Fiber that gets more people onto the Internet where Google can monetize them with ads, Bitcoin companies might devote some of their resources to mining even at a loss. For example, SatoshiDice might want to have its own mining pool to push through all of its pending transactions that some other pools might consider to be spam. Big exchanges would similarly want to make sure all of their deposits and withdrawals are processed faster than its competitors, etc. Lastly, companies might want to mine just to make sure the Bitcoin network is more decentralized.

And now, with companies like 21 Inc pushing for inclusion of their mining chips into various devices, we might see an emergence of essentially botnets of low-powered miners contributing their hashing power to their creators.

Botnet mining

Botnet mining bitcoins isn't really all that new. We had some mining viruses bundled with torrents, esports server code, or even embedded in websites through WebGL. However, since nowadays mining with anything short of a dedicated ASIC chip is worth less than the coding time required to run it. However, if we start embedding small ASIC chips into devices, things might get more interesting...

It would be possible for hardware manufacturers to include physical bundleware / crapware into their products similar to how phones nowadays come with pre-installed bloatware. Like 21 Inc's investor slides suggest, those mining chips would probably come with pre-defined address they will be always mining a portion of their income to, creating a revenue stream for the chip or phone manufacturers, or perhaps network operators or the like. I would also suspect that for some amount of time most of those chips would be locked in to a specific pool (similar to carrier-locking), which means most of the value of the chip will probably be extracted in a controlled fashion.

All in all, what would this boil down to? Most likely, the people that purchase the device with a bundled miner that would mine for a specified pool say, when the device is plugged in or charged. Maybe if we're lucky, those devices would mine on something like P2Pool, but that has its own problems. The customers might not notice their devices eat up a few extra dollars of electricity and could break down faster after the warranty is over. They would get some dust balances to use in the Internet of Things, but that wouldn't matter much in comparison to some other implications.

The Bitcoin difficulty could be pushed up over time, accelerating its already fast growth. Traditional for-profit miners would have harder and harder time competing in the market against the botnet. If the miners would really be pushed into every device, they would probably be unable to compete shy of plugging new chips in straight from the factory for mining before consumer electronics devices would go through the process of production-shipping-sale-mining. ASIC manufacturers would probably start offering their own mining chips and compete to build their own botnets of devices with bundled miners. Perhaps there would be some market for second-hand mining chips - the manufacturers would first mine with a fresh batch of chips to get in on the lower initial difficulty (possibly under the pretext of "stress testing"), then when it becomes unprofitable, the chips would be sold to consumers, a bit like what Butterfly Labs was doing, only on a bigger scale.

At that point, we would probably see traditional Bitcoin mining pools be replaced with pools owned by chip / hardware manufacturers or network operators. While the talk of "redecentralizing Bitcoin" is all well and good, when push comes to shove I doubt final consumers would be mining through P2Pool if the profits could instead be directed through some big corporation's pocket. Providing the cost of running such a pool would be small, you could still squeeze in a bit of money out of your consumers by making them pay for the electricity used in mining.

Getting your bitcoins for cheap / free might be undesirable, if you subscribe to the labour theory of value (a good is worth about as much as it costs to produce it). While a mining pool today might be more careful with its hard earned coins - selling them for as much as possible, waiting to sell if the price dips, etc. - a botnet mining pool might not care as much. They might also not care as much about various Bitcoin issues - they might not vote on various BIPs, not care if their software provider creates a pool that censors some transactions, create empty blocks, be easier to sell their mining power to "double-spend-as-a-service" pools, etc. If the mining is forced onto the users, they can't vote with their feet unless they are willing to unplug their electronics completely.

Conclusions

While the current state of largely centralized mining pools might be a potential Sword of Damocles hanging over the Bitcoin network, they have a strong incentive not to attack the network:

If a greedy attacker is able to assemble more CPU power than all the honest nodes, he would have to choose between using it to defraud people by stealing back his payments, or using it to generate new coins. He ought to find it more profitable to play by the rules, such rules that favour him with more new coins than everyone else combined, than to undermine the system and the validity of his own wealth.

Giving the mining power to everyone through a P2Pool-like solution might be seen as similar to low information voters - a lot of them would not know what to do.

If embedded mining chips become more widespread, we could see them disrupting the current mining status-quo, but I ultimately doubt the new mining pools would be much more decentralized than the current ones. They would also have less incentives to care about the Bitcoin network - it's not their main business.

Only time will tell how this will play out.

How to kill a currency

A lot of people have spelled Bitcoin's doom in the past. From a 51% attack to some other vulnerabilities, a lot of technical pitfalls are well known and documented. There is a whole Wiki page on this subject, and I even wrote a master's thesis on the subject. So while Bitcoin looks like it's around to stay, there are many other cryptocurrencies emerging nowadays that can be wiped out in some interesting ways. Lets discuss some of them.

Destroy the value of a currency

First off, a quick recap of the obvious for completeness sake:

The traditional 1.0 copycoins are perhaps the easiest to bring down. Their network is secured by the miners (in case the coin uses PoW) and in return the miners get paid in coins they mine. However, if the value of the coin was attacked, the miners wouldn't have any incentive to mine it. They would need to be subsidized by the people running the network. As I discussed before when talking about Quark, a repeated 51% attack coupled with double-spending various crypto-to-crypto exchanges would quickly ruin the coin's reputation and get it removed from all services, thus destroying the coin's value.

Now with that out of the way, lets talk about some new stuff.

End the "blockchain bloat"

The topic of blockchain bloat has been a heated topic in the Bitcoin community for a few years now. It started with SatoshiDice sending a lot of 1 satoshi transactions, and the topic got more interesting with the advent of Bitcoin 2.0 technologies. By "Bitcoin 2.0", I mean Crypto 2.0 platforms that use the Bitcoin blockchain as a store of their data. For example - Mastercoin and CounterParty. While those systems use the Bitcoin blockchain because they can rely on it being a universally stored immutable record, at the same time they are reliant on the network accepting and storing their extra data. This could be their potential downfall.

There are some people out there that could be called "Bitcoin purists". They create transaction blacklists to hamper the propagation of transactions from Bitcoin 2.0s and other blockchain bloaters. While those blacklists might be effective if there are a lot of nodes running this code (which is rather unlikely), a more insidious attack would be to convince the mining pools not to include data from the Bitcoin 2.0 platforms. As mining becomes more concentrated in big pools, and the mining profit margins become thinner and thinner, a few pools might welcome a subsidy from a purist or a 2.0 competitor.

Moreover, due to how Bitcoin works, this blacklisting can be quite easy to execute. Someone wishing the bloaters gone could check each block for those transactions. If there were no such offensive records in the given block, the attacker could just send the subsidy to the address from the coinbase transaction. This way one can reward censoring pools without even knowing who the parties involved are. You just have to let them know the rules of the game through an email or some public announcement.

To counteract this, the Bitcoin 2.0 would have to rely on the goodwill of the honest pools, increased transaction fees to give the pools an incentive to include their transactions or a direct subsidy from the 2.0 developers to the pools to let their transactions in.

All in all, this seems like an easy way to carve out your competition in the future if the competition between the Crypto 2.0 platforms will start to become more and more fierce.

Unenforceable embargoes

Many countries use the banking system and the flow of money as tools in their political regime. There is a lot of pressure to keep some countries, such as Iran or North Korea, from being able to deal with the rest of the world. However, in a decentralized Crypto 2.0 system, either everything goes or the system goes. This may very soon create a situation where the unstoppable force of innovation from the crypto space will meet with the unmovable object of nationalistic policies. In the end, only one will be able to prevail.

This issue affects a system like Ripple and Stellar the most. In those 2.0s one can freely trade between any pair of currencies. This means that if say, we have USD issued by a bank from the States and IRR issued by a bank from Iran, one can trade the USD for IRR just as easy as one would trade USD for EURO.

As the systems don't distinguish or discriminate between any currency or issuer, this makes the monetary sanctions unenforceable in the system without completely shutting the network down.

If this issue would ever come up, this would probably be the biggest legal battle a crypto system would have to face. Can a company develop a software that is by its very inclusive nature allowing some people to break the law? Can such a system be allowed to exist and run? Perhaps a combined pressure from a hegemonic government and oligopolistic banks would be enough to drive the crypto scene underground. However, given another outcome, we would see that the emperor has no clothes and progress cannot be stopped...

Conclusions

There is more than one way to kill a crypto. You can either attack its value to grind it down to dust, pay the miners to censor it into oblivion, or challenge the status quo and see what remains after the battle.

Proof of Stake lacks a fail-safe

I've discussed my various doubts about the delegated Proof of Stake a few moths back. Thinking about it some more recently, I have one more idea to add to that discussion that applies both to Proof of Stake, and distributed PoS - the lack of a fail-safe.

People criticise Proof of Work for creating centralization. Bigger miners earn more money that they invest in faster mining equipment to earn even more money and so on until there is only one entity that essentially owns the network. Everyone fears centralization in Bitcoin as it can bring about the dreaded 51% attack. However, a lot of people, including myself aren't really worried about this. Andreas Antonopoulos explained it well during the Texas Bitcoin Conference - a 51% attack isn't much of a threat any more since we can always fork the software and make the current ASICs obsolete. Just like that, any mining operation that relies on those specialized chips have it in their best interest not to attempt to be a malicious entity - they have too much to lose. While a malicious "government entity" (or anyone that wants to destroy the network at a cost) would not case about the losses, it wouldn't be able to accomplish anything regardless.

Looking at Proof of Stake, the network essentially lacks this fail-safe. If an entity controls the majority of coins in the system, they can perform a 51% attack as well. To take the network back, either one would need to abandon the PoS mining algorithm, or erase the malicious entity out of existance. However, due to the pseudonymous nature of cryptocurrencies, the attacker in question can easily shuffle their coins to new addresses and spread them around so much they become essentially indistinguishable from anyone else in the network. Tweezing them out would be hard and a lot of other people might get removed by a false-positive. As such, the network that relies on Proof of Stake cannot purge itself from a malicious attacker, like a Proof of Work network could.

Of course, a non-malicious entity wouldn't want to perform a 51% attack on the network. The attack would evaporate any value their stake would have. However, a malicious "government entity" that wished to take down a PoS network would have a much easier time doing it, since forking them out of the ledger would be much harder.

Why fast maturing altcoins are doomed to fail, or why $30 dollars a day is not enough to secure Quarkcoin

Recently I came across Quarkcoin, a Bitcoin-based altcoin with a very fast maturation. The blocks start with 2048QRK reward and halve every 60480 blocks. Each block is set to take about 30 seconds, so this give us roughly 3 weeks of blocks between each halving event. Minimum block reward is 1QRK, and will be reached after 11 halving events, or about 6 months.

A lot of people consider Quarkcoin to be a pump-and-dump premined scamcoin. In some sense, they are right, but in some sense, we are stretching the definition a bit here. QC has been promoted by the likes of Bill Still and Max Keiser, driving its price up a lot. While not falling strictly under the definition of a premined currency (one in which all coins are created in genesis block and subsequent mining reward is insignificant if present at all), it certainly is reminiscent of such schemes.

Looking at the market price of QRK (at the time of writing, each coin is work about a cent, giving the entire market of about 250 million coins the value of $2.5M), a lot of people from the Bitcoin community will recognize it as a pump-and-dump scheme. The currency exists without much of a market - it appears to be traded on 3 small exchanges, there is a lack of tools or documentation for developers, and it appears to be accepted through one obscure payment processor, mainly by shops that will accept any currency. All in all, there is nothing that warrants the current price, asides some key individuals driving its popularity.

However, at the same time Quarkcoin can be an amusing case study for fast maturing altcoins. Just think about it - once blocks will have 1QRK rewards, that will essentially be the baseline of how secure the network is. At the current price, this would equate to $30 per day.

Any mining-based altcoin can essentially be brought to a standstill by a 51% attack. This means that the total computing power of an attacker would equal to the computing power of the entire network. As long as the miners on the network are rational according to game theory (they mine the coins for profit and stop mining when they are not making a profit), the cost to mine the block should be roughly equal to the amount of money earned by mining the block. Since the block reward will level out at 1QRK per block, or 2880QRK per day, this is about as much it would cost to perform a 51% attack on the network in electricity costs.At the current exchange rate of 1 cent per QRK, this is a cost of $30. This is all that will stand between someone being to transact in Quarkcoin, and having their coins sit idly for a day not getting confirmed. Imagine what could happen in that time...

A malicious party could spin up a lot of Amazon EC2 instances, or otherwise rent some server farm time to be able to efficiently mine Quarkcoin without having to pay high upfront costs. It might cost them more than $30 per day, but even spending $1000 would be nothing in comparison to bringing down $2.5M market. They could buy up some QRKs beforehand and position them at online exchanges that do not require KYC verification and are not AML compliant. They start the 51% attack, sell all of their coins and announce what is happening - Quarkcoin is under 51% attack. The attack will persist as long as QRKs have value. No transactions will be confirmed, so nobody will be able to get their money into the exchanges and sell them until it is too late. All the big players that don't hold their money on the exchanges essentially lose all of their money. Panicked people do their best to dump their coins. The attack persists for an hour, a few hours, a day or more as needed. Those that were not convinced at the start change their mind sooner or later.

People holding a lot of money in Quarkcoin would probably do their best to fight against the attack - perhaps sending transactions with high fees to incentivise miners to mine, getting as much computing power as they can onto the network to counter the attack. The question is - how prepared would such people be for this situation in comparison to the attackers? One would have as much time as they need to prepare themselves and streamline the process, the others would have to catch up if they haven't done their lesson in advance. One could also go after the exchanges, performing DDOS attacks on them to bring them down and cause more panic - even if someone was able to get their money in, they might not be able to trade.

Of course, the network could be hardened against such attempts by the people with a lot to lose running their own miners beyond profitability and artificially increasing the difficulty. This would make a 51% attack harder, but at the same time it would destroy the healthy network of miners that would otherwise be interested in profiting from the currency.

All in all, what a lot of people that use fast maturing altcoins don't understand is that unless adoption is driven as fast as the reward is dropping, the currency will develop a big vulnerability to 51% attacks. High transaction volume with appropriate fees would solve this issue, but this requires people to start using the currency, not just buying it and holding it.

As it stands, it looks like Quarkcoin is headed in one of two directions - either it will be just another pump and dump coin and will end up in a number of people losing their money, or it will be destroyed in a more spectacular 51% attack on the network. Anyone holding a grudge against the coin or people that have a lot of their assets tied to the currency can be a potential attacker. A Bitcoin or Litecoin purist could wish to destroy it to prevent people from diverting their money from their currency of choice. Anonymous might do it for the lulz.

We'll have to wait and see whether Quarkcoin will go out with a bang or a fizzle, or perhaps persist against all odds. We will probably see in the following few months what the future will bring.