This is a good reply, finally, i've been asking around for days.
The main counter you have made here is something like: "Undermining Monero is possible, but would not achieve much, or would only do so for a short time before a solution would be deployed."
If it is possible and it does undermine Monero, then the goal (much) was achieved. We are talking about something they perceive to be, by the point they do this, an existential risk, perhaps on the level of a Hitler or Communist Russia. Think about that, and the war of attrition they would fight.
Knocking the price down 100$ in confidence in monetary terms would be the war equivalent of an air raid bombing on an enemies industrial sector.
Two huge assumptions are embedded in your scenario where we know an attack is taking place, that is, we have somehow confirmed that a state controls majority hash, and is fucking with tx's;
1. That a solution will and
1.2 can be implemented, and
2. that the price and project will recover.
The second strikes me as the "manifest destiny" level of confidence Bitcoin toxics have and the first is just as hopefull. While i agree that in general attacks can make a project stronger, this one anonymous hash providers, might not.
Advocating for or defending Monero at that point would be given no quarter or discussion. They would frame privacy coins as dangerous to a much higher level than even now.
Think of prohibition where they poisoned and allowed the sale of Alchohol, that in turn killed tons of people. There is no law so petty the state will not kill you over it. The state has and can do almost anything, credibility is established at the barrel end of a gun. No one would care if they run over your pet coin. They'll just say you are all drug dealers or something.
Another part of your repky relies on something others have said to me, a reliance on their past actions and behavior towards crypto. Seizing funds, legal games, regulations, ect. This still does not answer the question : How do we know hash is not captured/coordinated by the major pools right now ?
As far as attacks go, it's true, targeted censorship is not possible, but random censorship is. In addition to the other methods you mention, are all now tools they could use to undermine confidence in the network, if they did have hash dominance, and for cheap !
Not only that, this could be used in such a way and in a manner combined with an astroturf campaign to divert attention away from what is actually happening. For example, posting comments and starting rumors about it being a type of encryption or CT ring break or bug none of the devs can find, but it's actually just them controlling the hash the entire time.
As far as solutions, i like Nano's (xno) removal of fees and mining entirely and their special version of POS which is not a POS at all because nothing is staked, and is more akin to congressional voting, wherein how much weight a representative has is known to all and can be rebalanced if it gets too concentrated. But the reps, could still all be the same entity.
I need to study it more and of course it's core design is only pseudonymous like Bitcoi with no community ambition for privacy, which sucks but a fork of nano is working on Camo, a privacy tool like coinjoin.
Another is of course Worldcoin, with intrusive KYC and centralized development, so not really a solution.
Ultimately i don't think there is an obvious solution. What i'm describing is not a Sybil attack, i'm not saying they use bots or overwhelm the network with fake users.
There not being a readily obvious solution, does not remove the potential problem though.
POW or POS both just push the "Who watches the Watcher" problem up a level.
