Step 1) Buy 3% of the hash power (secretly)

Step 2) Set up a mining pool that merge mines Namecoin (or other alts) and auto sells for BTC, thus charging a negative fee

Step 3) Once your pool has enough hash power (3-4%), point your secret hash power at top mining pool

Step 4) Don't submit winning hashes, reducing the REVENUE of competitors by 3%

Step 5) Continue to subsidize your pool with BTC earned from competitors pools



Result: Competitors pools become unprofitable and your pool is the only profitable option, your pool gets 51%



Step 6) Randomly Orphan blocks produced by other pools (cutting into their profits more, increasing your hash power further as people are forced to join your pool or eat losses on their hardware investment)



The cost of the attack is an order of magnitude cheaper than buying 51% hash power and assumes only that a large number of miners are in this to earn profits today and not to hold BTC. You appeal to their short-term greed, their thin margins, or their cash flow constraints to force them to join you to avoid losses.



The only way to combat this is to have 51% of the hash power in private pools.