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There are two errors in your logic: 1) Mining power is still decentralized. It's not evenly distributed, true, but it is decentralized. 2) Just because some s

There are two errors in your logic: 1) Mining power is still decentralized. It's not evenly distributed, true, but it is decentralized. 2) Just because some significant percentage of it is in China, doesn't mean it's controlled by one single entity like you're trying to present it here. It's still distributed across thousands of independent miners.

i336_ 11y ago
Yes, but, the article states > ...the block chain is controlled by Chinese miners, just two of whom control more than 50% of the hash power. That's a pretty unique situation. If a predominant amount of hash power were concentrated in China, but distributed among some large (100+ to 1000+) number of miners, that would be fine. But a system of any kind is no longer decentralized the moment more than 49% of that network is entirely controlled by a small [enough] group of people.
- grubles 11y ago
  The China mining percentage could change and is likely about to change: http://www.coindesk.com/bitfury-details-100-million-georgia-data-center/ http://www.coindesk.com/bitfury-details-100-million-georgia-...
  - dragontamer 11y ago
    Okay, so we need to trust three people, or whoever has the biggest datacenters. The US Financial System relies on more than just Bank of America, Chase, and JP Morgan btw. There's more decentralization in the status-quo than the three or four big-name BTC Miners.
    - reso 11y ago
      True but not much more than those. I bet you de facto "control" of the US banking system could be said to exist in fewer than 20 entities.
      - ethanbond 11y ago
        At least some portion of which are elected or appointed by elected officials.
        ikeboy 11y ago
        The big mining pools are also chosen by individual miners, who can change at any time.
    - analognoise 11y ago
      This, which is amusing.
- imaginenore 11y ago
  That's a false statement. Two chinese pools control 52%: https://blockchain.info/pools?show_adv=no https://blockchain.info/pools?show_adv=no A pool is not a single entity, it's composed of hundreds, thousands of miners. To do some evil thing they will have to convince all of their miners to participate, and stay quiet at the same time. And all for what? So they can perform a >50% attack, crash the value, and ruin their investment? I would worry more about things like BitFury's ASIC datacenter, which is a true singular entity.
  - TD-Linux 11y ago
    Unfortunately miners don't get to make any real decisions about e.g. which transactions to include when running on a pool - so for arguments of decentralization the pool is one miner. Of course the miners can move to a different pool if bad things start happening, but it's only reactionary. There's some neat tech that gets around this that is compatible with Bitcoin, for example p2pool. It's not super popular yet but it solves some of these problems.
  - ryanlol 11y ago
    FWIW both of the pools are essentially ran by the same people too.
    - shrewduser 11y ago
      then bitcoin is already officially fucked.
  - api 11y ago
    (1) Get another more centralized pool to control 26%. (Or a cabal of them.) (2) Take both pools offline. (3) Profit.
jhulla 11y ago
Miners produce a stream of bits by consuming CPU cycles, energy, data centers and admins. First, China is a low cost producer across many product categories. It is not surprising that bitcoin mining is also on that list. Second, there are economies of scale to be exploited. Over time, it will become more profitable for the largest miners to increase capacity vs the smaller miners. The largest miners will get cheaper power contracts. That alone gives them an advantage that will allow them to take market share from the smaller miners. The end result is fewer, but larger, miners doing more work.

i336_ 11y ago

Yes, but, the article states > ...the block chain is controlled by Chinese miners, just two of whom control more than 50% of the hash power. That's a pretty unique situation. If a predominant amount of hash power were concentrated in China, but distributed among some large (100+ to 1000+) number of miners, that would be fine. But a system of any kind is no longer decentralized the moment more than 49% of that network is entirely controlled by a small [enough] group of people.

grubles 11y ago
The China mining percentage could change and is likely about to change: http://www.coindesk.com/bitfury-details-100-million-georgia-data-center/ http://www.coindesk.com/bitfury-details-100-million-georgia-...
- dragontamer 11y ago
  Okay, so we need to trust three people, or whoever has the biggest datacenters. The US Financial System relies on more than just Bank of America, Chase, and JP Morgan btw. There's more decentralization in the status-quo than the three or four big-name BTC Miners.
  - reso 11y ago
    True but not much more than those. I bet you de facto "control" of the US banking system could be said to exist in fewer than 20 entities.
    - ethanbond 11y ago
      At least some portion of which are elected or appointed by elected officials.
      - ikeboy 11y ago
        The big mining pools are also chosen by individual miners, who can change at any time.
  - analognoise 11y ago
    This, which is amusing.
imaginenore 11y ago
That's a false statement. Two chinese pools control 52%: https://blockchain.info/pools?show_adv=no https://blockchain.info/pools?show_adv=no A pool is not a single entity, it's composed of hundreds, thousands of miners. To do some evil thing they will have to convince all of their miners to participate, and stay quiet at the same time. And all for what? So they can perform a >50% attack, crash the value, and ruin their investment? I would worry more about things like BitFury's ASIC datacenter, which is a true singular entity.
- TD-Linux 11y ago
  Unfortunately miners don't get to make any real decisions about e.g. which transactions to include when running on a pool - so for arguments of decentralization the pool is one miner. Of course the miners can move to a different pool if bad things start happening, but it's only reactionary. There's some neat tech that gets around this that is compatible with Bitcoin, for example p2pool. It's not super popular yet but it solves some of these problems.
- ryanlol 11y ago
  FWIW both of the pools are essentially ran by the same people too.
  - shrewduser 11y ago
    then bitcoin is already officially fucked.
- api 11y ago
  (1) Get another more centralized pool to control 26%. (Or a cabal of them.) (2) Take both pools offline. (3) Profit.

jhulla 11y ago

Miners produce a stream of bits by consuming CPU cycles, energy, data centers and admins. First, China is a low cost producer across many product categories. It is not surprising that bitcoin mining is also on that list. Second, there are economies of scale to be exploited. Over time, it will become more profitable for the largest miners to increase capacity vs the smaller miners. The largest miners will get cheaper power contracts. That alone gives them an advantage that will allow them to take market share from the smaller miners. The end result is fewer, but larger, miners doing more work.