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The irony here is that "decentralized p2p-based currency" is very much centralized with 60-70% of the mining power concentrated in 2-3 mining pools who get to i

The irony here is that "decentralized p2p-based currency" is very much centralized with 60-70% of the mining power concentrated in 2-3 mining pools who get to impose their will on the system.

hudon 10y ago
Sorry but you've been misinformed... If you take a look, it takes at least 5 mining pools today to get over 50% of mining power [1]. Some have argued that this is more than enough decentralization that the network needs to stay secure [2]. The beauty of it is how easy it is to switch mining pools. Miners come and go [3] so the large mining pools need to make sure they're keeping both the miners happy and the network users happy. [1] https://blockchain.info/pools https://blockchain.info/pools [2] https://bitcoinmagazine.com/articles/problems-associated-with-bitcoin-mining-centralization-may-be-overstated-1474917259/ https://bitcoinmagazine.com/articles/problems-associated-wit... [3] https://news.bitcoin.com/pools-diversifying-bitcoin-mining/ https://news.bitcoin.com/pools-diversifying-bitcoin-mining/
- ChemicalWarfare 10y ago
  These numbers go up and down - because yes it's easy to switch pools - but even if 5 pools is the "magic 51% number" today, this centralization is borderline extreme. This is not about security mind you - this is about imposing the will where it takes 5-6 individuals or maybe one subpoena order from one government considering the physical location of these pools to force the rest of the blockchain to comply with you.
  - hudon 10y ago
    You're never forced to comply with the status quo, you can fork. This is what people in Ethereum realized and this is what the Bitcoin Unlimited movement is about.
    - ChemicalWarfare 10y ago
      Fork and then what? Unless you have formidable percentage of the total hashing power you're dead in the water. But if you do have it and with this bitcoin centralization it's not physically hard to control then you can threaten the rest to fork if they don't comply with your "direction".
      - hudon 10y ago
        This is conjecture on my part but to your point: some have suggested that the minority fork change its proof-of-work algorithm, to prevent attacks from the majority fork. I would also point out that miners are heavily incentivized to keep the network valuable. If 80% of the miners got together and decided that transactions need a signature from the PBoC or an output to the IRS before being valid, everyone would sell, the price would plummet, and the miners will be left with a bunch of inefficient heating equipment and no more revenue. Miners need to stay engaged with the users if they are to force any kind of change onto the network, lest the rewards they get from mining turn to dust.
        ChemicalWarfare 10y ago
        sure, there are things that are obviously "bad" for all of the miners. but the reality isn't as cut-and-dry - there are things that are up for a debate - but with this centralization there is no debate, or rather the debate is short :) which is why bitcoin xl didn't happen for example. not sure what your point is - you saying there's no centralization? it's not as bad as it seems? something else?
        hudon 10y ago
        I've just been refuting your original statements about how decentralized it is and about how miners get to "impose their will" arbitrarily. You seem to think that tomorrow 3 miners can come out and decide to increase the coinbase reward back to 50 btc and there would be no consequence. I'm saying the system doesn't work like that and that the level of decentralization is adequate.
kentt 10y ago
It is very easy to switch pools and miners do it regularly. If a pool makes poor decisions, the exodus from that pool is very fast.

The irony here is that "decentralized p2p-based currency" is very much centralized with 60-70% of the mining power concentrated in 2-3 mining pools who get to impose their will on the system.

hudon 10y ago

Sorry but you've been misinformed... If you take a look, it takes at least 5 mining pools today to get over 50% of mining power [1]. Some have argued that this is more than enough decentralization that the network needs to stay secure [2]. The beauty of it is how easy it is to switch mining pools. Miners come and go [3] so the large mining pools need to make sure they're keeping both the miners happy and the network users happy. [1] https://blockchain.info/pools https://blockchain.info/pools [2] https://bitcoinmagazine.com/articles/problems-associated-with-bitcoin-mining-centralization-may-be-overstated-1474917259/ https://bitcoinmagazine.com/articles/problems-associated-wit... [3] https://news.bitcoin.com/pools-diversifying-bitcoin-mining/ https://news.bitcoin.com/pools-diversifying-bitcoin-mining/

ChemicalWarfare 10y ago
These numbers go up and down - because yes it's easy to switch pools - but even if 5 pools is the "magic 51% number" today, this centralization is borderline extreme. This is not about security mind you - this is about imposing the will where it takes 5-6 individuals or maybe one subpoena order from one government considering the physical location of these pools to force the rest of the blockchain to comply with you.
- hudon 10y ago
  You're never forced to comply with the status quo, you can fork. This is what people in Ethereum realized and this is what the Bitcoin Unlimited movement is about.
  - ChemicalWarfare 10y ago
    Fork and then what? Unless you have formidable percentage of the total hashing power you're dead in the water. But if you do have it and with this bitcoin centralization it's not physically hard to control then you can threaten the rest to fork if they don't comply with your "direction".
    - hudon 10y ago
      This is conjecture on my part but to your point: some have suggested that the minority fork change its proof-of-work algorithm, to prevent attacks from the majority fork. I would also point out that miners are heavily incentivized to keep the network valuable. If 80% of the miners got together and decided that transactions need a signature from the PBoC or an output to the IRS before being valid, everyone would sell, the price would plummet, and the miners will be left with a bunch of inefficient heating equipment and no more revenue. Miners need to stay engaged with the users if they are to force any kind of change onto the network, lest the rewards they get from mining turn to dust.
      - ChemicalWarfare 10y ago
        sure, there are things that are obviously "bad" for all of the miners. but the reality isn't as cut-and-dry - there are things that are up for a debate - but with this centralization there is no debate, or rather the debate is short :) which is why bitcoin xl didn't happen for example. not sure what your point is - you saying there's no centralization? it's not as bad as it seems? something else?
        hudon 10y ago
        I've just been refuting your original statements about how decentralized it is and about how miners get to "impose their will" arbitrarily. You seem to think that tomorrow 3 miners can come out and decide to increase the coinbase reward back to 50 btc and there would be no consequence. I'm saying the system doesn't work like that and that the level of decentralization is adequate.

kentt 10y ago

It is very easy to switch pools and miners do it regularly. If a pool makes poor decisions, the exodus from that pool is very fast.