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> [Bitmain] has over 70% of the market for bitcoin mining rigs—effectively providing 70% of all the processing power on the network. It's incredible that one c

by pdog 9y ago

> [Bitmain] has over 70% of the market for bitcoin mining rigs—effectively providing 70% of all the processing power on the network. It's incredible that one company accounts for the vast majority of the entire Bitcoin network's hash rate.

loserboss 9y ago
Can't they now take over the market and generate bitcoin until everything crashes?
- Mtinie 9y ago
  In this case, no. They produce ~70% of the hardware used by other miners. If they kept the hardware inhouse it would be another story all together. If history is an indication, selling the "shovels" to others during this digital gold rush is more lucrative for Bitmain than mining would be.
  - sillysaurus3 9y ago
    Also, even if you controlled 99.99% of the hashing power, you still couldn't "generate bitcoin until everything crashes." You can't give yourself an arbitrary sum.
    - sp332 9y ago
      If you're either hoarding or spending 99.99% of all new bitcoins, that's going to cause issues in the market. But the other thing you can do with majority hashpower is double-spend your coins, then fraudulently verify the transaction as if it were valid.
    - nosuchthing 9y ago
      with 51%, you just give yourself the entire sum of network rewards not an arbitrary sum.
      - sowbug 9y ago
        At which point the exchange value of Bitcoin plummets, so you turn your $3.5 million in daily block rewards into nothing.
        Mtinie 9y ago
        Not necessarily. A smart actor with massive hash power (enough to stage a 50%+ attack) would gain the most by using a Sybil variant to subtlety take control. There is no reason to be overt if you can conceal the connection between "independent" mining pools.
        sowbug 9y ago
        We might disagree on what a 51% attack means. A single actor controlling a majority of hash power isn't a problem. Double-spends are a problem. If anyone double-spends, it will be noticed because there will be a permanent record of it in the form of orphaned blocks, and bitcoin value will decrease because Bitcoin transactions will have become less trustworthy. Thus, even in the case where a single actor has 51% hash power, that actor has a strong financial incentive not to conduct a 51% attack. The Sybil-style independent mining pools you describe aren't really hiding what people would be looking for, which is a coordinated preference for the fork that causes the double-spend. (Plus miners would have to accept the relayed second transaction into the mempool to begin with, which today nobody does. RBF might have changed this, but even then you should still be able to reason about whether anyone is even contemplating allowing a double-spend.) I'm not sure if I'm talking past you -- am I correct that we disagreed on what a 51% attack looks like?
        nosuchthing 9y ago
        Double spends attacks aren't the only issue when you have access to a large portion of the network. Malicious pools can prioritize their transactions and manipulate activity in the network to grant them as many block rewards as they want.
        nosuchthing 9y ago
  - kaffeemitsahne 9y ago
    They still could if they had put a backdoor in all their mining hardware.
- digitalzombie 9y ago
  The story talked about how they survived the 2013 crash or something. Also IIRC, digital currency is base on how much someone is willing to pay for it. If you own 90% of bitcoin and the rest own 10%, then wouldn't it be useless? I mean I'm not force to use bit coin I can just use real money if it's so hard to get bitcoin. There aren't that many people who are deeply invested in bit coin with a 90-10. The whole thing is kinda base on greed...
  - derimagia 9y ago
    They could mine it and still sell it, so it wouldn't be 90-10
- elif 9y ago
  As others have said they sell a lot of miners but their pool is the largest at 25%. If they did push 50%, even getting there, let alone the potential manipulations, could only be for negative outcomes. McDonalds could destroy the beef industry... But why?
- CyberDildonics 9y ago
  No. They don't actually control that much hash rate. Either the article is confusing the sales of their mining units to other miners or is outright wrong. If they really controlled that much of the hash rate, they would have activated emergent consensus to increase the max block size. They would have gotten around core and all their toxic censorship and bitcoin cash would never have needed to create a fork to get reasonable throughput.
  - socialist_coder 9y ago
    It's not wrong, look at the wording: > effectively providing 70% of all the processing power on the network. They are providing the processing power by selling mining chips. They are not operating those mining chips, so they don't control the processing power. They only provide it.
    - CyberDildonics 9y ago
      Which means that they can't do a 51% attack, which was what the comment above me was implying. They can't generate infinite bitcoin units anyway but if they controlled 70% of the mining power they could conceivably execute double spends, although even this would be unlikely. In any event the post above mine asked a yes or no question and the answer is no. The article implies that providing mining cpus is much more of a problem than it is since they don't actually control that much mining hash power.
- sbenitoj 9y ago
  Even if they could, why would they destroy an absolutely MASSIVE income stream, it goes completely counter to their own economic incentives.
__s 9y ago
Zipf's Law
raverbashing 9y ago
I wonder what's the effect of the Big Firewall on connecting to the btc network
- pas 9y ago
  There was a block propagation study. Not much. The latency itself is the issue, but propagation time should/could be amortized. https://bitcoin.stackexchange.com/questions/42378/how-relevant-is-the-chinese-great-firewall-in-the-blocksize-debate https://bitcoin.stackexchange.com/questions/42378/how-releva...
socialist_coder 9y ago
Is it that hard to believe? If you make the best X in your market, it's gonna be the most popular. 70% market share isn't so abnormal. If you're digging for gold and there are 5 different shovels you can buy, but 1 is clearly the best, is it that hard to believe that 70% of all shovels in use will be that best one?

by pdog 9y ago

loserboss 9y ago

Can't they now take over the market and generate bitcoin until everything crashes?

Mtinie 9y ago
In this case, no. They produce ~70% of the hardware used by other miners. If they kept the hardware inhouse it would be another story all together. If history is an indication, selling the "shovels" to others during this digital gold rush is more lucrative for Bitmain than mining would be.
- sillysaurus3 9y ago
  Also, even if you controlled 99.99% of the hashing power, you still couldn't "generate bitcoin until everything crashes." You can't give yourself an arbitrary sum.
  - sp332 9y ago
    If you're either hoarding or spending 99.99% of all new bitcoins, that's going to cause issues in the market. But the other thing you can do with majority hashpower is double-spend your coins, then fraudulently verify the transaction as if it were valid.
  - nosuchthing 9y ago
    with 51%, you just give yourself the entire sum of network rewards not an arbitrary sum.
    - sowbug 9y ago
      At which point the exchange value of Bitcoin plummets, so you turn your $3.5 million in daily block rewards into nothing.
      - Mtinie 9y ago
        Not necessarily. A smart actor with massive hash power (enough to stage a 50%+ attack) would gain the most by using a Sybil variant to subtlety take control. There is no reason to be overt if you can conceal the connection between "independent" mining pools.
        sowbug 9y ago
        We might disagree on what a 51% attack means. A single actor controlling a majority of hash power isn't a problem. Double-spends are a problem. If anyone double-spends, it will be noticed because there will be a permanent record of it in the form of orphaned blocks, and bitcoin value will decrease because Bitcoin transactions will have become less trustworthy. Thus, even in the case where a single actor has 51% hash power, that actor has a strong financial incentive not to conduct a 51% attack. The Sybil-style independent mining pools you describe aren't really hiding what people would be looking for, which is a coordinated preference for the fork that causes the double-spend. (Plus miners would have to accept the relayed second transaction into the mempool to begin with, which today nobody does. RBF might have changed this, but even then you should still be able to reason about whether anyone is even contemplating allowing a double-spend.) I'm not sure if I'm talking past you -- am I correct that we disagreed on what a 51% attack looks like?
        nosuchthing 9y ago
        Double spends attacks aren't the only issue when you have access to a large portion of the network. Malicious pools can prioritize their transactions and manipulate activity in the network to grant them as many block rewards as they want.
      - nosuchthing 9y ago
- kaffeemitsahne 9y ago
  They still could if they had put a backdoor in all their mining hardware.
digitalzombie 9y ago
The story talked about how they survived the 2013 crash or something. Also IIRC, digital currency is base on how much someone is willing to pay for it. If you own 90% of bitcoin and the rest own 10%, then wouldn't it be useless? I mean I'm not force to use bit coin I can just use real money if it's so hard to get bitcoin. There aren't that many people who are deeply invested in bit coin with a 90-10. The whole thing is kinda base on greed...
- derimagia 9y ago
  They could mine it and still sell it, so it wouldn't be 90-10
elif 9y ago
As others have said they sell a lot of miners but their pool is the largest at 25%. If they did push 50%, even getting there, let alone the potential manipulations, could only be for negative outcomes. McDonalds could destroy the beef industry... But why?
CyberDildonics 9y ago
No. They don't actually control that much hash rate. Either the article is confusing the sales of their mining units to other miners or is outright wrong. If they really controlled that much of the hash rate, they would have activated emergent consensus to increase the max block size. They would have gotten around core and all their toxic censorship and bitcoin cash would never have needed to create a fork to get reasonable throughput.
- socialist_coder 9y ago
  It's not wrong, look at the wording: > effectively providing 70% of all the processing power on the network. They are providing the processing power by selling mining chips. They are not operating those mining chips, so they don't control the processing power. They only provide it.
  - CyberDildonics 9y ago
    Which means that they can't do a 51% attack, which was what the comment above me was implying. They can't generate infinite bitcoin units anyway but if they controlled 70% of the mining power they could conceivably execute double spends, although even this would be unlikely. In any event the post above mine asked a yes or no question and the answer is no. The article implies that providing mining cpus is much more of a problem than it is since they don't actually control that much mining hash power.
sbenitoj 9y ago
Even if they could, why would they destroy an absolutely MASSIVE income stream, it goes completely counter to their own economic incentives.

__s 9y ago

Zipf's Law

raverbashing 9y ago

I wonder what's the effect of the Big Firewall on connecting to the btc network

pas 9y ago
There was a block propagation study. Not much. The latency itself is the issue, but propagation time should/could be amortized. https://bitcoin.stackexchange.com/questions/42378/how-relevant-is-the-chinese-great-firewall-in-the-blocksize-debate https://bitcoin.stackexchange.com/questions/42378/how-releva...

socialist_coder 9y ago

Is it that hard to believe? If you make the best X in your market, it's gonna be the most popular. 70% market share isn't so abnormal. If you're digging for gold and there are 5 different shovels you can buy, but 1 is clearly the best, is it that hard to believe that 70% of all shovels in use will be that best one?