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Stop. Equating. Hashrate. With. Network. Control. Hashrate barely matters. The influence these Chinese miners have is next to nil. Them having hashrate doens't

by darawk 9y ago

Stop. Equating. Hashrate. With. Network. Control. Hashrate barely matters. The influence these Chinese miners have is next to nil. Them having hashrate doens't mean they get to decide on anything meaningful, it just means they get to reap the economics benefits of transaction minting. If they tried to exploit their 'power' in any way, people would just fork the chain and move on. They have no ability to actually take advantage of their position in any meaningful way.

debacle 9y ago
> If they tried to exploit their 'power' in any way, people would just fork the chain and move on. You can't prevent someone from trying to mine, though. Bitcoin would have to develop some sort of defense or constantly be correcting whatever fork was the accepted truth.
- Frogolocalypse 9y ago
  He explained the dynamic. You responded with something completely unrelated.
freeloop3 9y ago
They can block transactions they don't like by refusing to put them into blocks. They can mine any competing fork with all empty blocks so transactions never confirm.
- darawk 9y ago
  Yes, totally. And the rest of the community can simply move to a fork with a new hashing algorithm that their hardware doesn't mine. Which is exactly what would happen if they tried anything. And is exactly why they will never try anything.
  - freeloop3 9y ago
    It's a lot more complicated than that. Suppose the miners did go MAD, and refused to accept any txns. How many days, weeks or months before the bitcoin users can decide on and implement a new hash algorithm? And with several other coins looking to take the crown away from bitcoin, how long before it no longer is the defacto entry point into crypto? Not only that, but if bitcoin dumps its miners as unceremoniously as you describe, it will create a lot of distrust between miners in general and the bitcoin users. I don't know what alternative hashing algorithm you had in mind, but if it becomes mineable by miners of another coin, they may see an opportunity to attack. Without a large community of miners protecting bitcoin, you will have thrown bitcoin to the wolves so to speak. And there is little reason for miners to protect bitcoin against such an attack, after they showed such disregard to the original community of miners. So, no, miners are not as impotent as you make out.
    - darawk 9y ago
      I partially agree, partially disagree. I think the way it would likely play out is not through committee voting or democracy, but rather through competitors cropping up and people voting with their feet. If tomorrow the miners started freezing transactions and abusing their power, then 24 hours hence at least 10 new forks of Bitcoin would emerge with different hashing algorithms, all vying for dominance. And the next day another 100 would emerge. Which one would win? I don't know, but it'd likely converge relatively quickly. Now, is this a bad outcome? Ya, it'd cause some short term disruption. No question about it. However, the miners know they can be routed around. And because they know that, they know they can't abuse their power without risking being cut out of the equation entirely. They are very strongly incentivized not to fuck with the network.
      - freeloop3 9y ago
        You didn't address my argument about alt coins taking over the top spot in such a scenario. When you say converge relatively quickly, relatively to what? How many days, weeks, months are we talking about? In that period of time where no one can spend or buy bitcoin, you don't see some other coin becoming dominant? Why not?
jMyles 9y ago
> just fork the chain and move on It's not quite that simple - the chain will need to be forked with a protocol whose algorithm doesn't allow these miners to continue to dominate. And achieving consensus on that in the heat of the moment will be non-trivial. Any fork that continues to use SHA-256 will be a trivial target for attack by these miners; they won't blindly continue to mine the "defunct" chain.
- down 9y ago
  the bitcoin gold algorithm, achieving consensus will be possible, because is a threat to bitcoin existence (user activated), won't be "that simple" but will be another attack and bitcoin will emerge stronger.
- darawk 9y ago
  Ya, it'd cause some short term disruption, to be sure. But it's not an existential threat. And it certainly doesn't make Bitcoin 'centralized'.
  - homakov 9y ago
    There are more than 1 variable in the outcome. And from what I see it is very existential. Just not used yet.
pdeuchler 9y ago
This is incredibly naive. 1) As other posters have already noted, these miners have economies of scale already set up to dominate any fork that still utilizes the SHA hash. Changing the hashing algorithm would be akin to creating a whole new coin. 2) All sufficiently de-centralized crypto mining eventually devolves into an electricity arbitrage game. ASICs are way too easy and cheap to build to give anyone a lasting advantage via computing efficiency, and once you normalize for capital costs whoever has the cheapest energy wins. For scale you also need access to lots of bandwidth and proximity to fabrication of the hardware begins to matter since mining is a zero sum game. Given those needs China will probably end up dominating most sufficiently de-centralized crypto mining. 3) You drastically underestimate the political, economic, and social cache of the Chinese miners in both the Bitcoin and general cryptocurrency world. Not only do these guys underpin a niche industry (that's worth lots of $$$), but they have their own network effects at this point. I think the main takeaway, which forking can never solve, is that the second any kind of decentralized currency shows any kind of value the powers that be will seek to centralize it. This is a problem with TOR just as much as it is a problem with Bitcoin, and one that I'm not sure we can solve today. Maybe one day we'll get another paper from Satoshi solving it for us.
- darawk 9y ago
  > As other posters have already noted, these miners have economies of scale already set up to dominate any fork that still utilizes the SHA hash. Changing the hashing algorithm would be akin to creating a whole new coin. No it wouldn't. The hashing algorithm is not intrinsic to Bitcoin. Changing it doesn't need to impact anything else. > 2) All sufficiently de-centralized crypto mining eventually devolves into an electricity arbitrage game. ASICs are way too easy and cheap to build to give anyone a lasting advantage via computing efficiency, and once you normalize for capital costs whoever has the cheapest energy wins. For scale you also need access to lots of bandwidth and proximity to fabrication of the hardware begins to matter since mining is a zero sum game. Given those needs China will probably end up dominating most sufficiently de-centralized crypto mining. That is true for PoW based mining, sure. Proof of stake doesn't have that problem, though. > 3) You drastically underestimate the political, economic, and social cache of the Chinese miners in both the Bitcoin and general cryptocurrency world. Not only do these guys underpin a niche industry (that's worth lots of $$$), but they have their own network effects at this point. I agree that they dominate and will continue to dominate hashrate. I disagree that that is a significant problem.
dlwdlw 9y ago
It is control over however, of the tangible embodiment of an idea. Like in movies where people fight over the last Bible in a post-apocalyptic world. The secular representation has a high degree of influence because true embodiment is too fragmented. The idea of the elephant only occurs with multiple people in multiple areas being able to observe their immediate environment (trunk, legs, etc..). If you take away the tools that allow for idea harmonization then the idea is crippled. Instead of a moving living elephant you have a chimera, or only static snapshots of what was.
mrep 9y ago
> If they tried to exploit their 'power' in any way, people would just fork the chain and move on. So screw over all the people that made transactions with the hacked bitcoins before the hack was found. Holy fucking shit! Now that I think about this, it is a massive timebomb waiting to happen! Once you have hacked the bitcoins, you can tumble them with other bitcoins, exchange them to other cryptocurrencies (which are also 1 way transactions so the person exchanging with the hacked coins is completely SOL), or exchange to fiat currencies (although that would probably be the most traceable so probably not). As you tumble and exchange the cryptocurrencies more and more, it becomes more and more difficult to hard fork the currencies to undo the hack. My wild prediction. At some point: 1: Some black hat will gain a controlling compute share of a cryptocurrency (either the chinese ASIC companies or a massive AWS/google cloud/azure... cloud mining to override the majority share and convince the network that some illegal transactions occurred). 2: They will then proceed to massively tumble the hacked coin through different exchanges through multiple different cryptocurrencies so that hard forking is nigh impossible to undo the hack. 3: Cryptocurrencies all crash because they are susceptible to mining takeovers which cannot be detected quickly enough to hardfork to undo the hack which render their whole design impractical.
- homakov 9y ago
  Yes. same plot as https://medium.com/@homakov/how-to-destroy-bitcoin-with-51-pocked-guide-for-governments-83d9bdf2ef6b https://medium.com/@homakov/how-to-destroy-bitcoin-with-51-p...
  - mrep 9y ago
    Interesting read. Although, can't you force a transaction from wallets even if you don't have the correct key if you have majority share so stealing money from the top wallets would be much more profitable than doing a double spend with your own money.
    - homakov 9y ago
      It's impossible to steal money from other wallets. Miners can only reverse history and double spend, which is anyway deadly enough.
homakov 9y ago
Hashrate is more important than anything else. They can mine empty blocks forever. Or be made to do it by China to protect yuan. I'm 100% sure it will happen if they see it as a threat.
- darawk 9y ago
  If they did that, people would simply fork the chain and switch the PoW algorithm. There would be very little downtime and no loss of funds. It'd be easy to transfer balances over.
  - homakov 9y ago
    Who decides it and when? Why new PoW is supposed to be "better"? Whenever you need to change consensus which wasn't expected by consensus itself (self amendability) you're in stale mate situation and NO ONE can predict how it's gonna turn out. There's no Captain Consensus who decides when and what PoW to use.
EGreg 9y ago
They ALREADY exploit their power. They can blacklist any address thereby freezing the assets in it. What you see is higher transaction fees. It's no 0% or 100% denial of service.

by darawk 9y ago

debacle 9y ago

> If they tried to exploit their 'power' in any way, people would just fork the chain and move on. You can't prevent someone from trying to mine, though. Bitcoin would have to develop some sort of defense or constantly be correcting whatever fork was the accepted truth.

Frogolocalypse 9y ago
He explained the dynamic. You responded with something completely unrelated.

freeloop3 9y ago

They can block transactions they don't like by refusing to put them into blocks. They can mine any competing fork with all empty blocks so transactions never confirm.

darawk 9y ago
Yes, totally. And the rest of the community can simply move to a fork with a new hashing algorithm that their hardware doesn't mine. Which is exactly what would happen if they tried anything. And is exactly why they will never try anything.
- freeloop3 9y ago
  It's a lot more complicated than that. Suppose the miners did go MAD, and refused to accept any txns. How many days, weeks or months before the bitcoin users can decide on and implement a new hash algorithm? And with several other coins looking to take the crown away from bitcoin, how long before it no longer is the defacto entry point into crypto? Not only that, but if bitcoin dumps its miners as unceremoniously as you describe, it will create a lot of distrust between miners in general and the bitcoin users. I don't know what alternative hashing algorithm you had in mind, but if it becomes mineable by miners of another coin, they may see an opportunity to attack. Without a large community of miners protecting bitcoin, you will have thrown bitcoin to the wolves so to speak. And there is little reason for miners to protect bitcoin against such an attack, after they showed such disregard to the original community of miners. So, no, miners are not as impotent as you make out.
  - darawk 9y ago
    I partially agree, partially disagree. I think the way it would likely play out is not through committee voting or democracy, but rather through competitors cropping up and people voting with their feet. If tomorrow the miners started freezing transactions and abusing their power, then 24 hours hence at least 10 new forks of Bitcoin would emerge with different hashing algorithms, all vying for dominance. And the next day another 100 would emerge. Which one would win? I don't know, but it'd likely converge relatively quickly. Now, is this a bad outcome? Ya, it'd cause some short term disruption. No question about it. However, the miners know they can be routed around. And because they know that, they know they can't abuse their power without risking being cut out of the equation entirely. They are very strongly incentivized not to fuck with the network.
    - freeloop3 9y ago
      You didn't address my argument about alt coins taking over the top spot in such a scenario. When you say converge relatively quickly, relatively to what? How many days, weeks, months are we talking about? In that period of time where no one can spend or buy bitcoin, you don't see some other coin becoming dominant? Why not?

jMyles 9y ago

> just fork the chain and move on It's not quite that simple - the chain will need to be forked with a protocol whose algorithm doesn't allow these miners to continue to dominate. And achieving consensus on that in the heat of the moment will be non-trivial. Any fork that continues to use SHA-256 will be a trivial target for attack by these miners; they won't blindly continue to mine the "defunct" chain.

down 9y ago
the bitcoin gold algorithm, achieving consensus will be possible, because is a threat to bitcoin existence (user activated), won't be "that simple" but will be another attack and bitcoin will emerge stronger.
darawk 9y ago
Ya, it'd cause some short term disruption, to be sure. But it's not an existential threat. And it certainly doesn't make Bitcoin 'centralized'.
- homakov 9y ago
  There are more than 1 variable in the outcome. And from what I see it is very existential. Just not used yet.

pdeuchler 9y ago

This is incredibly naive. 1) As other posters have already noted, these miners have economies of scale already set up to dominate any fork that still utilizes the SHA hash. Changing the hashing algorithm would be akin to creating a whole new coin. 2) All sufficiently de-centralized crypto mining eventually devolves into an electricity arbitrage game. ASICs are way too easy and cheap to build to give anyone a lasting advantage via computing efficiency, and once you normalize for capital costs whoever has the cheapest energy wins. For scale you also need access to lots of bandwidth and proximity to fabrication of the hardware begins to matter since mining is a zero sum game. Given those needs China will probably end up dominating most sufficiently de-centralized crypto mining. 3) You drastically underestimate the political, economic, and social cache of the Chinese miners in both the Bitcoin and general cryptocurrency world. Not only do these guys underpin a niche industry (that's worth lots of $$$), but they have their own network effects at this point. I think the main takeaway, which forking can never solve, is that the second any kind of decentralized currency shows any kind of value the powers that be will seek to centralize it. This is a problem with TOR just as much as it is a problem with Bitcoin, and one that I'm not sure we can solve today. Maybe one day we'll get another paper from Satoshi solving it for us.

darawk 9y ago
> As other posters have already noted, these miners have economies of scale already set up to dominate any fork that still utilizes the SHA hash. Changing the hashing algorithm would be akin to creating a whole new coin. No it wouldn't. The hashing algorithm is not intrinsic to Bitcoin. Changing it doesn't need to impact anything else. > 2) All sufficiently de-centralized crypto mining eventually devolves into an electricity arbitrage game. ASICs are way too easy and cheap to build to give anyone a lasting advantage via computing efficiency, and once you normalize for capital costs whoever has the cheapest energy wins. For scale you also need access to lots of bandwidth and proximity to fabrication of the hardware begins to matter since mining is a zero sum game. Given those needs China will probably end up dominating most sufficiently de-centralized crypto mining. That is true for PoW based mining, sure. Proof of stake doesn't have that problem, though. > 3) You drastically underestimate the political, economic, and social cache of the Chinese miners in both the Bitcoin and general cryptocurrency world. Not only do these guys underpin a niche industry (that's worth lots of $$$), but they have their own network effects at this point. I agree that they dominate and will continue to dominate hashrate. I disagree that that is a significant problem.

dlwdlw 9y ago

It is control over however, of the tangible embodiment of an idea. Like in movies where people fight over the last Bible in a post-apocalyptic world. The secular representation has a high degree of influence because true embodiment is too fragmented. The idea of the elephant only occurs with multiple people in multiple areas being able to observe their immediate environment (trunk, legs, etc..). If you take away the tools that allow for idea harmonization then the idea is crippled. Instead of a moving living elephant you have a chimera, or only static snapshots of what was.

mrep 9y ago

> If they tried to exploit their 'power' in any way, people would just fork the chain and move on. So screw over all the people that made transactions with the hacked bitcoins before the hack was found. Holy fucking shit! Now that I think about this, it is a massive timebomb waiting to happen! Once you have hacked the bitcoins, you can tumble them with other bitcoins, exchange them to other cryptocurrencies (which are also 1 way transactions so the person exchanging with the hacked coins is completely SOL), or exchange to fiat currencies (although that would probably be the most traceable so probably not). As you tumble and exchange the cryptocurrencies more and more, it becomes more and more difficult to hard fork the currencies to undo the hack. My wild prediction. At some point: 1: Some black hat will gain a controlling compute share of a cryptocurrency (either the chinese ASIC companies or a massive AWS/google cloud/azure... cloud mining to override the majority share and convince the network that some illegal transactions occurred). 2: They will then proceed to massively tumble the hacked coin through different exchanges through multiple different cryptocurrencies so that hard forking is nigh impossible to undo the hack. 3: Cryptocurrencies all crash because they are susceptible to mining takeovers which cannot be detected quickly enough to hardfork to undo the hack which render their whole design impractical.

homakov 9y ago
Yes. same plot as https://medium.com/@homakov/how-to-destroy-bitcoin-with-51-pocked-guide-for-governments-83d9bdf2ef6b https://medium.com/@homakov/how-to-destroy-bitcoin-with-51-p...
- mrep 9y ago
  Interesting read. Although, can't you force a transaction from wallets even if you don't have the correct key if you have majority share so stealing money from the top wallets would be much more profitable than doing a double spend with your own money.
  - homakov 9y ago
    It's impossible to steal money from other wallets. Miners can only reverse history and double spend, which is anyway deadly enough.

homakov 9y ago

Hashrate is more important than anything else. They can mine empty blocks forever. Or be made to do it by China to protect yuan. I'm 100% sure it will happen if they see it as a threat.

darawk 9y ago
If they did that, people would simply fork the chain and switch the PoW algorithm. There would be very little downtime and no loss of funds. It'd be easy to transfer balances over.
- homakov 9y ago
  Who decides it and when? Why new PoW is supposed to be "better"? Whenever you need to change consensus which wasn't expected by consensus itself (self amendability) you're in stale mate situation and NO ONE can predict how it's gonna turn out. There's no Captain Consensus who decides when and what PoW to use.

EGreg 9y ago

They ALREADY exploit their power. They can blacklist any address thereby freezing the assets in it. What you see is higher transaction fees. It's no 0% or 100% denial of service.