2 ms·
You are answering your own question. Suppose someone would invest billions in obtaining a mining rig that single handedly achieves 51% of the mining power of th
by tinco 9y ago
You are answering your own question. Suppose someone would invest billions in obtaining a mining rig that single handedly achieves 51% of the mining power of the network, then he effectively kills that network, and makes his investment worthless.
There's a reason the valuations of Bitcoin and Ether waiver every time it seems a pool is coming close to 51% mining power, it's because everyone is scared of what happens when that happens.
In the real world, I think miners approaching 51% of mining power is an accidental and temporary thing. It means that the coin is overvalued, and investors are over investing in mining operations. As the article states, the amount of profit these operations turn really isn't that big. They're operating on thin margins, and operations going bankrupt is not unheard of.
There's simply no reason to go and "own" the network. Best case, you'll turn a loss, worst case, you destroy the network and lose your entire investment.
- plantsbeans 9y agoIf you can keep your majority a secret, you can avoid the devaluing scenarios. The trick is to use the majority only when you need to, and to avoid detection.
- bsenftner 9y agoSuppose someone would invest billions in obtaining a mining rig that single handedly achieves 20%, or 30% or whatever% of the mining power of the network, then they effectively use that advantage to achieve manipulation of the network or manipulation of the economy via their monopoly/large-entity level oversight of the economy. As you point out, there is no incentive to kill the network, but quite a bit of incentive to manipulate the network. Via modern corporate shells, no doubt people/groups are already trying to achieve this, they do in any market.