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> One value of Bitcoin is in its decentralization. There is surmounting evidence that this is not true and that Bitcoin is actually quite centralized and would

• Jommi 8y ago
  Thanks for these links, usually when talking about it not being decentralized the source is either Forbes or Business Insider. Let's see what your sources have in store. EDIT: [0] https://arxiv.org/abs/1801.03998 https://arxiv.org/abs/1801.03998 Good paper, lots of good research. Identifies that top pools do not change position too often. Shows also that system profits prefer higher pool sizes. However, fails to notice that pools are made of individual miners/groups and do not represenet single huge datacenters. Groups/individuals can often change pools, and this is not an uncommon practive. [1] https://freedom-to-tinker.com/2015/07/28/analyzing-the-2013-.. https://freedom-to-tinker.com/2015/07/28/analyzing-the-2013-.... First thing to note is that this is 2013, when the bitcoin world was a lot more centralized (Only one major exchange, MT.Gox, much less visbiiltiy and credibility. I argue that more coverage results in a more decentralized system) Also, this is not really a decision of centralization, but feels akin to an UN meeting, where multiple actors discuss rationally the best course of action for their community, and then move in regards to that course. No one forced the community to follow their moves, but when they did, the results were better for the whole community. Of course, if they had not given advice from an authoritarian position, nobody might have listened. Yet, still Bitcoin would have survived, as explained by Buterin: https://bitcoinmagazine.com/articles/bitcoin-network-shaken-by-blockchain-fork-1363144448/ https://bitcoinmagazine.com/articles/bitcoin-network-shaken-... [2] https://arewedecentralizedyet.com/ https://arewedecentralizedyet.com/ See: Pools are not huge data centers >% of money supply held by top 100 accounts = 19% Not an accurate measure of centralization. Addresses do not mean single people, or even single organizations. Most of these addresses belong to either: >Zombie addresses of huge amounts of bitcoin gathered in the early days >Exchange cold and hot wallets >Huge organizations [3] https://fc18.ifca.ai/bitcoin/papers/bitcoin18-final13.pdf https://fc18.ifca.ai/bitcoin/papers/bitcoin18-final13.pdf Commentary on the developer activity of bitcoin compared to other open source code projects. Shows some centralization, but still not even close to a central authority. Not to mention that anyone can join the project at any time. If we say Linux development is decentralized, then we can say bitcoin development is decentralized. This is not evne taking into account the interaction that needs to be done between the developers and the miners. [4] https://www.tse-fr.eu/sites/default/files/TSE/documents/doc/.. https://www.tse-fr.eu/sites/default/files/TSE/documents/doc/.... Mostly about ineffieciencies in mining and decentralization. The core conclusion from the text is this: "This points to a major dilemma for distributed ledgers: On the one hand, the anonymity and decentralisation of public blockchains expose them to coordination failures and externalities. On the other hand, private blockchains can restore coordination and internalise externalities, but only to the extent that they involve the intervention of a centralised authority, which goes against the fundamental motivation for blockchain." Which I absolutely agree. Decentralized does not mean efficient, I dont argue that. ---- ---- ---- So all in all, the sources show that the decentralization of Bitcoin could be better. Yet, in all cases decentralization exists, and is not in imminent threat. To all Bitcoin "centralized" is not only erroneus, but disingenious.
  • hudon 8y ago
    > However, fails to notice that pools are made of individual miners/groups and do not represenet single huge datacenters. Groups/individuals can often change pools, and this is not an uncommon practice. citation needed. The trend in proof-of-work mining is consolidation of costs into large data centers[0], hence why it is no longer profitable for you to run an ASIC in your garage. Furthermore, there are very few profitable pools to choose from [0]. Large miners risk losing a lot of money by changing pools partly because not all pools provide as much revenue as the others. > where multiple actors discuss rationally the best course of action for their community, and then move in regards to that course. No one forced the community to follow their moves, but when they did, the results were better for the whole community. 3 individuals decided Bitcoin would orphan the longest chain [1]. The community had no say in the matter. How is that not centralized consensus making? > Which I absolutely agree. Decentralized does not mean efficient, I dont argue that. It is not only efficiency, it is also robustness. The more centralized the consensus-making mechanism of a blockchain is, the least likely consensus failures are [2]. If no one would have took control in 2013, there would have been 2 chains for an undetermined amount of time, leading to massive levels of fraud and money loss [1]. Do you think society would benefit more from a Bitcoin that has massive consensus failures like that or would you rather a Bitcoin that has a central authority (the handful of GitHub commiters + mining pool operators) that can quickly fix consensus failures and prevent large institutions from losing a ton of money? [0] https://arxiv.org/abs/1801.03998 https://arxiv.org/abs/1801.03998 [1] https://freedom-to-tinker.com/2015/07/28/analyzing-the-2013-bitcoin-fork-centralized-decision-making-saved-the-day/ https://freedom-to-tinker.com/2015/07/28/analyzing-the-2013-... [2] https://www.tse-fr.eu/sites/default/files/TSE/documents/doc/wp/2017/wp_tse_817.pdf https://www.tse-fr.eu/sites/default/files/TSE/documents/doc/...
• Jommi 8y ago
  Updated my response.