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If you imagined a world where a small cabal of power bankers could control monetary policy, why is it hard to imagine a small cabal of powerful bitcoin miners c

by jayd16 6y ago

If you imagined a world where a small cabal of power bankers could control monetary policy, why is it hard to imagine a small cabal of powerful bitcoin miners could do the same? The tech encourages large miners in terms of hardware and infrastructure investment. There's a race to the bottom for compute and power consumption that small miners can't really compete with. In this way the system could conceivably move towards that small powerful group.

gruez 6y ago
because bitcoin miners can't dictate monetary policy (they can only dictate transaction ordering/inclusion), but governments can do both.
- jayd16 6y ago
  How can they not dictate monetary policy? They could conceivably cause inflation by increasing mining rewards or perhaps deflation through coin destruction.
  - jude- 6y ago
    Miners don't decide what software other people run, that's why. If a miner tries to mint themselves more Bitcoin than they are due, then their block will be rejected by the network.
    - jayd16 6y ago
      The scenario in question is when a small group has control of the network through consolidated hash power.
      - jude- 6y ago
        > Miners don't decide what software other people run
      - gruez 6y ago
        That's irrelevant when nobody recognizes your coins. https://en.bitcoin.it/wiki/Economic_majority https://en.bitcoin.it/wiki/Economic_majority
  - doggosphere 6y ago
    That would require changes to the codebase which most nodes probably wouldn't support. Which would be creating their own fork. You can't just "increase mining rewards" as a miner.
- boh 6y ago
  They influence Bitcoin development (SegWit is a good example), so they dictate the Bitcoin version of policy.
  - yeneek 6y ago
    It's other way around. Majority of miners were against SegWit and blocked its activation for over a year. Community then decided to collectively upgrade their nodes to accept only certain transactions. It is called User Activated Soft Fork (#UASF) The miners had to make a decision. Mine coins that rest of the world dont want, or activate segwit.
doggosphere 6y ago
The difference is the bankers have authority and compliance by way of force. That is, government controls currency, you pay your taxes in dollars, you trade your oil in dollars, etc., or else. Crypto groups do not have this authority, and cannot impose their will beyond what the masses will accept. They compete with forks and alternative products. Some chains don't even use mining, some use alternate algorithms where SHA-256 ASICs have no advantage. If powerful groups try to force unpopular change, they'll just split the chain and more or less divide the value proportionally to the user-base that they can convince to join them. We saw this with Bitcoin Cash, Ethereum Classic, etc. So if the Bitcoin network does something I don't like, I have the option of leaving and supporting one of the potential forks I do like. Force cannot be imposed, and products must compete. This is one of the advantages of open source, decentralized software design.
- jayd16 6y ago
  Is splitting a real solution? Why can't that powerful group, which had control of the original chain take control of this new fork?
  - CyberDildonics 6y ago
    I think you mean to ask "why didn't they" since this has already happened multiple times in the past. The answer is that miners would have to take mining power away from the chain that they were mining. In practice the mining power that each chain receives is proportional to its current price. This is also something all the people upset about the electricity that bitcoin mining takes up need to understand. The electricity is being paid for by the people buying the balances that the miners mine. If people weren't buying the massive miner rewards every 10 minutes, the price of bitcoin would not stay the same and the same electricity usage would not be viable.
  - doggosphere 6y ago
    https://en.wikipedia.org/wiki/Fork_(software_development) https://en.wikipedia.org/wiki/Fork_(software_development) Confused about what you mean by "take control" of the new fork. The powerful miners are going to download a different set of software with different rules, and mine on it? That would just be supporting the new fork by participating on it, giving it more legitimacy by way of giving it resources (hash power). *EDIT: You can certainly attack a chain by dedicating your hash power to sabotaging their blocks. This however would make your own chain weaker, and generally not a profitable use of resources.

by jayd16 6y ago

gruez 6y ago

because bitcoin miners can't dictate monetary policy (they can only dictate transaction ordering/inclusion), but governments can do both.

jayd16 6y ago
How can they not dictate monetary policy? They could conceivably cause inflation by increasing mining rewards or perhaps deflation through coin destruction.
- jude- 6y ago
  Miners don't decide what software other people run, that's why. If a miner tries to mint themselves more Bitcoin than they are due, then their block will be rejected by the network.
  - jayd16 6y ago
    The scenario in question is when a small group has control of the network through consolidated hash power.
    - jude- 6y ago
      > Miners don't decide what software other people run
    - gruez 6y ago
      That's irrelevant when nobody recognizes your coins. https://en.bitcoin.it/wiki/Economic_majority https://en.bitcoin.it/wiki/Economic_majority
- doggosphere 6y ago
  That would require changes to the codebase which most nodes probably wouldn't support. Which would be creating their own fork. You can't just "increase mining rewards" as a miner.
boh 6y ago
They influence Bitcoin development (SegWit is a good example), so they dictate the Bitcoin version of policy.
- yeneek 6y ago
  It's other way around. Majority of miners were against SegWit and blocked its activation for over a year. Community then decided to collectively upgrade their nodes to accept only certain transactions. It is called User Activated Soft Fork (#UASF) The miners had to make a decision. Mine coins that rest of the world dont want, or activate segwit.

doggosphere 6y ago

The difference is the bankers have authority and compliance by way of force. That is, government controls currency, you pay your taxes in dollars, you trade your oil in dollars, etc., or else. Crypto groups do not have this authority, and cannot impose their will beyond what the masses will accept. They compete with forks and alternative products. Some chains don't even use mining, some use alternate algorithms where SHA-256 ASICs have no advantage. If powerful groups try to force unpopular change, they'll just split the chain and more or less divide the value proportionally to the user-base that they can convince to join them. We saw this with Bitcoin Cash, Ethereum Classic, etc. So if the Bitcoin network does something I don't like, I have the option of leaving and supporting one of the potential forks I do like. Force cannot be imposed, and products must compete. This is one of the advantages of open source, decentralized software design.

jayd16 6y ago
Is splitting a real solution? Why can't that powerful group, which had control of the original chain take control of this new fork?
- CyberDildonics 6y ago
  I think you mean to ask "why didn't they" since this has already happened multiple times in the past. The answer is that miners would have to take mining power away from the chain that they were mining. In practice the mining power that each chain receives is proportional to its current price. This is also something all the people upset about the electricity that bitcoin mining takes up need to understand. The electricity is being paid for by the people buying the balances that the miners mine. If people weren't buying the massive miner rewards every 10 minutes, the price of bitcoin would not stay the same and the same electricity usage would not be viable.
- doggosphere 6y ago
  https://en.wikipedia.org/wiki/Fork_(software_development) https://en.wikipedia.org/wiki/Fork_(software_development) Confused about what you mean by "take control" of the new fork. The powerful miners are going to download a different set of software with different rules, and mine on it? That would just be supporting the new fork by participating on it, giving it more legitimacy by way of giving it resources (hash power). *EDIT: You can certainly attack a chain by dedicating your hash power to sabotaging their blocks. This however would make your own chain weaker, and generally not a profitable use of resources.