6 ms·

Users, miners and developers all have different powers and hold each other to account in an interesting way that few people understand so far, affecting what 'c

Users, miners and developers all have different powers and hold each other to account in an interesting way that few people understand so far, affecting what 'control' really means. It needs to be put in context with alternatives. Compared to the alternative of corrupt governments that have complete control to print money at will, I have no doubt that it is a extremely promising experiment. ASICs do seem to pervert some incentives so people should be more interested in modified Proof-of-Work algorithms like Monero has been doing successfully

jayd16 5y ago
In what way do users have control over miners or developers? If the assumption is that corruption can overcome a democratic state, I never understood why its so crazy to suggest it can overcome developers or a mining cartel.
- ajkdhcb2 5y ago
  Developers are wasting their time if nobody wants to use what they develop. Miners lose their income if they are mining blocks on a chain that nobody wants to use. Users running software nodes validates the blocks, limiting what miners can do. Miners can be pushed to change the rules with methods like a 'User Activated Soft Fork'. The proof of work algorithm can even be changed, rendering all the ASIC hardware of the mining industry worthless.
  - matteotom 5y ago
    Corrupt governments and central banks can be pushed to change the rules with methods like "voting" or "mass protests".
    - sunshinerag 5y ago
      Except corrupt governments and central banks do not care for either. Central bank policies are not subject to voting by people. Did any of us vote for bailouts, QE?. corrupt governments also know how to suppress "mass protests". If these are the only ways to hold them to account how would that work.
      - matteotom 5y ago
        The Fed has a pretty straightforward mission to balance inflation and employment. If they're doing a bad job of that, then the president or congress (acting on behalf of the people) can act to hold them accountable. If congress decides that's no longer the right mission, they can pass a law changing it. And there are countless historical examples (even recent) of peaceful or violent protests causing change to corrupt governments.
      - lkrubner 5y ago
        Most of us did vote for quantitative easing. Certainly after 2008, for many years, in the USA and in Europe, people were voting any kind of stimulus they could get, and when it was impossible to get enough fiscal stimulus, most of us were willing to support any effort for monetary stimulus as a second-best alternative. It is, of course, an interesting point of discussion why it was so difficult to get sufficient fiscal stimulus, but that topic is too complex to get into in a comment on Hacker News.
      - nuerow 5y ago
        > Central bank policies are not subject to voting by people. Did any of us vote for bailouts, QE?. Isn't the role of a central bank to enact monetary policy and to contribute to financial stability? I mean, actively working to stabilize the value of money and to ensure inflation meets the government's policy goals, which are motivated by the need to ensure the economy stays healthy, don't sound like something that creates controversy. I mean, do we really need a vote do check if we want Zimbabwean hyperinflation? Given the alternative is the perpetual risk of seeing the value of your currency halve in less than a week, like BTC experienced a few months ago, how exactly is the service provided by a central bank bad or undesirable?
- jimmydorry 5y ago
  Corrupt states have a monopoly on violence. There is no such similar force ensuring people have to use the crypto made available to them. The Bitcoin network operates by balancing the economic incentives of each party, and at any point, any party is free to walk away. __Developers:__ * Profit motive: Paid salaries / bounties / donations by users, business that build off the Blockchain, miners, and appreciation from their BTC holdings * The consequence of all the core developers going rogue would be the price of BTC collapsing, salaries or donations no longer getting paid by either or all of the above groups __Miners:__ * Profit motive: Appreciation of BTC holdings, income derrived from doing their job by validating transactions and appending them to the blockchain for the block reward and transaction fees * Rogue miners can't exert much force on the system until they get close to 50% of the hashing power. * A collective of miners (e.g. a mining pool) can negatively impact the ecosystem by buying developers, or messing with transactions. This would result in a large cost by way of their holdings losing value and no longer being able to derrive as much income from mining. __Users:__ * Profit motive: Transacting and speculating with BTC gives it value. If a significant group of users dislike a developer's proposed changes or feels they are corrupt, they can make their voice heard which can force the miners and other developers to weigh in resolve the issue. If this does not happen, then the loss of confidence in Bitcoin can result in a fork (the troublemakers leaving the chain, or the majority / active users moving to a new coin and leaving the troublemakers behind). No one party in the above can force any issue on the other two stakeholders, and doing so against all economic incentives will typically cause enough damage that none of the other actors would likely go along with such an act. For example, the main active developers could get bought off and push out a client with 10GB transaction blocks. Assuming the miners also get bought off, the users can choose not to use such cyrpto and sell their coins while they can still get a decent value for them. The miners and developers would be king of their fiefdom, which means very little. This is only possible though if you treat the miners and developers each as a single entity. This is far from the case though.
  - EdwardDiego 5y ago
    > Corrupt states have a monopoly on violence Do you believe all states to be corrupt?
- wmf 5y ago
  Users have the money. If there's a fork, users can value one side higher than the other and then developers and miners will follow the money.
  - haimez 5y ago
    Right. The pyramid needs a base to stand on.
  - victor106 5y ago
    How many forks of Bitcoin have been as successful as Bitcoin?
    - ajkdhcb2 5y ago
      Some would argue that Bitcoin Cash is the real Bitcoin. People have to fight for the name when there is a fork. Miners were fighting for a different chain and actually lost
      - deleted 5y ago
        [deleted]
  - deleted 5y ago
    [deleted]
  - PEJOE 5y ago
    I thought Bitcoin was the money?
  - nuerow 5y ago
    > Users have the money. If there's a fork, users can value one side higher than the other and then developers and miners will follow the money. As the article shows, BTC's user side of the equation is actually controlled by a small group of investors. Thus, users like you and me have absolutely zero control or influence over the value of BTC, and are vulnerable to the manipulation done by this small group of investors. We already saw BTC's value tank to half in a matter of days. How do you explain that as being something that meets the users' best interests?
- Geee 5y ago
  Bitcoin is open-source software. Users decide which version they want to run. Developers and miners can't force users to switch to another version. Some miners tried to force an upgrade on users in 2017 which was averted with a threat of user activated soft fork.[0] [0] https://bitcoinmagazine.com/culture/bitcoin-independence-day-how-this-watershed-day-defines-community-consensus https://bitcoinmagazine.com/culture/bitcoin-independence-day...
  - runeks 5y ago
    > Developers and miners can't force users to switch to another version. Miners can, but it’s costly. By a majority mining empty blocks on the chain they wish users to switch away from they make that chain useless. However, they need to sacrifice profit on some other chain (by not mining on that) to do so.
- tenuousemphasis 5y ago
  Users choose which software to run, so they can fire one set of developers by running software by different developers. The software they run determines which blocks they consider valid, and if enough people agree that miners' blocks are invalid, miners will have to accept their blocks have less value or change the way they produce blocks.
stkdump 5y ago
By users you mean investors? The article argues that only a small group of investors have power. So replacing one man one vote by one dollar (or bitcoin) one vote is a loss of democracy. I don't see how corruption can be prevented by restricting the voting rights to the rich.
EdwardDiego 5y ago
> the alternative of corrupt governments Are all governments inherently corrupt in your mind?
wolverine876 5y ago
> Compared to the alternative of corrupt governments that have complete control to print money at will Major governments in wealthy countries have done an excellent job of managing currency. It's far more stable than cryptocurrencies, and the stability has improved as knowledge of economics has improved. They went through two massive economic calamities in 13 years (the Great Recession and the Coronavirus Pandemic) with almost no economic instability. Cryptocurrency seems to me to be a far greater threat to economic stability and for corruption and undemocratic seizure of power.

jayd16 5y ago

In what way do users have control over miners or developers? If the assumption is that corruption can overcome a democratic state, I never understood why its so crazy to suggest it can overcome developers or a mining cartel.

ajkdhcb2 5y ago
Developers are wasting their time if nobody wants to use what they develop. Miners lose their income if they are mining blocks on a chain that nobody wants to use. Users running software nodes validates the blocks, limiting what miners can do. Miners can be pushed to change the rules with methods like a 'User Activated Soft Fork'. The proof of work algorithm can even be changed, rendering all the ASIC hardware of the mining industry worthless.
- matteotom 5y ago
  Corrupt governments and central banks can be pushed to change the rules with methods like "voting" or "mass protests".
  - sunshinerag 5y ago
    Except corrupt governments and central banks do not care for either. Central bank policies are not subject to voting by people. Did any of us vote for bailouts, QE?. corrupt governments also know how to suppress "mass protests". If these are the only ways to hold them to account how would that work.
    - matteotom 5y ago
      The Fed has a pretty straightforward mission to balance inflation and employment. If they're doing a bad job of that, then the president or congress (acting on behalf of the people) can act to hold them accountable. If congress decides that's no longer the right mission, they can pass a law changing it. And there are countless historical examples (even recent) of peaceful or violent protests causing change to corrupt governments.
    - lkrubner 5y ago
      Most of us did vote for quantitative easing. Certainly after 2008, for many years, in the USA and in Europe, people were voting any kind of stimulus they could get, and when it was impossible to get enough fiscal stimulus, most of us were willing to support any effort for monetary stimulus as a second-best alternative. It is, of course, an interesting point of discussion why it was so difficult to get sufficient fiscal stimulus, but that topic is too complex to get into in a comment on Hacker News.
    - nuerow 5y ago
      > Central bank policies are not subject to voting by people. Did any of us vote for bailouts, QE?. Isn't the role of a central bank to enact monetary policy and to contribute to financial stability? I mean, actively working to stabilize the value of money and to ensure inflation meets the government's policy goals, which are motivated by the need to ensure the economy stays healthy, don't sound like something that creates controversy. I mean, do we really need a vote do check if we want Zimbabwean hyperinflation? Given the alternative is the perpetual risk of seeing the value of your currency halve in less than a week, like BTC experienced a few months ago, how exactly is the service provided by a central bank bad or undesirable?
jimmydorry 5y ago
Corrupt states have a monopoly on violence. There is no such similar force ensuring people have to use the crypto made available to them. The Bitcoin network operates by balancing the economic incentives of each party, and at any point, any party is free to walk away. __Developers:__ * Profit motive: Paid salaries / bounties / donations by users, business that build off the Blockchain, miners, and appreciation from their BTC holdings * The consequence of all the core developers going rogue would be the price of BTC collapsing, salaries or donations no longer getting paid by either or all of the above groups __Miners:__ * Profit motive: Appreciation of BTC holdings, income derrived from doing their job by validating transactions and appending them to the blockchain for the block reward and transaction fees * Rogue miners can't exert much force on the system until they get close to 50% of the hashing power. * A collective of miners (e.g. a mining pool) can negatively impact the ecosystem by buying developers, or messing with transactions. This would result in a large cost by way of their holdings losing value and no longer being able to derrive as much income from mining. __Users:__ * Profit motive: Transacting and speculating with BTC gives it value. If a significant group of users dislike a developer's proposed changes or feels they are corrupt, they can make their voice heard which can force the miners and other developers to weigh in resolve the issue. If this does not happen, then the loss of confidence in Bitcoin can result in a fork (the troublemakers leaving the chain, or the majority / active users moving to a new coin and leaving the troublemakers behind). No one party in the above can force any issue on the other two stakeholders, and doing so against all economic incentives will typically cause enough damage that none of the other actors would likely go along with such an act. For example, the main active developers could get bought off and push out a client with 10GB transaction blocks. Assuming the miners also get bought off, the users can choose not to use such cyrpto and sell their coins while they can still get a decent value for them. The miners and developers would be king of their fiefdom, which means very little. This is only possible though if you treat the miners and developers each as a single entity. This is far from the case though.
- EdwardDiego 5y ago
  > Corrupt states have a monopoly on violence Do you believe all states to be corrupt?
wmf 5y ago
Users have the money. If there's a fork, users can value one side higher than the other and then developers and miners will follow the money.
- haimez 5y ago
  Right. The pyramid needs a base to stand on.
- victor106 5y ago
  How many forks of Bitcoin have been as successful as Bitcoin?
  - ajkdhcb2 5y ago
    Some would argue that Bitcoin Cash is the real Bitcoin. People have to fight for the name when there is a fork. Miners were fighting for a different chain and actually lost
    - deleted 5y ago
      [deleted]
- deleted 5y ago
  [deleted]
- PEJOE 5y ago
  I thought Bitcoin was the money?
- nuerow 5y ago
  > Users have the money. If there's a fork, users can value one side higher than the other and then developers and miners will follow the money. As the article shows, BTC's user side of the equation is actually controlled by a small group of investors. Thus, users like you and me have absolutely zero control or influence over the value of BTC, and are vulnerable to the manipulation done by this small group of investors. We already saw BTC's value tank to half in a matter of days. How do you explain that as being something that meets the users' best interests?
Geee 5y ago
Bitcoin is open-source software. Users decide which version they want to run. Developers and miners can't force users to switch to another version. Some miners tried to force an upgrade on users in 2017 which was averted with a threat of user activated soft fork.[0] [0] https://bitcoinmagazine.com/culture/bitcoin-independence-day-how-this-watershed-day-defines-community-consensus https://bitcoinmagazine.com/culture/bitcoin-independence-day...
- runeks 5y ago
  > Developers and miners can't force users to switch to another version. Miners can, but it’s costly. By a majority mining empty blocks on the chain they wish users to switch away from they make that chain useless. However, they need to sacrifice profit on some other chain (by not mining on that) to do so.
tenuousemphasis 5y ago
Users choose which software to run, so they can fire one set of developers by running software by different developers. The software they run determines which blocks they consider valid, and if enough people agree that miners' blocks are invalid, miners will have to accept their blocks have less value or change the way they produce blocks.

stkdump 5y ago

By users you mean investors? The article argues that only a small group of investors have power. So replacing one man one vote by one dollar (or bitcoin) one vote is a loss of democracy. I don't see how corruption can be prevented by restricting the voting rights to the rich.

EdwardDiego 5y ago

> the alternative of corrupt governments Are all governments inherently corrupt in your mind?

wolverine876 5y ago

> Compared to the alternative of corrupt governments that have complete control to print money at will Major governments in wealthy countries have done an excellent job of managing currency. It's far more stable than cryptocurrencies, and the stability has improved as knowledge of economics has improved. They went through two massive economic calamities in 13 years (the Great Recession and the Coronavirus Pandemic) with almost no economic instability. Cryptocurrency seems to me to be a far greater threat to economic stability and for corruption and undemocratic seizure of power.