4 ms·

>It's in Bitcoin community's, and GHash's, economic interest that no miner exceeds 50%. Are Bitcoin community's interests and individual miners' interests alig

by josu 12y ago

>It's in Bitcoin community's, and GHash's, economic interest that no miner exceeds 50%. Are Bitcoin community's interests and individual miners' interests aligned? I understand why the bitcoin community wouldn't want a mining pool with more than 50% of the share, but why should "selfish" individual miners care?

bredren 12y ago
Miners occupy a powerful and yet somewhat isolated portion of rapidly evolving bitcoin ecosystem. For many people in the Bitcoin ecosystem, making the technology successful is about more than personal enrichment. A lot of folks see Bitcoin specifically (because of its present success) holding the potential for big changes in a shorter period of time. The people I've spoken with don't mince words: in general serious miners compete against others to make money, not societal change.
- eric_bullington 12y ago
  >The people I've spoken with don't mince words: in general serious miners compete against others to make money, not societal change. Fine, but in their ignorance and greed, they're going to lose their ability to make money.
Aqueous 12y ago
If the blockchain is dominated by a single interest, and that player starts abusing their market position, BitCoin's exchange rate will plummet and the economic interest in question will lose millions. So yes, it is in the community's interest and individual miners' interest to keep the hashrate distributed enough to prevent that from happening. What happens when people lose faith in the system? The 2008 financial crisis, the great depression, etc.... Nobody wins if the entire system breaks down.
- alwaysdoit 12y ago
  What stops them from taking a short position in Bitcoins and forcing the exchange rate into the ground?
- bunderbunder 12y ago
  This reasoning is based on the assumption that a 51% player must also be long on Bitcoin, and that they interpret the nature and value of the Bitcoin market in a similar manner to most members of the Bitcoin community. In other words, assuming that they don't know anything you don't. Considering we're talking about an entity that's managed to become a 51%er, that assumption sounds downright Pollyannaish to me. The same line of reasoning also supposedly implies that nobody should want to get even close to this point. Counterfactually, as it turns out. That said, I can see the attraction of that line of reasoning, too. When you've got a tiger by the tail, it probably is best not to contemplate too carefully what's at the other end.
  - joaorj 12y ago
    When they bought the mining machines they were entering bitcoin as long weren't they? They can't even sell their future winnings as they don't have them yet, so they are really long!
    - bunderbunder 12y ago
      Maybe they were. . . or maybe they've figured out something others haven't. Some sort of shorting-type scheme, perhaps. Normally I'm not so inclined toward conspiracist thinking, but considering all the different capers that have put Bitcoin in the news over the past couple years, in this particular case I'm inclined to make an exception.
    - dllthomas 12y ago
      Well, they aren't long bitcoin from buying mining rigs, they are long bitcoin call options denominated in energy. If the return seems likely to be too low, as eventually it must be when (if things continue) people make more efficient rigs, then it would eventually be in their interest to let the longer term options expire. It is totally conceivable that taking a huge short position and scaring everyone off of btc could mean more profit than the could be mined out of those rigs. Of course, you would need someone to take the other side of that bet, in a setting with sufficiently little counterparty risk that you can collect (which typically means a more regulated setting) and a sufficiently lax regulatory environment that you aren't likely to be accused of some illegal type of market manipulation. That said, people do seem to overlook such details... and this all only seems unlikely to very unlikely, not impossibly or absudly unlikely.
- marcosdumay 12y ago
  And nobody in the world wants Bitcoin to break down?
  - Aqueous 12y ago
    GHash doesn't - and that's why they will figure out a way to dip below 50% again.
deleted 12y ago
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by josu 12y ago

bredren 12y ago

Miners occupy a powerful and yet somewhat isolated portion of rapidly evolving bitcoin ecosystem. For many people in the Bitcoin ecosystem, making the technology successful is about more than personal enrichment. A lot of folks see Bitcoin specifically (because of its present success) holding the potential for big changes in a shorter period of time. The people I've spoken with don't mince words: in general serious miners compete against others to make money, not societal change.

eric_bullington 12y ago
>The people I've spoken with don't mince words: in general serious miners compete against others to make money, not societal change. Fine, but in their ignorance and greed, they're going to lose their ability to make money.

Aqueous 12y ago

If the blockchain is dominated by a single interest, and that player starts abusing their market position, BitCoin's exchange rate will plummet and the economic interest in question will lose millions. So yes, it is in the community's interest and individual miners' interest to keep the hashrate distributed enough to prevent that from happening. What happens when people lose faith in the system? The 2008 financial crisis, the great depression, etc.... Nobody wins if the entire system breaks down.

alwaysdoit 12y ago
What stops them from taking a short position in Bitcoins and forcing the exchange rate into the ground?
bunderbunder 12y ago
This reasoning is based on the assumption that a 51% player must also be long on Bitcoin, and that they interpret the nature and value of the Bitcoin market in a similar manner to most members of the Bitcoin community. In other words, assuming that they don't know anything you don't. Considering we're talking about an entity that's managed to become a 51%er, that assumption sounds downright Pollyannaish to me. The same line of reasoning also supposedly implies that nobody should want to get even close to this point. Counterfactually, as it turns out. That said, I can see the attraction of that line of reasoning, too. When you've got a tiger by the tail, it probably is best not to contemplate too carefully what's at the other end.
- joaorj 12y ago
  When they bought the mining machines they were entering bitcoin as long weren't they? They can't even sell their future winnings as they don't have them yet, so they are really long!
  - bunderbunder 12y ago
    Maybe they were. . . or maybe they've figured out something others haven't. Some sort of shorting-type scheme, perhaps. Normally I'm not so inclined toward conspiracist thinking, but considering all the different capers that have put Bitcoin in the news over the past couple years, in this particular case I'm inclined to make an exception.
  - dllthomas 12y ago
    Well, they aren't long bitcoin from buying mining rigs, they are long bitcoin call options denominated in energy. If the return seems likely to be too low, as eventually it must be when (if things continue) people make more efficient rigs, then it would eventually be in their interest to let the longer term options expire. It is totally conceivable that taking a huge short position and scaring everyone off of btc could mean more profit than the could be mined out of those rigs. Of course, you would need someone to take the other side of that bet, in a setting with sufficiently little counterparty risk that you can collect (which typically means a more regulated setting) and a sufficiently lax regulatory environment that you aren't likely to be accused of some illegal type of market manipulation. That said, people do seem to overlook such details... and this all only seems unlikely to very unlikely, not impossibly or absudly unlikely.
marcosdumay 12y ago
And nobody in the world wants Bitcoin to break down?
- Aqueous 12y ago
  GHash doesn't - and that's why they will figure out a way to dip below 50% again.

deleted 12y ago

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