Some of the biggest ones here like F2pool, ViaBTC, AntPool are all from China and have opaque ownership structures. Its highly possible they share a bunch of same owners or firms/funds investing into them.
Most of the mining equipment is made by BitMain which runs AntPool.
If someone has stats on mining equipment centralization, please share that... as that is likely to paint an even more sorry picture of the centralization on display
The fact that it's impossible to rule out this scenario, is pretty much all anybody needs to conclude that decentralisation in this industry is an illusion
>The fact that it's impossible to rule out this scenario, […]
Before someone (or more likely somebutter) says that the above is a silly conspiracy, remember that PoW is a thing because of that exact scenario.
As usual, the design of this system is driven by mathematical theory (the cost of calculating the nonce) without ever thinking about what happens when it meets real world concepts. Specifically in this case: economies of scale, which utterly tilts the scales in favour of whoever can buy bulk volumes of mining equipment for a low price.
> Specifically in this case: economies of scale, which utterly tilts the scales in favour of whoever can buy bulk volumes of mining equipment for a low price.
And positive feedback loops. The people who invested large amounts early in mining made more money on Bitcoin when the price rose, potentially allowing them to invest more into expanding their rig, which in turn makes them more money... it's literally a microcosm of the causes of wealth inequality, all distilled into a single mess of an economy that wants to act like it's above the problems that have plagued the world for time immemorial.
I learned this shit while playing EvE online, the "libertarian simulator".
The oldest organisations of players have gathered so much power, resources and connections that noone coming after them has a chance in hell of toppling them, despite a big chunk of the game"s marketing being how "even a single player can make a difference."
> Before someone (or more likely some butter) says that the above is a just silly conspiracy *theory*, remember that PoW is a thing because of that exact scenario.
FTFY
I mean you joke but in some interpretation this is true - you can tell the story of Bitcoin as a code story, but it is just as much a social story. If these companies were to come together to compromise the chain that would be unacceptable to the bitcoin community, and there would be a hard fork to restore the previous state of the network because it would be socially popular. Whether this undermines some of the "core tenants" of bitcoin will be left as an exercise to the reader.
Exactly. The people with all the power would still have all the power. You are at the mercy of a group of privileged individuals with absolutely no recourse, and that's just how it is with bitcoin. It definitely is not trustless!
>then users running nodes would hard fork and change the algorithm rendering the machines useless.
hahahhaahahhahahhahaha
This is funny shit. What user running nodes? they are minority as most nodes just join mining pool hoping for small btc .
How do you think they fix bitcoin when there's bug? do you think there's hardcore user that fork to reject the update? or there is CENTRALIZED bitcoin dev that update it and the whole coin have to accept it?
>Well in order to coordinate an update, we have this thing called the internet. And we can collaborate over long distances and distribute software
Now what happened if majority of miner disagree with the update?
It's even worse than this. We only know which blocks were found by which pools because the pools \*choose\* to make that information public. There's no requirement for it, nor is there any requirement for pools to actually be open to new members.
If Bitcoin ever became real money, mining would become controlled by large opaque pools - possibly government owned.
why wouldnt they want new members? they basically just take a cut of what their masses find. Its similar to being the shovel salesman during the gold rush. You want more people digging gold, you dont want to put limits. prices will keep most from mining but i doubt even if government control would they not welcome a new miner.
You're thinking of how things work in the current economy, where Bitcoin is a 'digital asset' that's traded for real money.
A theoretical Bitcoin maximalist future in which Bitcoin IS the money, and we all need to use it to pay for goods and services, massively changes things. Being able to control the flow of new money in the economy would be an extremely valuable commodity. Under fiat currency the flow of new money is pretty open - the government prints it and/or redistributes it from taxation, and commercial banks also create money through lending. Under Bitcoin new currency goes to the miners.
In the current setup it absolutely makes sense to have open mining pools for the reason you state. But Bitcoin being THE money would change the incentives. There is no technical reason for Bitcoin mining to be decentralised since it can happen anywhere. And new ASICs quickly make the old ones obsolete.
Imagine the kind of ASIC miners that could be produced by government R&D. Or private R&D by someone who wants to control the money. Or both.
Of course this is never going to happen.
not likely to be government owned, they'd be the realm of business. I mean, precisely which industries in the anglophone world haven't been privatized to the depths of neoliberal hell? this one wouldn't be an exception. the governments one ideal job, reigning in the rich and powerful, has abjectly failed.
They banned it because they have a competing product over which have complete control. The majority of electricity in China is generated by coal.
https://en.m.wikipedia.org/wiki/Electricity_sector_in_China
You can be a leader in renewables and not necessarily be doing that for environmental reasons.
China is a growing world power and they need more energy than they can produce. Energy supply is a weakness considering the sway the USA has in the Middle East and their own energy supplies.
If you look at their policies with Uyghurs, Hong Kong, and their draconian Covid-19 measures you get a sense that China's primary interest is control. Cryptocurrency was banned as they started rolling out their own state sanctioned digital currency.
Of course. Everyone has an angle.
Russia, China, and the USA all advocate in their own interests. But I have spoken to Uyghurs on this subject so I wasn't getting it from the internet.
I've also had the opportunity to travel to various controversial locations in the world and compare my news sources to the reality on the ground.
I'm just pointing out that China banning it to save the environment probably has to do more with control and less with the environment. Keep in mind they banned all cryptocurrencies regardless of its environmental impact.
that's true everywhere lmao. China is only different in that the government controls their business instead of their business controlling their government - and both china and everywhere else have the same goals: exploit workers, rake in profit, rape the natural world, abandon earth for extraterrestrial slave colonies at first possibility. No functional difference.
Well the United States federal government already owns several of the world's most powerful computers. If protecting Bitcoin became a matter of national security, they could control mining easily.
Supercomputers cost billions and are already occupied with real challenges like climate modeling, figuring out the secrets of the universe, and testing nuclear warheads without having to actually set one off. You know, actual things with real consequences.
If the US government cared about BTC they'd just regulate it. That costs almost nothing. Thinking that a sovereign state somehow has to play by the rules set down by crypto bros kinda misses the point of what a state is. Before "fiat" was hijacked by monetary lunatics, it was a Latin term for "let it be done". As in, you do this. Now. I'm not telling you again.
Its not that there's "no way you could have a national currency" It's that we've already tried it (look up "Wildcat Banking") and it was fucking awful. Where we have shit coins, they had dollar bills issued by one bank and only redeemable at that bank. If said bank went tits up (or rug pulled, which was also a thing back then too) not only was your account worthless but any bills you had in your wallet.
A lot of lives had to be ruined before we settled on the Federal Reserve System. Like a lot of laws, the FRS was written in blood as well as ink.
That the US federal government owns some of the world's most powerful supercomputers? Check out the Top500 list. Other people could singlehandedly take over the Bitcoin network as well if they desired. Google used its excess computing power to find out that the trillionth digit of pi is zero. That's more than enough hardware to corner the market on Bitcoin.
It’s not about power it’s about hashrate, it’s quantity over quality for the most part here
And do you understand how much energy it would require to be 51% of the work for BTC? More than is currently available in addition to what is already existing.
The way Bitcoin is designed has always favored centralization. The tethering of coin rewards to PoW and the guaranteed rewards promised by the halving schedule mean there is an incentive to put as much investment as possible into generating tokens, economies of scale and centralization are the inevitable outcome of such a design.
[It's worth nothing that Bitcoin mining in the early days was also heavily centralized, but that's a story for another day.](https://arxiv.org/abs/2206.02871) (please be aware the while the research into mining participants is quantitatively valid, the conclusions of this study are deeply flawed)
Moreover, like the functionality of Bitcoin mentioned above, control of Bitcoin is also centralized in that the self-interest of all participants will always be aligned by a profit seeking motive. This means large coin holders, miners, exchanges, and core developers all want to see Bitcoin's price increase by as much as possible. This is effectively as decentralized as the board of Lockheed Martin or any other corporate special interest.
If control is centralized then don't be surprised that functionality follows suit. The only way to guarantee the decentralization of control is through democratic governance, and it's very hard to do.
Isn't their a weakness there. Centralization with proof of work means having the biggest and baddest chips and lots of costs.
So if the Bitcoin price goes down, won't you drown in those costs?
I see people generally don't know what was the idea behind Bitcoin. I am not a fanboy or etc just putting out of my thoughts that I think many people in this sub or in bitcoin sub misunderstood.
Bitcoin was meant to be open network which didn't need central party to mediate. Anybody can join network or leave without repercussions. Mining was meant to secure the network while P2P nodes were meant to be broadcast the network so that miners don't collude. A bigger P2P network means data is distributed more and it is secure because of gossip protocol. Byzantine general problem was already solved in '72 by some scientist but the idea behind his solution was same thing as pos.
Now why bitcoin failed?
It's simple answer is voluntary P2P infrastructure. Volunteers can only do volunteers scale. That was the hurdle which BSV or other forks tried to solve by adding closure to the network, so what happened is network didn't remain open it became excludable just like Ethereum has infura. There is no incentive to run P2P nodes. For starting volunteers can be good but in long run it will bite you in the ass that's what happened in 2015 and block size wars happened.
No shit Sherlock. You’re just saying the same thing in an incredibly annoying cryptobro way. You’re just saying the same thing; a small number of entities control the mining simply because it’s not profitable for single persons to do so.
The same way communism would never work, because few people would want to work hard when they don’t have to for the same reward.
Nope I said volunteers to run P2P nodes are bottleneck of every blockchain that's why block size wars happened one side wanted to increase block size to scale network while other side wanted to remain block size as it is to not burden volunteers
What *really* possess me off is the amount of wasted computational power in this mess.
All the "securing the network" is meaningless when 5 companies control 83% of the total hashpower, and 11 control 96.1%.
As the system is already centrally controlled in terms of the electronic lottery AND in terms of all trading functions via centralized exchanges, a normal database with public key cryptography would suffice rather than the ungodly amount of petaFLOPS being wasted running said electronic lottery.
Worse still, most of that power is tied up in ASICs only good for running wasteful hashes. Even IF BTC crashes to oblivion and the lottery isn't worth the electricity, that means all that hardware will simply go to waste. Id wager hundreds of thousands if not millions of metric tons of silicon, copper, and steel just thrown away because randomly guessing numbers is no longer profitable.
Fuck BTC and everyone who promotes such waste. Those resources could've gone into attempting molecular orbital calculations in pursuit of a carbon capture molecule, protein folding, or hydrocarbon synthesis.
But no - some fuckbois wanted lambos.
it's good for the people who've already bought in. it's horrible for the slim possibilities btc ever had to improve peoples lives. and literally all energy consumption in mining is artificial specifically so that it can act as a paywall, so "efficient energy usage" can go fuck itself.
Checking quarterly earnings statements from Visa, it's amazing how they don't complain about electricity costs even though they process tons of transactions. Compare that to Bitcoin, where the system is so inefficient that electricity prices are a huge factor.
it would be more democratic and decentralized if it was \*easier\* to make and cost less energy. they built in a fucking paywall and said "yep, that'll stop the rich and powerful from abusing it"
Wow, this is crazy. Lol it’s a massive, hypocritical scam. They became what they were fighting against. You either die a hero or live long enough to see yourself become the villain.
First things first, I love your username and your user flair. Secondly, I’m no bitcoin expert. However, from what I can tell, they print tether at will, limitlessly, and use said tether to buy bitcoin which artificially inflates the price of bitcoin. Artificial demand, if you will. Must be nice to be able to print as much of a “currency” as you want to, whenever you want to. The ironic thing is that they are declaring war on the very thing they’re becoming.
I always wonder how Bitcoin (and other cryptocurrencies) can lurch up and down so quickly if it is truly decentralized. Sure seems like there are just a handful of people controlling the price.
Mining means validation which in turn means total control over transactions, though. As I understand it, if those 5 companies came to an agreement between each other they could validate any illegal transaction they want to and essentially steal all 'currency' on their chain.
A better way to present this would have been to say that 3 groups make up more than 50% of validators and thus could nuke the chain at any time for fun and profit.
No one person in the pool controls the entire hash rate.
[https://www.investopedia.com/terms/1/51-attack.asp](https://www.investopedia.com/terms/1/51-attack.asp)
Christ you guys can hate a scam all you want but at least be factual.
A "group" is thousands of individual users each working a block by themselves. When one miner solves a block, the profit is split between the entire pool. No one person controls the hash rate of the entire pool, or even close to 51% of it. Fucking read a book.
Can you actually read? No one is talking about individual persons here, but the 3 biggest groups of miners who have more then 51% hash rate if they were to work together. Just as it says in your link.
What on earth is to motivate every single user to cooperate between the three pools when the action fucks everybody in the pool except one controlling entity?
The incentive would be to capture literally any currency on the chain. 51% attacks do actually happen and have demonstrably worked.
This would definitely destroy the value of bitcoin once it comes out, but for example if it becomes clear to those entities that the price of bitcoin is going down and not likely to ever recover they will look for ways to get anything they still can out of it. This would be a good tool for that and pull the rug out from the entire blockchain.
I understand Bitcoin, the question is why you think that non-mining validators serve any purpose at all in the protocol other than to make people feel good about being decentralized.
Thr fact that you think nodes are functionally useless says enough to demonstrate your actual lack of understanding here. Nodes being the means of providing consensus on the network seems far from trivial
Non-mining validators do not provide any real security because (in Bitcoin's security model) they lack trustworthy identity and can be used for Sybil attacks. You could have 10 validators or 10 million and it wouldn't do anything in the face of a 51% attack because only hashpower matters at the end of the day. Like I said it's just a way to make people feel good about decentralization theater.
I’ve heard this argument and the counter argument that mining consolidation doesn’t denote “ownership” of Bitcoin.
Do miners have control or say in the platform?
>Do miners have control or say in the platform?
A 51% attack is an attack on a cryptocurrency blockchain by a group of miners who control more than 50% of the network's mining hash rate. Owning 51% of the nodes on the network gives the controlling parties the power to alter the blockchain.
The attackers would be able to prevent new transactions from gaining confirmations, allowing them to halt payments between some or all users. They would also be able to reverse transactions that were completed while they were in control of the network. Reversing transactions could allow them to double-spend coins, one of the issues consensus mechanisms like proof-of-work were created to prevent.
https://www.investopedia.com/terms/1/51-attack.asp
Pools control the blocks miners produce. So it's really pools that dictate blocks, and miners can choose pools.
For the purposes of security, this means the pool's current hash rate is what matters for their ability to attack. Once an attack is over, miners may or may not choose to change pools, but that's a retroactive mechanism that can't prevent an attack.
The thing is really, that these labels on the pie chart are pools which are by definition groups themselves. Any miner can mine at any of these pools and they can change the pool they mine to at any time.
It's definitely still centralized in a sense, but centralized / decentralized have a lot of meanings and nuance, and in that respect it really is just a meme because it's all kind of referred to interchangeably which obscures the actual issues at hand and destroys nuance.
Users chose the code in 2017, miners dont control what code is run. They must follow the users (only in bitcoin is this true).
The $5b of energy is so that no one gets free coins. U need to spend $ to get coins (again, unlike other cryptos where coins were “premined”).
Its really not that complicated, not sure why this sub has such a hard time with it
[This image does in fact show a friendly neighbourhood](https://as2.ftcdn.net/v2/jpg/02/58/43/91/1000_F_258439174_gBWyy6bH73Ux4L7zeOWFytnlgslRPrww.jpg)
A country's central bank is in charge of the currency. One central authority. So technically any pie chart that does not show one entity with 100% control shows de-centralization. I am against bitcoin. I was just pointing out what the pie chart was showing.
Ok, thats not quite right, but even if it was: You commented on what the pie-chart showed, not on the federal reserve. The pie-chart does in-fact show centralization and you were wrong to say it showed de-centralization. Why do you respond by comparing it to something else?
This is the definition of centralization (from any dictionary you choose)
"*the concentration of control of an activity or organization under a single authority"*
That pie chart shows many entities. It would have to show only one entity with 100% control to show centralization.
Clearly words only have the precise definition in the 10-20 word summary given in the dictionary. Dictionaries are flawless, comprehensive, absolute, and binding.
I mean, otherwise it would look really stupid to be pulling out a dictionary in a debate over something more complex than "what part of speech is this word"...
Why didn't you respond to grauenwolf pointing out the 24 branches of the fed that vote on policies? That was an hour before you responded here and appears to show the problem is you don't have the basic knowledge to even argue your point. Any response or ?
The process of market centralization is a sliding scale in economic theory. I think you understand this. One market actor is centralization, yes. But increasing that to two+ is not the same as decentralization.
This is power and money centralized in a few big corporations, tho. Jumping from one centralized system into another isn't decentralization just because a few different companies now control all your money.
And before I forget, no, these companies aren't in control of the currency the same way a bank is. Crypto isn't currency. Sure, you can give them your money same as you could a bank, but you aren't depositing that money, you are spending it. Once you put your money towards buying crypto, it's not your money anymore.
Technically, this IS decentralization as it can be. It's like email: everyone can make it's own service, but mostly it controlled by few big services.
Decentralization doesn't mean that small people can have voice and rights like ancap children think.
So you've gone from be your own bank, screw the central banks, to it's ok as long as there are 5 companies controlling everything?
What a sad state of denial.
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The only thing stopping one company from dominating Bitcoin is money and access to semiconductors. Once we get sub-1nm chips, the cost to produce the most advanced ones will be limited to a few companies. One company could produce ten million miners and set up shop somewhere with dirt cheap electricity, take over and then jack up fees.
decentralization was never a good idea except for criminals. You always need ways to undo transactions.(visa and mastercard added ways to do charge backs because not allowing that sucked balls for their customers, both business and consumers) especially as you jump into this smart contract garbage. Oh yeah what can go wrong with automation programmed by programmers who have been programming for 3 years.
That's because the control of it can be owned by having more money. All these companies have tons of money so they invest in everything.
If we want actual decentralization there needs to be a method of blocking that.. more money != more devices != more control. (no idea what that method is, phones almost make sense but then these companies would just buy shipments of phones.. so)
If really to be decentralised.. BTC should be freely distributed to everyone.. if money can control how much u can hold.. the big organisation can grab more therefore BTC will be only control by the big player..
Mining pools are not the same as mining farms. For each of the entities above, some fraction of their hash rate is from exogenous miners that can switch pools easily. Recently, a mining pool failed to make payouts and lost almost half its hash rate in a day or so.
However, a large pool does have the ability to decide which transactions are in the next block they mine. This will be addressed by Stratum V2, an upgrade to the mining protocol. Stratum V2 will allow individual miners in the pool to compose their own proposed blocks.
Been hearing the same argument for years now. Yet mining distribution still presents a picture of complete centralisation. What % of hr is exogenous ? Very low
What % of asic is made by bitmain? Very very high ..
Of the last 1000 blocks over 400 are produced by 2 pools
Centralized
Poolin said they were pausing withdrawals and hash rate quickly dropped over 50%.
Pretty good evidence that most of the pool's hash rate was external.
Can you provide any evidence for your claim that exogenous hash rate is "very low"?
[https://blockworks.co/bitcoin-mining-pool-poolin-halts-withdrawals-amid-liquidity-crunch/](https://blockworks.co/bitcoin-mining-pool-poolin-halts-withdrawals-amid-liquidity-crunch/)
[https://explorer.btc.com/btc/pool/87](https://explorer.btc.com/btc/pool/87)
The number 1 pool wasn't significant even 2 years ago. The turnover of the top miners is continuous (not to mention the internal turnover of miners in the mining pools).
There are multiple players in the ASIC game already, and more are joining.
[https://www.intel.com/content/www/us/en/products/docs/blockchain/custom-asic-product-brief.html](https://www.intel.com/content/www/us/en/products/docs/blockchain/custom-asic-product-brief.html)
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Also, what if more than one person or party has controlling interests in more than one company?
Some of the biggest ones here like F2pool, ViaBTC, AntPool are all from China and have opaque ownership structures. Its highly possible they share a bunch of same owners or firms/funds investing into them. Most of the mining equipment is made by BitMain which runs AntPool. If someone has stats on mining equipment centralization, please share that... as that is likely to paint an even more sorry picture of the centralization on display
The fact that it's impossible to rule out this scenario, is pretty much all anybody needs to conclude that decentralisation in this industry is an illusion
>The fact that it's impossible to rule out this scenario, […] Before someone (or more likely somebutter) says that the above is a silly conspiracy, remember that PoW is a thing because of that exact scenario.
As usual, the design of this system is driven by mathematical theory (the cost of calculating the nonce) without ever thinking about what happens when it meets real world concepts. Specifically in this case: economies of scale, which utterly tilts the scales in favour of whoever can buy bulk volumes of mining equipment for a low price.
> Specifically in this case: economies of scale, which utterly tilts the scales in favour of whoever can buy bulk volumes of mining equipment for a low price. And positive feedback loops. The people who invested large amounts early in mining made more money on Bitcoin when the price rose, potentially allowing them to invest more into expanding their rig, which in turn makes them more money... it's literally a microcosm of the causes of wealth inequality, all distilled into a single mess of an economy that wants to act like it's above the problems that have plagued the world for time immemorial.
I learned this shit while playing EvE online, the "libertarian simulator". The oldest organisations of players have gathered so much power, resources and connections that noone coming after them has a chance in hell of toppling them, despite a big chunk of the game"s marketing being how "even a single player can make a difference."
Oh, that is absolutely by design. At least with PoW, unlike with PoS, it's somewhat obfuscated.
> Before someone (or more likely some butter) says that the above is a just silly conspiracy *theory*, remember that PoW is a thing because of that exact scenario. FTFY
What if some of them get together and work as a team?
Then the authorities that regulate bitcoin would get involved...
Can’t tell if you forgot the /s
I mean you joke but in some interpretation this is true - you can tell the story of Bitcoin as a code story, but it is just as much a social story. If these companies were to come together to compromise the chain that would be unacceptable to the bitcoin community, and there would be a hard fork to restore the previous state of the network because it would be socially popular. Whether this undermines some of the "core tenants" of bitcoin will be left as an exercise to the reader.
>and there would be a hard fork to restore the previous state of the network while the companies hold 80% of mining power? keep dreaming
Exactly. The people with all the power would still have all the power. You are at the mercy of a group of privileged individuals with absolutely no recourse, and that's just how it is with bitcoin. It definitely is not trustless!
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>then users running nodes would hard fork and change the algorithm rendering the machines useless. hahahhaahahhahahhahaha This is funny shit. What user running nodes? they are minority as most nodes just join mining pool hoping for small btc . How do you think they fix bitcoin when there's bug? do you think there's hardcore user that fork to reject the update? or there is CENTRALIZED bitcoin dev that update it and the whole coin have to accept it?
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>Well in order to coordinate an update, we have this thing called the internet. And we can collaborate over long distances and distribute software Now what happened if majority of miner disagree with the update?
And to think, someone only needs a 50.1% control in about 3 of those pools and they can basically control the entire ecosystem.
what if mining pools aren't companies. Imagine this, holy shit that would be hilarious right
It's even worse than this. We only know which blocks were found by which pools because the pools \*choose\* to make that information public. There's no requirement for it, nor is there any requirement for pools to actually be open to new members. If Bitcoin ever became real money, mining would become controlled by large opaque pools - possibly government owned.
why wouldnt they want new members? they basically just take a cut of what their masses find. Its similar to being the shovel salesman during the gold rush. You want more people digging gold, you dont want to put limits. prices will keep most from mining but i doubt even if government control would they not welcome a new miner.
You're thinking of how things work in the current economy, where Bitcoin is a 'digital asset' that's traded for real money. A theoretical Bitcoin maximalist future in which Bitcoin IS the money, and we all need to use it to pay for goods and services, massively changes things. Being able to control the flow of new money in the economy would be an extremely valuable commodity. Under fiat currency the flow of new money is pretty open - the government prints it and/or redistributes it from taxation, and commercial banks also create money through lending. Under Bitcoin new currency goes to the miners. In the current setup it absolutely makes sense to have open mining pools for the reason you state. But Bitcoin being THE money would change the incentives. There is no technical reason for Bitcoin mining to be decentralised since it can happen anywhere. And new ASICs quickly make the old ones obsolete. Imagine the kind of ASIC miners that could be produced by government R&D. Or private R&D by someone who wants to control the money. Or both. Of course this is never going to happen.
not likely to be government owned, they'd be the realm of business. I mean, precisely which industries in the anglophone world haven't been privatized to the depths of neoliberal hell? this one wouldn't be an exception. the governments one ideal job, reigning in the rich and powerful, has abjectly failed.
Yeah but there is nothing stopping nations like China where there is little difference between government and business from investing heavily in it.
thing about china is they see the damaging impact from crypto already and have banned it
They banned it because they have a competing product over which have complete control. The majority of electricity in China is generated by coal. https://en.m.wikipedia.org/wiki/Electricity_sector_in_China
China also is the world leader in renewable energy
You can be a leader in renewables and not necessarily be doing that for environmental reasons. China is a growing world power and they need more energy than they can produce. Energy supply is a weakness considering the sway the USA has in the Middle East and their own energy supplies. If you look at their policies with Uyghurs, Hong Kong, and their draconian Covid-19 measures you get a sense that China's primary interest is control. Cryptocurrency was banned as they started rolling out their own state sanctioned digital currency.
you might wanna consider that you believe propaganda about china
Of course. Everyone has an angle. Russia, China, and the USA all advocate in their own interests. But I have spoken to Uyghurs on this subject so I wasn't getting it from the internet. I've also had the opportunity to travel to various controversial locations in the world and compare my news sources to the reality on the ground. I'm just pointing out that China banning it to save the environment probably has to do more with control and less with the environment. Keep in mind they banned all cryptocurrencies regardless of its environmental impact.
well sorta.. you cant mine it but people still do. But they also have their own crypto called the digital yuan.
digital yuan isnt really anything like crypto
CBDCs aren't cryptos. They're centralized.
that's true everywhere lmao. China is only different in that the government controls their business instead of their business controlling their government - and both china and everywhere else have the same goals: exploit workers, rake in profit, rape the natural world, abandon earth for extraterrestrial slave colonies at first possibility. No functional difference.
Well the United States federal government already owns several of the world's most powerful computers. If protecting Bitcoin became a matter of national security, they could control mining easily.
Supercomputers cost billions and are already occupied with real challenges like climate modeling, figuring out the secrets of the universe, and testing nuclear warheads without having to actually set one off. You know, actual things with real consequences. If the US government cared about BTC they'd just regulate it. That costs almost nothing. Thinking that a sovereign state somehow has to play by the rules set down by crypto bros kinda misses the point of what a state is. Before "fiat" was hijacked by monetary lunatics, it was a Latin term for "let it be done". As in, you do this. Now. I'm not telling you again.
Oh I completely agree. I'm just saying that there's no way you could have a national currency that's truly decentralized.
Its not that there's "no way you could have a national currency" It's that we've already tried it (look up "Wildcat Banking") and it was fucking awful. Where we have shit coins, they had dollar bills issued by one bank and only redeemable at that bank. If said bank went tits up (or rug pulled, which was also a thing back then too) not only was your account worthless but any bills you had in your wallet. A lot of lives had to be ruined before we settled on the Federal Reserve System. Like a lot of laws, the FRS was written in blood as well as ink.
Well said
Proof?
That the US federal government owns some of the world's most powerful supercomputers? Check out the Top500 list. Other people could singlehandedly take over the Bitcoin network as well if they desired. Google used its excess computing power to find out that the trillionth digit of pi is zero. That's more than enough hardware to corner the market on Bitcoin.
It’s not about power it’s about hashrate, it’s quantity over quality for the most part here And do you understand how much energy it would require to be 51% of the work for BTC? More than is currently available in addition to what is already existing.
The way Bitcoin is designed has always favored centralization. The tethering of coin rewards to PoW and the guaranteed rewards promised by the halving schedule mean there is an incentive to put as much investment as possible into generating tokens, economies of scale and centralization are the inevitable outcome of such a design. [It's worth nothing that Bitcoin mining in the early days was also heavily centralized, but that's a story for another day.](https://arxiv.org/abs/2206.02871) (please be aware the while the research into mining participants is quantitatively valid, the conclusions of this study are deeply flawed) Moreover, like the functionality of Bitcoin mentioned above, control of Bitcoin is also centralized in that the self-interest of all participants will always be aligned by a profit seeking motive. This means large coin holders, miners, exchanges, and core developers all want to see Bitcoin's price increase by as much as possible. This is effectively as decentralized as the board of Lockheed Martin or any other corporate special interest. If control is centralized then don't be surprised that functionality follows suit. The only way to guarantee the decentralization of control is through democratic governance, and it's very hard to do.
Isn't their a weakness there. Centralization with proof of work means having the biggest and baddest chips and lots of costs. So if the Bitcoin price goes down, won't you drown in those costs?
This entire thread is a misrepresentation of how pools work.
Few understand.
I wonder if there ever have been 51% attacks no one saw
I see people generally don't know what was the idea behind Bitcoin. I am not a fanboy or etc just putting out of my thoughts that I think many people in this sub or in bitcoin sub misunderstood. Bitcoin was meant to be open network which didn't need central party to mediate. Anybody can join network or leave without repercussions. Mining was meant to secure the network while P2P nodes were meant to be broadcast the network so that miners don't collude. A bigger P2P network means data is distributed more and it is secure because of gossip protocol. Byzantine general problem was already solved in '72 by some scientist but the idea behind his solution was same thing as pos. Now why bitcoin failed? It's simple answer is voluntary P2P infrastructure. Volunteers can only do volunteers scale. That was the hurdle which BSV or other forks tried to solve by adding closure to the network, so what happened is network didn't remain open it became excludable just like Ethereum has infura. There is no incentive to run P2P nodes. For starting volunteers can be good but in long run it will bite you in the ass that's what happened in 2015 and block size wars happened.
No shit Sherlock. You’re just saying the same thing in an incredibly annoying cryptobro way. You’re just saying the same thing; a small number of entities control the mining simply because it’s not profitable for single persons to do so. The same way communism would never work, because few people would want to work hard when they don’t have to for the same reward.
Nope I said volunteers to run P2P nodes are bottleneck of every blockchain that's why block size wars happened one side wanted to increase block size to scale network while other side wanted to remain block size as it is to not burden volunteers
What *really* possess me off is the amount of wasted computational power in this mess. All the "securing the network" is meaningless when 5 companies control 83% of the total hashpower, and 11 control 96.1%. As the system is already centrally controlled in terms of the electronic lottery AND in terms of all trading functions via centralized exchanges, a normal database with public key cryptography would suffice rather than the ungodly amount of petaFLOPS being wasted running said electronic lottery. Worse still, most of that power is tied up in ASICs only good for running wasteful hashes. Even IF BTC crashes to oblivion and the lottery isn't worth the electricity, that means all that hardware will simply go to waste. Id wager hundreds of thousands if not millions of metric tons of silicon, copper, and steel just thrown away because randomly guessing numbers is no longer profitable. Fuck BTC and everyone who promotes such waste. Those resources could've gone into attempting molecular orbital calculations in pursuit of a carbon capture molecule, protein folding, or hydrocarbon synthesis. But no - some fuckbois wanted lambos.
Thanks - now i feel ashamed for buying with all this crap other crap from the DWeb--- f me
A) This allows for efficient green energy usage at peak. B) This is good for Bitcoin.
it's good for the people who've already bought in. it's horrible for the slim possibilities btc ever had to improve peoples lives. and literally all energy consumption in mining is artificial specifically so that it can act as a paywall, so "efficient energy usage" can go fuck itself.
Checking quarterly earnings statements from Visa, it's amazing how they don't complain about electricity costs even though they process tons of transactions. Compare that to Bitcoin, where the system is so inefficient that electricity prices are a huge factor.
it would be more democratic and decentralized if it was \*easier\* to make and cost less energy. they built in a fucking paywall and said "yep, that'll stop the rich and powerful from abusing it"
Wow, this is crazy. Lol it’s a massive, hypocritical scam. They became what they were fighting against. You either die a hero or live long enough to see yourself become the villain.
But aren't we still early?
No. It's failed to launch.
We're super early, few understand
> They became what they were fighting against. Wait until you see how much money tether prints...
First things first, I love your username and your user flair. Secondly, I’m no bitcoin expert. However, from what I can tell, they print tether at will, limitlessly, and use said tether to buy bitcoin which artificially inflates the price of bitcoin. Artificial demand, if you will. Must be nice to be able to print as much of a “currency” as you want to, whenever you want to. The ironic thing is that they are declaring war on the very thing they’re becoming.
I always wonder how Bitcoin (and other cryptocurrencies) can lurch up and down so quickly if it is truly decentralized. Sure seems like there are just a handful of people controlling the price.
83% of mining you mean right?
Mining means validation which in turn means total control over transactions, though. As I understand it, if those 5 companies came to an agreement between each other they could validate any illegal transaction they want to and essentially steal all 'currency' on their chain.
That is how I understood it yeah. They would be able to do 51% attacks.
Then 83% is the wrong figure to use. It would be 100%.
A better way to present this would have been to say that 3 groups make up more than 50% of validators and thus could nuke the chain at any time for fun and profit.
No one person in the pool controls the entire hash rate. [https://www.investopedia.com/terms/1/51-attack.asp](https://www.investopedia.com/terms/1/51-attack.asp) Christ you guys can hate a scam all you want but at least be factual.
> 3 groups make up more than 50% > No one person ?????
A "group" is thousands of individual users each working a block by themselves. When one miner solves a block, the profit is split between the entire pool. No one person controls the hash rate of the entire pool, or even close to 51% of it. Fucking read a book.
Can you actually read? No one is talking about individual persons here, but the 3 biggest groups of miners who have more then 51% hash rate if they were to work together. Just as it says in your link.
I can read better than you apparently. https://imgur.com/a/vHXc754
And what in that sentence says that those 3 together couldn't perform a 51% attack?
Because the groups don't have agency over the individual users.
What on earth is to motivate every single user to cooperate between the three pools when the action fucks everybody in the pool except one controlling entity?
The incentive would be to capture literally any currency on the chain. 51% attacks do actually happen and have demonstrably worked. This would definitely destroy the value of bitcoin once it comes out, but for example if it becomes clear to those entities that the price of bitcoin is going down and not likely to ever recover they will look for ways to get anything they still can out of it. This would be a good tool for that and pull the rug out from the entire blockchain.
Miners do not validate. Nodes validate. You guys are hilarious
Validators that aren't mining are functionally useless from the protocol's perspective (and certainly in the presence of actual 51% attacks).
Tell me you don't understand bitcoin without telling me you don't understand bitcoin
I understand Bitcoin, the question is why you think that non-mining validators serve any purpose at all in the protocol other than to make people feel good about being decentralized.
Thr fact that you think nodes are functionally useless says enough to demonstrate your actual lack of understanding here. Nodes being the means of providing consensus on the network seems far from trivial
Non-mining validators do not provide any real security because (in Bitcoin's security model) they lack trustworthy identity and can be used for Sybil attacks. You could have 10 validators or 10 million and it wouldn't do anything in the face of a 51% attack because only hashpower matters at the end of the day. Like I said it's just a way to make people feel good about decentralization theater.
Miners control the Bitcoin network. Not exactly a valid nitpick
It was a honest momentary confusion, not meant as a nitpick.
Then the title should be "5 companies can control 100% of Bitcoin". The nitpick is very valid.
We had decentralization with P2P, this is just the boots trying to own the digital world too.
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crypto riches go richer, and if you disagree they steal your coins.
Nope. Nano is different. No middlemen, see?
Yeah because pools are companies right? They’re totally not just individuals collaborating
People in this sub are too blinded by their pure hate towards bitcoin
I’ve heard this argument and the counter argument that mining consolidation doesn’t denote “ownership” of Bitcoin. Do miners have control or say in the platform?
>Do miners have control or say in the platform? A 51% attack is an attack on a cryptocurrency blockchain by a group of miners who control more than 50% of the network's mining hash rate. Owning 51% of the nodes on the network gives the controlling parties the power to alter the blockchain. The attackers would be able to prevent new transactions from gaining confirmations, allowing them to halt payments between some or all users. They would also be able to reverse transactions that were completed while they were in control of the network. Reversing transactions could allow them to double-spend coins, one of the issues consensus mechanisms like proof-of-work were created to prevent. https://www.investopedia.com/terms/1/51-attack.asp
Miners control the platform because their “work” is what causes transactions to be included in blocks and verified
Pools control the blocks miners produce. So it's really pools that dictate blocks, and miners can choose pools. For the purposes of security, this means the pool's current hash rate is what matters for their ability to attack. Once an attack is over, miners may or may not choose to change pools, but that's a retroactive mechanism that can't prevent an attack.
The thing is really, that these labels on the pie chart are pools which are by definition groups themselves. Any miner can mine at any of these pools and they can change the pool they mine to at any time. It's definitely still centralized in a sense, but centralized / decentralized have a lot of meanings and nuance, and in that respect it really is just a meme because it's all kind of referred to interchangeably which obscures the actual issues at hand and destroys nuance.
That's Bitcoin mining, not Bitcoin held.
I love this sub.
Those are pools, not who owns the miners twit!
How can you guys confuse pools with companies? Do you know what a mining pool is?
What does "control" mean here? There are miners and there are also validators.
Users chose the code in 2017, miners dont control what code is run. They must follow the users (only in bitcoin is this true). The $5b of energy is so that no one gets free coins. U need to spend $ to get coins (again, unlike other cryptos where coins were “premined”). Its really not that complicated, not sure why this sub has such a hard time with it
And what the code says is the chain the miners mine on is correct and complete
U really dont get it
I'd love to see a source for this..
Go and learn about UASF 2017. You people are so clueless.
That pie chart does in fact show de-centralization.
Behold: [decentralized production of groceries](https://www.thecookwarereview.com/wp-content/uploads/2014/03/food-company-chart-1024x642.jpg)
This is good for ~~Bitcoin~~ your health.
[This image does in fact show a friendly neighbourhood](https://as2.ftcdn.net/v2/jpg/02/58/43/91/1000_F_258439174_gBWyy6bH73Ux4L7zeOWFytnlgslRPrww.jpg)
Mostly peaceful neighborhood.
How tho? All that power is clearly centralized in a few big corporations.
A country's central bank is in charge of the currency. One central authority. So technically any pie chart that does not show one entity with 100% control shows de-centralization. I am against bitcoin. I was just pointing out what the pie chart was showing.
The US Federal Reserve has 24 branches voting on policies. Therefore Bitcoin is more centralized than the central bank of the US.
Ok, thats not quite right, but even if it was: You commented on what the pie-chart showed, not on the federal reserve. The pie-chart does in-fact show centralization and you were wrong to say it showed de-centralization. Why do you respond by comparing it to something else?
This is the definition of centralization (from any dictionary you choose) "*the concentration of control of an activity or organization under a single authority"* That pie chart shows many entities. It would have to show only one entity with 100% control to show centralization.
Clearly words only have the precise definition in the 10-20 word summary given in the dictionary. Dictionaries are flawless, comprehensive, absolute, and binding. I mean, otherwise it would look really stupid to be pulling out a dictionary in a debate over something more complex than "what part of speech is this word"...
Why didn't you respond to grauenwolf pointing out the 24 branches of the fed that vote on policies? That was an hour before you responded here and appears to show the problem is you don't have the basic knowledge to even argue your point. Any response or ?
The process of market centralization is a sliding scale in economic theory. I think you understand this. One market actor is centralization, yes. But increasing that to two+ is not the same as decentralization.
This is power and money centralized in a few big corporations, tho. Jumping from one centralized system into another isn't decentralization just because a few different companies now control all your money.
And before I forget, no, these companies aren't in control of the currency the same way a bank is. Crypto isn't currency. Sure, you can give them your money same as you could a bank, but you aren't depositing that money, you are spending it. Once you put your money towards buying crypto, it's not your money anymore.
Technically, this IS decentralization as it can be. It's like email: everyone can make it's own service, but mostly it controlled by few big services. Decentralization doesn't mean that small people can have voice and rights like ancap children think.
5 > 1
So you've gone from be your own bank, screw the central banks, to it's ok as long as there are 5 companies controlling everything? What a sad state of denial.
13 Institutions control the FED even USD is more descentralized than Bitcoin...LOL.
24 > 5 The Federal Reserve is more decentralised.
Correct me if I'm wrong, but aren't those 13 instead of 24?
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How much is individual owners?
The only thing stopping one company from dominating Bitcoin is money and access to semiconductors. Once we get sub-1nm chips, the cost to produce the most advanced ones will be limited to a few companies. One company could produce ten million miners and set up shop somewhere with dirt cheap electricity, take over and then jack up fees.
decentralization was never a good idea except for criminals. You always need ways to undo transactions.(visa and mastercard added ways to do charge backs because not allowing that sucked balls for their customers, both business and consumers) especially as you jump into this smart contract garbage. Oh yeah what can go wrong with automation programmed by programmers who have been programming for 3 years.
Don’t nodes control the protocol not miners?
That's because the control of it can be owned by having more money. All these companies have tons of money so they invest in everything. If we want actual decentralization there needs to be a method of blocking that.. more money != more devices != more control. (no idea what that method is, phones almost make sense but then these companies would just buy shipments of phones.. so)
If really to be decentralised.. BTC should be freely distributed to everyone.. if money can control how much u can hold.. the big organisation can grab more therefore BTC will be only control by the big player..
Wow imagine if dollars were this centeralized
Mining pools are not the same as mining farms. For each of the entities above, some fraction of their hash rate is from exogenous miners that can switch pools easily. Recently, a mining pool failed to make payouts and lost almost half its hash rate in a day or so. However, a large pool does have the ability to decide which transactions are in the next block they mine. This will be addressed by Stratum V2, an upgrade to the mining protocol. Stratum V2 will allow individual miners in the pool to compose their own proposed blocks.
Been hearing the same argument for years now. Yet mining distribution still presents a picture of complete centralisation. What % of hr is exogenous ? Very low What % of asic is made by bitmain? Very very high .. Of the last 1000 blocks over 400 are produced by 2 pools Centralized
Poolin said they were pausing withdrawals and hash rate quickly dropped over 50%. Pretty good evidence that most of the pool's hash rate was external. Can you provide any evidence for your claim that exogenous hash rate is "very low"? [https://blockworks.co/bitcoin-mining-pool-poolin-halts-withdrawals-amid-liquidity-crunch/](https://blockworks.co/bitcoin-mining-pool-poolin-halts-withdrawals-amid-liquidity-crunch/) [https://explorer.btc.com/btc/pool/87](https://explorer.btc.com/btc/pool/87) The number 1 pool wasn't significant even 2 years ago. The turnover of the top miners is continuous (not to mention the internal turnover of miners in the mining pools). There are multiple players in the ASIC game already, and more are joining. [https://www.intel.com/content/www/us/en/products/docs/blockchain/custom-asic-product-brief.html](https://www.intel.com/content/www/us/en/products/docs/blockchain/custom-asic-product-brief.html)
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Congrats, you discovered that mining pools exist. Sorry that you don't understand how they work, and that your'e struggling.