Bitcoin is decentralised such that:
1. No one can change the rate of bitcoin production
2. There is always the option to directly make transfers using a bitcoin client.
Having the option is very important even if people use online banks and wallets etc as it will act on a brake on banks and governments' usual tendancy to overlend, overspend, overregulate etc. Just the possibility of people banking directly should be enough to keep the overlying infrastructure in check.
Topic: Bitcoin is no longer decentralized - page 5. (Read 8359 times)
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You arguments against this account for competitive advantages that one (big) operation can realize against another.
Except the own chips argument, the arguments don't account for small operations
2. Big operations have additional expenses to handle waste heat and inventory that easily account for any el. cost advantages.
If Hax0r B0b doesn't add his AC costs to his tally, doesn't' mean they're not much greater, per GH, than those of large mining farms. They are.Except the own chips argument, the arguments don't account for small operations
2. Big operations have additional expenses to handle waste heat and inventory that easily account for any el. cost advantages.
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3. Thanks to headcount cost the hobbies don't have.
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The chips argument crumbles due to the fact that chips only suppliers will be forced to sell their chips cheaper and cheaper until any cost advantage is lost.
Thus far, chip manufacturers have successfully mined their chips, while selling to the "hobbyists" at quite a nice markup 
So nice, in fact, that the majority of ASICs purchased are proving to be unprofitable to the "hobbyists."
With all the buthurt aimed at BFL & Avalon, one could mistakenly assume that the "hobbyists" expected to make money from their "hobby."
Yes, they do. But who cares about them? If they would do simple economics they would come to the conclusion that it is impossible to make long time serious money in a marked that works like Bitcoin mining. As soon as the price rises to a level where it becomes more profitable new miners will join until it is barely providable again. That's how every marked with no entry barriers works.Bitcoin mining is a business with no entry barriers. No special skill, licences, ect. is required to become a miner. Like with every business tha falls into that are (run a copy shop, open a cafe, mown lawns) it will always be possible to do it privately. Of course there will be Organisations doing it. But they will never get such a advantage to completely suppress privae operators. Of course this also means profit will be pathetic. But nobody ever promised a free lunch with Bitcoin.
If you don't put much stock into logical arguments, look around you -- GHash.io is a good example.
Seems like you have a strange definition of logic, looking at your posts.Are you arguing that large mining farms operated by ASIC manufacturers are *not* more profitable than hobbyists paying retail for miners & power? That the guy mining with USB Block Erupters has just as much chance of breaking even as ASICminer or GHash.io?
Rly?
*This is a serious question, ignore the smiley
If bitcoin mining is a business with no entry barriers, so is *every business*. Want to make cars? Go to a parts store, buy all the parts, and bolt them together in your free basement, with your free time (because HOBBY), and sell it on the open market. Sure, your parts will cost you ~10 times the price of an assembled car, and you'll never recover your costs, but it's a nice
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You arguments against this account for competitive advantages that one (big) operation can realize against another.
Except the own chips argument, the arguments don't account for small operations
2. Big operations have additional expenses to handle waste heat and inventory that easily account for any el. cost advantages.
Except the own chips argument, the arguments don't account for small operations
2. Big operations have additional expenses to handle waste heat and inventory that easily account for any el. cost advantages.
If Hax0r B0b doesn't add his AC costs to his tally, doesn't' mean they're not much greater, per GH, than those of large mining farms. They are.
Le me try in terms even you should understand. Bob runs is small miner in his basement/free room etc. he doesn't need a AC at all, nor does he need to rent a place to host them.
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3. Thanks to headcount cost the hobbies don't have.
Hobbyist don't need to hire people.
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The chips argument crumbles due to the fact that chips only suppliers will be forced to sell their chips cheaper and cheaper until any cost advantage is lost.
Thus far, chip manufacturers have successfully mined their chips, while selling to the "hobbyists" at quite a nice markup
So nice, in fact, that the majority of ASICs purchased are proving to be unprofitable to the "hobbyists."With all the buthurt aimed at BFL & Avalon, one could mistakenly assume that the "hobbyists" expected to make money from their "hobby."
Yes, they do. But who cares about them? If they would do simple economics they would come to the conclusion that it is impossible to make long time serious money in a marked that works like Bitcoin mining. As soon as the price rises to a level where it becomes more profitable new miners will join until it is barely providable again. That's how every marked with no entry barriers works.
Bitcoin mining is a business with no entry barriers. No special skill, licences, ect. is required to become a miner. Like with every business tha falls into that are (run a copy shop, open a cafe, mown lawns) it will always be possible to do it privately. Of course there will be Organisations doing it. But they will never get such a advantage to completely suppress privae operators. Of course this also means profit will be pathetic. But nobody ever promised a free lunch with Bitcoin.
If you don't put much stock into logical arguments, look around you -- GHash.io is a good example.
Seems like you have a strange definition of logic, looking at your posts.
The only advantage of bitcoin is that everyone has the RIGHT to mine the currency or run the backbone (bitcoin client), but most users wont care about those rights.
You are missing another advantage which is the most important one in my opinion. A public currency like bitcoin, no matter how centralized mining becomes, allows anyone to verify the amount of currency in ciruculation, i.e. see all issued currency. Try that with dollars, or gold for that matter
Decentralized does not mean "evenly distributed". It means "no one can stop you".
Don't like the reference software? No one can stop you from writing your own.
Don't like the current mining devices? No one can stop you from designing and building your own.
Don't like how mining is being done today? No one can stop you from starting your own farm/pool/whatever.
Note that these choices aren't necessarily wise. Some or all of them may be unprofitable. But no one on the entire planet has the ability to prevent you from doing them.
Don't like the reference software? No one can stop you from writing your own.
Don't like the current mining devices? No one can stop you from designing and building your own.
Don't like how mining is being done today? No one can stop you from starting your own farm/pool/whatever.
Note that these choices aren't necessarily wise. Some or all of them may be unprofitable. But no one on the entire planet has the ability to prevent you from doing them.
Centralization=bitcoins become more rare=bitcoins raise in value
I'm not a whiny miner who thinks he's entitled to a free lunch, so its fine by me.
I'm not a whiny miner who thinks he's entitled to a free lunch, so its fine by me.
It's time to move on and invest individually and try doing mining cooperatives.
Decentralization is not a binary state, it is a continuum.
Change is a fact of reality. Early on all the users of Bitcoin were equal. They (almost) all mined, all ran the same software. None had any real power over another, which I think is really the main purpose of decentralization. That couldn't last forever, eventually some participants would be tremendously more important than some others.
Bitcoin has lost more decentralization faster than I expected it would, and I am unhappy with the current state of affairs, especially with the level of centeralization occurring in mining and in "trust based" hosted wallet services. These levels of consolidation undermine the security assumptions that justify our system. The future is unclear.
But "not decentralized"? Well, can you suggest an alternative?
Change is a fact of reality. Early on all the users of Bitcoin were equal. They (almost) all mined, all ran the same software. None had any real power over another, which I think is really the main purpose of decentralization. That couldn't last forever, eventually some participants would be tremendously more important than some others.
Bitcoin has lost more decentralization faster than I expected it would, and I am unhappy with the current state of affairs, especially with the level of centeralization occurring in mining and in "trust based" hosted wallet services. These levels of consolidation undermine the security assumptions that justify our system. The future is unclear.
But "not decentralized"? Well, can you suggest an alternative?
If miners mined to secure the network, completely disregarding profitability, you would be correct.
I think that many people are not interested in mining at a loss.
Perhaps i'm wrong.
I think that many people are not interested in mining at a loss.
Perhaps i'm wrong.
So?
The only way everyone could make BTC would be if infinite BTC would be crated each day. But then they would be worthless.
If miners mine at a loss some shut down until it's profitable for the remaining ones again. Still has nothing to do with decentralization.
Go back & reread a few posts, pl0x. The arc of this thread goes something like this (i know you won't take my "reread" advice because of my learningz):
When small mining operations become unprofitable, large mining operations will account for the majority of the hashrate. This undermines the decentralized nature of bitcoin, Q.E.D.
If my TL;DR is not detailed enough, i'm afraid rereading the thread is the best solution.
And we already had this. If it becomes unprofitable the large ones will be forced to shut down due to their running expenses. While the small hobbits can continue.
If big miners are more cost-effective, small miners will become unprofitable before the large ones, and will be forced to shut down first. If you feel that small miners are more efficient than the large ones, please explain why.
If you don't put much stock into logical arguments, look around you -- GHash.io is a good example.
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You arguments against this account for competitive advantages that one (big) operation can realize against another.
Except the own chips argument, the arguments don't account for small operations
2. Big operations have additional expenses to handle waste heat and inventory that easily account for any el. cost advantages.
Except the own chips argument, the arguments don't account for small operations
2. Big operations have additional expenses to handle waste heat and inventory that easily account for any el. cost advantages.
If Hax0r B0b doesn't add his AC costs to his tally, doesn't' mean they're not much greater, per GH, than those of large mining farms. They are.
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3. Thanks to headcount cost the hobbies don't have.
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The chips argument crumbles due to the fact that chips only suppliers will be forced to sell their chips cheaper and cheaper until any cost advantage is lost.
Thus far, chip manufacturers have successfully mined their chips, while selling to the "hobbyists" at quite a nice markup
So nice, in fact, that the majority of ASICs purchased are proving to be unprofitable to the "hobbyists."With all the buthurt aimed at BFL & Avalon, one could mistakenly assume that the "hobbyists" expected to make money from their "hobby."
If miners mined to secure the network, completely disregarding profitability, you would be correct.
I think that many people are not interested in mining at a loss.
Perhaps i'm wrong.
I think that many people are not interested in mining at a loss.
Perhaps i'm wrong.
So?
The only way everyone could make BTC would be if infinite BTC would be crated each day. But then they would be worthless.
If miners mine at a loss some shut down until it's profitable for the remaining ones again. Still has nothing to do with decentralization.
Go back & reread a few posts, pl0x. The arc of this thread goes something like this (i know you won't take my "reread" advice because of my learningz):
When small mining operations become unprofitable, large mining operations will account for the majority of the hashrate. This undermines the decentralized nature of bitcoin, Q.E.D.
If my TL;DR is not detailed enough, i'm afraid rereading the thread is the best solution.
And we already had this. If it becomes unprofitable the large ones will be forced to shut down due to their running expenses. While the small hobbits can continue.
You arguments against this account for competitive advantages that one (big) operation can realize against another.
Except the own chips argument, the arguments don't account for small operations
2. Big operations have additional expenses to handle waste heat and inventory that easily account for any el. cost advantages.
3. Thanks to headcount cost the hobbies don't have.
The chips argument crumbles due to the fact that chips only suppliers will be forced to sell their chips cheaper and cheaper until any cost advantage is lost.
If miners mined to secure the network, completely disregarding profitability, you would be correct.
I think that many people are not interested in mining at a loss.
Perhaps i'm wrong.
I think that many people are not interested in mining at a loss.
Perhaps i'm wrong.
So?
The only way everyone could make BTC would be if infinite BTC would be crated each day. But then they would be worthless.
If miners mine at a loss some shut down until it's profitable for the remaining ones again. Still has nothing to do with decentralization.
Go back & reread a few posts, pl0x. The arc of this thread goes something like this (i know you won't take my "reread" advice because of my learningz):
When small mining operations become unprofitable, large mining operations will account for the majority of the hashrate. This undermines the decentralized nature of bitcoin, Q.E.D.
If my TL;DR is not detailed enough, i'm afraid rereading the thread is the best solution.
If miners mined to secure the network, completely disregarding profitability, you would be correct.
I think that many people are not interested in mining at a loss.
Perhaps i'm wrong.
I think that many people are not interested in mining at a loss.
Perhaps i'm wrong.
So?
The only way everyone could make BTC would be if infinite BTC would be crated each day. But then they would be worthless.
If miners mine at a loss some shut down until it's profitable for the remaining ones again. Still has nothing to do with decentralization.
And who cares if miners make a profit? Like I already have written it is designed to always be barely profitable. In both directions.
Bitcoin was a nice experiment of a decentralized currency,
but now it is becoming more and more like the traditional banking system,
less decentralized and more in the control of a few entities.
but now it is becoming more and more like the traditional banking system,
less decentralized and more in the control of a few entities.
Unlike the traditional banking system, this system does not provide a monopoly to arbitrarily create money out of thin air. THe supply is mathematically certain, and available to anyone wishing to "mine" (process transactions, that is). Note that, even today, anyone can mine. Either invest significantly and mine yourself, or pool resources with others, and mine cooperatively. In that sense, we are more like a banking co-op than a traditional bank. Again, very democratic and decentralized, open to anyone.
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We see already that the blockchain is to huge for most users so they won't bother with using the bitcoin-client.
Instead most people will use bitcoin wallets in the cloud, and the real bitcoin clients will be run mostly by corporations, not by consumers.
It's not too huge for me. Those who want quick fixes in life will end up getting quick fixes. Opening an account with PayPal, linking it to your bank account, and verifying it, takes longer than getting your full node up and running. Ditto for applying for and receiving a credit card from a bank. Bitcoin is faster and simpler.Instead most people will use bitcoin wallets in the cloud, and the real bitcoin clients will be run mostly by corporations, not by consumers.
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The same goes with mining, it is not profitable anymore for you to mine coins at home, it must be done with ASIC and in a large scale to be profitable over time.
See the first point above.Quote
So the bitcoin infrastructure will become like fiat:
-The currency is issued by the banks ( bitcoins mined by a few mining corporations)
-The SWIFT backbone is run by the banks (bitcoin clients and mining run by a few corporations)
The only advantage of bitcoin is that everyone has the RIGHT to mine the currency or run the backbone (bitcoin client), but most users wont care about those rights.
-The currency is issued by the banks ( bitcoins mined by a few mining corporations)
-The SWIFT backbone is run by the banks (bitcoin clients and mining run by a few corporations)
The only advantage of bitcoin is that everyone has the RIGHT to mine the currency or run the backbone (bitcoin client), but most users wont care about those rights.
In some ways yes. I would not say that the above is the only advantage - there are many, many more, and I am sure you can think of a few without me helping you.
The problem here is that you initially misunderstood bitcoin and formed wrong expectations, which now seem failed. Don't let that distract you. Bitcoin is a versatile, powerful technology. It already works today. It will be working even better in the future.
How much coin does that mine you? Less than ever before.
Thank you for proving my point /thread
This has nothing to do with decentralization.
The pie is fixed in size. If more people want a piece your piece has to become smaller. This also happens if Bitcoin becomes more decentralized as more independent miners are out there.
Not sure if you're responding to my quote, which is stripped from its context -- it was a reply to heyek's claim that "mining is cheaper than ever."
Mining is cheaper than ever if you denominate it in GH/s per BTC spent. If you, OTOH, wish to mine at a profit, the picture changes
Still this changes nothing for decentralization which is the OT.
This is not about how profitable it is to mine.
...
If miners mined to secure the network, completely disregarding profitability, you would be correct.
I think that many people are not interested in mining at a loss.
Perhaps i'm wrong.
How much coin does that mine you? Less than ever before.
Thank you for proving my point /thread
This has nothing to do with decentralization.
The pie is fixed in size. If more people want a piece your piece has to become smaller. This also happens if Bitcoin becomes more decentralized as more independent miners are out there.
Not sure if you're responding to my quote, which is stripped from its context -- it was a reply to heyek's claim that "mining is cheaper than ever."
Mining is cheaper than ever if you denominate it in GH/s per BTC spent. If you, OTOH, wish to mine at a profit, the picture changes
Still this changes nothing for decentralization which is the OT.
This is not about how profitable it is to mine.
Off Topic:
Mining can never be very profitable in the long term. It is a marked with virtually no entry barriers. Therefore as soon as it is more profitable to mine BTC than to buy them, new miners will appear and drive profitability down until it again makes more sens to buy them than to mine.
The only reason this was untrue for a while was the transition to a new technology which crated artificial entry barriers due to the poor availability of the new technology.
This becomes less true now day by day and the entry barriers disappear again, therefore mining becomes again barely profitable.
Mining is not decentralized, when 3-4 people control >50% of network hash power.
ASIC miners in the hands of the masses mean nothing, when they abdicate their power by mining at a centralized pool rather than p2pool.
ASIC miners in the hands of the masses mean nothing, when they abdicate their power by mining at a centralized pool rather than p2pool.
Also this! A real miner validates transactions by creating blocks and not only sells shares to a pool (a real miner).
This is the true issue here.
Mining is not decentralized, when 3-4 people control >50% of network hash power.
ASIC miners in the hands of the masses mean nothing, when they abdicate their power by mining at a centralized pool rather than p2pool.
Most "miners" play no role in selecting bitcoin transactions. They are simply selling a computing service to the mining pool operator.
ASIC miners in the hands of the masses mean nothing, when they abdicate their power by mining at a centralized pool rather than p2pool.
Most "miners" play no role in selecting bitcoin transactions. They are simply selling a computing service to the mining pool operator.
This is just FUD.
I have been following bitcoin since 2011 and has seen how the bitcoin world has changed over time, yes you could call me a FUD, but Im just being analytical and aware of the trends in the bitcoin world over time.
adam3us, the inventor of hascash is also concerned about the centralization in bitcoin mining.
...
Now the concern is longer term. Imagine its 3-5 years down the road.
Rows of data center racks lined with blades chock full of 14nm
hashcash mining cores. A danger I see is that manufacturers have an
interest to hoard as long as bitcoin price supports a high profit with
next gen hardware compared to what is available to others. So the big
boys (and I mean financial houses, venture capitalists, kind of level)
will be best placed to be able to buy their way into the line at TMSC,
front millions in design, pre-order fees, circuit board design. The
risk is p2p miners arent going to be able to get access to equipment
that can financially compete with this equipment. Butterfly seems like
a small player - maybe they'll ship. But what can be done with the
above scale could eclipse their power and efficiency, probably in the
same way ASIC outclasses GPUs and I can see market reasons why
you or I wont be able to buy them.
Now some people might think so what - all's fair in a moore's law arms
race - thats part of the design. And to some extent thats right.
Bitcoin could do fine like that, but it wont be a p2p currency any
more, not really. That's because if all the peers are big stock market
listed companies, with corporate lawyers, very statically and easily
identifiable, they will do whatever governments tell them to do. And
governments will tell them to convert the network into swift 2.0
including government feeds for analysis (yes bitcoin is public anyway,
but not to your legally required truename etc), and legal requests to
block this and that payment entity change the protocol by fiat etc. to
roll back transactions because of some fraud or dispute unrelated to
bitcoin, to freeze and confiscate bitcoins - we'll be back to square one.
...
Now the concern is longer term. Imagine its 3-5 years down the road.
Rows of data center racks lined with blades chock full of 14nm
hashcash mining cores. A danger I see is that manufacturers have an
interest to hoard as long as bitcoin price supports a high profit with
next gen hardware compared to what is available to others. So the big
boys (and I mean financial houses, venture capitalists, kind of level)
will be best placed to be able to buy their way into the line at TMSC,
front millions in design, pre-order fees, circuit board design. The
risk is p2p miners arent going to be able to get access to equipment
that can financially compete with this equipment. Butterfly seems like
a small player - maybe they'll ship. But what can be done with the
above scale could eclipse their power and efficiency, probably in the
same way ASIC outclasses GPUs and I can see market reasons why
you or I wont be able to buy them.
Now some people might think so what - all's fair in a moore's law arms
race - thats part of the design. And to some extent thats right.
Bitcoin could do fine like that, but it wont be a p2p currency any
more, not really. That's because if all the peers are big stock market
listed companies, with corporate lawyers, very statically and easily
identifiable, they will do whatever governments tell them to do. And
governments will tell them to convert the network into swift 2.0
including government feeds for analysis (yes bitcoin is public anyway,
but not to your legally required truename etc), and legal requests to
block this and that payment entity change the protocol by fiat etc. to
roll back transactions because of some fraud or dispute unrelated to
bitcoin, to freeze and confiscate bitcoins - we'll be back to square one.
...
How much coin does that mine you? Less than ever before.
Thank you for proving my point /thread
This has nothing to do with decentralization.
The pie is fixed in size. If more people want a piece your piece has to become smaller. This also happens if Bitcoin becomes more decentralized as more independent miners are out there.
Not sure if you're responding to my quote, which is stripped from its context -- it was a reply to heyek's claim that "mining is cheaper than ever."
Mining is cheaper than ever if you denominate it in GH/s per BTC spent. If you, OTOH, wish to mine at a profit, the picture changes
How much coin does that mine you? Less than ever before.
Thank you for proving my point /thread
This has nothing to do with decentralization.
The pie is fixed in size. If more people want a piece your piece has to become smaller. This also happens if Bitcoin becomes more decentralized as more independent miners are out there.
crumbs - you prefer decentralization, since it is the Unique feature of bitcoin.
No, crumbs is anti-progressQuote
hayek - you dont mind if bitcoin is becoming centralized, since it is the natural way for all industrial development, where an industry becomes more specialized, effiecient and concentrated in the hands of a few corporations
No, this is not centralization it is progress. It's like saying that a library is centralizing knowledge. It's not. These people are not taking anything from you or me. They are creating wealth, not hoarding or destroying or limiting it.Quote
Both of you are right from your respective perspective.
No crumbs is terribly wrong. Quote
For me, bitcoin's "Unique Selling Point" was: Anonimity and Decentralization.
But now bitcoin feels less anonymous than my VISA-card, and is becoming as centralzied as the banking system (SWIFT).
So why should I bother using bitcoin instead of VISA when I don't get the original features of bitcoin?
But now bitcoin feels less anonymous than my VISA-card, and is becoming as centralzied as the banking system (SWIFT).
So why should I bother using bitcoin instead of VISA when I don't get the original features of bitcoin?
Don't. Just go back to fiat. This is just FUD.
This is why we can't have nice things
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