The common sense says that if bitcoin becomes uncompetitive and there is no other secure and decentralized alternative, then it will just give economic incentives to create such a system. From there it is just a matter of time that such a system will be created.
Regardless of technology improvement and development progress, bitcoin can't afford in any ways to become uncompetitive to remain relevant.
It's been 5 years since Bitcoin was introduced, and countless forks have appeared, some of them very interesting. There were low fees, fast blocks, different crypto, PoS and so on... None of these have succeeded at (or even got close to) challenging Bitcoin.Regardless of technology improvement and development progress, bitcoin can't afford in any ways to become uncompetitive to remain relevant.
I can't imagine a scenario where Bitcoin is being overtaken by another cryptocurrency, unless it's a real breakthrough in terms of design, and it still retains Bitcoin's properties. But in this case, it can be adopted by Bitcoin as well...
If you can define what kind of competitiveness you mean and picture a scenario, I'd be interested in reading that.
The competitiveness I am referring is mostly in terms of fees and delays. Right now there is no point of using an altcoin unless you are chasing pump n dump speculative bubbles but if using bitcoin becomes too expansive then it will make a lot of sense to start using some altcoins. Not because of technological breakthrough but simply because of economic pressures.
But none of these alt coins are as decentralized.. they run the risk of miner regulation the same as bitcoin but with much smaller network security. So we won't know unless there are some that offer high security/decentralization and lower fees, which may be just a short term play before those fees rise to meet bitcoins
Unless an altcoin proves that good enough decentralization is good enough and being overly decentralized is being proven unnecessary and only hurts competitiveness.
I think this is important for bitcoin to find a balance with enough decentralization to keep the system secure AND competitive. Otherwise another altcoin will find that balance in the long run.
no the system MUST remain fully decentralized or it breaks the strength of cryptographic encryption. There is no balance you speak of, there is innovation however.
@adamstgBit: what level? well aslong as miners are susceptible to a regulation attack then I'd say its sufficiently decentralized. The rest of the problems can be solved over time, but this one would be the end of it if we don't solve.
I'd imagine that if mining remained decentralized and the powers-that-be realized "it just ain't gonna" happen that they would be incentisized to keep full-nodes up and transfered their wealth into bitcoin at that point because they know their wealth would be preserved. If these incentivesized full nodes are running (as I translated Satoshi's message IMO) that's fine because we have powerful players supporting the nodes we know the network won't be "not" relaying/securing blocks for a long time.
Everything hinges around mining decentralization. If this is possible then having full-nodes won't be a problem.
And how many nodes does that represents exactly being fully decentralized? If 1000 nodes is enough, then can we consider 1M nodes to be unnecessary? No?
Miner decentralization matters more than full-node decentralization. It takes half of the miners to become regulated to cause havok, while half of the full-nodes can be removed with no affect to the network.
Agreed but how does the block size limit influence miners centralization if most miners rely on mining pools.
block propagation delays with bigger blocks causing miners to tend towards using networks that offer no anonymity because Tor et all increase latency. That's just one thing it does. It also increases pool to pool header synchronization (centralization) to get a head start on mining next block. The first point is stronger because if miners can't remain anon then it can be subject to a regulation attack. (not to be confused with anonymous coin transfers)
This is why I say that the time to increase blocks will be when 0 fee tx takes longer than 5 days, as it will give ample time to solve the anon problem.
But most big mining pools are already publicly known and subject to regulations. No? Secondly, if mining pools are being regulated in a jurisdiction what stop them to move to an unregulated one? Moreover, what stop miners to move from a regulated pool to an unregulated one? Trying to regulate miners is only a fools game IMO.
The mining pool does not know the location of the miner if the miner is anonymous. Regulating miners is an end game prospect for gov't to try to put a cap on bitcoin if it grows too big or they feel really threatened by it. Thus it needs to be avoided at all cost for survival.
I agree but miners that mine on a pool are not affected by larger blocks if I am not mistaken so they can stay anonymous fairly easily. On the other hand, how can bitcoin become so big that it threatens governments with artificial limitations that makes it uncompetitive (if we consider that blocks are being full and fees/delays rise a lot)?
That assumption is incorrect. Bigger blocks cause larger delays which remove the ability to remain hidden to be profitable. (assuming price will always lag difficulty which is a good assumption as it is worse case and realistic).
If people stop trusting government they will put their money in somewhere the government cannot control which will frustrate them because they want control to try to plan ahead. If government isn't using bitcoin themselves yet, they will try to shut it down so they can retain control of society. A corrupt politician can try to do the same thing also as another angle of attack, to persuade people to vote by saying he will reduce fees (by regulating miners).
I'm not saying fees can't rise to be unrealistic and cause uproar because people don't value security as much as they are paying.. however innovation will help fight this problem (live to fight another day).
