Topic: Concerns: The Centralization of a Decentralize Currency (Read 3177 times)

Which is why they are not called DeBeers Gold.  Diamonds are next to worthless.   Artificial scarcity is necessary to prevent people from realizing the ring they bought has been marked up 50,000%.  Calling it "marked up" is actually nice.  It is a worthless chunk of extremely common rock.  It has no value beyond the artificial marketing and control of the diamond industry (and BTW yes I bought my wife a diamond engagement ring years ago).  "Diamonds are forever" didn't exist prior to 70 years ago and likely due to creation of flawless synthetics won't last another 70.

DeBeers Diamonds is the reply.

THIS.

For some reason some people think decentralized means a socialist network where every node is exactly equal.  That is never going to happen.

Look at gold production as a analogy.

Lot of people buy/use gold but only a tiny fraction actual mine gold.
Someday lots of people will buy/use Bitcoin but only a tiny fraction will actual mine coins.

Gold mining is decentralized with operations around the globe.
Bitcoin mining is decentralized with operations around the globe.

Although no company has control of Gold wholesale market roughly a dozen companies produce the lions share of the world's gold.
Although no pool has control of Bitcoin supply roughly a dozen pools produce the lions share of the world's coins.

I still think the mining code should be kept out of the client, however I think it would be a good idea to have p2pool built in.

Just posting my vote to bring back mining into the qt client for all the reason's listed. Everyone should be contributing their individual votes to the security of the network as CPU cycles.

I'd like to see a feature in the client that lets me select a core or dedicated CPU utilization while running - or a full utilization timer for a pre-selected amount of time or a seti style mining schedule that kicks off when you're not logged in or otherwise using the computer.

I've heard somewhere on this forum about a new method of submitting shares to pool. The idea was that the pool would account your share as valid if the reward generation address will match that of the pool. So, you will choose which transactions you plan to include in it, you will choose what nonstandard features you will support and as long as you credit the share to pool, it will be accounted to your score.

Thus, the pool will just become a large accounting server who takes care about share and reward distribution, but cannot influence the mined blocks.

I really love this idea. Does it have any drawbacks? Why aren't there new pools offering it?

+1

I think this would be a great idea, especially if GPU mining was enabled.

To get more trust for pools, I wished the miners would get a copy of what they actually try to sign. Today it would be possible that pool A mines for pool B for the shares never actually mining a block for them essentially only costing B's money. If A would also send a copy of the block to be signed to the miner, the miner could broadcast the block himself to stop such attacks. He could also refuse to mine blocks without transactions etc ...

Why do miners sign stuff they are not allowed to read? You only see what you signed once it shows up in the block chain but if you happened to mine for some alt chain, you will not even be aware you publicly signed something.

After the MegaUpload attack (and the incredible counter attack - 24% of traffic!!!) which was to stop MegaBox (which we will build, on Bitcoin no less) anything can go down for any reason.

Incentives are moot when the FBI sux MPAA cawk that hard.

I think the pro-active option is critical.

I also think we need to understand that bitcoins are tokens. I fully expect local exchanges which offset commodity speculation (price of rice in Thailand versus in the exchange) to prop up where people refuse to trade rice at the same price as the gamblers want.

I like the fact that 1) bitcoins have different values at different exchanges, and 2) the arbitrage opportunities are far and few between allowing localization of prices.

And lastly, we will never hit 21 Million BTC, so any BTC that aren't spent are BTC that do not exist.

Still, maybe the way to avoid disaster is to encourage chain forks at a small rate.

I can outline an idea I had a while ago:
Say the difficulty is 1,000,000.
Say the fork threshold is 5.
The fork difficulty is 5,000,000.
Say your block qualifies for difficulty 10,000,000.
Your block is 2x the fork threshold.
If you choose to fork then your fork would have difficulty 5,000,000 / 2 = 2,500,000 with reward 50 * 2,500,000 / 1,000,000 and 21 Million limit.

So now you could mine harder coins for a bigger reward. On the flipside if you get a block that qualifies for 100,000,000 then:
Your new fork has a difficulty of 5,000,000 / 20  = 250,000 with a reward of 50 * 250,000 / 1,000,000

Ultimately the point of mining is transaction security. However, this becomes a contradiction. If more coins are transacted in mining than being spent then who is being protected? An empty car with a great engine still wastes gas sitting there.

Obviously this is correct. Let's pretend NYC, LS, SF, Orlando, Chicago, and Dallas are the really big Pools. When a Government attacks, their ICBM will take out those cities. That won't destroy the economy but it will do great damage. However, if 'every' city was a miner/pool, it would be very difficult to take them all out. The economy will suffer a little rather than a lot.

Would it not be beneficial to keep the size of cities to a maximum size. In the above example, I would prefer a 'gazillion medium sized ones."

The p2pool idea is a good one. It is hoped that it could be included at some point.

Investors / New users are weary of the client. From discussion with many, off network, they are weary of Pool Operators. They see them as the FED 2.0    Whether that is correct or incorrect doesn't matter. It is the perception that it is correct.  They see the Pool Operators shaping the currency and its uses towards an end they don't understand.  One might not be able to educate them as to the real purpose or even explain it to them. But one can include them. IF they were to "get a trickle of bit-pennies", then they would not be so worried about the former.

Nodes are shrinking not growing. This needs to turn around. At least give them a chance at making some money by leaving their nodes on and connected.

And to include the masses, it is possible to tell people how a Flip-Flop Oscillator works without telling them the process Doping of the IC chips. ie. Most people know how a car works but could careless about the technicals of it.

Explain BIP 16, 17 to people. All they know is that a change is coming and they can't judge for themselves whether it is good or bad. And that is always bad cause they pull out and do a wait and see scenario.

BTW: For the most part, I do trust the big pools and believe they have the interests of the community at heart (plus a little greed). But, the road to hell is paved with good intentions.

No.  Mining isn't like that.

Could there be other incentives to hack pools?
Not only to attack Bitcoin but also to use the power to break passwords?

Decentralized systems often settle into some kind of "power law distribution."

For example, there's no central authority determining how large cities all over the world should be, and yet if you plot the size of cities you'll see that there are a few REALLY big ones, a bunch of medium sized ones, and a gazillion small ones.

Plot the size of the bitcoin mining pools and I think you'll see the same thing.

If there were no mining pools, then plot the hashing power of individual miners and I bet you'd see the same thing... (ArtForz used to be a significant fraction of mining power all by himself, for example)

I worry a lot more about incentives than I do size; if the "naturally big" players have the right incentives, then they're not bad for the network. So far, I think the incentives are working nicely. For example, people HAVE tried to knock out the big mining pools and exchanges using denial-of-service attacks, and the big mining pools and exchanges have (as far as I can tell) worked to fix that problem themselves.

PS: p2pool built into a bitcoin client is something I'd fully support, I think a lot of people would like a one-button "get a trickle of bit-pennies" option.

You can't really change the protocol anymore. Rather, it is possible, but any change that radical the miners will very likely vote down. You can augment the protocol with something running alongside it. Having P2Pool built into every miner and bitcoin client is a possibility.

the shorter the blocks the more the miner suffers from getting the latest block delayed. i know how users of a service i worked at regularly reported bugs. it turned out that we decided that 1 minute old messages will not be fetched by the clients anymore and deleted them but the ping times in tibet were regularly over 30s with frequent delays of over 60s. now add download time with a slow connection and you will have half the world that would not participate in  mining if the blocks were 1/minute.

but you ask if a system would be imaginable. yes, it would. (proof me wrong )

Bittorrent itself isn't centralized, or even centralizable.  The concepts just don't fit together.  What is centralized is the sharing of torrent files.  The world has exactly one good public torrent site, a bunch of good(semi-)private sites, and a billion spammy/scammy/crappy sites.  That one good public site has stood up to the entire entertainment racket for a long time, armed with nothing but chutzpah.

Bitcoin itself is similarly decentralized by nature, but has a few high profile central services.  The exchanges, for example, are vulnerable to attack, but the bitcoin network wouldn't even blink.

Excuse my dumb question, but is a protocol imaginable that makes solo-mining as worthwhile as mining today in a pool by rewarding with much smaller blocks?

Actually, I like the idea of bringing back mining in clients, even if it's CPU. If all clients mined by default (including mobile ones), using very low intensity and priority, the electrical costs per person would be negligible, but it would help secure the network as a whole, plus someone once in a while would win a sort of bitcoin lottery just for participating in the system. It would also provide a tiny incentive for people to leave their nodes running, especially if it's promoted to the type of people who don't understand bitcoin and finances in general, and buy lottery tickets (same person really)

Agreed. BitTorrent hurts an the entertainment industry and the entertainment industry attacks it. BitCoin could hurt world financial markets and their respective governments if not done with great care. I would tend to believe that the pressure brought to bare from those two entities could be a little more effective than the entertainment industries.

A mining pool implemented over Tor would take incoming connections - not produce outgoing connections to services, which is the thing you're referring to as being blocked.  Apples and oranges.

I think it's a non-issue.  Imagine if they decided they want to take out everybody seeding illegal torrents - something they are already interested in doing today.  Look how successful they've (not) been.  And that's for something that is undisputedly illegal.  Bitcoin mining is not.