Topic: Deepbit Approaching 50% Once Again - page 6. (Read 19151 times)

No, the whole point of Bitcoin was to put the power to choose who to trust, or not, into the hands of individuals, and the way that's done is by voting with hash power. If you trust Tycho and think he's offering a fair deal, you hash for him. If you trust some other pool operator instead, you hash for them. If you want to go it alone, that's an option with its own risks and rewards; one of the rewards might be the ability to selectively prioritize your own transactions, or other such things.

The point is, he doesn't really control that power. The people giving it to him are engaged in an implicit contract that he's offering, and if he violates the terms of that contract, some people will stop trusting him.

Interestingly, most of you are worried about the fact that he might double spend, and instead missing the enormous cashout potential any large pool operator has.

Think about how big a block reward is in terms of USD right now. One block is worth $750 USD. Just cashing out by stealing all the generated reward a pool operator has control of, until everyone wises up and leaves, would be enormous.

You are already trusting that they aren't going to do this to you. Eventually enough people would leave the pool if he did something naughty that he would lose his power. No matter what that naughty thing is.

That's pretty much what I was thinking after reading your first post.  Large pools are a natural result of how Bitcoin is designed, and for the individual miner, the best case would be taking part in a pool that has 100% of the hashing power.

Unfortunately the problem is only going to get worse.  As more and more hashing power is added, and as bitcoins go up in real value, the lump sum value of solving a block will go way up while the chance of doing so will go way down.  In the very, very long term it might average out, but nobody is going to be willing to wait that long.  And I'm not really sure it's reasonable to expect them to, to be honest.

From a variance standpoint, Bitcoin's design makes the largest pools the most attractive.  Which is bad for the security of the currency, and unfortunately an unavoidable result of how Bitcoin works.  You can trust that people will "do the right thing" and move to smaller pools, or you can trust the pool operators not to abuse their power, but the whole point of Bitcoin was to avoid having to place that kind of trust in individuals.

THIS x1000

The question is, would it really shake confidence enough? The miners won't mind - other than the initial shock on the exchanges, they'll be making MORE money since the difficulty would go down to whatever the single pool is putting out, not what the whole network is outputting. If the attack can be held long enough, it will be impossible to reverse without shutting down the pool through some other means, thanks to the 50% requirement needed from the rest of the network just to regain control.

In fact, this attack could happen right now in a much harder to detect manor. The major pools could silently collude to slightly increase the amount of invalid blocks other miners create, causing the affected miners to move to their pool, which has fewer invalid blocks.

The reason why people join pools is to make money. If you shake confidence in BTC, it will become worthless. Why would any pool do this? You can say that the pool operator might start doing it but miners would leave in droves.

DDoSing? Man, you're thinking small. A pool that has 51% of the hashing power, besides everything else mentioned here, can also simply ignore blocks made by anyone else, effectively making their pool the ONLY way to mine. And this is the scariest attack their is, since unlike double-spending which is short-term, this would cause long-term problems if a pool was able to maintain their majority hashing power long enough to stop people from mining for nothing in other pools.

Getting pretty close... :O

Yes, you did miss your point.

Unless I'm misunderstanding, your opinion is simply "eff the system as long as I get some cash out of it."

And for the record, you can't blindly say we're all "economic Darwinists."  I certainly do not rob little children, homeless people or the elderly for their cash or possessions and say "pwnt for lulz!  Darwin bishes!"

This is the most brilliant thing I've read in a long time!

Biological Darwinism?  Survival of the fittest organism?

You do realize that deepbit is dependent on the bitcoin network, right?  In other words, it can be considered a biological parasite or even a natural predator.

If you, as a supporter of that parasite or predator, kill the host organism..... you're equally dead.  There are no more shmoo to eat.  The entire ecosystem collapses into nothing.

Where's that guy I called naive?  He *has* to read this...

Wouldn't you want to be on the winning side though...?

http://bitcoinwatch.com/

Pay no attention to that chart.

This is the real chart:

Please provide some kind of evidence for this claim. How exactly did the government intervene so that Internet Explorer was forced into more "fair" competition? Has Microsoft stopped bundling Internet Explorer with Windows? No, they haven't.

Since you've failed to back up your claim, I can only assume you are referring to the European Commission's settlement with Microsoft whereby Microsoft agreed to present users with a browser selection screen. The problem with that theory though is that it only applies to EU countries and only happened with Windows 7, several years after Firefox had already been chipping away at Internet Explorer. Unless you provide some new information, your claims don't hold water. Firefox is exactly the evidence you required yet, unsurprisingly, it doesn't "count".


The same argument applies to the raw materials monopolies. You are just welcoming competition by not selling to whoever bids the highest.

Where are you guys getting that nifty pie-chart? Is it auto-generated somewhere? What's our current total network power?

That's not accurate unfortunately.  That assumes that Nike will act ethically and that their only recourse to maintain their monopoly is the manipulation of their product's price and quality.  If Nike has a monopoly then nothing prevents them from acting unethically and taking other steps to prevent competition such as using their size to demand exclusive contracts for raw materials necessary to produce shoes or overpaying for those materials thereby increasing the market's barrier to entry.

This is the same way with an ultra-powerful monopolistic pool.  They can use their size and resources to prevent competition by dDosing for example.

None of your responses represent an answer to my one question asked of you.

What evidence do you present that the monopolies formed under a free market are balanced by an invisible potential competitor? Internet Explorer is a terrible example, as it was sued under Anti-Trust laws and the evil government forced Microsoft to change its practices to create more "fair" competition.


I had a feeling that by opening the conversation up with any side commentary that I wouldn't get an answer so I will not make further response. This is not to reject your points or brush them aside, but I do want an answer.

There is ample evidence of monopolies acting unfairly when their monopolistic power grants them that ability (some has been given, so let's not argue over this part). Where is your evidence in the real world (not simply theory) of monopolistic companies held in abayance not by government or anti-trust law, but by the mechanics of the economic principles you espouse? I'm honestly curious.

Look, if I have a business harvesting moon rocks and you complain that I'm charging too high of a price or that it creates a terrible drain on the workers then start your own company. If you can't find investors willing to risk their money then what right do you have to say that the prices are too high? All prices are too high since consumers would like to get everything for free but when dealing with economics we have to evaluate actions, not words.

Let's take oil for example. It's rare and hard to acquire. Therefore, the prices they charge reflect this. If the price of oil is too high then people will switch to other sources of energy. If they are still buying it, it doesn't matter if they are grumbling about the price, clearly the price isn't too high, otherwise, it wouldn't be selling. The same applies to any other natural monopoly. Free market monopolies aren't "bad" as long as you get rid of the idea that you should be able to get everything for free. The prices will always approach what it's actually worth.


That's just opinion, nothing more. Perhaps the software itself is inferior but you can't consider it in a vacuum. You need to consider human capital, how many people understand it, use it, can program with it, what kind of support there is for it, etc. If Linux was so wonderful, it would have taken over by now. Counterexample, Mozilla Firefox. Internet Explorer had a monopoly but now it's losing market share daily. Firefox is king these days.

All that matters is that it's dangerous to Bitcoin. Regardless of how the attack happens. Once the confidence in a currency is lost, it's gone for good. If you believe in Bitcoin you should be doing what you can to protect it. Even if it means more variance. I'm moving to Eligius right now.

Uhm, what evidence do you have of this? I mean yes, I understand the theory, and have heard it about a billion times, but what *evidence* is there.

The person you quoted gave a couple of good examples of non-governmentally enforced monopolies. Standard Oil. US Steel. Neither of these were monopolies enforced by governmental action. Both caused terrible drains on everyone, especially the workers (I doubt the people lining the gates begging for a days wages would have said that everyone was happy) who were essentially forced into servitude by the situation. But this is getting offtopic, I'm still looking for evidence.

Barrier of entry to market is not as trivial as you make it sound. Yes it may sound "fair" that it's difficult to enter a profitable market for late comers, but it doesn't help your point that monopolies are balanced by potential rivals if the barrier to entry is so high that competition is almost impossible.

EDIT: As a potential counter example, look at microsoft. An inferior product at hugely inflated prices from a terribly inefficient company that is essentially a monopoly due to legacy support requirements and an almost impossibly high barrier to entry at market.

If it's difficult to enter the market then Nike had the same difficulty entering the market. Turnabout is fair play.