Any system that relies on specialist groups to supply a fundamental feature or infrastructure will always yield centralization coalescing around them.
To fix the centralization you need to remove miners as a group. Mining has to be a by-product of using the system - users are the miners. The more users there are, the more mining takes place, transaction throughput increases and security strengthens. Not as it is now - the more money you have, the more mining you can do and users are just an advertizing strategy for their service.
Unfortunately Satoshi designed the Bitcoin system to be centralized. He/she even spoke of centralization in countries where electricity was cheapest or could have been offset against the heat generated. Bitcoin as it stands is destined to be purely data-center driven and owned probably by government backed corporate interests (aka banks).
I don't have any answers to this. The system as it stands was not designed to resist centralization and economists will drive the design towards centralization so it can be monetized just as the internet has been.
Topic: Fixing Bitcoin's 2nd big issue.. (Read 4121 times)
Regarding the quantum computers 'm fairly certain there's already existing algorithms that are quantum=proof, so we will just need to upgrade from double sha256 to quantum proof cryptography and we're done.
Miners aren't stupid and as soon as pools become too large miners willswitch to other pools reconfigure the server farm so it looks like more pools to balance them out again.
Miners know that if it looks like one pool becomes too large, bitcoin will be sold in large numbers and they will lose profit, so they will make sure this doesn't happen.
It is not in their own best interest to make sure the pools are at least somewhat balanced.
Miners aren't stupid and as soon as pools become too large miners will
Miners know that if it looks like one pool becomes too large, bitcoin will be sold in large numbers and they will lose profit, so they will make sure this doesn't happen.
It is not in their own best interest to make sure the pools are at least somewhat balanced.
FTFY.
Regarding the quantum computers 'm fairly certain there's already existing algorithms that are quantum=proof, so we will just need to upgrade from double sha256 to quantum proof cryptography and we're done.
I don't think mining is too centralized though, I have seen much larger pools back in the day. Miners aren't stupid and as soon as pools become too large miners will switch to other pools to balance them out again.
Miners know that if one pool becomes too large, bitcoin will be sold in large numbers and they will lose profit, so they will make sure this doesn't happen.
It is in their own best interest to make sure the pools are at least somewhat balanced.
I don't think mining is too centralized though, I have seen much larger pools back in the day. Miners aren't stupid and as soon as pools become too large miners will switch to other pools to balance them out again.
Miners know that if one pool becomes too large, bitcoin will be sold in large numbers and they will lose profit, so they will make sure this doesn't happen.
It is in their own best interest to make sure the pools are at least somewhat balanced.
There are solutions to this, but...
They are very much in Altcoin territory. If they were implemented then the result would not be Bitcoin. And the transition to other solutions would not be accepted by the community.
I think you need to eliminate the distinction between mining and using.
You wanna get your tx into the block chain? You gotta provide your share of the hashing power needed to make a block. But that's only the start. To make all the economic interests line up, you'd have to change so many things about how blocks get put together and accepted into the block chain and how you decide one block chain is better than another and so on.... As I say, the result would not be Bitcoin.
They are very much in Altcoin territory. If they were implemented then the result would not be Bitcoin. And the transition to other solutions would not be accepted by the community.
I think you need to eliminate the distinction between mining and using.
You wanna get your tx into the block chain? You gotta provide your share of the hashing power needed to make a block. But that's only the start. To make all the economic interests line up, you'd have to change so many things about how blocks get put together and accepted into the block chain and how you decide one block chain is better than another and so on.... As I say, the result would not be Bitcoin.
With regard to Quantum Computers..
http://www.techworm.net/2016/05/ibm-launches-free-quantum-computing-for-everyone-to-use.html
So we are inching closer..
For signatures, it requires a change of the signature algo to a hash bashed/ quantum secure scheme, and if I'm not mistaken, segwit makes this 'easier' to do ?
As for mining, Grover's algo only halves the difficulty of a pre-image attack, which is what you need for mining, so a switch to SHA512 would seem to fix that..
Getting the current miners to switch to a different 'ASIC-Chip'.. (can you use old sha256 chips to mine sha512 ?) .. would be interesting.. As it could reset the current balance of mining power.. And we may get a second shot at getting mining 'right'.
There's hope yet, gentlemen.
http://www.techworm.net/2016/05/ibm-launches-free-quantum-computing-for-everyone-to-use.html
So we are inching closer..
For signatures, it requires a change of the signature algo to a hash bashed/ quantum secure scheme, and if I'm not mistaken, segwit makes this 'easier' to do ?
As for mining, Grover's algo only halves the difficulty of a pre-image attack, which is what you need for mining, so a switch to SHA512 would seem to fix that..
Getting the current miners to switch to a different 'ASIC-Chip'.. (can you use old sha256 chips to mine sha512 ?) .. would be interesting.. As it could reset the current balance of mining power.. And we may get a second shot at getting mining 'right'.
There's hope yet, gentlemen.
What if they don't need to scale? What if they break down a 2000 qubit problem into emulated segments of 5 qubits, just like a 8-bit processor can do with 16-bit or 32-bit operations?
Because those segments would not be quantum-entangled.
We can already emulate 5-qubit computations much faster on classical hardware
than on a real quantum compute, and we can combine 1000s of those emulations.
That does not a 200 qubit system make...
Quantum computer are a problem for btc. thats true.
But it still need quite a lot of time until quantum computers are
But it still need quite a lot of time until quantum computers are
made to scale.
Fixed that for you...
Btw, quantum mining is a tiny problem compared to being able to steal money from any address that's ever spent money,
by using Shor's algorithm to recover the private key from the public key...
What if they don't need to scale? What if they break down a 2000 qubit problem into emulated segments of 5 qubits, just like a 8-bit processor can do with 16-bit or 32-bit operations? They might take a speed penalty for doing so but still be lightning-fast.
I'm no expert on qubits or quantum cryptography but we have to rule this possibility out completely. And then we also have to rule out the possibility that there aren't any technologies deployed by governments which are way more advanced than the marketplace (say IBM's 5 qubit QC).
Quantum computer are a problem for btc. thats true.
But it still need quite a lot of time until quantum computers are
But it still need quite a lot of time until quantum computers are
made to scale.
Fixed that for you...
Btw, quantum mining is a tiny problem compared to being able to steal money from any address that's ever spent money,
by using Shor's algorithm to recover the private key from the public key...
Quantum computer are a problem for btc. thats true.
But it still need quite a lot of time until quantum computers are invented.
But it still need quite a lot of time until quantum computers are invented.
Bit coin has a BIG issue that is quantum computers, and if anybody says there are none then they are blind.
How ever I think that quantum computers consume a lot of electricity to ever be profitable for them to mine bitcoin.
But every day goes by we come closer to solving that issue and then only 3 big companies become bitcoin network owner since only they have quantum chips.
And for other issue, in centralized currencies usually banks destroy old and used money and cut down a lot of trees to make new money.
But I guess bitcoin is worse than them to force people to use a lot of natural sources to mine bitcoin.
What happened to the idea to make the world a better place not to compete and see it destroyed even faster.?
How ever I think that quantum computers consume a lot of electricity to ever be profitable for them to mine bitcoin.
But every day goes by we come closer to solving that issue and then only 3 big companies become bitcoin network owner since only they have quantum chips.
And for other issue, in centralized currencies usually banks destroy old and used money and cut down a lot of trees to make new money.
But I guess bitcoin is worse than them to force people to use a lot of natural sources to mine bitcoin.
What happened to the idea to make the world a better place not to compete and see it destroyed even faster.?
Well, as long as we're using our imaginations here, I might as well throw my wild thoughts in too. Why not just change the whole mining incentive idea into one that is more "lottery" based. One where there is no advantage to pointing more hashing power at the chain but one based on just running a full node. One where it's not who finds the block that's rewarded but some random node that gets the reward....It seems like that would encourage more participation; therefore, decentralizing the hashing power. A larger distribution of small chunks of power could still provide the power necessary to run the network....I'm sure there are a lot of problems with that idea but why not throw some brain cells at them?
Ho hum.. just talking to myself here.. 
How about this :
Make it so that the miner's centralised hash power can't compete with the masses.
..
There are 1 billion android phones out there.
If Android phones (unsure if Apple would jump onboard with this..) started to come out with heat efficient, low power, mining chips and excellent low-bandwidth mining pool integration, would that help..
I'm not up on how powerful a small SHA256 chip is at the moment.. Can someone who knows chip in.. ?
Do 1 billion times that number amount to more than a hill of beans in this crazy bitcoin miner's world ?
If so, the pool operators, would make their cut (and if using the original OP scheme there could be many of them), but the Hashing would be left to the users..
How about this :
Make it so that the miner's centralised hash power can't compete with the masses.
..
There are 1 billion android phones out there.
If Android phones (unsure if Apple would jump onboard with this..) started to come out with heat efficient, low power, mining chips and excellent low-bandwidth mining pool integration, would that help..
I'm not up on how powerful a small SHA256 chip is at the moment.. Can someone who knows chip in.. ?
Do 1 billion times that number amount to more than a hill of beans in this crazy bitcoin miner's world ?
If so, the pool operators, would make their cut (and if using the original OP scheme there could be many of them), but the Hashing would be left to the users..
A comment about your idea. Would that not mean that some of the major miners would start mining blocks less frequently, leaving the majority of blocks to be mined by an even smaller number of miners, should they choose to mine at the lowest difficulty/reward? That could result in more consecutive blocks being mined, with the dangers inherent to that increasing too.
It's hard to stop centralization, large miners are basically self selecting, i.e. somewhere with free electricity and good internet. What Bitcoin need is something like in a PoS coin, where there is a disadvantage or lull after mining your last block. I have no idea how that would work though.
Ho hum.. just talking to myself here..
How about this :
Make it so that the miner's centralised hash power can't compete with the masses.
..
There are 1 billion android phones out there.
If Android phones (unsure if Apple would jump onboard with this..) started to come out with heat efficient, low power, mining chips and excellent low-bandwidth mining pool integration, would that help..
How about this :
Make it so that the miner's centralised hash power can't compete with the masses.
..
There are 1 billion android phones out there.
If Android phones (unsure if Apple would jump onboard with this..) started to come out with heat efficient, low power, mining chips and excellent low-bandwidth mining pool integration, would that help..
Phones already have heat efficient, low power, mining chips: DRAM.
You just need to use a PoW for which reading and writing billions of bits at random locations
forms the bottleneck...
Ho hum.. just talking to myself here..
How about this :
Make it so that the miner's centralised hash power can't compete with the masses.
..
There are 1 billion android phones out there.
If Android phones (unsure if Apple would jump onboard with this..) started to come out with heat efficient, low power, mining chips and excellent low-bandwidth mining pool integration, would that help..
I'm not up on how powerful a small SHA256 chip is at the moment.. Can someone who knows chip in.. ?
Do 1 billion times that number amount to more than a hill of beans in this crazy bitcoin miner's world ?
If so, the pool operators, would make their cut (and if using the original OP scheme there could be many of them), but the Hashing would be left to the users..
How about this :
Make it so that the miner's centralised hash power can't compete with the masses.
..
There are 1 billion android phones out there.
If Android phones (unsure if Apple would jump onboard with this..) started to come out with heat efficient, low power, mining chips and excellent low-bandwidth mining pool integration, would that help..
I'm not up on how powerful a small SHA256 chip is at the moment.. Can someone who knows chip in.. ?
Do 1 billion times that number amount to more than a hill of beans in this crazy bitcoin miner's world ?
If so, the pool operators, would make their cut (and if using the original OP scheme there could be many of them), but the Hashing would be left to the users..
So not a lot of action here..
Has anyone got any other ideas about how to combat Mining Centralisation.. ?
Because trying to get the miners to fork bitcoin in a way that will make mining less profitable, as some have stated.. isn't going to happen..
Has anyone got any other ideas about how to combat Mining Centralisation.. ?
Because trying to get the miners to fork bitcoin in a way that will make mining less profitable, as some have stated.. isn't going to happen..
the only thing I'm sure is that the more miners the best it would be. I cannot imagine bitcoin running only on few centralized miners-"institutions" ...
I agree.
And to make more miners take part, I am saying you need to let more miners onto the main chain.
Mining as part of a pool is not the same as mining as an individual entity.
One is trust free, one is not.
So, DumbFruit's astute comments about everyone merging into one massive mining pool so as to maximise profits, I think, has some caveats.
In the system described in the OP, a mining operation that manages to get on the main chain once a day, gets paid every block. AND doesn't need to trust anybody.
That is why the EXTRA incentive I mention, up to 1% IF you are at 144x difficulty, is small.
Just enough for an individual mining operation to do it, thereby allowing more miners on chain, but not enough to entice you away from your trust free mining setup, to become a pooled miner.
I suppose the goal should be for mining to be unprofitable, to keep big entities at bay, and instead many individuals need to perform the service charitably.
I agree with this somewhat, and think that it is exactly where we are headed..
the only thing I'm sure is that the more miners the best it would be. I cannot imagine bitcoin running only on few centralized miners-"institutions" ...
Using this system, finding 10 blocks at Level 1, is less profitable than finding 1 block at Level 10.
Suppose there are equal numbers of level1 and level10 miners and no others.
Let the level1 block reward be 25BTC, and the level10 one be 250BTC,
each spread out over the last 144 blocks.
The expected payout for a level1 block is then 1*25BTC/144 + 143*(10/11*25BTC+1/11*250BTC)/144
= (25BTC/144)*(1+143*20/11) = 25BTC * 29/16.
For a level10 block it is 1*250BTC/144 + 143*(10/11*25BTC+1/11*250BTC)/144
= (25BTC/144)*(10+143*20/11) = 25BTC * 30/16.
Finding 10 level1 blocks is clearly WAY more profitable.
No. There is no 250btc reward for level 10 miners. There is just the same block reward for everyone.
The 'levels' are all relative to each other.
Level 10 miners make 10 times more than level 1 miners. But there is only the usual 25btc per block to share.
If all the miners are level 10 difficulty, they all make the same, just as if they were all at level 1.
Using this system, finding 10 blocks at Level 1, is less profitable than finding 1 block at Level 10.
Suppose there are equal numbers of level1 and level10 miners and no others.
Let the level1 block reward be 25BTC, and the level10 one be 250BTC,
each spread out over the last 144 blocks.
The expected payout for a level1 block is then 1*25BTC/144 + 143*(10/11*25BTC+1/11*250BTC)/144
= (25BTC/144)*(1+143*20/11) = 25BTC * 29/16.
For a level10 block it is 1*250BTC/144 + 143*(10/11*25BTC+1/11*250BTC)/144
= (25BTC/144)*(10+143*20/11) = 25BTC * 30/16.
Finding 10 level1 blocks is clearly WAY more profitable.
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