Andreesen said that one mining pool had veto power over system changes. I don't think that, in itself, is a big deal. I know how to encrypt my wallet.
On the other hand, I have no real understanding of what he's talking about.
1. Where are the "rules" about these large mining pools? I didn't see it in Satoshi's white paper.
(please answer!)
The rules are everything about how bitcoin works, such as: Difficulty is calculated to set the block generation rate to about one every ten minutes. There are 50 bitcoins generated in each block. The reward halves every 4 years. And so on.
2. Why does this matter? Does the person who is awarded a block get to "control" it forever?
Gavin is wanting to change one of the rules, to allow multi-sig transactions. If there is a mining pool with >50% of the hashing power, they could refuse to accept the new rule, and reject any transaction that doesn't follow the old rules. The problem here is that the pool decides the content of the block being mined. They decide which transactions to include and which to reject. The miners have effectively given up any power they had on deciding the 'rules' to the pool operator.
The advantage of p2pool over the traditional pools is that each miner uses their own bitcoind to decide which transactions to include in the blocks they mine. There's no central pool operator deciding whether to go with Gavin's rule or Luke's rule. Each miner in the pool downloads either Gavin's bitcoind or Luke's bitcoind, hence getting their own 'vote'.
3. Instead of some commie a$$ appeal (sorry, I'm and 80s kid) to donate to smaller mining pools (which some of you were making), why can't I loan them to these "more virtuous" mining groups and get kicked back some of the discovered blocks, thus receiving a return on my investment - rather than "DONATING?"
If so, could you please such an enterprise!
The idea of the donations in to incentivise miners to use p2pool instead on one of the traditional pools (as if saving the (up to) 10% fees that the traditional pools charge isn't enough). Having you loan some BTC only to have to pay you back more than you loan would be a disincentive. What's in it for me as a miner? I end up losing BTC to you.
4. Sorry if I sound like an arrogant buffoon that has a Bobby Knight poster on my wall, but I doubt I'm the only one who has the same misconception. I'm buying BTC to try to make $$$ and am "tech-challenged."
It's OK. I love David Hasselhoff's early work too.
