I agree, but not on point 1.
I believe bitcoin is vulnerable to a 51%.
At some point in time large hardware manufacturers possess a huge amount of hardware, just before they ship it all out.
If someone within the facility misuses this, a 51% attack could happen.
Topic: Large Miners' Added Cost => Decentralization (Read 614 times)
Two points
1. No single miner can grow large enough to threaten the network (50%+).
2. Human nature causes "the tragedy of the common", hence mining is not a profitable business unless you have the cheapest hardware and the cheapest electricity.
1. No single miner can grow large enough to threaten the network (50%+).
2. Human nature causes "the tragedy of the common", hence mining is not a profitable business unless you have the cheapest hardware and the cheapest electricity.
So what is your point? We should stop buying new hardware.
Well if so, there is always someone who does buy a new miner, cause people are greedy.
Well if so, there is always someone who does buy a new miner, cause people are greedy.
There are countless discussions about centralization vs decentralization with many good arguments - and many not so good ones 
There's one argument I haven't seen though, and I believe this one is important in favor of decentralization.
For each additional unit a large miner installs he reduces the value of all existing miners.
This is true for all his own mining units as well as it's true for every mining unit on the bitcoin network. As an investment decision, however, the miner would of course only care about the reduced value of his own miners.
It is likely that the largest miners at some point talk together and agree not to invest in additional miners, sort of like OPEC agrees to limit oil supply. Why would they undermine the value of their existing assets?
Smaller miners should do the same, but it is totally unrealistic. For each of us individually it does not matter if other miners lose profit. The effect each one of us has on the network is also so small that the negative effect we have on our own miners do not matter either. Economist call this the tragedy of the common. If all of us stopped buying miners now, whether we are large or small, we all could mine profitably for a long time.
For bitcoin as a whole this is good. For miners this is just another nail in the coffin.
There's one argument I haven't seen though, and I believe this one is important in favor of decentralization.
For each additional unit a large miner installs he reduces the value of all existing miners.
This is true for all his own mining units as well as it's true for every mining unit on the bitcoin network. As an investment decision, however, the miner would of course only care about the reduced value of his own miners.
It is likely that the largest miners at some point talk together and agree not to invest in additional miners, sort of like OPEC agrees to limit oil supply. Why would they undermine the value of their existing assets?
Smaller miners should do the same, but it is totally unrealistic. For each of us individually it does not matter if other miners lose profit. The effect each one of us has on the network is also so small that the negative effect we have on our own miners do not matter either. Economist call this the tragedy of the common. If all of us stopped buying miners now, whether we are large or small, we all could mine profitably for a long time.
For bitcoin as a whole this is good. For miners this is just another nail in the coffin.
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