You're saying that's actually false because these "3 or 4 entities" can block whatever they want and the rest of the network is powerless to prevent it?
Yes, by design. They can. They won't mostly.
I think many would argue that 3 or 4 entities making all the decisions was definitely not part of the design. You seem to be advocating that it would be better if miners were in full control of consensus, but clearly most people aren't going to buy into that vision.
I agree that is was not part of the *indicated purpose* of the design, but it *was part* of the design, as we see it experimentally confirmed, and game-theoretically explained. PoW always will evolve into an oligarchy, like any market does, but in this particular case, with no "product differentiation" and open, anonymous competition, it is evident that this would happen. I'm not expressing any advocacy. I'm just telling you what was the logical consequence of the actual design, confirmed in reality by the experiment.
I think that Satoshi had more in mind "a few hundred" rather than "four". That's the only difference between his vision and the outcome of the experiment. But obviously, he clearly stated that it wouldn't be decentralized in the way you think it is: that is, over a large portion of its participants. Was Satoshi lying, was he simply wrong, or didn't it matter in his mind, we don't know of course. But that's the design that he proposed, and that's what came out of it, with the caveat of less deciders than anticipated, because of the unanticipated formation of pools.
Your expensive non-mining node wouldn't see anything fishy. It simply turns out that the 4 most important mining pools decide not to include transactions from user X or exchange X, and decide not to mine on blocks that do so. That's the consensus by proof of work.
Yeah, I'm not saying it's like you get a popup alert or anything, but people do have eyes. When lots of people notice their withdrawals haven't confirmed and it becomes one of those big issues where everyone piles in with an opinion, as customarily happens on the internet, someone's going to notice and figure it out. The more people who can instantly check and see that the transactions weren't included, the faster the community can react. Hence why more nodes are better than fewer.
What you are talking about, are the news feeds. Coindesk, this forum, other centralized places of news. That's the "eyes of the market". That's where people get informed (or misinformed). No "full node runners" would pay attention to it, because, as you say, there won't be pop-ups. If you would like to *demonstrate* it here, you'd link to things on blockchain.info. You wouldn't use your own full node for that.
The few geeks who are able to look at that using their full node wouldn't be believed as much as a link to blockchain.info. This is what really keeps those oligarchs, our overlords of bitcoin, in check: the buzz on internet, the market sentiment, their business. Not the full nodes. Most full node runners wouldn't even know where to look or what to do to see this.
Guess what ? Exactly such an intermediate system is what Dash put in place: the master nodes. The master nodes are a PoS layer between the user and the miners. They will make a pre-confirmed mem-pool which the miners have to include. But it is proof of stake. There, it are the master node owners which are the overlords, but they are more of them.
I'm not suggesting it would be clean, but it's an option. A somewhat nuclear option, granted. But even if there was a period where the network had to suffer with a lack of hashrate, that's what difficulty adjustments are for. And the more nodes who have a full copy of the blockchain, the stronger that nuclear option looks. Hence why more nodes are better than fewer.
This is one of those make-believe stories again. There is absolutely no strength in holding thousands of identical copies, because
whatever that nuclear option is, it will be decided by a monopolist: Core, the overlord of bitcoin, because he has the brand name. If not, there will be many forks. And if that happens, how much time would it take ? I cannot believe that they can do this in a few weeks time. Hell, they cannot even roll out their pet LN in two years' time. And the suspicion would be that they planned this in advance, with tons of specific hardware ready to do the new algo. This story is of the type "I hide a big nasty dog in my basement, and if you rob me, I will release him". "Our system is decentralized and robust against attacks, and if you dare, our Good Overlord in the basement will change the system the next week so that your attack fails."
Yes, but the general idea is you don't want to make it easier for entities to collude and that's what people argue will happen with fewer nodes. The greatest level of transparency, neutrality, trustlessness and permissionlessness is achieved through the blockchain being shared and updated in real time between as many users on the network as possible. Hence why more nodes are better than fewer.
As I have now outlined many different times, it doesn't make much of a difference, especially because bitcoin was
designed not to leave power to non-mining nodes that are easily sybilled. More nodes are very slightly better than fewer, if one doesn't introduce system limitations in order to have more of them. Because the very very small added decentralization by having thousands of copies is not offset by the huge performance hit you introduce by taking the requirements for this into account, like limiting the amount of transactions that can be done.
And the reason most users are prepared to gamble on its tokens is because it is decentralised. If you take that away and 3 or 4 entities can make unilateral decisions without consequence, the vast majority of participants lose faith and the entire experiment fails.
No, the reason why most users are prepared to gamble on its token is because they BELIEVE it is decentralized. In fact, not even. They believe that others believe that it is decentralized. Bitcoin is a Keynesian beauty contest. It doesn't matter what you find best, it matters what you think others believe will find best.
This is why this make-believe story of many nodes is necessary, to maintain that erroneous belief. This is exactly like one needs to do human sacrifice for the Great God Dodo, simply to maintain the belief in the power of the Great God Dodo. If the Great God Dodo wouldn't be able to require human sacrifice, the Great God Dodo wouldn't be powerful, wouldn't he ?
In the same way, if there's no necessity to have "many full nodes", it would be fairly obvious that bitcoin is centralized. So one needs to propagate the myth that bitcoin is decentralized, and that Joe, with his node in his basement, is "contributing to the decentralization of bitcoin". So that you can show that there are 11 000 Joes that all copy the same data set made by 10 pools out there, and tell people "look how decentralized our system is: there are 11 000 identical copies out there, and all of them have checked that everything is OK. Power to the people ! Bitcoiners of the world, unite !". While the fundamental design of bitcoin was exactly to avoid any power of these cheap nodes.
From Satoshi's white paper, third page:
"The proof-of-work also solves the problem of determining representation in majority decision
making. If the majority were based on one-IP-address-one-vote,
it could be subverted by anyone
able to allocate many IPs."
This is where Satoshi says that full nodes shouldn't have power.
I'm not prepared to gamble on Ripple's or Stellar's tokens because I don't think they're decentralised enough, although I do have to say even they sound more decentralised than your vision for Bitcoin.
I have no "vision for bitcoin", I'm telling you the factual, actual state of bitcoin's power structure, and how that actual state of bitcoin was already foreseen by Satoshi in November 2008, and why this is a simple logical consequence of his design. Apart from having only 3-4 pools instead of a few hundreds of solo miners. Yes, this goes against the narrative of bitcoin. Satoshi wanted to make a system that works, for all practical purposes. The decentralization narrative was good propaganda to make it going, but it doesn't correspond to reality. When one is going to cripple the system in order to feed the narrative, one is making a big mistake.
You are expressing your "belief". And that's what all these "decentralization stories" are about: make believe. The Great God Dodo doesn't exist.