Topic: Will bitcoin computation power eventually rest in the hands of a few? (Read 2656 times)

I'm talking about dispersal of mining (i.e. control of the block chain) not the coins themselves.  The intent is that Bitcoin be a distributed P2P system, without central points of control.  If some proprietary special sauce (FPGA, ASIC, magic Terminator brain chips) puts mining in the hands of a few, then you don't have a distributed P2P system, you have an online bank.  I'm referring more to the transaction processing component than the free BTC rewards.  Probably even worse if this happens in secret.

this is not a weakness at all.

"Without some method to enforce dispersal..."

the method of dispersal is clear - and always has been:  there's no point in being a Bitcoin millionaire - or, indeed, a millionaire in any currency at all - if you don't spend it for your own pleasure or on those projects which interest you.

of course, once you're spending your Bitcoin, you are... ummm... what's the word i'm looking for?

oh yes!  you're dispersing them.

...aren't you?

Let's not forget at what rate new GPUs get released, FPGA and especially ASIC designs/investments would have to compete not with the current generation of GPUs but future shrinks/designs to break a profit.

Interesting point and probably a weakness in the design.  Without some method to enforce dispersal, it won't happen.  How serious this turns out to be I guess we may find out.

Short answer yes
I wrote a long answer And it was lost

those that can afford will keep doing
hobbyists like me can't afford to live & mine
ya I made a few bucks
no where near my equipment costs

FPGAs have an ROI even less than GPUs since they cost 4 times as much and deliver 1/4 the hashrate.  The only people using them are going to be ones that: 1) already have access to them 2) have no better use for them 3) are willing to use a business asset in an unethical way that may get them fired 4) and know about bitcoin, I would guess the number of people that match these attributes are well below 1,000, probably in the double digits if that.  Also with the market being so volatile and unknown, there is no way in hell anyone is going to dump millions into an ASIC.  I would guess GPU mining is it until the price of bitcoin is almost all based on power consumption (either through high difficulty rate or very low value), then FPGAs may be an alternative, but at that point your ROI is going to be so far in the future I doubt it will be worth it.

Show your work.

You're probably on the wrong forum.

+1

when you get right down to it, there's really nothing quite as scientifically beneficial as money.

look what the first and second round internet billionaires are doing... they're going to the freakin' moon, and bankrolling huge scientific projects.  gates is trying to destroy diseases like he once destroyed lotus.

what will Bitcoin billionaires do?

I just wish there would be as much computing power going towards cracking the next CSS / Bluray / Console encryption as it surfaces.

Or protein fitting for cancer research.

Or any other scientifically beneficial stuff.

Pareto principle should apply IMO. This means that 80% of hashing power will be concentrated in hands of 20% of [bitcoin mining] population. It is probably the case already.

When only few ppl will have concentrated mining power, who will buy coins from them? They'll immidietly lose all their value.

And now others have more than 50%. You don't know who are others. IMO is better to know several well known pools than one unknown mass of others where can be hidden someone with >50% power.

Of course there is the threat of hashing power becoming too concentrated. We've already seen deepbit take 50% of the total hashing power before.

Regardless, bitcoin is small potatoes right now, meaning that it can be destroyed fairly easily if someone with significant means really intended it, but also that there is not enough incentive for this to happen arbitrarily.
FPGA is not a threat right now, nor is it likely to become so for a while, there is a significant market behind GPU creation, efficiency, optimization (which bitcoin benefits from indirectly), and very very very little behind FPGA. It is possible that someone enterprising enough to engineer their own custom setup at the expense of days/weeks/months/years(?) and tens of thousands of dollars, but even then it is unlikely they will invest enough to compromise btc, where is the return?

It is certainly likely however that hashing power will become increasingly concentrated, not into the hands of a few, but as profitability diminishes the large farms will be the ones to remain (except for the hobbyists , but they will not make up a majority of the power on the network).

You didn't search before you posted this, did you?

Also, there is no danger of hashing power getting too concentrated.  Anyone that has the ability to command that much computing power totally has better things to do with it.

First there were CPU miners, meaning anyone who owns a computer had the ability to mine for bitcoins. Bitcoins could theoretically be mined by billions of people.

Then there were the GPU miners, and the pool of people who could affordably mine bitcoins shrunk from billions to millions.

Eventually some scientific computing FPGA designers will design custom hardware specifically tailored to mine bitcoins. No doubt this has already happened and will increase -- and these people aren't going to share their hardware design like the gamers did. The pool of people who can affordably participate in bitcoin mining has been reduced to thousands.

What does this mean for the security and long-term outlook of bitcoin?

Can bitcoin survive if the computational power keeps getting concentrated in the hands of elite experts with expensive educations and lots of capital?

How is this going to result in a secure and democratic currency?

How is it possible to avoid a single party or cartel from controlling 50% of the network when private crypto specialists are able to mine bitcoins with orders of magnitude less expense in comparison to the average Joe with a laptop who nevertheless wants to ensure the survival of an alternative, distributed currency?

Is bitcoin fundamentally flawed in the assumption that cryptographic power can be effectively distributed over the long term, rather than concentrated in the hands of a few specialists and their investors?