Topic: With ~90% of blocks solved by 10 pools, is Bitcoin really decentralized anymore? (Read 336 times)
May 14, 2020, 10:38:15 PM
I dont worry about this because pool is just gather place of miners to a strong calculate to "miner BTC". With Diff is very high now, individual miners cant mine BTC because they have a weak calclete though blocktime of BTC is 10 minute. This is reason why pool is born
May 14, 2020, 10:20:31 PM
This is not a valid reasoning to call bitcoin is a centralized coin as 10 pools are getting 90% of new bitcoins. Firstly because the new coins generated are now negligible to what is already in circulation and it's 90% is further more divided into 10+ pools. A large amount of coins (40%) are held by a thousand addresses, which still is much decentralized that fiat money in the world.
People manipulate news on such potential centralization of bitcoin hashrates if some big pools make deal and work as a group. I don't know how they can accept such deal because it will potentially bring damages to all of us, including biggest-pools corporation. If one has been in crypto for long enough, back in 2017 and 2018, that one should well know there was many news on the bitcoin potential replay attacks due to their fear on hashrate centralization. How many years passed from that, 2 or 3 years and we have never witnessed a replay attacks on Bitcoin network. In the future, I believe there are more pools will join the the hashrates will be decentralized more. May 14, 2020, 09:29:24 PM
its worked out that there is about 80exa of 'farms' and upto 60exa of smaller groups. which is why you see the hashrate peak at 140exa but drop to 80-90exa because hobby miners are jumping in and out at a whim.
Overall a great response thank you. And that quote right there ^ is exactly the kind of thing I was curious about. Assuming accuracy, that means that really only about 60% (rough number at that 140exa) is actually these few big mines that I was referencing, and almost 40% is made up of much smaller. Assuming those numbers are correct, that paints a much better picture than what's easily assumed these days. Thank you again!
This is not a valid reasoning to call bitcoin is a centralized coin as 10 pools are getting 90% of new bitcoins. Firstly because the new coins generated are now negligible to what is already in circulation and it's 90% is further more divided into 10+ pools. A large amount of coins (40%) are held by a thousand addresses, which still is much decentralized that fiat money in the world.
May 14, 2020, 09:00:35 PM
its worked out that there is about 80exa of 'farms' and upto 60exa of smaller groups. which is why you see the hashrate peak at 140exa but drop to 80-90exa because hobby miners are jumping in and out at a whim.
Overall a great response thank you. And that quote right there ^ is exactly the kind of thing I was curious about. Assuming accuracy, that means that really only about 60% (rough number at that 140exa) is actually these few big mines that I was referencing, and almost 40% is made up of much smaller. Assuming those numbers are correct, that paints a much better picture than what's easily assumed these days. Thank you again!
May 14, 2020, 06:09:03 PM
miners cannot change the rules. they can only select which transactions to include.
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with that said yes in CPU days it was fully decentralised. . but even in GPU days pools popped up. i remember in 2012 when there was only like 3 pools. so more than 10 is an improvement.
also these large pools are not made up of just one facility with one manager.
even antpool is made up of sub farms around the word in many facilities with many managers. and they pool hop if things get too over the top
its worked out that there is about 80exa of 'farms' and upto 60exa of smaller groups. which is why you see the hashrate peak at 140exa but drop to 80-90exa because hobby miners are jumping in and out at a whim.
...
what should be more concerning is back in 2009-2017 people were making their own nodes. they tweaked them for their own personal needs. like blockchain.info tweaked their backend node to allow for studying and storing blockchain data in different formats.
however these days we are stuck with just one main source of codebase and that main source has become the omni powerhouse of what new rules are allowed.
the codebase has lost more of its 'decentralisation'
..
with that said yes in CPU days it was fully decentralised. . but even in GPU days pools popped up. i remember in 2012 when there was only like 3 pools. so more than 10 is an improvement.
also these large pools are not made up of just one facility with one manager.
even antpool is made up of sub farms around the word in many facilities with many managers. and they pool hop if things get too over the top
its worked out that there is about 80exa of 'farms' and upto 60exa of smaller groups. which is why you see the hashrate peak at 140exa but drop to 80-90exa because hobby miners are jumping in and out at a whim.
...
what should be more concerning is back in 2009-2017 people were making their own nodes. they tweaked them for their own personal needs. like blockchain.info tweaked their backend node to allow for studying and storing blockchain data in different formats.
however these days we are stuck with just one main source of codebase and that main source has become the omni powerhouse of what new rules are allowed.
the codebase has lost more of its 'decentralisation'
May 14, 2020, 03:55:51 PM
Bitcoin doesn't rely on mining being decentralized in order to protect itself against attacks, it makes attacks extremely expensive thanks to proof of fork, and the kinds of damage that attacks can do are very limited because of the network of validating nodes, and the blockchain and its rules. So, it's not only a question if one entity can get 51% of the hashpower, it's the question why would anyone want to waste millions of dollars per day without causing any long-lasting damage to Bitcoin's protocol.
May 14, 2020, 09:56:14 AM
Wallmart and Bitcoin miners, simply not a good comparison in my opinion.
A big business that leverage the economies of scale and efficiencies that can only be gotten by being global, massive, and having a huge backing to make it impossible for smaller operations to function or profit?
Seems like a pretty good comparison...
May 14, 2020, 03:30:59 AM
OP, mining is cartelized towards the biggest mining farms, but the network itself is still decentralized/censorship resistant, thanks to the people around the world who continue to run/maintain their full nodes. More full nodes = more security.
This I guess was my point - there's this "cartel" of big mines that effectively verify all the money.
You misunderstand. Miners don't "verify all the money" because they are miners, it's because they're full nodes. Some miners don't run full nodes, they connect to a mining pool.
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Those full nodes just keep a record of it. So there's still a small number of entities (these large mines) that have the control over bitcoin's transfer. You can't send or receive bitcoin unless one of these big mines agrees that you did by putting it in a block. If they all went away yes the small miners would pick up the slack, but odds are (statistically speaking) it's one of these few big mines verifying everything.
This is true under a 51% attack. Under cartelization conditions, I dare them to try. They would just be hurting themselves, and their mining farms.
Plus in fact, it could be debated that it's the full nodes that define what miners are.
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We've repeated the same mistakes already made with the rest of the economy. Walmart killed the local stores. Chain restaurants killed the local cafes. Big mines killed the ability to mine.
Wallmart and Bitcoin miners, simply not a good comparison in my opinion.
May 13, 2020, 05:52:29 PM
I think that by starting the topic about the pools I derailed my own point before I got a chance to make it, and hey that's on me.
Ignoring pools, who really owns most of the hashrate out there? Is it these 10,000 individual miners (I question how many their actually are, I'd love to see numbers if anyone has done the research there...)?
Or is it say, 10, or 20, or 100 huge mines? That was the point I'm trying to make. Even if there are 10,000 people all mining at home, their entire combined hashrate is likely today (and certainly in the future as difficulty and power requirements go up and margin continues to go down) a rounding error in the scale of total hashrate.
Ignoring pools, who really owns most of the hashrate out there? Is it these 10,000 individual miners (I question how many their actually are, I'd love to see numbers if anyone has done the research there...)?
Or is it say, 10, or 20, or 100 huge mines? That was the point I'm trying to make. Even if there are 10,000 people all mining at home, their entire combined hashrate is likely today (and certainly in the future as difficulty and power requirements go up and margin continues to go down) a rounding error in the scale of total hashrate.
May 13, 2020, 04:42:46 PM
Pools themselves are decentralized. Members of a pool can switch at any time. So, yes, Bitcoin is highly decentralized.
May 13, 2020, 03:35:31 PM
Each pool is comprised of tens of thousands of miners... So I'd say it's still decentralized.
Just because ten pools are used to collate their hashing power, doesn't mean that they are somehow centralized, it's just pure economics at this point. Few miners have the mining hardware capable of successfully discovering a block in reasonable time, so the only alternative is to join a pool and split the reward.
It's like comparing these mining pools to individual hardware manufacturers. Antminer, Avalon, Bitmain etc. Just because 70% of miners are using Bitmain, does that mean it's centralized? The answer is no, because each miner still has their own capacity to choose what they want to do if it ever came down to it.
Still, I would like to see more pools.
Just because ten pools are used to collate their hashing power, doesn't mean that they are somehow centralized, it's just pure economics at this point. Few miners have the mining hardware capable of successfully discovering a block in reasonable time, so the only alternative is to join a pool and split the reward.
It's like comparing these mining pools to individual hardware manufacturers. Antminer, Avalon, Bitmain etc. Just because 70% of miners are using Bitmain, does that mean it's centralized? The answer is no, because each miner still has their own capacity to choose what they want to do if it ever came down to it.
Still, I would like to see more pools.
May 13, 2020, 11:33:06 AM
there's this "cartel" of big mines that effectively verify all the money. Those full nodes just keep a record of it.
first of all why do you use the term "cartel" here?secondly miners do NOT verify anything. they are only performing a tedious task of computing hashes. it is the nodes that verify transactions.
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You can't send or receive bitcoin unless one of these big mines agrees that you did by putting it in a block.
if a miner rejects a transaction, another one picks it up. if a pool rejects a transaction then miners leave that pool for another one. if things get bad and a large number of miners turn malicious the nodes would create a fork and turn their millions of dollars investment into bricks by changing the mining algorithm.in other words miners are kept in line by the nodes.
I was quoting someone else who stated that mining is "cartelized" - was simply sticking with the wording they used.
It's the miner's who are completing blocks and therefore stamping transactions as part of the "permanent record" so to speak.
Like you said, right now if a pool proves to be malicious (or even gets too powerful, as we've seen in the past) then the smaller miners can choose to jump ship to another pool. As mining continues to have higher and higher requirements due to the ever-rising difficulty and the proliferation of these mega-mines, there are fewer and fewer who can make that decision to change in any meaningful way.
May 13, 2020, 11:22:11 AM
there's this "cartel" of big mines that effectively verify all the money. Those full nodes just keep a record of it.
first of all why do you use the term "cartel" here?secondly miners do NOT verify anything. they are only performing a tedious task of computing hashes. it is the nodes that verify transactions.
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You can't send or receive bitcoin unless one of these big mines agrees that you did by putting it in a block.
if a miner rejects a transaction, another one picks it up. if a pool rejects a transaction then miners leave that pool for another one. if things get bad and a large number of miners turn malicious the nodes would create a fork and turn their millions of dollars investment into bricks by changing the mining algorithm.in other words miners are kept in line by the nodes.
May 13, 2020, 11:07:48 AM
OP, mining is cartelized towards the biggest mining farms, but the network itself is still decentralized/censorship resistant, thanks to the people around the world who continue to run/maintain their full nodes. More full nodes = more security.
This I guess was my point - there's this "cartel" of big mines that effectively verify all the money. Those full nodes just keep a record of it. So there's still a small number of entities (these large mines) that have the control over bitcoin's transfer. You can't send or receive bitcoin unless one of these big mines agrees that you did by putting it in a block. If they all went away yes the small miners would pick up the slack, but odds are (statistically speaking) it's one of these few big mines verifying everything.
We've repeated the same mistakes already made with the rest of the economy. Walmart killed the local stores. Chain restaurants killed the local cafes. Big mines killed the ability to mine.
May 13, 2020, 08:39:06 AM
Honest question... we have 10 pools making up like 90% of solved blocks according to https://www.buybitcoinworldwide.com/mining/pools/ and https://www.blockchain.com/pools (not sure the validity of these, but they seem to agree).
You forget most important thing. Its pools, its not entities like companies. If one pool will behave malicious to Bitcoin, everyone will leave it and go with their hash power to other pools.
One real concern is if someone has huge mining operation its easier for him to scale his operation and cut costs while small miners can't do that. Big miners will grow, small will stay small.
Similiar to small companies vs corporations (big companies). No easy way to do smth about it here.
May 13, 2020, 07:00:12 AM
As a rule, mining is now not profitable even if you buy a bunch of miners. It has long been known for the fact that you won’t have time for the price, it will always fall, as will the power with the release of new devices.
May 13, 2020, 03:01:17 AM
OP, mining is cartelized towards the biggest mining farms, but the network itself is still decentralized/censorship resistant, thanks to the people around the world who continue to run/maintain their full nodes. More full nodes = more security.
May 13, 2020, 02:22:56 AM
I guess that was my point. Anyone can't just mine and have it be profitable anymore. An average person can't just decide they want to be a part of this and start mining bitcoin (and see any kind of real result) without it requiring significant investment, and living in the right place with the right electricity rates.
why do you think that? nobody is stopping anybody else from making that kind of investment and taking the risks that the numerous miners have been taking and mine bitcoin. it is not an exclusive market that they wouldn't sell you ASICs. i think your problem is that you don't want to make that kind of commitment and instead prefer to take the least amount of risk (not buy any new equipment that is ASIC and use what you already have which is a PC) and make the most reward. well that's not going to work. in fact part of the security of bitcoin is ensured because of that. in some ways this is making sure miners are committed to the work they are doing.
the investment is not that significant as you think either. the range of ASIC prices is usually between $1000-$2000 and considering the fact that you would be mining the only decentralized and the most valuable currency in the world, i'd say it is a cheap price to pay.
May 13, 2020, 02:09:48 AM
I'm well aware of how pools work.
But Most of the hashrate ON those pools is provided by a very small number of very large mining operations. Yes there are thousands of smaller miners also but their contributions are comparatively minute.
And yes some people are able to mine from home still, but like you said it's a smaller number, and they're having to step up their own operations quite a bit.
But Most of the hashrate ON those pools is provided by a very small number of very large mining operations. Yes there are thousands of smaller miners also but their contributions are comparatively minute.
And yes some people are able to mine from home still, but like you said it's a smaller number, and they're having to step up their own operations quite a bit.
I think it is pretty obvious that if you are a average Joe and solo mining, then it is no longer profitable even if you step up your operations. You need to have new mining rigs and cheap electricity of course. And I'm not sure if. there are still mining bitcoin by themselves in 2018-2019, your financial metric is close to 0.
Maybe I'm just old and nostalgic for the olden days when you could fill up a USB hub with USB stick miners and have it feel meaningful.
On the other hand, it's pretty cool that this has been going on long enough to feel nostalgic about!
On the other hand, it's pretty cool that this has been going on long enough to feel nostalgic about!
I guess you are mate, those where the days when someone can really mine. As bitcoin grows and so is the difficulty in mining.
May 13, 2020, 01:50:16 AM
I'm well aware of how pools work.
But Most of the hashrate ON those pools is provided by a very small number of very large mining operations. Yes there are thousands of smaller miners also but their contributions are comparatively minute.
And yes some people are able to mine from home still, but like you said it's a smaller number, and they're having to step up their own operations quite a bit.
I guess that was my point. Anyone can't just mine and have it be profitable anymore. An average person can't just decide they want to be a part of this and start mining bitcoin (and see any kind of real result) without it requiring significant investment, and living in the right place with the right electricity rates.
Maybe I'm just old and nostalgic for the olden days when you could fill up a USB hub with USB stick miners and have it feel meaningful.
On the other hand, it's pretty cool that this has been going on long enough to feel nostalgic about!
But Most of the hashrate ON those pools is provided by a very small number of very large mining operations. Yes there are thousands of smaller miners also but their contributions are comparatively minute.
And yes some people are able to mine from home still, but like you said it's a smaller number, and they're having to step up their own operations quite a bit.
I guess that was my point. Anyone can't just mine and have it be profitable anymore. An average person can't just decide they want to be a part of this and start mining bitcoin (and see any kind of real result) without it requiring significant investment, and living in the right place with the right electricity rates.
Maybe I'm just old and nostalgic for the olden days when you could fill up a USB hub with USB stick miners and have it feel meaningful.
On the other hand, it's pretty cool that this has been going on long enough to feel nostalgic about!
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