Bitcoin Forum

Mining is as centralized as ever, this day is now here. A single corporation owns the majority of the hash rate, bitcoin could be done any minute now. The argument "against their interest" doesn't stand as long as they have the chance to give bitcoin a fatal blow. Interests change and are affected by all sorts of sources, now it has to do with a multi billion dollar economy.

https://news.ycombinator.com/item?id=10774773

We've had far worse distribution of the hashrate. It's not guaranteed that they can 51%, and when these chips go on sale everywhere they won't be able to dominate the hashrate... We'll see, only time will tell if we're in danger.

Why would they "give bitcoin a fatal blow"?

That would be killing the company...

They aren't going to attack themselves, obviously, but the fact that 51% might be achievable for a company raises some questions and red flags. If a private company can do it, a government can probably do it too, with bigger ease. I think that is the biggest point of these hashrate issues.

It was always like this, but now it's more difficult, and as time goes by it becomes even more difficult.

the link is missing soo much facts, and instead filled with so much opinion.

the article says bitfury now has the capacity of 650peta.. um nooo that the total world network hashrate of every different company.. not just one
https://blockchain.info/charts/hash-rate

also it suggests that the 200peta bump in the last 30 days is due to bitfury..

well bitfury is mining ~91peta at the moment which is 13% of the entire mining network  ...then that means 30 days ago(200peta less), bitfury must have had minus 109peta

https://blockchain.info/pools

also the article says that bitfury must be ramping up.. yet they have been 13% for the last 4 days
https://blockchain.info/pools?timespan=4days

and as for the understanding of the term "centralised" this means 1 point of failure where every node talks direct to that one point..
bitcoin has no single point. its distributed.. so please if you want to suggest that bitcoin is getting less distributed.. say less distributed.. as saying centralised is just wrong on many levels

The most stupid thing I have heard. The OP before making such stupid thread must read and learn more about bitcoin. Then create threads about its actual and future status. Bitcoin was decentralized, is decentralized and will be decentralized. Even if one day will be centralized will be only by the desire of all the world countries with the aim to take care of it and managing it for its good. Thing this (the last) futuristic but much more verifiable than the variant given by OP. Bitcoin cannot be never centralized in the way mentioned by OP. Following is explained the reason. Since today are produced and are in circulation about 15 million bitcoin. Bitfury must mine for other more than 125 years and assuming that no one will mine even 1 satoshi during these years (variant this absolutely impossible)  Bitfury can have (if will be live the sons of actual owners of Bitfury) only the remaining 6 million (less than the half of all the bitcoin in circulation). This amount can make rich 100 generations of their sons but nothing else. They can try to use it for several reasons (that can affect even the price of bitcoin) but never will be able to own it. Who want can read everything told in this post here: https://en.bitcoin.it/wiki/Controlled_supply (https://en.bitcoin.it/wiki/Controlled_supply)

Sill it's pretty scary to think that one single company could own 51% of the hash rate.
I'm not sure I completely understand the extents of it but doesn't it give them absolute power of decision over what is and what isn't recorded on the blockchain and how transactions happen?

they dont own 51%.. so relax.. its just some dummy make up a story trying to cause panic just for a price dump and pump.

This is only rumor as the fact can be seen blockchain.info, where it is clearly stated bitfury only have 13% of share on hashrate far lower than 51%.
People now have more knowledge about how bitcoin works so i don't think this type rumors will create any panic.

There were be always other people who will mine. There were be always other businesses which will compete with Bitfury and will be always someone who will invent another better thing than that which have already Bitfury. As for the blochckchain cannot be made nothing that can affect it. He is totally independent and decentralized. Is the amount of all the transactions made from every person who send bitcoin from all around the world. So nothing can happen to it.

We have been throught this before and nothing seems to happen, it eventually evens it out as time progresses, but there is a clear group of 3 - 4 max miner companies that have most of the hashrate. Unfortunately I can't think of any solution to this, and satoshi predicted mining specialization too.

any attempt to harm the network by anyone with a 51%, would be better spent in the mining scene itself, so no way someone is so retarded to destroy his own profit

i'm not buying any of those fud

Well for someone that is already a billionaire and some eccentric guy that hates Bitcoin, hey may not care about wasting the resources to attack it. In any case this is why it's really extremely important that nodes are as decentralized as possible which is why we can't use blocks that are too big to be able to run Core in your average computer.

exchange can simply freeze everything to prevent dumping at that point, so i'm not sure how he is really going to harm the network with double spending

there are conter measures even when a 51% is "deployed"

In that case, I guess pools are able to stop such attacks if they take place ever...
51% ain't a big problem as it's being tackled many times before, and so will be tackled again in future...

It is really worrying how centralized mining has become in bitcoin.
p2pool seems to be the best decentralized pool alternative that could save bitcoin.

I'm not sure this statement is true anymore, i just watched a private company (SpaceX) return a rocket from low earth orbit and land it standing up, i never seen NASA do that........ ??? ;D

Maybe someone will develop some new tech to increase decentralization, everyone will always want bitcoin to look decentralized even if it isn't.

I think it would be too much of an investment to bother with it. I'd rather just enjoy the profit from all that mining.

Heh, you do know why bitfury gets so many orphans right?

Their miners are hopeless.
It's could be as high as 10% wasted ... so a 650PH mine could be throwing away as much as 65PH

My pool has had the misfortune of having a miner with bitfury miners throw away a block.
Bitfury often do themselves, if you look at some of their orphans you'll see why.

Though the actual blame could probably be laid at the feet of Dave also ...

You cannot just say goodbye to decentralization. Big miners are always advantageous for keeping the network in a most secured state. Nowadays, as per the number of unconfirmed transactions (https://blockchain.info/unconfirmed-transactions) occurring per second, to get them included in a block, it'll definitely need more hashrates. Thus hashrate distribution is increasing exponentially.

That's where PPS mining kicks in for smaller miners. Although the fees are considerably higher than PPLNS, here you get assured payouts from pools whether a block gets confirmed or not. Now if you are feeling lucky, try solo. ;)

it looks like profits centralize very fast...

funny things is, the network was more centralized when the whole mining game started, than now, so it's actually more decentralized than ever

But what happens when all the halving has taken place and we hit the proposed 21 000 000 total bitcoins.
The difficulty is already knocking out the small individuals who are presumably the life and blood of the whole system...
Does the whole currency then get sold back to highest bidder ie: illuminati banksters and we are back to square one again..??
How does mining carry on after that if there are no rewards coming from the blockchain ... ??
How does the whole currency perpetuate into the future ... ??

These are the same questions that I am I pondering, before, even a small person with little resources could compose his small factory mining, now, is watching or worse, pay for join to big cloud mining...

transaction fees are also rewards for the miners

It was only a matter of time before some big bank or investor to take up the "game". They first studied the structure and now control ...

Who has 300 Pentahash?

How are they going to get the ASIC's??

Think Bitmain, Spondoolies and Bitfury are just going to give up?

The other mining hardware developers might not have enough money behind them if the banks decide to throw considerable amounts of money at the issues. The banks can buy their hardware, they can pay to develop their own mining hardware, they can buy out pools or other miners. It all comes down to a war of attrition.

On the plus side there probably isn't enough need to take over Bitcoin right now, and it would be more profitable to just invest in Bitcoin businesses rather than take control of the Bitcoin economy.

The network has always adjusted itself when facing the 51% potential threat. It's not the first time it happens and won't be the last. bitcoin will survive!

none because it mean that someone is holding more than 33% of the network, if we talk as a single farm, and pool at best have 20%

well if you want to go by country than chinese have double of that...

Personally, I think that the "Too Big To Fail" banks don't care about Bitcoin hardly at all. Until it amounts to $100B or more, it's probably not interesting. Today, BTC might be $11 Billion?

That's two bad trades in a year for JP Morgan.  

Yes, they'll have folks look at it, but I think they have zero interest in trying to "control" it, whatever that might mean. Bitcoin shares a common trait with all fiat currencies. A loss of confidence by those holding it, and there will be a run for the exits to a safer currency. It could easily fall from $500 to less than $100 in a day if folks don't think it's "safe". BTC has no alternative use as do some metals like Gold/Silver/Copper and such.

Yeah of-course if bitcoin is centralized the profit will be high and the miners are much benefitted

Many banks are getting involved in this technology indirectly for their profit. Its just because bitcoin is decentralized tech.

Decentralization is a relative term vs. the number of users and size of the network.

a single farm can't get never 51% of network ( I think after reading some points of protocols and mining farms)

that's not the point, because a pool can easily reach that number, and it was proven in the past with ghash

and anyway if all chinese farm work together and merge their huge farm in the future, for whatever reason they could easily surpass 51%...

Could you, or somebody else, elaborate on exactly what such a collection of pools would do? I always read about the "dreaded 51% attack" possibility. What exactly would happen? Some kind of double-spend thing?

Are there any nefarious actions that would go undetected for a long period of time?

My simplistic view is that if the block-chain is being improperly manipulated it will eventually get detected. If that happens then there would be a massive loss in confidence of Bitcoin and the currency would essentially collapse as nobody would trust it's "value".

Is that the most dire outcome possible?

https://en.bitcoin.it/wiki/Weaknesses

Attacker has a lot of computing power, there are listed the things that will happen in the case of 51%, but it must be done by who reach 51%, it's not magically happen alone

By having 51% of the hash power, the miner can do anything he wants with the blockchain.
-they can decide if a block gets into the blockchain or gets orphaned
-they can decide whether or not a transaction gets included in the blockchain by orphaning any block that includes it

The possibilities are endless. think of the exchanger X who is known to have 10k btc in their cold storage. Miner Y has 51% of the hash power of the block chain.
Miner Y puts X's addresses on a blacklist and won't include any transactions that have anything to do with those addresses in their blocks. furthermore,  they will orphan any block from other miners' if they include blacklisted transactions because, well it can. it has more hashing power than everyone else combined.
Miner Y contacts X and demands 2k btc to release the addresses from hostage status. exchanger X is forced to pay or wait until Y goes away or has less than 50% hash power.

Here's another way to profit:
short $200m worth of bitcoins.
Completely halt every transaction to be made so the btc value drops to < $1 within days
Release the blockchain and enjoy their $200m profit in their pocket

While I am no expert on this by any means, it's not obvious to me that even a "51% attacker" can prevent the block chain from being progressed by the remaining 49%, albeit at a slower rate. While the Attacker might not confirm anything, isn't that similar to just turning yourself off? The other Unaffected will continue as they always do, and confirm transactions won't they?

Like I said, my understanding of this very weak, so I may well be completely wrong.

As for driving the price to $1, that seems to me about the same as destroying Bitcoin (IMHO). After that who would risk anything on BTC after that point?

Centralization was about the happen. How is this news?
In every market where there is money to be made money will come in and take over.

The idea was bound to lose because of capitalization.

And bitcoin was made to fight that capitalization scheme. But yeah, turns out it was a victim to that too.

Without decentralization what is bitcoin more then any other coupon system.
Being managed by 1 party who totally controls it?

Only a madman would invest in such a thing right.

Decentralizatoin is something which could kill bitcoin.
Having bitcon centralized means bitcoin is not what it is advertised and people will leave.

I would leave and sell all my bitcoins, if just a selective group of people I don't know control my money.

I don't think the decentralization will stop now or in the future. Chinese pools control most of the hash but not all are chinese owned asics. A lot of that is coming from europe and the united states. That means miners can choose another people by then.

It doesn't matter if it end today or in a year.
Fact is we are heading to a moment where it will be centralized which means you coins are owned by a entity.

Not a governement, but way worse.. a group of companies...

Heres a link provided by f2pool.. Shows you just how much comes to their pool from outside sources.. Its not coming from europe or us.. Take a look.. im sure all the chinese public pools have the same mining distribution.. currently chinese pools control over 70 % of the network :-\

https://www.f2pool.com/regions
https://bitcointalk.org/index.php?topic=700411.msg13430057#msg13430057

Best Regards
d57heinz

Wow just wow.
The US only controls like 3% and F2Pool already 21% of the network @ https://blockchain.info/pools
Which means if more chinese pools work like that, it's already kind of decentralized.

I normally don't post on stuff like this but I have been looking around and thinking, what I have came up with............

Well BitFury smashed what ~90 blocks and counting in the past 4 days alone. That is 2250BTC and damn near $900K USD at current market value in 4 days........ and they are bringing out faster more efficient gear.

Come out with a chip, be part of the community and let them show the world what your product can do after its been tried and true by many and appeal to investors. Open up investments and close public sales so you don't have to foot the bill on the next chip designs. You stay ahead of the competition until the difficulty is going sky high and the halving is near. This turn around you go public and private to get as much product out the door to the public late as possible (but still early enough to sell hard) so you can mine on the newest tech to achieve the maximum in pocket dollar and wait to see what happens after the halving.

Sure some of that is speculation, but at the rate they are going they have no reason to sell to the public other than to keep making money. They are squeezing out home/hobbyist miners and small scale farms everyday and this will only snowball after the halving. At this point it becomes more and more centralized and more and more people and companies walk away and turn to another coin. If that happens any of the holdings they were speculating with will be damn near priceless as so will their gear and any current R&D. So like I said feed the commons enough gear and BTC to make them feel involved and avoid that so called dreaded 51% attack while you sit on your throne. Sure its assumed btc is too big and too much money is into it to go south, hell I'm still mining at $0.13/kwh..... but just step back and look with an open mind at their actions and holdings as well as other asic manufacturers. Asic is the best and worst thing to happen IMO, too many shady companies and most if not all of them compete with their customers. They also have to sell out to cover operating, employee and other costs not to mention profit so that drives the BTC price down while raising difficulty.

Since 5/10/2015 they have mined 43,811 and some change, thats $17.5M USD at the $400 mark. Today that wallet is sitting on 1,140BTC
                                 https://blockchain.info/address/1A66YkobmtQvGbq9jt5faw6nCE8tgjGgKT

Since 11/14/2013 this BitFury wallet mined 11,564 coins...........
                                 https://blockchain.info/address/1DrK44np3gMKuvcGeFVv9Jk67zodP52eMu

EDIT: only reason for new gear is to stay or become more profitable
        only 2 reasons to sell to the public is to keep them relevant and cover cost which is kind of one in the same

Decentralization needs to continue because once if it gets centralized automatically there will arguments to hold the power which results in drastic change in nature and technology of bitcoin.

Decentralization is key for bitcon to succeed.
I hope we will see more EU/USA based companies stepping in.
On the long term this model is not profitable for most of these companies since the fees are just to high in those countries.

However if nothing will happen, it will come to decentralzation and it bitcoin will fail..

No one doubts gov can do it, actually cost to 51% bitcoin is relatively low, no one needs any proof of that.

I think that this focus on "decentralization" is way over-blown. I think that there is precious little consensus on what it means to be "decentralized". Wouldn't 100 roughly equal sized pools do it? How about a 1000? I don't expect that it will make much sense for the economics of "mining" (aka transaction processing) to be viable for more than a few hundr4ed or a few thousand locales and facilities. Fine I get the fear about the dreaded "51% attack", but mining need not be viable to 90% of the folks on this forum to be safe and "decentralized".

I would then further suggest that Bitcoins success or failure will have almost nothing to with decentralization. As a currency, it needs some semblance of stability. Right now its got all the anonymity of cash, which almost nobody uses for anything but small in person transactions where you take the purchased item with you. Who here gets paid in actual cash? Who would send off cash to an unidentified person and them not having confidence in who you are? As a payment scheme, Bitcoin really come up short, except possibly in some very limited scenarios. Just look at all the various methods folks use to prevent fraud and such. Escrow services? Signed transactions? All of this is made up and seems pretty hokey compared to a credit card, or even PayPal.

Just my $.02 on the topic.

yeah but the same cost can be used to actually support the network and get the reward, so why a government should destroy a marketcap that is a joke in any case?

to prevent it to be too big in the future? remember that a 51% attack can at best destroy the value of bitcoin, not bitcoin itself, cheap coin will be bought again