Bitcoin Forum

When you put your money in cryptocurrencies, the miners will control your life.

If the miners decide to switch to another altcoin you cannot sell any of your coins - no matter which coin it is, even Bitcoin. If they reduce their efforts prices to transfer becomes extremely high. If you have a lot of your money in cryptocurrencies, the miners will become your new slave masters

You're not wrong but this is more of a problem for a centralized mining mob like the one running Bcash.

The intention was never to have large-scale mining farms to control majority of the hashrate. Irony is if centralization leads to crypto bubble bursting, nobody stands to gain including the miners. It's not in any miner's interest to corner the market.

It is always in a supplier's interest to corner the market and become a monopoly if they can

Yes I think the recent changes have bitcoin much more centralized they are actually eliminating its very prior motive of decentralization. Every fork every change is being done on the basis of miner's support. Segwit2x which was in interest of common people was cancelled because it reduced miner's fees. sarcastically bitcoin saying the currency which is aiming at a decentralized world is itself being centralized.

That's going by the assumption that the miners are invested in Bitcoin themselves and believe in the technology, if a large corporation was against Bitcoin and had enough reason for an investment towards gaining the majority of the hashrate, then there could be problems.

That's basically what's happening now that the Jihan cartel is toying around with Bitcoin for their own gain. It has gone even so far that the average block generation time has gone up significantly to 15 minutes per block, while it should be closer to the 10 minute mark on average. Currently the difficulty indicates a decline of around 25%, but once the difficulty adjustment comes near, it will be 'just' a decline of 5-10%, while after the difficulty adjustment, they'll let it fall to once agian show a +20% decline. It's a disgusting practice.

I may indeed not have been the intention. But is is nonetheless the result. We are rapidly getting to the point where it will in reality become China which controls mining - and then China will in reality be controlling the crypto currencies including Bitcoin

Miners getting too powerful is one of the arguments in favor of proof-of-stake. Although that has its own share of problems. What would Bitcoin look like if it switched from proof-of-work to proof-of-stake?

Miners are everyone (in theory). If profit seeking miners abandon bitcoin, then anyone could bring up mining machines to keep up the transactions confirming to be included in the blockchain. This is the case with several cryptocurrencies that are not profitable to mine. People stay in the blockchain because they believe in the currency's potential. Not just driven by profit. You can actually buy old/inefficient mining equipment for very cheap.

All the more reason to stick with the major coins that are more likely to last a long time. As long as Bitcoin is a top coin with a large market cap, there will be miners. The fees might be high, but the miners are going to make their profit.

I think the coins that we need to worry about are the ones that have low market cap and are not profitable for miners. Many of those will not survive.

But that is the point. If the giant mining farms in China wants to, they can put a stranglehold on transactions to the point where you are effectively unable to sell/transfer your Bitcoin unless you give them a huge part of your money.

Even more dangerous is that with control comes the ability to favor their own transactions, much like the illegal practice of front-running in stock markets.

That sounds like a fundamental problem that could come to haunt Bitcoin evenutally. Is it possible to prevent front-running by adapting the Bitcoin code?

Proof of stake will work if it wasn't based on how much you stake. Based on amount staked, it's actually worse than PoW. A cap on maximum stake maybe? We'll come up with a system which is egalitarian without giving any individual or a group of individuals an advantage over others. I'd say within the next 5 years if not sooner.

I don't see how. And this is exactly why regulated exchanges are regulated. Centuries of experience shows that without oversight/regulation then there will always be someone using underhanded tactics to cheat. Hence this is a deeply fundamental problem for a Bitcoin with no centralized oversight/government

Unless it's amazon, the cost of cornering the market would be prohibitive for anyone intending to just destroy or stall bitcoin.

Not prohibitive for the Chinese government for example

It's either have someone oversee and overseer cheat themselves or have bad actors within community cheat.

rock and a hard place

At the end of the day it comes down to trust and disgust. When sufficiently many people feel manipulated by the miners (or held hostage where they can't sell when they want to) they will leave the market. Trust in a decentralized vision will be replaced with disgust, and in that scenario it will effectively spell the end of Bitcoin.

That's the absolute truth, because am not sure any of use will really spend about  $20 as transaction fee so that our transactions will be confirmed.  They are our slavery masters and whatever that they say is what goes.

As long as bitcoins are still top in the large market, i seen there is no reason for miners to switch to another altcoins to mining and left bitcoins.
It is true that this system becomes very sucks when the miners start setting the high price for the priority of a transaction.

Now I wonder if it's possible to design a cryptocurrency in such a way that makes frontrunning impossible.

For example, what if transactions have to be processed strictly sequentially?

That requires an agreement of what "sequentially" means, which can be problematic. Either one ledger entry is then determined to be the "master" which decides for all others - or everyone needs to synchronize perfectly with the exact same clock.

Well, I see your point and yeah. Miners are really asking for high fee right now. And those high fee, is so high than our expectation to be. And I believe that it is immoral act for them to do that. I sent money recently for .001 BTC what a shame.

I got your point and I do agree somehow on those words but not totally because miners would really still remain on the strongest crypto which is bitcoin which means they would stay here as long as they can because they are making money on here if they would decide to switch on other coins then its not surprising because they would really do just for the sake of money.

But if they are using their dominance to do front-running, they are effectively making money by cheating everyone else. It also means that a powerful group can convince the miners either by arguments or by money to switch their services to an altcoin, then the impact is tremendous and as a Bitcoin holder there is nothing you can do

Are you saying it's physically impossible to prevent frontrunning that way?

I've found this article about an alternative method using submarine sends. It's not based on Bitcoin but for Ethereum.

http://hackingdistributed.com/2017/08/28/submarine-seeds/

I don't agree with this. Ultimately the final say is up to the market support. Miners are running a business, so they will stay were the profit is. The market is build on supply and demand, so if we demand bitcoin for example, like is happening right now, miners will stay in bitcoin because it's more expensive, so it gives them more profit. Yes, they might switch to some other coins from time to time (like bcash), but they will only stay there if we start selling our bitcoins and start supporting bcash.
If we don't swap our coins, they will just have to come back. If they don't, then difficulty will adjust to the new hash power, and we will still be fine. If difficulty decreases, then it will be even more profitable to mine BTC, so again, in the end, miner will be where the profit is, and the profit is where the demand is, so we are not slaves.

The miners can drive up transaction costs for you without you being able to do anything about it. The Chinese mining farms are becoming so big that you cannot hope to compete yourself.

Its not actually cheating since they are giving their legit service on here which is on pushing up transactions in the network.I cant think off that there would be a powerful group that would convinced most of the miners to switch on a particular coin and would leave bitcoin in the air. They wont do such thing because they would really prefer to coin which do have a higher demand and adoption and they would really stick on it.If the thing you said do happen then I cant imagine on the panic it would create.

Front-running is not a legit service.

Well, the slave owners couldn't ignore the needs of their slaves to get food as otherwise they wouldn't be profitable, but that didn't change that the balance of power was extremely skewed in one specific direction.

Its a bitter truth of crypto-world. Miners do have all the control on every crypto-currency. From developing new coins to confirming a transaction, everything is in miners hand. And the bad part is we can't really help ourselves to get rid of it. Bitcoin miners are taking advantage of it by rising transaction fees day by day.

I understand what your trying to say, and part of it is truth and i agree with it. But you are wrong in one thing, if miners didn't have profit from it they would not mine it, as long as there is profit in mining, miners will mine. Probability of miners leaving profitable coin just because... i can't even come up with an idea why they would leave profitable coin. At the end i think we can agree that, for even like miners leaving bitcoin is near impossible.

Stop thinking about "the miners" as a monolithic "they." They are not a single entity, and they are competing against one another. Bitmain's long term interests do not necessarily align with those of Bitfury or BTCC or Kano/CKpool.


This is just due to the difficulty algorithm. But the real problem we are seeing today has less to do with decreased hash rate (though that has an effect) and more to do with network spam.

I think the design accounted for the generic 51% attack; rational miners aren't interested in jeopardizing their long term investment. But if an actor like Bitmain controls a majority (or super majority) of the hash rate, they can afford to continually spam the blockchain and force fees higher, because they themselves are recouping the spam attack costs by mining the blocks.

 i don't know what to say either because these guys are trying to milk the system for cash and we can't all afford those huge fees they are imposing on us by the day. If they are our slave masters then i guess there is the need  for a rebellion against them.

A miner will do everything they can to exploit the system provided for them to maximise profit. That's how crypto is designed to operate and that's human nature. The people you should be getting arsey with are the ones who designed the software they're running on that allows it.

And if one set of miners doesn't do it out of the goodness of their heart you can bet another one certainly will.

They can't just decided to switch to another altcoins, because they have to mine on the chain with the most rewards to stay profitable - otherwise they will quickly go bankrupt. And if they would switch to other chain, it doesn't mean that it will automatically gain enough boost to its value to make it profitable - users don't care about it, they want security, decentralization, immutability. If the situation was as you described, Bitcoin and all cryptocurrencies would die years ago because it would mean that they can't deliver their promises.

You mean Satoshi? :P

I suppose this is the problem with ASIC-compatible mining. On one-hand, ASICs makes a cryptocurrency more secure because there's no excess capacity that you can rent and use for an attack. If it's profitable to mine, it's online, or will be online soon based on retarget timing.

On the other hand, we're seeing massive centralization of chip-manufacturing. Seemingly no one can compete yet with Bitmain's cheap production capabilities. Accordingly, while hashrate may be irrelevant to Bitcoin's consensus rules, they can do a lot to manipulate perception due to the long length of blocks/time between difficulty retargets.

Yes, that pesky fella.

I guess this is what happens when your pet is opened up to millions of greedy people. They're going to stretch and test every atom of it. You'd need truly epic oversight to anticipate every future avenue.

Yes indeed this is a problem. Hence I have also invested in Vertcoin which only enables GPU mining hence it's a lot more decentralised compared to btc
maybe one day people will realise the potential of a coin like vertcoin

Its a little bit true that miners are trying to influence the growth and existence of a crypto coin but its not 100% possible in bitcoin.They tried their best to control bitcoin,block segwit activation but they failed.That's why,they joined hands with Roger ver and supported to mine BCH instead of BTC.They are trying to influence bitcoin also,but thanks to satoshi for his decentralized model,they are not fully successful.

It is the problem with mining, the more you invest, the better the profit hence they can control the market that way. If they decided to hodl the coins until there are not enough currency out there, its price will increase and then they let out small bits for us to cram on. They have forseen the future of bitcoin, I wished I am the.one who bought 2 pizza for 10,000 btc.

It's really a problem. It seems to me that this situation with the miners is a mistake. Originally bitcoins were mined only by the users themselves. It was a decentralized system. Perhaps this is a topic for thought for the developers. They have become a target for the miners this month. Perhaps they will draw conclusions from this attack.

We have only seen a small sample of the miners' power, this will get worse when people realize that the miners are in a perfect position to do front-running

They really do control have the say at this point. It could get ugly, but remember, they are invested in the long term health of BTC.

That does not have to be the case. If the miners believe Bitcoin will crash, they will engineer it so that they profit a lot from it at the expense of everyone else.

This is one of many negatives of Mining Centralization.
The purpose is to DECENTRALIZE not to hand Bitcoin to few cabals.
But am wondering if temporarily switching to PoS avert potential risk?

If you will get good high powered processors, coolers etc. you will relax when your coins will be mined. Invest in equipment, in the real thing and you will earn the real money. This is freedom, not a slavery.