Bitcoin Forum

http://www.cato.org/multimedia/daily-podcast/unfortunate-future-bitcoin (http://www.cato.org/multimedia/daily-podcast/unfortunate-future-bitcoin)

"bitcoin will crash to zero, get out now! Yes, I am disappointed too."


tl;dr  "bitcoin will be worthless, because the mining will become centralised"

Quite a chilling speech by Kevin Dowd there. It's based on the assumption that mining will definitely end up becoming a centralised monopoly.

I'm fairly naive to the technical prospects of ASICs, but I was under the impression that ASICs development stands to reach a relative ceiling as it catches up with Moore's law, and that at this stage the advances in ASIC chip efficiency would slow down, matching Moores law as with other established processors. With the likes of Samsung then mass-producing mining chips for broad distribution, I would imagine that small-scale miners (especially solar powered ones) would become more accessible such that everyone could mine at the same rates. This would then re-decentralise the network again.

Am I wrong?

If bitcoin becomes worthless because it's too centralized, then those hubs will stop mining because they will be losing money, thus reducing the centralization of it, thus bitcoin regains value again.

This guy is full of anecdotes to cheer the like-minded crowd. Ghostbusters, "hammer and sickle", etc., etc. This is probably how the high street club elite was poo-pooing Darwin: "whose grandfather was a monkey-nobody in OUR club, sireeeee!".

would be nice if that would be the case...
but i think all that will happen is that they make a subsidary and claim its a different company (they could even stay in the same datacenter use the same cooling and so on).

we'll see.

things a 51%+ miner can do:
 - kill competition
 - refuse to include some specific transactions (only bad if they also kill competition)
 - history attack (eg start from an older block and build a new chain from there... thats hard to accomplish, because it will take them a good amount of time and transactions with more confirmations are more safe)

^ any of this is detectable.

as no big miner wants to dillute their investment i dont think that will happen.

i am only afraid that such big miners will be a target for governments to kill certain transactions.

did i miss a threat?

51% won't happen because no single entity has anywhere near 51% power. And even if it DID, like you said, they'd be destroying their own wealth by destroying the robustness of bitcoin.

yeah, the self preservation 51% avoidance principle works well in theory, but not so well if someone like  a government is trying to damage Bitcoin. In such a scenario, the fewer mining operations, the easier it would be to take over, coerce, attack a majority of the network. Thus the network is currently theoretically less secure than it used to be, and will be less secure as it becomes increasingly 'centralised' by operations who have the means to get their hands on the latest bleeding edge ASIC tech ahead of everyone else.

I guess what I'm wondering is whether the proneness to mining centralisation that we're currently experiencing might be a rather a short/medium term issue, lasting only until ASIC production reaches the same technological limits as for current IC production, whereby the latest ASICs wouldn't become obsolete quite as quickly as they do currently, thus making small-scale (so more decentralised) mining more viable for longer periods.

Any ASIC tech-savvy people know if this slowing of ASIC advances to an asymptote is likely outcome any time soon?

I've mined bitcoin since CPU was the only way, and mined via GPU the first day it was possible, and partook in FPGA designs and finally have maintained relationships with the major ASIC producers of today.

Currently 14nm designs are being prototyped and will be released within the next two years. Things are certainly reaching a plateau.

yes they are. if you are in the IT, hardware part of it you would know!
it's like trying to reach the speed of light, the faster you go the harder it is!

https://i.imgur.com/OQ27PFB.jpg

Should I say more ?

Thanks for the info. It puts my mind at ease to know that ultimately, ASIC mining might go full circle back to a practicable 'one processor, one vote' again.

Kevin Dowd was well spoken, but apparently missing out this important decentralisation saving factor was a glaring oversight on his part.

 you are far more correct then Kevin Dowd as the mining is not very important at all in determining BTC's value.

ummm... last I checked, historically, there is a direct correlation between difficulty and price. Look at some graphs!

If I had a bitcoin for every warning I have ignored..; Hey wait, I do! :D

Also, WTF is Kevin Dowd?

Pretty much my philosophy too.  ;D