Bitcoin Forum

I see, there are people saying that increasing block size will increase centralization. This is true. But, the heart of bitcoin, i.e. mining, is already centralized. And this is due to pool mining. I hear, miners will decide with their hash power that which BIP will win. But, this is practically pool owners are chosing, not an average miner. If you want to stop this centralization, break the pools. This requires capping the difficulty, not the blocksize.

March 2, 2016 Update : Core devs are now planning a Hardfork to fix difficulty drop algorithm (http://lists.linuxfoundation.org/pipermail/bitcoin-dev/2016-March/012489.html).

Omg i think you might beat turtlehuricane in stupidity contest.....

Wow

Or maybe you forgot your meds today? So your brain is farting ?

mining pools do not "centralize" bitcoin.
for example, the current voting going on isn't made by the pools individual miners of that pools choose what they are voting for.
and if a pool ever do not operate to an individual's liking he is free to choose a pool that dose.
if anything pools allow for further decentralization of bitcoin mining by allowing small miners to continue to mine at such a high difficulty.

This is only a theory and does not happen in practical life due to inertia problem (https://en.wikipedia.org/wiki/Social_inertia). This is the reason XT could not gain traction. As long as the exisitng setup is not directly hurting them, majority does not want a change. So, whatever the pool owner choses will be accepted by an average miner.

well i guess that's true to a point
if a pool public announces  its running XT code ready to fork bitcoin
you can bet your ass everyone will vacate that pool.
actually poeple stopped going to and switch out of ghah.io pool when it hit >51% power

According to this logic central banks allow decentralization of wealth.

my logic is irrefutable.

without pools bitcoin mining would only be feasible by massive multi million dollar mining farms.

Pools are not centralizing Bitcoin, because they compete with each other and miners are free to choose with which pool they want to mine.

The problems created by excessive block sizes are far more serious, because this leads to a reduction in the number of all full nodes, not just miners. This would reduce the overall security of the network and make surveillance / blocking of nodes much easier.

ya.ya.yo!

let's say there are 0 full nodes only minners, how does this impact security? only total hashing power determines the level of security no?

Capping the difficulty means that blocks would be found faster and faster as hashrate increases, accelerating bitcoin towards the final 21 million coin money supply point much faster than under the current plan. Miners would find blocks faster, but the halvings would come much faster so they'd be getting less and less when they did score a block.

I'm not sure how capping difficulty would change anything. If anything the only miners that could stay mining in such an environment would be the most efficient (of course this is tending to be true today, but would be even more so under these conditions). That would increase centralization of mining, not decrease it.

I presume you suggest there is 1 node since 0 pretty much means the system is dead.

So... 1 node servicing all of Bitcoin..mmmmm I wonder what could go wrong  ::)

No. If difficulty is capped, block reward needs to be adjusted accordingly, so that all bitcoins do not get mined faster. Lowering block reward in capping difficulty will de-incentivize big hash power, wich is resource hungry. So, mining will be back to small machines again, if we can take down the difficulty and lower the block reward.

Blocktimes might become way too fast. Which causes a lot of orphan blocks and problems related to that. If pool mining was not possible, I agree more home miners would mine indeed.

Capping the difficulty would screw the issuance schedule... this is non sense

aside from the sybil attack there are no other problem about security if there are zero full node, miners are more important

it's probably the reason why there are zero incentive for them, to run one

You didn't explain up front that you were also proposing to change the block rewards. Nonetheless this changes nothing. "big hash power" is MORE efficient than small home miners, not less as implied by your "resource hungry" comment. The relationship doesn't change just because we change the pacing of block rewards or the size of the rewards. Home-based miners will lose money trying to mine 1 BTC blocks as easily as they can now mining 25 BTC blocks, with small-scale inefficient setups.

You are asking the impossible when you call for decentralization by protocol changes. As it stands the success of bitcoin means that there is big money in mining/securing the network. Because there is big money involved, there is large incentive to investment a lot of money to be the most efficient miner and mine on a large scale. I don't like that either, but I don't see a solution. It's inherent to the fact that mining bitcoin has become lucrative. The only way to "fix" that would be to destroy the value of mining, which is hardly desirable.

The only real way I can see to fight for decentralization is to maintain low barriers to entry, and equal access to the most efficient bitcoin mining hardware. This means encouraging regulatory and legal scrutiny of mining hardware makers (and their relationships with large miners) to ensure no funny business in the way mining hardware is made available and sold in an equitable manner. (Given this is largely a function of Chinese government/law as things stand, I have no idea how to approach this in practice and the downside risks of such scrutiny.)

 ::)

No problem about security other than arbitrarily double spending, issuing 100,000,000 coins for themselves, etc, etc. You realise ONE node has the ability to totally rewrite the protocol.

Mining is without doubt second to nodes in terms of importance:
http://www.truthcoin.info/blog/measuring-decentralization/

As I understand it, it is not the pools who vote, but the miners inside the pool, right? I mean, a miner in one pool can vote distinct that other miners in the same pool?

Pools don't control anything.... the miners in them do.

wut? you're talking about an hypothetical scenario of a 51% attack, i'm talking about miners as a many pool and farm, not a single entity that dictate everything

your scenario will not happen unless bitcoin is already dead, miners have no reason to double spend at all,

and no, nodes are not more important than miners, without miners no more coins will be issued, and we will not have bitcoin at all

1 thing, it's not the decentralization aspect that keeps the bitcoin network safe, is the reward itself, that prevent it from being unsecure

 ???

I'm not sure what you are talking about either but we were considering a scenario with 1 node in which case that one node is free to change the protocol rules at will.

And yes, anyone with a brain will understand nodes are more important than miners: they're the one who run the P2P protocol. Security is pretty much useless without a big enough distribution of nodes so that the rules of the game can't be modified.

If there's only two nodes running the system it doesn't matter if there's a quadrillion miners "securing" it, the rules can be changed at will which makes the whole system worthless.

For once we agree.

For the wrong cause...

they're right tho, you can't mess around with difficulty directly, it should be sort of sacred like the max amount of bitcoins.
Touch one of the pillars of bitcoin, and it will all come tumbling down.

cheers

the solution to it is not capping the difficulty or keeping the blocksize low..

if you really want to help decentralisation. its simple.. when a pool solves a block, it cant submit a new block for atleast 2 blocks.. thus giving the opportunity for other pools to solve.

that way for every 3 blocks there are 3 different pools that solved it. rather then just 1 solving all 3 blocks

This is not possible, because the pool will change its mining address to hide identity.

This. If you can solve the identity verification problem required to do what franky1 is proposing, you've also made Bitcoin obsolete.

Anonymity at its best. ;)

Or quite the contrary - it will become more centralized. You know, the 'home miners' will be the first to get out, because they are the least cost-effective, and only large mining farms with bleeding-edge hardware and cheap electricity will stay...

If we capped the difficulty too low, wouldn't we end up with a lot more than 1 block every 10 minutes? I thought that's why the difficulty moved around.

If the difficulty is capped you would basically limit the mining market and the development of it, it would be a regulation that stagnates free competition for mining. This alone could have disasterous consequences. Think about your proposition again and try later, because this one simply doesn't compute.

Capping the difficulty does not affect hash power. The amount a miner earns is determined by their fraction of the total hash power. Big or small, a miner will still increase their earnings by increasing their hash power.

If you cap the difficulty, you cap the security of the main chain, you cap the cost of a 51% attack.

By capping you only hurt the system even more, the big miners have not just one machine churning on the blocks, but a vast array of miners all working, if the cap is installed all they have to do is make smaller clusters and gain even more control.

If you want to cap, you should make it a lottery as to which miner, regardless it's hashing power will get a reward, so there is no certain ROI for the big mining rigs, just the basement miners will be happy enough to set up a rig and maybe never get a reward but still contribute to a decentralised world of wonder! But the mathematics will probably prove me wrong there too, because chances for a big mining rig to win the reward will still be greater than the hobby miners..

But the higher the difficulty goes the more seure the networks becomes because of the technology rush. 

I think a big problem with bitcoin is the average joe cannot mine succesfully like before though.

That is a myth. The "average joe" has never been able to make a decent (if any) profit from mining. Even when CPU mining dominated, people generally mined at a loss.

wont the diff have to be capped at a very low number to do that?

How come CPU mining be unprofitable for those who mined then and sold later ?

Before bitcoins had value, miners spent money mining worthless bitcoins. Once bitcoins had value, the value of the mined bitcoins were still less than the cost to mine them.

Holding bitcoins has been very profitable for some people, including the miners that mined at a loss.

So, in simple terms, you can not just mine and sell. You need to mine, hold and sell.

It completely new things how to cap difficulty and how it could prevent some miners take 51% attack. If some one explain that would be more helpful. Thanks in advance.

Please read this...

if you cap Difficulty there is no cap on how fast blocks will be solved

you could get in a situation that blocks take ~1 second to solve.

orphen rate would go sky high.

no way.

But, there are many Alt coins where the average time to find a block is close to 1 second. Do they have high orphan rate ?

If we cap the difficulty, the network will no longer be scalable, we will have blocks every few minutes instead of 10.

Probably.
Ethereum has a 10 second block time which causes many orphans, but I think they are called Uncles and it's still possible to get a block reward from them.

In the light of Luke Jr's proposal to adjust difficulty on block halving, this thread has become relevant again.

That isn't 100% true. If lets say you mine in AntPool, and they vote for a decision you don't want. What do you do? Simple. Switch! Lots of pools out there and surely one will suit your needs?

this is where luke is wrong.

difficulty is not based on total network hashrate of all miners hash combined. but on the time a miner can solve a block.

and it has been proven many times that MANY miners can make a block around 10 minutes. with a few varients of seconds between each
EG 6 of the top 20 pools REGULARLY make blocks around 10 minutes

so even if a few miners dropped off wont cause any issues at all. because miners can still make blocks in the same time period as always.

the debate of lukes should not be about the reward halving causing miners to drop out to cause prolonged time of blocksolving. which someone like him (a pool owner) should know all about. but instead its should be about (i think its his hidden reasoning) making it slightly easier to mine to give the little guys a chance to get some profits instead of the remaining big guys leaping forward with less competition and getting more rewards more often.

to me doing a hardfork purely for difficulty is stupid. because within a few weeks the difficulty would go up again. and thus its a waste of code and hard forking just for such a temporary measure of letting his little pool have a slight betterchance of profit for a couple weeks.

his proposal has nothing to do with blocktimes.
because if all the top 6 pools can make blocks in 10 minutes. give or take a few seconds.. then if 3 dropped out there are still 3 big pools making blocks in 10 minutes. thus less competition and thus the remaining 3 will solve more blocks between them rather then sharing between 6.