Say goodbye to decentralization

[Amph]

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

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[z12]

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?

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

[alh]

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?

[newcoins1978]

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.

[lumeire]

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.

[martinacar]

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.

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.

[jt byte]

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.

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.

[MaritiJames3]

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.

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.

[jt byte]

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.

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...

[d57heinz]

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.

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.

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

[Bitcoinbro]

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.

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.

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.

[sobe-it]

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

[romero121]

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.

[HarryKPeters]

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..

[enquirer]

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.

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

[alh]

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.

[Amph]

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.

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

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