Satoshi's Big Mistake & The Centralization of Bitcoin. What are your thoughts?

[popovicbit]

https://www.youtube.com/watch?v=_RC8wEL2r9s


The discussion really starts at the 34:00 min mark. I really respect James D'Angelo and appreciate hearing his constructive criticism. Often times the discussions surrounding BTC are either too much "cheerleading support" or "scam/pyramid critics". James D is humble enough to admit he does not have an answer to the increasing centralization problem, but I would like to see what you all think could be a solution.

Please watch the whole discussion from the 34 min mark onward before discussing...

More than 50% of the hardware mining is located China, is this correct? Could this cause problems in the future? why or why not?

[pereira4]

https://www.youtube.com/watch?v=_RC8wEL2r9s


The discussion really starts at the 34:00 min mark. I really respect James D'Angelo and appreciate hearing his constructive criticism. Often times the discussions surrounding BTC are either too much "cheerleading support" or "scam/pyramid critics". James D is humble enough to admit he does not have an answer to the increasing centralization problem, but I would like to see what you all think could be a solution.

Please watch the whole discussion from the 34 min mark onward before discussing...

More than 50% of the hardware mining is located China, is this correct? Could this cause problems in the future? why or why not?

I have watched all this guy's videos except this one because it's 1 hour.. I will have to find smoe extra time for this one. Anyway, I think satoshi predicted centralization of mining, in a way, so this is no surprise. Which is why we need decentralized nodes more than ever. Imagine if we end up with big mining cartels and big node cartels.. that's pretty much it, thats why we need a conservative blocksize.

[franky1]

bitcoin IS DECENTRALIZED and always will be. the issue is not decentralized vs centralized

instead its:
mass distributed decentralization vs limited distribution decentralization.

the only reason that china is succeeding is that they are cheaply making the mining rigs..
its not about electric. or politics.

so here is the situation:

rigs cost only $350 to make.. and take a week to deliver outside china

so when they sell rigs for $1800 to the US, they can make 5 rigs and instantly put 4 rigs online (thanks to your funds) while you are still waiting for your single rig to be delivered and because you bought their 4 rigs without realising it. they have no upfront costs. while you are a week behind them in mining, 4x less power then they gained and $1800 out of pocket before you even start.

its the making of the mining rigs that is the difference between who is a success, making profit vs who is making a loss.

as for satoshi being blamed..
in 2009 satoshi only envisioned CPU mining.. it wasnt until late 2009 was satoshi told that GPU mining was possible and even then he wanted them to hold off and wait.
in 2012 FPGA came to light... but wait.. satoshi wasnt around.. satoshi didnt program them, satoshi didnt have access to put code to prevent it..
he wasnt around.
and that was way before the first ASIC got invented.. so blaming satoshi for ASICS is a fowl attempt at shifting blame to someone that had no involvement.

fully distributed decentralization is possible via technology.. but greed and lack of morals dictates how distributed it is, no code can program human decision

[Amph]

yes they are all in china but they are different farm with different company behind it, so now they are not a single entity and thus not centralized

i will leave here again this example, if all the miners from every country go in only one country, to mine, do you think this can be considered centralized? i think not

and last but not last, it was intended by satoshi, to have high specialized megafarm, and leave the casual mining behind

[franky1]

yes they are all in china but they are different farm with different company behind it, so now they are not a single entity and thus not centralized

i will leave here again this example, if all the miners from every country go in only one country, to mine, do you think this can be considered centralized? i think not

and last but not last, it was intended by satoshi, to have high specialized megafarm, and leave the casual mining behind

agreed centralization is definitely not the case.
 in 2012 america had most of the distribution.. but did the yanks scream that the europeans needed to jump on board faster? did they scream for Australia to jump into mining? did they demand spain jump onboard.. nope.. they were happy with america owning the majority of the distribution..

as they seen the pools were individual companies.. which is the same for china

[popovicbit]

I think in the video James makes the point that it can be very dangerous to have more than 50% of the hardware mining in an undemocratic country like China. There might exist a scenario in the future where China might move to disrupt bitcoin. Having more than 50% hardware mining right under there nose allows for some scary possibilities. The mining farms in China are also well known and not hidden. 


The problem is not comparable to the USA or Europe early on because we enjoy certain freedoms and have more rights than people in China.

[Bitcoinpro]

bitcoin IS DECENTRALIZED and always will be. the issue is not decentralized vs centralized

instead its:
mass distributed decentralization vs limited distribution decentralization.

the only reason that china is succeeding is that they are cheaply making the mining rigs..
its not about electric. or politics.

so here is the situation:

rigs cost only $350 to make.. and take a week to deliver outside china

so when they sell rigs for $1800 to the US, they can make 5 rigs and instantly put 4 rigs online (thanks to your funds) while you are still waiting for your single rig to be delivered and because you bought their 4 rigs without realising it. they have no upfront costs. while you are a week behind them in mining, 4x less power then they gained and $1800 out of pocket before you even start.

its the making of the mining rigs that is the difference between who is a success, making profit vs who is making a loss.

as for satoshi being blamed..
in 2009 satoshi only envisioned CPU mining.. it wasnt until late 2009 was satoshi told that GPU mining was possible and even then he wanted them to hold off and wait.
in 2012 FPGA came to light... but wait.. satoshi wasnt around.. satoshi didnt program them, satoshi didnt have access to put code to prevent it..
he wasnt around.
and that was way before the first ASIC got invented.. so blaming satoshi for ASICS is a fowl attempt at shifting blame to someone that had no involvement.

fully distributed decentralization is possible via technology.. but greed and lack of morals dictates how distributed it is, no code can program human decision

they make alot more than four, $350 would be about 350 Tonnes of sand and thats a few Tonnes of Silicon Chips

good post the scale of the scam was always mutli levelled with alot of monopolistic traits involved

[franky1]

I think in the video James makes the point that it can be very dangerous to have more than 50% of the hardware mining in an undemocratic country like China. There might exist a scenario in the future where China might move to disrupt bitcoin. Having more than 50% hardware mining right under there nose allows for some scary possibilities. The mining farms in China are also well known and not hidden.  


The problem is not comparable to the USA or Europe early on because we enjoy certain freedoms and have more rights than people in China.

i guess you have never been to china and have just watched Fox news in regards to how they describe the East..

seriously USA is more financially corrupt and greedy compared to china..
and stop thinking that warehouses hundreds of miles apart are owned by one person.
and stop thinking that this one person is a government employee

then and only then will you realise that china is a country of 1.3 billion.. thats over 3 times the population of america..

yes thats right 3 times more individuals, 3 times more divergence, 3 times more differing mindsets

i really do laugh when people think america is the biggest and most moral country in the world

[popovicbit]

I think you are not following what the discussion is about. Fox news?...America being the most moral country? those comments have nothing to do with anything.

You clearly have not watched the video or care to see what points James has brought up.

Of course China has 1.3 billion people...of course they are 3 times bigger than the USA. Those are facts that are not relevant here.

If every Chinese citizen was mining in their homes then I would agree with you. However, when there are huge warehouses mining bitcoin it makes it by definition more centralized. Furthermore, when most of those warehouses are located in one country, that should be cause for caution.

[maokoto]

Probably you'll want to stone me, but a possible solution would be to turn Bitcoin into a POS coin. That would give people an opportunity to mine from home again avoiding much of the centralization.

Just my two cents

[popovicbit]

Probably you'll want to stone me, but a possible solution would be to turn Bitcoin into a POS coin. That would give people an opportunity to mine from home again avoiding much of the centralization.

Just my two cents

They mentioned having 49% being POS and the other POW. I'm not technical at all so I have not idea how that would work.

[franky1]

I think you are not following what the discussion is about. Fox news?...America being the most moral country? those comments have nothing to do with anything.

You clearly have not watched the video or care to see what points James has brought up.

Of course China has 1.3 billion people...of course they are 3 times bigger than the USA. Those are facts that are not relevant here.

If every Chinese citizen was mining in their homes then I would agree with you. However, when there are huge warehouses mining bitcoin it makes it by definition more centralized less distributed. Furthermore, when most of those warehouses are located in one country, that should be cause for caution.

again america had the majority of pools just 2 years ago..

in 2009 just 5-12 PEOPLE had the majority of miners.

you complaining about countries is just racism.. it doesnt matter if bitmain has a ware house in china or in america.. it really doesnt.. the location has no concern about anything..
bitmain is NOT BTCC, bitmain is not F2pool.. they are all different ip addresses with all different staff.. meaning although is not distributed well .. it definetly is not centralized.

learn the word centralized and how it differs to limited distribution... then you will learn that bitcoin is not and will not be centralized.. and the only concern is the limited distribution.. which has no bearing on physical location. because the internet has no borders.

anyone moaning about mining power of china doesnt understand the terms centralization. and the punch line of their motives to be soo angry, ends up being more about that they personally can no longer make a million dollars from one GPU. and jealous of large investors, especially large investors that are not American

caring and arguing about the country.. but not taking a hard look at the individual hashrate of one pool shows your missing the point of the whole argument.

so worry less about what country it is.. as next year the country of choice will be iceland.. not china.. then you will be racist about iceland..

instead just worry if one pool gathers up 50% as that is just one percent away from a possibility of that miner causing issues.
and even then its still not "centralized".. centralized is if there was 100% hash power.. where there was no alternative at all.. where there is only one choice. one point of failure.

[popovicbit]

I think you are not following what the discussion is about. Fox news?...America being the most moral country? those comments have nothing to do with anything.

You clearly have not watched the video or care to see what points James has brought up.

Of course China has 1.3 billion people...of course they are 3 times bigger than the USA. Those are facts that are not relevant here.

If every Chinese citizen was mining in their homes then I would agree with you. However, when there are huge warehouses mining bitcoin it makes it by definition more centralized less distributed. Furthermore, when most of those warehouses are located in one country, that should be cause for caution.

again america had the majority of pools just 2 years ago..

in 2009 just 5-12 PEOPLE had the majority of miners.

you complaining about countries is just racism.. it doesnt matter if bitmain has a ware house in china or in america.. it really doesnt.. the location has no concern about anything..
bitmain is NOT BTCC, bitmain is not F2pool.. they are all different ip addresses with all different staff.. meaning although is not distributed well .. it definetly is not centralized.

learn the word centralized and how it differs to limited distribution... then you will learn that bitcoin is not and will not be centralized.. and the only concern is the limited distribution.. which has no bearing on physical location. because the internet has no borders.

anyone moaning about mining power of china doesnt understand the terms centralization. and the punch line of their motives to be soo angry, ends up being mor about that they personally can no longer make a million dollars from one GPU. and jealous of large investors, especially large investors that are not American

Has nothing to do with racism...replace China with Russia and I would be just as worried. Race has nothing to do with it. You are being very defensive...

[gentlemand]

Centralisation to an extent is inevitable. That's just how the world works. People will gather in groups and interests will pool. If BTC had been designed from the ground up to massively resist it every aspect of it it would probably be borderline unusable.

[franky1]

Centralisation to an extent is inevitable. That's just how the world works. People will gather in groups and interests will pool. If BTC had been designed from the ground up to massively resist it every aspect of it it would probably be borderline unusable.

centralization is 100% the hashing
51% or 33% is not centralization... its decentralized with limited distribution

centralization is not a sliding scale..
its an all or nothing.. a boolean (true or false), a switch (on or off), a binary (1 or 0).. its either centralized or decentralized..

it requires 100% mining to be centralized. so accept bitcoin is decentralized..

and then knowing its decentralized, you can then argue the spread of distribution.. because decentralization can be limited or massive

[gentlemand]

Indeed. Alright then, the building up of resources, services and computing grunt into the hands of a select few.

[franky1]

Indeed. Alright then, the building up of resources, services and computing grunt into the hands of a select few.

a miner in china has less than 35% at most..

yet last year it was england that had the worry of 51%
before that america had the worry of 51%

so again based on pools.. individually. there is no worrys in regards to "china".. just individual miners. which location should not be the main statement

next year iceland will have some noticable high hashing pools.. but again unless its near 51% for a single individual pool.. then there is no argument. and trying to merge separate pools and claim they are the same.. and then blame the country they are stationed at... is illogical

[johnyj]

I think this is only temporary, because mining is a highly competitive business, the one who can always win are those home miners without electricity cost, industry miners will always have to pay electricity cost thus have some disadvantage against home miners. When the day comes when the chip technology has reached its limit (bitcoin quickly jumped to already the most advanced process node now), then only those who can run without electricity cost will continue, at that stage mining will be distributed again, large mining farms will all run with a loss thus shutdown

[lottery248]

we still have a lot of the miners overseas, don't want centralization on mining? create your own pool.
btw a single gigahash gives a lot of good advantage to the blockchain security AFAIK, and the price per GH isn't that pricey anymore as the hashing power rises say by day.

[LiQio]

Centralisation to an extent is inevitable. That's just how the world works. People will gather in groups and interests will pool. If BTC had been designed from the ground up to massively resist it every aspect of it it would probably be borderline unusable.

centralization is 100% the hashing
51% or 33% is not centralization... its decentralized with limited distribution

centralization is not a sliding scale..
its an all or nothing.. a boolean (true or false), a switch (on or off), a binary (1 or 0).. its either centralized or decentralized..

it requires 100% mining to be centralized. so accept bitcoin is decentralized..

and then knowing its decentralized, you can then argue the spread of distribution.. because decentralization can be limited or massive

What about 85% or 99.99%? Would you call that decentralized with limited distribution as well?
Centralization is typically a process, a path. Therefore the word is so often used with adverbs of degrees.