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Author Topic: Consequences of mining pool controlled by a single country?  (Read 549 times)
metalbean
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July 02, 2017, 07:00:00 AM
 #1

What are the possible consequences when mining pools are controlled by a single country?

I wonder how can they affect the future of bitcoin. Say for example can they become a veto or block to future actions (and inactions).

Let's start a fact based discussion guys Smiley

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July 02, 2017, 07:57:59 AM
 #2

It's only about if the pools' owners were public figures and there could be control and/or regulation from governments.

If all of the pools were based in China but it was hard to figure out where they were, and there were many of them with 1% hashrate or so, I wouldn't see it as a problem, but if all the pools were based in China but there were only four of them and everyone knew about the owners, it would be a problem.

That said, the hash rate in those pools is still somewhat decentralised from a lot of different people, so if those people saw the regulations as a threat to Bitcoin, they could just create a few pools which don't have that problem.

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July 02, 2017, 08:04:59 AM
 #3

What are the possible consequences when mining pools are controlled by a single country?

I wonder how can they affect the future of bitcoin. Say for example can they become a veto or block to future actions (and inactions).

Let's start a fact based discussion guys Smiley


The location of the miners is not important when it comes to decide bitcoin's fate (like blocking the future actions) as not all the miners are owned by the same person. There are investors from USA, Europe, Africa and so on.

However it is not completely risk free. The biggest risk is the Chinese government. It is like putting all the eggs into the same basket. If the Chinese government suddenly makes wild decisions, every hash power there is will be affected. That's a huge risk.
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July 02, 2017, 09:17:28 AM
 #4

It's only about if the pools' owners were public figures and there could be control and/or regulation from governments.

If all of the pools were based in China but it was hard to figure out where they were, and there were many of them with 1% hashrate or so, I wouldn't see it as a problem, but if all the pools were based in China but there were only four of them and everyone knew about the owners, it would be a problem.

That said, the hash rate in those pools is still somewhat decentralised from a lot of different people, so if those people saw the regulations as a threat to Bitcoin, they could just create a few pools which don't have that problem.

Wouldn't the pools more or less decides, say, when it comes to SegWit. The pool just switch it on (or off) and the miners continue to mine. OR how dow it work? (I don't mine)

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July 02, 2017, 09:44:38 AM
 #5

It can do nothing for two reasons :

-There is no pool big enough to influence or force anything on its own.

-If miners disagree with a proposal of the pool, they will simply change of pool.

The country will just collect the fees, but that's all.

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July 02, 2017, 09:47:27 AM
 #6

What are the possible consequences when mining pools are controlled by a single country?

I wonder how can they affect the future of bitcoin. Say for example can they become a veto or block to future actions (and inactions).

Let's start a fact based discussion guys Smiley


The fact that matters more is whether the mining pools are regulated by government or some authority because until all of them move in same direction with same thinking, they can't influence the Bitcoin ecosystem no matter if they live within single geographical boundary.

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July 02, 2017, 10:30:06 AM
 #7

miners will not destroy their own business, in fact this already happened in the past with a pool contorlling 51% of the hash, but they just shifted the hashrate to other pool and everythign resolved

chinese also know this, and it's the reason why there are many big pool in china that have a levelled hashrate

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July 02, 2017, 10:51:24 AM
 #8

I guess that you are indirectly mentioning about the Chinese. Apart from the unethical competition issues, the Chinese government is also famous for its intervention in all aspects of life. There is a real chance that the government will use the mining hash power to their own advantage. Right now I can't say how they will do it, but it is a possibility.

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July 02, 2017, 01:27:54 PM
 #9

Pools get there benefits from number of miners connected to it so it would bizarre for them to set it to any single country. If you thinking making it bound to one country which will to allow other countries to connect to them then that will make them loose their value real soon. As they won’t be pumping any bitcoin or coins from their pool and getting no investments.

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July 02, 2017, 05:43:56 PM
 #10

I'm not going to talk about technical stuff since I'm not familiar with it but we can still say that what country those miners are can have an effect on bitcoins. Right now China have most of these due to cheaper parts and lower electricity. (You might think that's enough for them but no, some miners still steal electricity).

Government interference is still a risk, like what we've seen a few months ago. Having most of the mining pools in a country means any unrest there can affect prices. Not to mention if it suddenly turn hostile against bitcoin.

Hopefully it would be more widespread in the future. Norway seem to be a good candidate for mines because of the cheap geothermal power.

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July 04, 2017, 06:33:19 AM
 #11

Pools get there benefits from number of miners connected to it so it would bizarre for them to set it to any single country. If you thinking making it bound to one country which will to allow other countries to connect to them then that will make them loose their value real soon. As they won’t be pumping any bitcoin or coins from their pool and getting no investments.



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July 04, 2017, 06:53:25 AM
 #12

most of what you see are pools not mining farms. and these are different. a mining farm is the one owning the hash rate and the pool is just a server or a bunch of them where these hash powers are connecting to each other to "pool the work".
and mining is not as centralized as you may think. if you do some search (which is a bit hard because information is scattered) these miners and even pools come from all over the world. they aren't really ALL in a single country.

and as for risks like a veto that you mentioned, they can do that but you need to understand that miners are just employees not the network. they matter so little. the real important part of the network or the back bone is the nodes. they decide what to veto not the miners.

for example you can check BIP148 and 149 aka UASF or the proposal to change PoW for more information to find out why miners don't really matter. (although these proposals aren't great and i don't like them but these are solutions that can be used against any possible miners turning to the dark side Cheesy)

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July 04, 2017, 07:04:23 AM
 #13

Instead of paying the fees the miners will pay the fees to the country possessing it. But except if this is a really poor country, they do not care about so few money... You will not fund a war if this is your question Cheesy !
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July 04, 2017, 07:21:26 AM
 #14

What are the possible consequences when mining pools are controlled by a single country?

I wonder how can they affect the future of bitcoin. Say for example can they become a veto or block to future actions (and inactions).

Let's start a fact based discussion guys Smiley


If bitcoin mining is controlled by only one country then bitcoin can be affected greatly. The government in that country if they plan to manipulate the price and value of bitcoin then it will go to their plan. This will make bitcoin centralized since they have the monopoly on the production of bitcoin and due to this bitcoin crash could be near and bitcoin holders will be migrating to other altcoins which is more safer. This will end to the crash of bitcoin leaving it valueless due to that circumstance. But anyway there is no need to worry since that event is impossible to happen today and in the future.

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July 04, 2017, 10:32:35 AM
 #15

What are the possible consequences when mining pools are controlled by a single country?

I wonder how can they affect the future of bitcoin. Say for example can they become a veto or block to future actions (and inactions).

Let's start a fact based discussion guys Smiley


Not much really. They'll simply be a really big mining pool, potentially reaping in a lot of bitcoins by using their spare machines, that is all.

There is a possibility that some national governtment if they want to destroy bitcoin altogether would launch a 51% attack. But it would take them probably hundreds of millions if not billions of dollars to get enough hashpower and pay for monthly electricity bills to do this, so it is quite illogical for anyone to do this really. It is a concern, though. You can read more about it here: http://www.coindesk.com/51-attacks-real-threat-bitcoin/

If china controlled all its mining pool operations though that would be interesting because certainly there are a lot of secret bitcoin mines in china reaping the benefits of cheap electricity and natural cooling. In that case, i guess bitcoin will be negatively affected although a fork will always solve the problem.














 

 

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pinkflower
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July 04, 2017, 11:15:48 AM
 #16

miners will not destroy their own business, in fact this already happened in the past with a pool contorlling 51% of the hash, but they just shifted the hashrate to other pool and everythign resolved

chinese also know this, and it's the reason why there are many big pool in china that have a levelled hashrate

Even if they controlled 100% of the hashing power they wouldnt dare try to create any form of doubt in the system. They cant risk it failing because they have the most at stake in their own system.



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Iranus
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July 04, 2017, 04:47:48 PM
 #17

It's only about if the pools' owners were public figures and there could be control and/or regulation from governments.

If all of the pools were based in China but it was hard to figure out where they were, and there were many of them with 1% hashrate or so, I wouldn't see it as a problem, but if all the pools were based in China but there were only four of them and everyone knew about the owners, it would be a problem.

That said, the hash rate in those pools is still somewhat decentralised from a lot of different people, so if those people saw the regulations as a threat to Bitcoin, they could just create a few pools which don't have that problem.

Wouldn't the pools more or less decides, say, when it comes to SegWit. The pool just switch it on (or off) and the miners continue to mine. OR how dow it work? (I don't mine)
No.  The miners direct their hashrate wherever they want.  The pool is just what they use to keep their income steady.

They could equally switch to a pool which is big enough for them to have steady income, has equally low fees (or lower) and supports the scaling solution that they want.

Miners act in their economic interest, and pools' hashrate can move around.

In the case of a more objective situation, like governments trying to screw around with what pools can do, a large amount of the miners would agree to switch to another pool which is not being controlled.

Admittedly there's a point at which finding an unregulated pool is hard or people don't care enough about it, if pools become very controlled.  But I don't see that as a significant threat, at least in the short term.
Proton2233
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July 04, 2017, 04:54:21 PM
 #18

Why would the government want to control pools? It's not logical. You can only control what the government has a monopoly. Each miner has the right of selection pool so that the control is not possible.

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