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Author Topic: Bitcoin Mining Power Concentration And The Price Of Bitcoin  (Read 830 times)
dna_gym
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September 02, 2013, 03:09:32 PM
 #1

I wonder if that will happen in the near future.
Concentration of mining power eliminates one unique characteristic of bitcoin (distributed network).
It is inevitable because concentration gives an advantage of cost-effective mining capability.
Ultimately, the result will be extremely big mining data centers of only 3 or 4 locations.
At that time, does the price of bitcoins rely on historical or story-telling value?
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pedrog
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September 02, 2013, 05:16:28 PM
 #2

If that happens, bitcoin fails!

dna_gym
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September 03, 2013, 11:10:11 AM
 #3

If that happens, bitcoin fails!
Yes, I think that way, too.
Wondering saving bitcoin is feasible or not.
But I also think that at the stage of extreme concentration, we may have to embrace it.
And Bitcoin will be like just one of the money services operated by ordinary corporations (still all transactions might be visible to anyone, though).
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September 03, 2013, 11:12:34 AM
 #4

51% attack could happen, people will stop using btc
asic companies must sell miners to stop centralization
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September 03, 2013, 12:10:44 PM
 #5

51% attack could happen, people will stop using btc
asic companies must sell miners to stop centralization

even below costs ?
Smiley

                                 
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pedrog
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September 03, 2013, 01:11:13 PM
 #6

If that happens, bitcoin fails!
Yes, I think that way, too.
Wondering saving bitcoin is feasible or not.
But I also think that at the stage of extreme concentration, we may have to embrace it.
And Bitcoin will be like just one of the money services operated by ordinary corporations (still all transactions might be visible to anyone, though).

It's a little more complicated than that, the consensus of the network doesn't rests only on hashrate power, ever full node is a vote, so it may be impossible to control the protocol like that.

Plus it's a free market, every bitcoin user can fund mining companies through Bitfunder, BTCTC, etc, and buying mining rigs, it's a profitable business so, probably, for the near future we're going to see mining companies popping up all around the world, and the concentration of hashing power will vary a lot, like it did in the last 12 months.

dna_gym
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September 28, 2013, 12:32:47 PM
 #7

It's a little more complicated than that, the consensus of the network doesn't rests only on hashrate power, ever full node is a vote, so it may be impossible to control the protocol like that.
Ledger consensus of Bitcoin relies on voting based on hashing power (in my understanding...).
So it is a problem if large portion of hashing power is controlled by a few companies, I think.
b!z
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September 28, 2013, 02:23:42 PM
 #8

51% attack could happen, people will stop using btc
asic companies must sell miners to stop centralization

even below costs ?
Smiley
look at asic miner usb sticks price when they came out, and look at the price now.
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