What will happen if two mining company unites

[shield132]

Imagine two mining giants and manufacturers, for example Bitmain and Bitfury decided to unite. What will happen? If their hashrate become more than 50% of total hashrate and decided to hang on others opinion, what will happen?
Yes maybe I talk something unimaginable but would like to hear opinions from others.
And don't spam please.

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[bitperson]

Imagine two mining giants and manufacturers, for example Bitmain and Bitfury decided to unite. What will happen? If their hashrate become more than 50% of total hashrate and decided to hang on others opinion, what will happen?

Satoshi addressed this scenario on page 4 of the bitcoin whitepaper:

"If a greedy attacker is able to assemble more CPU power than all the honest nodes, he would have to choose between using it to defraud people by stealing back his payments, or using it to generate new coins. He ought to find it more profitable to play by the rules, such rules that favour him with more new coins than everyone else combined, than to undermine the system and the validity of his own wealth."

[Xavofat]

Notably, if a 51% attack occurs, the attacker(s) can't just create coins out of thin air, nor can they reverse other people's confirmed transactions.

They can reverse their own transactions, and they would probably attempt to scam Bitcoin merchants or pressure people into paying excessive fees for their transactions or something like that.  However, the value of Bitcoin would then be at risk, so it wouldn't be good for them in the long run, especially considering how much money they have invested in mining.

Also, if major mining pools joined together to do this, many miners would just switch to a new pool which isn't attacking the network.

[Xester]

If they will unite then there will be a mining monopoly. This will be problematic to the community if this new group monopolizing the mining will be greedy and will try to place new rules on the system on their favor. But if they will follow by the rules then there will be no problem since this will mean more cheaper and faster transactions. But there is still danger if they will not abide by Satoshis rules.

[stompix]

Imagine two mining giants and manufacturers, for example Bitmain and Bitfury decided to unite. What will happen? If their hashrate become more than 50% of total hashrate and decided to hang on others opinion, what will happen?
Yes maybe I talk something unimaginable but would like to hear opinions from others.
And don't spam please.

That strategy would mean killing the goose that is laying the golden eggs.
The initial reaction on the markets will be probably enough to make them reconsider that move.

Secondary, it's not certain that they do really have more than 51% of the hashrate.
Don't forget that although in theory those pools come close to 60% there are a lot of private miners that are hashing there, even from outside China, that might switch to a different pool.

[shield132]

Imagine two mining giants and manufacturers, for example Bitmain and Bitfury decided to unite. What will happen? If their hashrate become more than 50% of total hashrate and decided to hang on others opinion, what will happen?
Yes maybe I talk something unimaginable but would like to hear opinions from others.
And don't spam please.

That strategy would mean killing the goose that is laying the golden eggs.
The initial reaction on the markets will be probably enough to make them reconsider that move.

Secondary, it's not certain that they do really have more than 51% of the hashrate.
Don't forget that although in theory those pools come close to 60% there are a lot of private miners that are hashing there, even from outside China, that might switch to a different pool.

Yeah that may really means killing of goose that lays the golden eggs but don't you know that bitmain is going to release asic miners for ethereum? That will destroy GPU mining and it means killing of geese and it's golds together.
I know what's reality and what's not. Because of that I wan to turn some fantazy and and imagine situation where they share 60% of whole hashrate and no private miner is going to leave them, they are as faithful as ever.

[iconternal]

If two big quarries unite I think that will make it even better and fierce for the mining power, and I think it's very good to do.

[gentlemand]

I'm certain Bitmain has controlled well over 51% at certain points. They no doubt have proxy pools and mining operations kept quiet. There's enough ill will against them that in the case of an attack freezing them out would be pretty much the only thing every single person in Bitcoin could agree on.

They may want to monopolise everything, but they also know their monopoly relies on the rest of the community. They don't operate in a vacuum.

[rommelzkie]

If this 51% attack happened and created BIG FUD for bitcoin blockchain security. Then there is a higher chance that the current developers of bitcoin will switch into other type of verification like Proof of Stake.

[Goodday]

bitcoin Some people have their own miners' engines to mine while others join an open pit pool where they combine their efforts to increase their chances of getting bitcoin

[WaffleMaster]

There's news that even big companies like Nvidia and AMD will start developing Bitcoin/ETH miners just to try and sooth the GPU problem in the market and also bite into Bitmain's billion dollar industry. If it came down to a legitimate attack contesting Bitcoin I would believe there'd be a hardfork from whatever block there was a big problem on. Sure, lots of money would be lost, Bitcoin would crash in price, but ultimately it would become more decentralized and those companies would not be able to do so again.

[BountyX]

Imagine two mining giants and manufacturers, for example Bitmain and Bitfury decided to unite. What will happen? If their hashrate become more than 50% of total hashrate and decided to hang on others opinion, what will happen?

Satoshi addressed this scenario on page 4 of the bitcoin whitepaper:

"If a greedy attacker is able to assemble more CPU power than all the honest nodes, he would have to choose between using it to defraud people by stealing back his payments, or using it to generate new coins. He ought to find it more profitable to play by the rules, such rules that favour him with more new coins than everyone else combined, than to undermine the system and the validity of his own wealth."

This is my same line of thought. These mining companies are so unbelievably rich just because they "own" Bitcoin, but in the very moment they would play dirty with it they would kill their Goose That Lays the Golden Eggs.

[forumsehat]

It would be great if two big companies come together and that will make the company stronger in managing, and certainly will get greater results.

[franky1]

back in satoshi's day (cpu mining) the concept was:

if a miner could out pace other miners then that miner can then make some nasty changes. but that concept was flawed because it would need the community as a whole to accept the block as valid and not reject it.
which is where the concept was extended to explain that if other nodes who CPU mined also had the same new code and over many blocks there was a clear majority of which blocks were accepted over all. then that majority became the main chain. and most users would need to react and either update their node to join.. or if the new rule was nasty. not upgrade and just treat it as an altoin of more hashpower but less real world utility(not let merchants adopt nasty new rule)

same thing for GPU pool mining. even if many miners grouped together to out hash the rest of the community. the main payment services (coinbase/merchants/bitpay/exchanges) needed to also have the code for the new rules otherwise the blocks were deemed invalid and pools couldnt spend their rewards with their favourite merchants/services

the worse to occur was high reject/orphan rates which eventually gets the rule breaking pool IP banned and thus they only communicate with their like minded peers.thus making their own altcoin. the community that sticks to the old rules may suffer a delay in the average block time until difficulty adjusted

now that mining is no longer '1 node 1 miner' because ASICS dont hold the blockchain and nodes dont themselves mine directly. pools really do need to persuade the community to download a new node client version, with the new rules for the blocks to be acceptable.

this is why running a node is important. pools could make blocks of 200coin reward. but if no one in the main communuty accept such block. a pool cant really spend that block and thus they are wasting electric and ASIC hashtime making blocks the community (metaphorically) throw in the trash within 2 seconds

this leads to the 'rule breaking' pool to decide to either carry on with their altcoin and then develop exchange/paymnt service relations with merchants to accept their new coin network.. or stop mining the new rule (kiling the alt) and going back to mining the old rules just to atleast have the normal block rewards accepted by merchants, to cover pools mining costs

[Wind_FURY]

OP, they can be a threat but that is not happening. Miners know that the community has the power to do a user activated hard fork to "brick" their Asics.

This brings back me to Cobra's blog. Everyone should read it whether you agree or disagree.

https://medium.com/@CobraBitcoin/an-open-letter-to-the-bitcoin-community-to-change-the-proof-of-work-algorithm-12a6545c20d0

[vinasky]

If they capture more than 50% of the coins, they will control the market
but it is not exactly 

[franky1]

OP, they can be a threat but that is not happening. Miners know that the community has the power to do a user activated hard fork to "brick" their Asics.

This brings back me to Cobra's blog. Everyone should read it whether you agree or disagree.

https://medium.com/@CobraBitcoin/an-open-letter-to-the-bitcoin-community-to-change-the-proof-of-work-algorithm-12a6545c20d0

trying to be unbiased. cobra's opinion is flawed in many ways.
1. by separating mining from the nodes(2013) actually splits the point of failure. because instead of core changing something and the whole community moving. the pools have to agree/disagree. this made core (in 2016) not fully tyranical because core cant control the mining internally via code. this is why core did not get segwit activated in december 2016 because they only had ~30% of the community vote.

2. as my previous post said pools cant simply change the rules and mess with bitcoin. because the nodes/community have to agree. but nodes too shouldnt have the power to change the rules without the pools or node users agreeing. which core abused by making opposition/abstainers shift to a altcoin to unanimously get their fudged 95% in 2017

3. this is where we do actually need multiple full nodes made by different teams, which can use consensus to make agreements on positive changes. and not allow negative changes, rather than just 1 team acting like tyrants avoiding consensus by throwing opposition into altcoins so they always win the vote.

anyway the other major flaw of cobra's thinking is this:
4. if a mining algo change did occur. in a fair and multi team consensus agreement... it would still not help the little guys get on the profit ladder.. big mining companies (yes there are many more than just bitmain, although cobra wont admit that) these mining companies will just pool together many nodes and within a short time be back at the top of the ladder again.
EG
if it was a PoS.. lets say 100k individuals staked. .. 20 pools could simply make 10k stake each(200k) 3.3% of the time a pool get a block and 0.00033% of the time a individual wins a block
EG
if it was a PoH(harddrive).. lets say 100k individuals had nodes. .. 20 pools could simply buy 10k raspberry Pi's each(200k) 3.3% of the time a pool get a block and 0.00033% of the time a individual wins a block

so no matter what within hours/days weeks. there will always be a way to 'pool' resources

to me i am not worried about pools. as my previous post pointed out. the real point of failure is the lack of diversity in node teams

[Wind_FURY]

OP, they can be a threat but that is not happening. Miners know that the community has the power to do a user activated hard fork to "brick" their Asics.

This brings back me to Cobra's blog. Everyone should read it whether you agree or disagree.

https://medium.com/@CobraBitcoin/an-open-letter-to-the-bitcoin-community-to-change-the-proof-of-work-algorithm-12a6545c20d0

trying to be unbiased. cobra's opinion is flawed in many ways.
1. by separating mining from the nodes(2013) actually splits the point of failure. because instead of core changing something and the whole community moving. the pools have to agree/disagree. this made core (in 2016) not fully tyranical because core cant control the mining internally via code. this is why core did not get segwit activated in december 2016 because they only had ~30% of the community vote.

You mean 30% miner vote not community vote, correct? I believe the USAF changed all that. Some people would say it was S2X, but that is highly arguable. From both sides, to be fair and unbiased.

2. as my previous post said pools cant simply change the rules and mess with bitcoin. because the nodes/community have to agree. but nodes too shouldnt have the power to change the rules without the pools or node users agreeing. which core abused by making opposition/abstainers shift to a altcoin to unanimously get their fudged 95% in 2017

Core abused? Can you explain more? You do not mean the USAF, do you?

3. this is where we do actually need multiple full nodes made by different teams, which can use consensus to make agreements on positive changes. and not allow negative changes, rather than just 1 team acting like tyrants avoiding consensus by throwing opposition into altcoins so they always win the vote.

We cannot control the people on what implementation they want to run. You can blame the community for wanting to run Core's software, not the developers.

anyway the other major flaw of cobra's thinking is this:
4. if a mining algo change did occur. in a fair and multi team consensus agreement... it would still not help the little guys get on the profit ladder.. big mining companies (yes there are many more than just bitmain, although cobra wont admit that) these mining companies will just pool together many nodes and within a short time be back at the top of the ladder again.
EG
if it was a PoS.. lets say 100k individuals staked. .. 20 pools could simply make 10k stake each(200k) 3.3% of the time a pool get a block and 0.00033% of the time a individual wins a block
EG
if it was a PoH(harddrive).. lets say 100k individuals had nodes. .. 20 pools could simply buy 10k raspberry Pi's each(200k) 3.3% of the time a pool get a block and 0.00033% of the time a individual wins a block

so no matter what within hours/days weeks. there will always be a way to 'pool' resources

Peter Todd also tweeted that there was a Greg Maxwell talk where Greg said that changing mining algorithm would be to the advantage of the Asic companies because they would always be the first to put out new Asic mining hardware to the market.

to me i am not worried about pools. as my previous post pointed out. the real point of failure is the lack of diversity in node teams

Maybe because Core is undeniably the best? Although I would like to see another team try to be the best.

[jonkibo]

maybe the the currency of crypto is being at high rate so that it is good for us to use bitcoin or other crypto site or wallet.