Hashers are not miners, and Bitcoin network doesn't need them.

[Ekkio]

Bitcoin network follows bitcoin protocol and any message sent to bitcoin node has to follow strict rules that enforced by cryptography. If a bitcoin node has a hashing power attached to it, then it's not only verifies and relays new blocks and transactions but also creates new blocks and forces protocol rules into blockchain. So it's those bitcoin nodes that have hashing power and knowledge about protocol govern Bitcoin network and make it secure.

The basic security premises of bitcoin concept was that there would be decentralized network of bitcoin nodes each with small share of hashing power to ensure that there is no single person or small group who can control Bitcoin network. If it's not true then quite a lot of bad things could happen, here is the link with some examples of what kind of new rules can be enforced if someone have majority of hashing power under control, this is also known as soft-fork, to name a few: shorter block time interval, coin divisibility, native color coin support or require AML registration for every address and turn it into surveillance coin.

Bitcoin value comes from it's utility, it is much easier to store and transfer ownership of value by using Bitcoin network. There is a one way relationship between Bitcoin network value and amount of hashing power, the more value Bitcoin network has the more amount of hashing power would be bought by miners. But the opposite is not true, if tomorrow Bitcoin hashing power drop by two nothing bad would happen, after maximum of 2014 blocks network hashing difficulty would readjust, it would be twice easier to find a block and everything would go back to normal, bitcoin market price would not drop either.

People who create bitcoin infrastructure, provide services and innovate are those who make Bitcoin network useful and increase it's value, but via inflation hashers leech that value out of Bitcoin, in exchange they were suppose to help to enforce Bitcoin network rules in decentralized manner. That premises was broken by pools, no longer hashers have to run bitcoin software and govern Bitcoin network instead they just point their hashing power to pools and delegate their enforcement power to small group of people, and that makes that hashing power useless in terms of securing Bitcoin network.

Concerns about pools and how they erode bitcoin security were first raised more than two years ago when Deepbit acquired significant share of bitcoin hash power, but most people agreed that in case a pool would be used for nefarious actions hashers would just point to another more honest pool. The reality didn't match those expectations, Ghash.io was used for double spending. And yet two months after the incident their hashing power share was 15% bigger, and it's only dropped after they stopped accepting new hashers. This is happening because hashers do not care about Bitcoin network security and from that point of view they are evil.

Hashers are not miners, they just hash previous block looking for magic number, they don't care where this block came from or how it was created. Bitcoin network doesn't need hashers, they are parasites who are leeching value from Bitcoin without providing anything in return.

[Holliday]

That is a lot of explanation about the problem. What is the solution?

How do you convince "hashers", who just sell hashing power to a pool, to become "miners", who submit blocks which they've created themselves?

[tvbcof]

That is a lot of explanation about the problem. What is the solution?
...

I'd like to see the community consider the issue (or set of issues) to be an architectural flaw and over time migrate to an implementation which corrects the flaws.

I doubt seriously that it would happen however.  Many do not consider these things to be flaws (clustered around the Bitcoin Foundation as I see it) and the mining contingent already has more than enough clout to nuke any foundational shifts they don't agree with.

Not only that but Bitcoin is mature enough now such that it would be extremely difficult to make such changes even if everyone was on-board.

[Holliday]

That is a lot of explanation about the problem. What is the solution?
...

...mining contingent already has more than enough clout to nuke any foundational shifts they don't agree with.

I have to disagree. Those holding bitcoins (which doesn't necessarily coincide with those mining them) have the clout. Miners forcing changes holders do not want, or not embracing changes holders do want, will find themselves mining worthless coins.

[Akka]

An Issue really is that there only is a financial incentive to submit hashes and not to provide the additional infrastructure Bitcoin needs, Bandwidth and space to store the Blockchain -Y run a full node.

In the very beginning only solo mining was possible and every Hasher was a real miner who crated blocks and verified transactions. This changed with the development of pooled mining.

I wonder if the possibility of pooled mining is just something Satoshi didn't think about.

Also, for a Noob you have a pretty good understanding 

[Gabi]

That is a lot of explanation about the problem. What is the solution?

How do you convince "hashers", who just sell hashing power to a pool, to become "miners", who submit blocks which they've created themselves?

By telling them to use p2pool. You have the advantages of a pool but no "pool owner" that can mess with the network.

[Holliday]

An Issue really is that there only is a financial incentive to submit hashes and not to provide the additional infrastructure Bitcoin needs, Bandwidth and space to store the Blockchain -Y run a full node.

Well... yes and no.

Short term: There is no financial incentive to be a "miner". Just submit hashes to a pool and get paid.

Long term: If the network is successfully attacked thanks to consolidation of hashing power into the hands of a malicious individual or group, and confidence in the currency is lost, no one will be getting paid for hashing or mining.

Unfortunately, it seems most "hashers" are short sighted.

Of course, if the consolidation never result in an attack, it doesn't much matter.

[Holliday]

That is a lot of explanation about the problem. What is the solution?

How do you convince "hashers", who just sell hashing power to a pool, to become "miners", who submit blocks which they've created themselves?

By telling them to use p2pool. You have the advantages of a pool but no "pool owner" that can mess with the network.

I've been a proponent of P2Pool from the start. I've advertised it. I've donated to forrestv. I've donated to the P2Pool miners. I've mined there myself. I've asked for the community to donate. I've asked for the miners to switch. I've written a beginner's guide (probably outdated by now). Yet, it's still a small part of the network total. Besides it does have some issues of it's own. When your hash rate is small enough that you don't find a share during the share chain window, you experience extreme variance beyond that of simply being in a small pool (hashers obviously hate extreme variance which is why we have huge pools to begin with).

What I'm saying is, "telling them to use P2Pool" isn't a solution because people don't listen.

[tvbcof]

...
Of course, if the consolidation never result in an attack, it doesn't much matter.

And I'll have to disagree with this.

In my case, I consider Bitcoin's value in solving my potential problems to be directly proportional to it's potential to thwart state level attack.  This means decentralization.

As centralization occurs or seems inevitable, my interest in the solution from both a financial and political point of view diminishes.  Consequently my liquidation strategy changes.  Of course it might be argued that it is a good thing when 'hoarders' let go their BTC, but the effects will be short term and it could probably be considered something of an omen and/or harbinger.

It is critical to note that my thoughts on this are completely forward thinking.  I'll agree that nothing bad things have not happened yet, and concede that it could be some time before they do (if ever.)  That is irrelevant to me.  I speculated on Bitcoin some time ago with an eye toward the future and the future continues to be where my full attention is directed.

[Colin Miner]

no longer hashers have to run bitcoin software and govern Bitcoin network instead they just point their hashing power to pools and delegate their enforcement power to small group of people, and that makes that hashing power useless in terms of securing Bitcoin network.

Yes, I see your point. I agree. Miners are trying to get the best reward for their work, pools can help achieve this. But it was bitcoin that offered this reward and encourage miners to chase it.

[QuestionAuthority]

I completely agree with you OP. Hashers, as you call them, are just another example of profit mongers that are using Bitcoin to reap whatever short term reward there is out of Bitcoin and convert it to fiat. That's Bitcoins biggest problem as far as I can tell. This community is plagued by them and even has devs that seem to fit in that category. I've always seen pool sysops as profit mongers with the exception of a couple of them. Pool operators don't help the network as much as they help themselves to network power and control. If P2Pool was implemented before the pools took control it could have captured and kept majority control of the network because individuals would have been required to learn its use to reap the reward. Sadly, it's now too late for any meaningful change.

[Holliday]

...
Of course, if the consolidation never result in an attack, it doesn't much matter.

And I'll have to disagree with this.

In my case, I consider Bitcoin's value in solving my potential problems to be directly proportional to it's potential to thwart state level attack.  This means decentralization.

As centralization occurs or seems inevitable, my interest in the solution from both a financial and political point of view diminishes.  Consequently my liquidation strategy changes.  Of course it might be argued that it is a good thing when 'hoarders' let go their BTC, but the effects will be short term and it could probably be considered something of an omen and/or harbinger.

It is critical to note that my thoughts on this are completely forward thinking.  I'll agree that nothing bad things have not happened yet, and concede that it could be some time before they do (if ever.)  That is irrelevant to me.  I speculated on Bitcoin some time ago with an eye toward the future and the future continues to be where my full attention is directed.

Well... that comment was my way of making fun of those who would make light of the situation, so I agree with your disagreement. ;p

A centralized Bitcoin is worthless to me. Do you hear that hashers?

[whtchocla7e]

Bitcoin is open for anyone to join. There's money to be made from Bitcoin. People flock in to turn a buck just like dogs follow the scent of urine. That's just the natural order of things. People design software with good intentions but good intentions don't count for nothing in the end and some things just can't be foreseen.

[Ekkio]

no longer hashers have to run bitcoin software and govern Bitcoin network instead they just point their hashing power to pools and delegate their enforcement power to small group of people, and that makes that hashing power useless in terms of securing Bitcoin network.

Yes, I see your point. I agree. Miners are trying to get the best reward for their work, pools can help achieve this. But it was bitcoin that offered this reward and encourage miners to chase it.

There is a clear distinction between Miners and Hashers. Miners verify validity of transactions and blocks according to Bitcoin protocol but Hashers do no such thing they are happy to hash anything while looking for magic number. I would like people to understand it because that will help to get the message out.

[smooth]

p2pool is the best solution we have right now. Working to promote it and improve it (for example with prettier graphs that miners like) is the best thing that can be done short term.

It is important to recognize that not everyone needs to adopt p2pool to help the problem a lot, or even solve it entirely. If p2pool hypothetically made up 50% of the network hash rate, then no other pool (or even a group of them secretly colluding) could possibly ever get over 50%. In fact every incremental gain made my p2pool makes the centralized (i.e. dangerous) pools smaller. p2pool at 10% would be a huge step (currently at 2%).

tldr: support p2pool.

One last thing.  It is entirely reasonable for small hobby miners to just solo mine. Yes it is high risk but people spend good money on lottery tickets, so no reason to not take shot on getting a full block (roughly 20K USD equivalent) if you are doing it for fun and not a business with bills to pay. People need to understand (and the OP deserves credit for trying to explain it) that this is not like folding@home or some other grid where accumulating numbers on a score ranking is the goal for a participant. If you want to help the network it is far better to solo mine.

[Ekkio]

I completely agree with you OP. Hashers, as you call them, are just another example of profit mongers that are using Bitcoin to reap whatever short term reward there is out of Bitcoin and convert it to fiat. That's Bitcoins biggest problem as far as I can tell. This community is plagued by them and even has devs that seem to fit in that category. I've always seen pool sysops as profit mongers with the exception of a couple of them. Pool operators don't help the network as much as they help themselves to network power and control. If P2Pool was implemented before the pools took control it could have captured and kept majority control of the network because individuals would have been required to learn its use to reap the reward. Sadly, it's now too late for any meaningful change.

Thank you for your support, I think if we can explain the problem and why it is important, then it would be possible to convert Hashers to Miners.

[QuestionAuthority]

I completely agree with you OP. Hashers, as you call them, are just another example of profit mongers that are using Bitcoin to reap whatever short term reward there is out of Bitcoin and convert it to fiat. That's Bitcoins biggest problem as far as I can tell. This community is plagued by them and even has devs that seem to fit in that category. I've always seen pool sysops as profit mongers with the exception of a couple of them. Pool operators don't help the network as much as they help themselves to network power and control. If P2Pool was implemented before the pools took control it could have captured and kept majority control of the network because individuals would have been required to learn its use to reap the reward. Sadly, it's now too late for any meaningful change.

Thank you for your support, I think if we can explain the problem and why it is important, then it would be possible to convert Hashers to Miners.

That's a very astute summary of an ongoing issue for a newbie. You've either been watching and reading quietly for years or you're a sock of someone that knows what's going on. I don't mind though. I've done that too. Sometimes you want to cheer and say how great things are going and at other times you want to tell the old timers here exactly how far they've wedged their head up their ass. Multiple accounts work well for that. 

[zemario]

Simply put,
you cannot expect people to solo mine because at the current difficulty, most of the ppl will never close any block and hence won't ever cash in any coins.
Keeping the difficulty constant and half of the reward  instead could maybe be more suited for an ecosystem with a lower hasher/miner ratio. I think this is the obvious solution (if only it would be one).
But of course, all in all, the problem that bitcoin solves is:

How do you enforce a set of rules on a p2p network and make sure noone changes it at will?

So I'm not sure what most people are thinking of when they talk about changes in the protocol.

That said, and ignore the copycats, bitcoin is the first real experiment of its kind. Maybe in the future, a more advanced/robust crypto currency could displace bitcoin, maybe one that builds on top of bitcoin's distribution of wealth.
 
EDIT: i haven't look into p2p as it is quite new. My first impression is that most are just blindingly assuming it will solve all problems. Could anyone explain in a couple of paragraphs how it works?

[jaked]

You're trying to demoralize a perfectly legitimate behavior on part of the "hashers", but this only diverts the discussion from the real issue: the protocol itself.
The protocol was designed to encourage profit seekers, or "hashers", to.. hash.

Satoshi didn't foresee this centralization behavior.
But I can guarantee you, that if he did, he wouldn't seek a moralizing argument, but a technical solution.
The whole point of Bitcoin is to be moral-agnostic, and trust-free. It's a cryptographically secured public ledger, not a charity fund or a society equalizer.

Calling names is pointless. We need technical solutions, not moral preaching.

[smooth]

you cannot expect people to solo mine because at the current difficulty, most of the ppl will never close any block and hence won't ever cash in any coins.
displace bitcoin, maybe one that builds on top of bitcoin's distribution of wealth.

Sell it as a lottery or raffle. The current block size of about 20K USD is definitely attractive to a certain audience. In fact there is an audience for these prizes at pretty much any size, so this does scale. Sure most people get no coins, but imagine the fun of checking your miner and finding out that you mined/won the big jackpot.

Of course there is also an audience for wanting to see $0.17 worth of BTC "mined" each day slow and steady via a pool. But the larger the population of lottery players, the less significant the pools become. The world has shown conclusively that lotteries can organize billions of dollars worth of resources across millions of people, which is just what Bitcoin mining is supposed to do.