Silvio Micali: Satoshi never imagined industrial-scale mining

[vit05]

Silvio Micali is the founder of Algorand Blockchain. Is he right about this claim?

As he explained, when you put incentives out there, people learn how to use those incentives for making money in ways that are nearly impossible to predict. He pointed to bitcoin as a prime example, saying its creator probably never imagined bitcoin's incentive structure would lead to industrial-scale mining pools.

Coindesk



Satoshi wrote this still in 2008:

At first, most users would run network nodes, but as the
network grows beyond a certain point, it would be left more and more to
specialists with server farms of specialized hardware. A server farm would
only need to have one node on the network and the rest of the LAN connects with
that one node.

https://bitcointalk.org/index.php?topic=1458.msg16906#msg16906

ribuck's description is spot on.

Pool operators can modify their getwork to take one additional parameter, the address to send your share to.

The easy way for the pool operator would be to wait until the next block is found and divy it up proportionally as:
user's near-hits/total near-hits from everyone

That would be easier and safer to start up.  It also has the advantage that multiple hits from the same user can be combined into one transaction.  A lot of your hits will usually be from the same people.

The instant gratification way would be to pay a fixed amount for each near-hit immediately, and the operator takes the risk from randomness of having more or less near-hits before a block is found.

Either way, the user who submits the hit that solves the block should get an extra amount off the top, like 10 BTC.

New users wouldn't really even need the Bitcoin software.  They could download a miner, create an account on mtgox or mybitcoin, enter their deposit address into the miner and point it at anyone's pool server.  When the miner says it found something, a while later a few coins show up in their account.

Miner writers better make sure they never false-positive near-hits.  Users will depend on that to check if the pool operator is cheating them.  If the miner wrongly says it found something, users will look in their account, not find anything, and get mad at the pool operator.

https://bitcointalk.org/index.php?topic=1976.msg25119#msg25119

[mdayonliner]

saying its creator probably never imagined bitcoin's incentive structure would lead to industrial-scale mining pools.

I kinda feel  the same.

Hashrate Distribution...



Sometimes it scars me thinking if they plan for a 51% attack. All you need is a syndicating in between few big mining farms. I am not sure if is is possible practically.

[aliashraf]

Actually, Satoshi did predict industrial scale mining he failed predicting pools because he was unaware of the amount of pressure toward pooling in his implementation of PoW based on the worst principle ever, winner-takes-all.

Industrial scale mining farms are not the threat, mining pools are. Satoshi disappeared in the same time that users were starting to complain about their variance and slush was kick starting his pool. He made just one comment (that op has quoted) regarding this issue which is very disappointing by the way as he is just talking about simple technical issues and avoids more sophisticated strategic implications of the proposal. He disappeared few days later, forever.

So, if it is about whether satoshi was kind of a god and predicted everything or not, the answer would be a big NO, Satoshi Nakamoto was an ordinary human being who made a lot of big and small mistakes designing and implementing bitcoin and this is why we should improve it instead of  being stuck with a legend.

Cyberspace does not belong to legends (neither original ones like Satoshi nor the fake ones like Vitalik Buterin) it belongs to hard working, committed  mathematicians, developers, hackers  and advocates all over the planet.

But, for the record, failing to predict the industrial scale mining is not in his failure list anyway.

[bitmover]

Sometimes it scars me thinking if they plan for a 51% attack. All you need is a syndicating in between few big mining farms. I am not sure if is is possible practically.

I doubt they would plan a 51%, because the price would drop and they would lose their investment. Those pools are interested in bitcoin success.

Industrial scale mining farms are not the threat, mining pools are. Satoshi disappeared in the same time that users were starting to complain about their variance and slush was kick starting his pool. He made just one comment (that op has quoted) regarding this issue which is very disappointing by the way as he is just talking about simple technical issues and avoids more sophisticated strategic implications of the proposal. He disappeared few days later, forever.

So, if it is about whether satoshi was kind of a god and predicted everything or not, the answer would be a big NO, Satoshi Nakamoto was an ordinary human being who made a lot of big and small mistakes designing and implementing bitcoin and this is why we should improve it instead of  being stuck with a legend.

Satoshi was a genius, because he knew when to disappear.
This is not satoshi's blockchain. Satoshi's existence would make bitcoin centralized on him.

As ethereum is centralized on vitalik Buterin. Vitalik's blockchain.

The solution to those design issues with btc will come from the community. There are some proposals and one day there will be a solution.

Sometime ago I read something about Changing proof of work in a way that asic hardware would become less effective. I believe there are many interesting proposals out there and soon community will have a consensus about one.

[aliashraf]

Industrial scale mining farms are not the threat, mining pools are. Satoshi disappeared in the same time that users were starting to complain about their variance and slush was kick starting his pool. He made just one comment (that op has quoted) regarding this issue which is very disappointing by the way as he is just talking about simple technical issues and avoids more sophisticated strategic implications of the proposal. He disappeared few days later, forever.

So, if it is about whether satoshi was kind of a god and predicted everything or not, the answer would be a big NO, Satoshi Nakamoto was an ordinary human being who made a lot of big and small mistakes designing and implementing bitcoin and this is why we should improve it instead of  being stuck with a legend.

The solution to those design issues with btc will come from the community. There are some proposals and one day there will be a solution.

Well, check this one : Proof of contributive Work it's my work by the way.

[BitBustah]

The 51% attack fear mongering by giant mining corporations is unfounded.  if this happened the miners would take a massive financial hit and bitcoin would crash.  It would make no sense to do it  the negatives far outweigh the positives.  The only way is if some mad man, similar to the joker, just wants to watch the world burn and doesn't care about the money.

[mdayonliner]

The 51% attack fear mongering by giant mining corporations is unfounded.  if this happened the miners would take a massive financial hit and bitcoin would crash.  It would make no sense to do it  the negatives far outweigh the positives.  The only way is if some mad man, similar to the joker, just wants to watch the world burn and doesn't care about the money.

How about those forces who do not want the banking system to be decentralized? They don't care about value of bitcoin coz they have the printed money.

I doubt they would plan a 51%, because the price would drop and they would lose their investment. Those pools are interested in bitcoin success.

This logic make sense.

[vit05]

Cyberspace does not belong to legends

For context, Slush Pool emerged in November 2010. It was an independent project, but created within the community.
I would say that the problem is when legends center the whole decision-making process. But Bitcoin always had several people contributing in a decentralized way, several projects arose and many thanks to the economic incentives.

The great advantage of truly decentralized projects is that no matter how much a legend is admired, because it has no coercive power to forbid parallel projects or forks, the project can continue independent of its will.

Ie financial incentives hinder future predictions.

It's totally different from what happens with some projects like EOS or TRON.

[cellard]

The 51% attack fear mongering by giant mining corporations is unfounded.  if this happened the miners would take a massive financial hit and bitcoin would crash.  It would make no sense to do it  the negatives far outweigh the positives.  The only way is if some mad man, similar to the joker, just wants to watch the world burn and doesn't care about the money.

How about those forces who do not want the banking system to be decentralized? They don't care about value of bitcoin coz they have the printed money.

I doubt they would plan a 51%, because the price would drop and they would lose their investment. Those pools are interested in bitcoin success.

This logic make sense.

The costs of a sustained 51% attack are too high at this point. Can the government-wall street-banking cartel-whatever you want to call it afford it? probably, they can print a lot of money and do it, but at what cost? can they really print a bunch billions unnoticed and start attacking?

I think the 51% attack route is discarded by now, their route now is to attack bitcoin from within, create drama, create misinformation, create forks and support these forks.. political warfare.

[aliashraf]

Cyberspace does not belong to legends

For context, Slush Pool emerged in November 2010. It was an independent project, but created within the community.

Slush and generally pool development projects are not part of the bitcoin development history. They are parasites that naturally grow in any ecosystem and should have been rejected as a solution to variance dilemma of bitcoin mining.

Satoshi was not ready for this: Either he lacked the vision to understand the threat or he had become too paranoid about Feds.

Plus, I don't think it would be a good suggestion to consider second layer projects of any kind as a part of the bitcoin development generally. They are always suspected to yield a definite centralization threat even if they are open-source and even if they are contributed by a number of bitcoin devs (like LN) now do the math about a closed privately designed software by some opportunist like slush pool. The guy just abused the community in his own best interests, a community abandoned by its paranoid leader.

[hatshepsut93]

The 51% attack fear mongering by giant mining corporations is unfounded.  if this happened the miners would take a massive financial hit and bitcoin would crash.  It would make no sense to do it  the negatives far outweigh the positives.  The only way is if some mad man, similar to the joker, just wants to watch the world burn and doesn't care about the money.

How about those forces who do not want the banking system to be decentralized? They don't care about value of bitcoin coz they have the printed money.

Printing money is not equal to infinite resources, you can only abuse it so much before the whole economy crumbles. And to attack Bitcoin you have to constantly burn electricity, and the only thing you really achieve is denial of service that has no lasting network effects. So, a 51% attack would only cause some short-term panic and inconvenience, which is hardly enough to kill Bitcoin. Also, with Lightning you can keep using Bitcoin even if the blockchain is being attacked by mining empty blocks, because you only need on-chain transactions to open and close channels which shouldn't be needed often.

[cellard]

The 51% attack fear mongering by giant mining corporations is unfounded.  if this happened the miners would take a massive financial hit and bitcoin would crash.  It would make no sense to do it  the negatives far outweigh the positives.  The only way is if some mad man, similar to the joker, just wants to watch the world burn and doesn't care about the money.

How about those forces who do not want the banking system to be decentralized? They don't care about value of bitcoin coz they have the printed money.

Printing money is not equal to infinite resources, you can only abuse it so much before the whole economy crumbles. And to attack Bitcoin you have to constantly burn electricity, and the only thing you really achieve is denial of service that has no lasting network effects. So, a 51% attack would only cause some short-term panic and inconvenience, which is hardly enough to kill Bitcoin. Also, with Lightning you can keep using Bitcoin even if the blockchain is being attacked by mining empty blocks, because you only need on-chain transactions to open and close channels which shouldn't be needed often.

Exactly, I don't get why some people think that just because you have a machine that prints dolla-dolla bills, you are now suddenly "printing infinite electricity" as well. You can allocate resources via your printed money up to a point, at the end of the day resources are scarce, and it would be noticeable that the government is fucking around too much.

I believe they are aware of this already. So they can only hope to bribe miners to perform an 51%, but as it has been said, they are attacking their own cash cow, they are shooting themselves in their own feet, pretty dumb to accept the bribe when you can sit on your mining machines and keep making money.

So their angles of attack are: Supporting forks, manipulation of public opinion and bribing miners to support their forks.