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February 01, 2019, 03:23:40 PM |
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While reading articles there were two paragraphs that questioned me Proof of work was only ever a way to take central control out of the Bitcoin system. But decentralisation is hard – centralisation is always more efficient. So decentralisation failed by 2014, when mining had recentralised to a few large pools. Remember the 51% apocalypse in 2014?
Bitmain has controlled up to 50% of the mining (across multiple pools), makes 80% of the ASICs, and already messed with the BTC hash rate in late 2017. Nobody cared much at the time, because the crypto bubble was in the throes of full “number go up” on the exchanges.
The point of cryptocurrency was decentralisation. If you remove that, the only question left is “why on earth are you bothering with all of this.”
(There’s arguably a hypothetical use case for a centrally-administered blockchain-like currency, such as XRP, which then doesn’t have to bother with proof of work. In that case, we’re still waiting for non-hypothetical production systems that move beyond pilot stage.) https://www.theblockcrypto.com/2019/01/31/the-buttcoin-standard-the-problem-with-bitcoin/ It turns out that crypto communities make a lot of noise about the value of decentralization, but when you look under the covers, the entire coin comes down to a very small number of participants. For instance, Bitcoin’s blockchain is constructed by 19 mining entities, that’s it. Ethereum’s blockchain is constructed by 11. These are tiny numbers. While it’s true that each and every one of these mining entities consists of multiple sub-players, the fact is that they have come together under a unified entity and are operating together as one big business unit. There is a narrative that mining pools are internally decentralized, that there is invisible decentralization in these systems.
That argument turns out to be complete bunk. It’s like the emperor’s new clothes: they claim that there is something there that no one can see or measure or touch. The bottom line is participants in a mining pool are typically in no position to question what a pool operator is doing. They are in no position to detect when a pool operator launches an attack. So this narrative that these entities are internally decentralized doesn’t hold water. They might not be incorporated, but they are very much one group of people operating for a common cause. https://www.longhash.com/news/interview-with-emin-gun-sirer-there-are-no-truly-decentralized-coinsSure centralization is easier that decentralization but does it mean it's impossible? Hell no, I am confident we can still build something decentralized, we can't be perfect within a decade, that's something taking a lot of more years. I am interested in a debate with people on this subject and the author's opinion
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February 01, 2019, 03:44:47 PM |
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I think those 2 articles are missing out something in them. Bitcoin and most of these cryptocurrencies haven't really been adopted that much by people yet. I must admit that the rate of adoption has been quite slow but I believe if very many people where to adopted and started using cryptos in their day to day lives. We would then clearly see a perfect picture of decentralization.
What we are seeing right now is a small group of people out of the whole world population who are aware of cryptos and are using them which makes it difficult to see the effect of decentralization.
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amrulshare
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February 01, 2019, 04:15:18 PM |
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both articles explain that centralization will remain in our lives and in reality it is like that. even though the decentralization system is in the early stages of adopted and maybe someday it will become a mature system does not mean it will be a solution so that the system becomes a democracy. because there are perpetrators and victims in the event of a decentralized system
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LeGaulois (OP)
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February 01, 2019, 04:30:23 PM |
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Define what you're calling "decentralization system" because there are projects working with decentralization since about 20 years. (Bitcoin is not the first decentralized money btw). Are there mature enough? I don't know but as I said people don't care about decentralization if you want to "shock" them, show them the money. Money, it's all that people see
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hatshepsut93
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February 01, 2019, 05:14:21 PM |
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I'm not worried too much about centralization of mining, because Proof of Work is based on game theory - cheating is not profitable, following the rules is. As long as the network of full nodes is decentralized, the attack surface remains very limited and predictable. Contrary to a popular opinion, miners don't control Bitcoin, they can't change the rules, they can change user balances, etc.
Bitcoin has won its biggest battle against centralization in 2017, when SegWit2x and Bcash were rejected by the community, and as of now I don't see any big threats to Bitcoin.
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February 01, 2019, 06:11:50 PM |
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The hardest part is when people think efficiency should be prioritised at the expense of decentralisation. It's an easy trap to fall into. Even I was a little guilty of that mindset for a time. I know better now, though. It's just something we have to confront when it arises. Hopefully it will become easier over time as Bitcoin grows and we can more clearly recognise the benefits when compared to more centralised alternatives. I think it'll be pretty self-evident at some point. I'm not worried too much about centralization of mining, because Proof of Work is based on game theory - cheating is not profitable, following the rules is. As long as the network of full nodes is decentralized, the attack surface remains very limited and predictable. Concurred. The alignment of incentives holds as true today as it did at the inception of the Bitcoin network.
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Halmater
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February 01, 2019, 07:17:35 PM |
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Decentralization is the key element of crypto currencies. Advancement in technology makes easier to implement decentralized system in many sector. Because it offers flexibility and speed when compared to former. Similarly, we are going to a financial sector which is decentralized and because only this way financial sector can fit into our age.
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franky1
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February 01, 2019, 07:32:00 PM |
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mining is about collating data and then locking it.
thats it
its then the nodes that have the actual power. they can reject blocks that dont fit the rules. in short the only power mining pools have is to decide which transactions to include or exclude.
pools dont have the power to change the rules.
the power to change the rules remains with developers that code the rules and distribute their code. if developers have code that bypass users ability of choice. EG remove the consensus opt-in of new rules by making things mandatory/compatibility bypassed. then that is the bigger threat
many people think bypassing consensus is great as it makes changes easier/faster to administer. but the downside is... guess what. making it easier/faster to make changes.
pools cant make changes devs can
learn who the real threats are especially when the devs hate having opposing teams to keep them inline especially when the devs hate having to play using consensus and prefer by-passes especially when the devs hate having to work on a lvel playing field with other teams and instead want to be the only core/reference/fullnode/implementation
as for those assuming mining is a threat due to "50% china".. thats just the comedy FUD of racists firstly the hashrate distribution is actually more diverse then the racists chant
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I DO NOT TRADE OR ACT AS ESCROW ON THIS FORUM EVER. Please do your own research & respect what is written here as both opinion & information gleaned from experience. many people replying with insults but no on-topic content substance, automatically are 'facepalmed' and yawned at
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franky1
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February 01, 2019, 08:50:08 PM |
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i can't see bitcoin mining is truly decentralized because pools makes DoS attempt easier.I also doubt some of those miners really care about decentralization as decentralization/P2P pool is exist.
there are 20+ pools there is one main brand of node even the top pool which people call bitmain is actually not one team. there are multiple facilities in multiple countries with multiple mindsets. did you know that the blocks tagged as just 'antpool' have half a dozen facilities. this can be fact checked by noticing the half a dozen DIFFERENT coin reward addresses they re-use. and also double fact checked because some of the facilities are accepting of segwit, some are not. which shos diverse management. and then when you geolocate th facilities you will see they are spread out over san fran, georgia, iceland, hongkong, mongolia yet. when it comes to developers one team called core. REKT campaigning any diversity off the network, mandating people follow cores roadmap or be found thrown off the network but hey. if you think losing a couple transactions for an hour until they get reconfirmed by another block is a bigger threat than a dev team that implement changes without consensus.. then let that be your weakness in understanding the security of decentralisation
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I DO NOT TRADE OR ACT AS ESCROW ON THIS FORUM EVER. Please do your own research & respect what is written here as both opinion & information gleaned from experience. many people replying with insults but no on-topic content substance, automatically are 'facepalmed' and yawned at
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February 01, 2019, 08:50:33 PM |
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Bitmain has controlled up to 50% of the mining (across multiple pools), makes 80% of the ASICs, and already messed with the BTC hash rate in late 2017. It's not this simple. Bitmain operates a lot of hardware on behalf of clients, who can pull the plug at any time. The Bitcoin Cash war showed they have far less mining resources than previously thought. Miners have incentive to leave their pools if they're threatening the protocol. Competition in the ASIC manufacturing sector would be welcome, though. What's the breakdown on those numbers? Bitfury is still relevant, right? I know GMO was a major disappointment and I've heard nothing good about Ebang. Who else is there? Any news on that horizon?
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February 01, 2019, 08:56:45 PM |
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Bitmain has controlled up to 50% of the mining (across multiple pools), makes 80% of the ASICs, and already messed with the BTC hash rate in late 2017. It's not this simple. Bitmain operates a lot of hardware on behalf of clients, who can pull the plug at any time. The Bitcoin Cash war showed they have far less mining resources than previously thought. Competition in the ASIC manufacturing sector would be welcome, though. Bitfury is still relevant, but GMO was a major disappointment and I've heard nothing good about Ebang. Who else is there? Any news on that horizon? bitmain dont make the hardware. comparison.. if bitmain was Asus. then TSMC would be AMD bitmain dont control 50-80% bitmain dont operate alot of hardware on behalf of clients comparison.. if bitmain was a state the mining farms would be private land owner just paying taxes
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I DO NOT TRADE OR ACT AS ESCROW ON THIS FORUM EVER. Please do your own research & respect what is written here as both opinion & information gleaned from experience. many people replying with insults but no on-topic content substance, automatically are 'facepalmed' and yawned at
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February 01, 2019, 09:00:33 PM |
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Decentralization is harder because we are talking about an autonomous project, in other words, the engine should work alone to have a decentralized project. That's the success key on this kind of projects.
If you think about a business like Microsoft or facebook, with all the control they try to handle is impossible to make from those decentralized projects. But Bitcoin can work that way because it doesn't need a boss.
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February 02, 2019, 03:32:01 AM |
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unfortunately the internet nowadays is filled with idiots who keep creating websites and publish a lot of bullshit. the first article is from someone who is caught up in the Bitmain drama and is just creating a clickbait based on his imagination and is using dramatic statements such as "the 51% apocalypse in 2014" followed by talking about "bitcoin" to make it look legit. a quick search can tell you that the thing in 2014 was literary nothing and it was in fact from GHash.io and there was no 51% attack. and both articles suffer from the same naivete of not knowing the difference between a miner and a mining pool. they think they are the same which is why they make stupid statements such as "Bitcoin’s blockchain is constructed by 19 mining entities". of course most part of these two are intentional drama feeding on the lack of understanding of the readers.
regarding your title, of course decentralization is hard. in fact it is more like a non stop battle to keep it that way. but when it comes to mining, you can only call it centralized if a handful of people control a large amount of the hashrate not the pools that only connects the actual miners from all around the world.
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elda34b
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February 02, 2019, 03:37:20 AM |
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Decentralization may be more difficult, but it does not make it impossible or undesirable for us. Still, bitcoin and other cryptocurrencies continue to exist to this day and are completely decentralized. People support it and I think that in the future we will be able to create a good decentralized system.
Seems like you ignore the point in OP and continue to define "decentralization" in your own terms, which is unclear. I'm not really sure what kind of decentralization we're talking about, is it: the power to change the rules, how new money come into circulation, deciding which transaction is valid, and so on. Either way, I believe this topic is broader than we think and as pooya said, sometimes people mix imagination and reality to support their stance.
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Xardasim
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February 02, 2019, 09:59:02 AM |
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people don't care about decentralization if you want to "shock" them, show them the money. Money, it's all that people see
Certainly. Today if we pay attention to the ranking, we will see that some centralized moneys are in the top 10 and what should be understood is that people just concerns is the money that can be used today and more is better. The rest is unnecessary anyway.
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February 02, 2019, 10:47:07 AM |
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'Remember the 51% apocalypse in 2014?'
That was some shouting on Reddit and then once it looked like a danger it instantly faded away.
'Bitcoin’s blockchain is constructed by 19 mining entities'
How can someone be asked their opinion on this when they don't even know what a mining pool is?
Bitcoin is the one of the extreme few still attempting to remain decentralised. Its developers, users and miners at least have the gumption to realise how important it is, even when its implementation is far from perfect. Most other projects never had it in the first place or gave it up.
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kaisa
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February 02, 2019, 11:51:03 AM |
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I agree with the opinions of Frank1 and ETFbitcoin, the mining process is not part of a decentralized system. True, what Franky said is that mining only functions as a system supervisor, so that when someone tries to make a duplicate of bitcoin it will be confirmed by the mining system. I think the term decentralization is final that the system is transparent, is not regulated by any authority (CEO) or institution, and without intermediaries. Bitcoin is able to answer all of that. As for the altcoin case, I feel doubtful. The article mentioned both do not have the right data and logic. I think they make arguments based on price perspective or price manipulation, not on the bitcoin decentralization system.
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squatter
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February 02, 2019, 12:12:42 PM |
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'Bitcoin’s blockchain is constructed by 19 mining entities'
How can someone be asked their opinion on this when they don't even know what a mining pool is? There are definitely incentives against egregious majority miner attacks by pools, but it still represents a nonzero threat. Let's not forget that in its heyday, the operators of GHash.IO engaged in double spending attacks. Here is one such example. The less hash rate in the hands of any individual operator, the better.
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pawanjain
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February 02, 2019, 12:22:14 PM |
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It's a sure thing that decentralization is a lot harder than centralization because decentralization involves a distributed system and building such things are harder than building centralized applications. But anyway, as the technology is improving day by day, decentralized applications are increasing. Programming languages like Solidity has been created to build smart contracts and dapps.
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February 02, 2019, 01:37:29 PM |
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decentralisation failed by 2014, when mining had recentralised to a few large pools.
The point of cryptocurrency was decentralisation. If you remove that, the only question left is “why on earth are you bothering with all of this.”
Bitcoin’s blockchain is constructed by 19 mining entities, that’s it. Ethereum’s blockchain is constructed by 11. I am confident we can still build something decentralized, we can't be perfect within a decade, that's something taking a lot of more years. I think we should be talking about at least two types of decentralization: that of mining and of possession. Mining is indeed dangerously centralized in the hands of a small bunch of people whom I don't find trustworthy. Is it bad ideologically? I guess it is. Does it have major impact on cryptos? I don't think so. The thing is that miners can't do much. They don't influence the price directly, and they can just keep mining or stop mining. If they keep mining, nothing changes. If they stop mining, some still will and the difficulty rate will probably have time to adjust (if a half stops mining at once, the rate will most likely adjust in about a month anyway). If we turn to holders and traders - here I'd say we have a pretty positive picture of a seriously decentralized market. If we look here, we can see that while there are some big holders of bitcoin, at least a couple of thousands of bitcoin wallets have to act at once to make a big difference.
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