Should mining rental platforms be regulated?

[Abiky]

Most recently, ETC Labs have discussed the possibility of regulating mining rental platforms like NiceHash to prosecute malicious actors performing 51% attacks on the Ethereum Classic blockchain. They've decided to go towards the "regulation route" instead of implementing a mechanism to protect against such network disruptions. I believe that regulating miners goes against the ethos of crypto/Blockchain tech. I wouldn't be surprised if someday, crypto startups and companies come with the idea of imposing KYC on mining entities themselves. This would undermine the privacy and decentralization of Blockchain technology as we speak.

Do you think that mining rental platforms should be regulated? Will this prevent 51% attacks on most cryptocurrencies with a small network hashrate? If regulation is not ideal, what do you think should be the solution? Will governments be willing to require NiceHash to expose miners' identities? Your input will be greatly appreciated.

[Claudio99]

Doesn't make sense, a miner can be recognized on a mining blockchain through his mining hash power and also some Algorithm are proof to 51% attack, there are many Algorithms in crypto space and few have already swapped to better mining Algorithm with 100% proof to attack

[so98nn]

Do you think that mining rental platforms should be regulated? Will this prevent 51% attacks on most cryptocurrencies with a small network hashrate? If regulation is not ideal, what do you think should be the solution? Will governments be willing to require NiceHash to expose miners' identities? Your input will be greatly appreciated.

I don't see any relevance between mining and it's regulation by government?

I mean what would they do if they regulate it?

Let us take a scenario where there is an attack on the NiceHash server, xyz million wiped out from the server and miners got exposed. How government is supposed to tackle this situation?

Because if they start regulating it, then they will have to regulate the transactions also which is not acceptable in first place because it will be failure of mining data integrity.

This will expose the link to the level of bank accounts and I don't think no miner is in the possession to give such details. Many of them even happy with the fact that they are earning passive money anonymously.

If we consider these many factors then it looks to me, we don't need regulations for such things.

If there is attack then it's failure of service provider by not providing good security to their network. Basically they are responsible for investigations.

[Abiky]

I don't see any relevance between mining and it's regulation by government?

I mean what would they do if they regulate it?

Let us take a scenario where there is an attack on the NiceHash server, xyz million wiped out from the server and miners got exposed. How government is supposed to tackle this situation?

Because if they start regulating it, then they will have to regulate the transactions also which is not acceptable in first place because it will be failure of mining data integrity.

This will expose the link to the level of bank accounts and I don't think no miner is in the possession to give such details. Many of them even happy with the fact that they are earning passive money anonymously.

If we consider these many factors then it looks to me, we don't need regulations for such things.

If there is attack then it's failure of service provider by not providing good security to their network. Basically they are responsible for investigations.

That's an excellent question. I doubt governments will be able to successfully regulate miners in the entirety. Regulating mining rental platforms today remains a grey area (and will be for a long time). The decentralized and open source nature of crypto makes it quite challenging to enforce regulations on any Blockchain network. Mining rental platforms themselves could enforce KYC/AML for usage of their services, but anyone can simply mine on their own and still perform a 51% attack on a cryptocurrency without having to go ID verification of any kind.

Based on these facts, I doubt the ETC team will be able to mitigate 51% attacks with government regulations. They might as well implement a mechanism on the Blockchain to protect ETC against these attacks (checkpoints, AuxPoW, Chainlocks maybe?). But talking about regulating mining rental platforms effectively brings back the middleman which crypto was meant to avoid in the first place. It's best to leave everything as is, and focus on making blockchains resilient against further disruptions (not regulate them). Time will tell us what lies ahead with the future of mining rental platforms in the crypto/Blockchain industry. Just my thoughts