Bitcoin centralization and governmet control

[a_6apcyk]

I want to discuss the vision of bitcoin future. One of the main idea of Bitcoin was decentralization, but now we can see that all hashrate is concentrated in pools, which works under some jurisdiction, pay taxes, burn electricity - they are legal. As far as bitcoin becomes more and more legal in different countries the governments will be going to control it.
Lets imagine that pools have some blacklist of addresses for which they do not process transactions. This list can be presented from some international bitcoin control organization (it's just imagination for now!) that, for example, fights with financing of terrorism. As pools are legal organizations they will have to do what they were said.
Worse scenario is that pools will be able to proceed only whitelists of addresses and legal lightning channels.
As pools control almost all hashrate there will not be any real chance to find block outside the pool.
I think bitcoin is potentially very colt controlled thing. What do you think about it ?

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[Poker Player]

I find it interesting what you are saying but I'm not sure wether the pools can do that. Can miners choose which transactions to process? Let's see if someone with more technical knowledge can enlighten us.

Anyway, it's a bit fantasy, as all the pools would need to act as a whole, and there would still be some miners outside the pools.

[a_6apcyk]

I find it interesting what you are saying but I'm not sure wether the pools can do that. Can miners choose which transactions to process? Let's see if someone with more technical knowledge can enlighten us.

Anyway, it's a bit fantasy, as all the pools would need to act as a whole, and there would still be some miners outside the pools.

Miners of course can choose which transactions to process

[a_6apcyk]

Unfortunately I can not post images yet. Here you can see hashrate distribution among pools https://www.blockchain.com/charts/pools . As far as I know (not sure) most pools are Chinese. So China already control most hashrate. And as for me it is a little bit scary 

[cryptomaniac_xxx]

Unfortunately I can not post images yet. Here you can see hashrate distribution among pools https://www.blockchain.com/charts/pools . As far as I know (not sure) most pools are Chinese. So China already control most hashrate. And as for me it is a little bit scary 

But there are also a lot of mining farms outside of China, and we don't know what is on the government's mind, they have been thinking of banning bitcoin mining already, and that's why those big miners farms in China has a plan B already. So I would agree with your concern, but so far there is no incentive either from the government or the Chinese miners itself to sabotage bitcoin so I think we are safe by now. So that is the safe guard we have right now, Bitmain and other mining pools gains nothing about bitcoin centralisation or even a 51% attack.

[Argoo]

As long as there is a decentralized cryptocurrency, governments will try to control it as much as possible. This process of confrontation will last for a very long time, since, indeed, the cryptocurrency has many opportunities to resist such control.
Over time, a certain golden mean should be worked out in this matter, which should generally suit both cryptocurrency owners and the government.

[a_6apcyk]

Unfortunately I can not post images yet. Here you can see hashrate distribution among pools https://www.blockchain.com/charts/pools . As far as I know (not sure) most pools are Chinese. So China already control most hashrate. And as for me it is a little bit scary 

But there are also a lot of mining farms outside of China, and we don't know what is on the government's mind, they have been thinking of banning bitcoin mining already, and that's why those big miners farms in China has a plan B already. So I would agree with your concern, but so far there is no incentive either from the government or the Chinese miners itself to sabotage bitcoin so I think we are safe by now. So that is the safe guard we have right now, Bitmain and other mining pools gains nothing about bitcoin centralisation or even a 51% attack.

As for now I fully agree with you. But let's try to look a little farther. Bitcoin is going to become legal everywhere, because there is no another way for countries. They can not just close their eyes and say "We do not know what is Bitcoin. We do not accept it" like it was some time ago. To become legal it must be regulated by laws. The only way to regulate it is to regulate miners.
As for miners, they will have to concentrate in pools, because is no another way to find a block in acceptable time. The pools will work in some jurisdiction under it's laws. So they will have to do what they will be said by laws of this jurisdiction. Furthermore if for example USA decide that pool do something wrong, the pool owners will have to live the rest of their life at some forgotten island or in American prison. That's why in my opinion it will not be easy for big pool to change it's jurisdiction.
There is one other anxious scenario. Today mining equipment is build on top of current technological level and there is little manufacturers in the wold who can produce chips for ASICs. Let's imagine that bitcoin will be legally recognized money. So ASICs can be recognized as money development equipment, mining can be recognized as money production. And all of this can be strongly regulated by laws - production, sellings, and mining process.
In theory the whole process of bitcoin lifecycle can be controlled   

[a_6apcyk]

As long as there is a decentralized cryptocurrency, governments will try to control it as much as possible. This process of confrontation will last for a very long time, since, indeed, the cryptocurrency has many opportunities to resist such control.
Over time, a certain golden mean should be worked out in this matter, which should generally suit both cryptocurrency owners and the government.

But what form this golden mean will have? What do you think ?

[cryptomaniac_xxx]

Unfortunately I can not post images yet. Here you can see hashrate distribution among pools https://www.blockchain.com/charts/pools . As far as I know (not sure) most pools are Chinese. So China already control most hashrate. And as for me it is a little bit scary 

But there are also a lot of mining farms outside of China, and we don't know what is on the government's mind, they have been thinking of banning bitcoin mining already, and that's why those big miners farms in China has a plan B already. So I would agree with your concern, but so far there is no incentive either from the government or the Chinese miners itself to sabotage bitcoin so I think we are safe by now. So that is the safe guard we have right now, Bitmain and other mining pools gains nothing about bitcoin centralisation or even a 51% attack.

As for now I fully agree with you. But let's try to look a little farther. Bitcoin is going to become legal everywhere, because there is no another way for countries. They can not just close their eyes and say "We do not know what is Bitcoin. We do not accept it" like it was some time ago. To become legal it must be regulated by laws. The only way to regulate it is to regulate miners.

I totally agree that there should be regulations as least by government standards.

As for miners, they will have to concentrate in pools, because is no another way to find a block in acceptable time. The pools will work in some jurisdiction under it's laws. So they will have to do what they will be said by laws of this jurisdiction. Furthermore if for example USA decide that pool do something wrong, the pool owners will have to live the rest of their life at some forgotten island or in American prison. That's why in my opinion it will not be easy for big pool to change it's jurisdiction.

But as long as there are countries willing to accept mining pools  then it could be very easy for miners. Just like what happen to many exchanges in the 2017-2018 bust. Majority of them move to a safe haven like Malta.

There is one other anxious scenario. Today mining equipment is build on top of current technological level and there is little manufacturers in the wold who can produce chips for ASICs. Let's imagine that bitcoin will be legally recognized money. So ASICs can be recognized as money development equipment, mining can be recognized as money production. And all of this can be strongly regulated by laws - production, sellings, and mining process.
In theory the whole process of bitcoin lifecycle can be controlled   

Yes, and that is the economics of bitcoin, it's lifecycle. Bitmain and Canaan are already a billion dollar business. I think what we need though is many players to get into the picture to move away from the concentration of mining pools in one place - China.

[AnonBitCoiner]

As long as there is a decentralized cryptocurrency, governments will try to control it as much as possible. This process of confrontation will last for a very long time, since, indeed, the cryptocurrency has many opportunities to resist such control.
Over time, a certain golden mean should be worked out in this matter, which should generally suit both cryptocurrency owners and the government.

Bitcoin is the decentralized currency and it was not able to control by the government as of now.This made bitcoin unique from other cryptocurrency.
Some government legalized the bitcoin and try to get the tax for it.By legalizing ,the flow of bitcoin is some what control by some government.

[dothebeats]

I want to discuss the vision of bitcoin future. One of the main idea of Bitcoin was decentralization, but now we can see that all hashrate is concentrated in pools, which works under some jurisdiction, pay taxes, burn electricity - they are legal. As far as bitcoin becomes more and more legal in different countries the governments will be going to control it.

The good thing is that at the first hint of control and strangulation from local governments, mining operators are already starting to look for areas/countries wherein this problem is non-existent. Just look at mining operators from China and Russia for example. Some have moved to other parts of Europe and some have decreased their gears on the said countries and moved the bulk of their equipment elsewhere. Like you and me, most miners do not want to be dictated on what to do and how much do they want to give the government for taxes. They simply move and settle elsewhere.

Lets imagine that pools have some blacklist of addresses for which they do not process transactions. This list can be presented from some international bitcoin control organization (it's just imagination for now!) that, for example, fights with financing of terrorism. As pools are legal organizations they will have to do what they were said.
Worse scenario is that pools will be able to proceed only whitelists of addresses and legal lightning channels.
As pools control almost all hashrate there will not be any real chance to find block outside the pool.
I think bitcoin is potentially very colt controlled thing. What do you think about it ?

People can easily circumvent this by creating new addresses. That simple. Also, given the whole address space of bitcoin is 2^160, that's literally inexhaustible and no amount of law enforcement can ever comprehend just how many that number is really in the real world. While measures would surely be put into place to combat money laundering and fraud in the space, I think it would not extend more than that since it's practically impossible to contain bitcoin and its working parts individually or as a whole. Bitcoin is, by design, fragmented and decentralized so as to avoid being manipulated and controlled by a central entity, and I think it has the capabilities to live true of its design.

[a_6apcyk]

People can easily circumvent this by creating new addresses. That simple. Also, given the whole address space of bitcoin is 2^160, that's literally inexhaustible and no amount of law enforcement can ever comprehend just how many that number is really in the real world. While measures would surely be put into place to combat money laundering and fraud in the space, I think it would not extend more than that since it's practically impossible to contain bitcoin and its working parts individually or as a whole. Bitcoin is, by design, fragmented and decentralized so as to avoid being manipulated and controlled by a central entity, and I think it has the capabilities to live true of its design.

The problem is not in generation new addresses, the problem is transferring bitcoins from existing addresses to any other. This is the point of possible control.

[7788bitcoin]

The problem is not in generation new addresses, the problem is transferring bitcoins from existing addresses to any other. This is the point of possible control.

This is the joke of the century, if you are not able to transact to new address then it means the network is dead and dusted. How do you think it will be proposed, the entire world will come out and control the miners and allow which coins to move and which coins will be stuck which is impossible in any aspect of imagination  .

If the government wanted to kill the network they could have done that when it started exploding, regulations is coming but that does not mean that the government will be controlling the entire network.

[stompix]

I want to discuss the vision of bitcoin future. One of the main idea of Bitcoin was decentralization, but now we can see that all hashrate is concentrated in pools, which works under some jurisdiction, pay taxes, burn electricity - they are legal.

Pools don't burn electricity the way you think, and pools are not owning the hash rate, in most cases it's miners that point their gear to a pool...which brings us to the flaw in your scenario...

Lets imagine that pools have some blacklist of addresses for which they do not process transactions.

At which point miners will be against this censorship which will, of course, hurt bitcoin and their profits and they will point their gear towards a pool that does not havea blacklist, easy as pie.

As pools control almost all hashrate there will not be any real chance to find block outside the pool.

As I said, pools don't control the hash rate, so, come with another scenario next time.

The only way to regulate it is to regulate miners. As for miners, they will have to concentrate in pools, because is no another way to find a block in acceptable time. The pools will work in some jurisdiction under it's laws. So they will have to do what they will be said by laws of this jurisdiction.

p2pool, problem solved 

[Harlot]

I don't think not processing their transactions is a good move at all because one of the biggest steps done by the authorities is tracking them through the transactions they have made and simply not just blacklisting all the transactions they are seeing.  I know the authorities have the power to do these but I don't think they want this to happen in the first place that's why we only see enforcement of KYC and AML procedures from happening to the Bitcoin network and also of course them knocking to all the crypto related services we have as the more coverage they have the more chances they can track down these criminals.

[a_6apcyk]

The problem is not in generation new addresses, the problem is transferring bitcoins from existing addresses to any other. This is the point of possible control.

This is the joke of the century, if you are not able to transact to new address then it means the network is dead and dusted. How do you think it will be proposed, the entire world will come out and control the miners and allow which coins to move and which coins will be stuck which is impossible in any aspect of imagination  .

If the government wanted to kill the network they could have done that when it started exploding, regulations is coming but that does not mean that the government will be controlling the entire network.

It is not joke at all. Just imagine situation in for example 10 years. Bitcoin is legal everywhere and miners are requlated by regional laws. Some international organization control miners in some way (for example in recommendation way). The purpose of this organization is to track "bad" addresses. At the same time some hacker have cracked some exchange and transferred  it's bitcoins to their own address. Everybody knows this address and organization adds it to some "black list". If any miner include the transaction from this address he will ne responsible for it. As for me I see this scenario quite realistic.

[a_6apcyk]

I want to discuss the vision of bitcoin future. One of the main idea of Bitcoin was decentralization, but now we can see that all hashrate is concentrated in pools, which works under some jurisdiction, pay taxes, burn electricity - they are legal.

Pools don't burn electricity the way you think, and pools are not owning the hash rate, in most cases it's miners that point their gear to a pool...which brings us to the flaw in your scenario...

Pools do not burn electricity. They create transactions using hash rate of miners. So it will be fair to say that they indirectly owning the hash rate.

Lets imagine that pools have some blacklist of addresses for which they do not process transactions.

At which point miners will be against this censorship which will, of course, hurt bitcoin and their profits and they will point their gear towards a pool that does not havea blacklist, easy as pie.

The lists will be very small against full transactions bandwidth. Therefore, using blacklists will not affect the income of miners.

From the other side the first thing that miners care of is their profit. If pool gives good fees miners will go to this pool, no matter if it is controlled by somebody or not.

As pools control almost all hashrate there will not be any real chance to find block outside the pool.

As I said, pools don't control the hash rate, so, come with another scenario next time.

Read above. Small miners can do noting with their hash rate without pools.

The only way to regulate it is to regulate miners. As for miners, they will have to concentrate in pools, because is no another way to find a block in acceptable time. The pools will work in some jurisdiction under it's laws. So they will have to do what they will be said by laws of this jurisdiction.

p2pool, problem solved 

Maybe. But I heard that miners always care about internet connection speed and quality for fast block propagation. p2p is always slower than direct connections. But maybe one of ways.

[Botnake]

I don't think not processing their transactions is a good move at all because one of the biggest steps done by the authorities is tracking them through the transactions they have made and simply not just blacklisting all the transactions they are seeing.  I know the authorities have the power to do these but I don't think they want this to happen in the first place that's why we only see enforcement of KYC and AML procedures from happening to the Bitcoin network and also of course them knocking to all the crypto related services we have as the more coverage they have the more chances they can track down these criminals.

True, blacklisting is not anymore necessary, what the government are really doing is they monitor transactions and if you do an illegal activities, it's easier to tract the transaction as it's in the public blockchain, we have regulated gambling sites, exchanges (local and international), and other forms, if they regulate that they can impose a KYC, yes, that's what they will do so if one would cash out from illegal source of transaction, they can easily find it.

if they'll ban mixers, that would make their job easier.

[a_6apcyk]

I don't think not processing their transactions is a good move at all because one of the biggest steps done by the authorities is tracking them through the transactions they have made and simply not just blacklisting all the transactions they are seeing.  I know the authorities have the power to do these but I don't think they want this to happen in the first place that's why we only see enforcement of KYC and AML procedures from happening to the Bitcoin network and also of course them knocking to all the crypto related services we have as the more coverage they have the more chances they can track down these criminals.

I like your answer very much. I think it one of the ways for "soft control". And as I know many countries spend a lot of money to make analytic, tracking and deanonimizing tools for bitcoin blockchain. Moreover, bitcoin is no so good as anonymous currency as it is always said. As for governments the only thing you have to do as to bind as more addresses as possible to real persons. And that is all you need. Because all correlations and interconnection are already written to blockchain for forever.

[stompix]

Pools do not burn electricity. They create transactions using hash rate of miners. So it will be fair to say that they indirectly owning the hash rate.

Nope, the term will be more like renting rather than owning, miners can quit and turn to a different pool at any time for a better fee or better chances, so nope, they don't own anything.

The lists will be very small against full transactions bandwidth. Therefore, using blacklists will not affect the income of miners.
From the other side the first thing that miners care of is their profit. If pool gives good fees miners will go to this pool, no matter if it is controlled by somebody or not.

Would you use a currency that can simply freeze your funds at any time just because a foreign government has said so? What would then be the difference with fiat? Once this happens the price will drop, hurting longterm miners a hundred times more than a few small tx, think what the implication longterm mean.
Also in 12 years, we're going to see 3 more halvings the reward will go from 6.25 to 0.78, right now the fees are indeed just 8%, but they will probably dominate even before than, most likely even in 2 halvings, and in 4 they will be the main income.

Maybe. But I heard that miners always care about internet connection speed and quality for fast block propagation. p2p is always slower than direct connections. But maybe one of the ways.

Once miners switch to p2p then traditional pools will have no hashrate to find blocks, no matter how fast their connection is.

[Argoo]

As long as there is a decentralized cryptocurrency, governments will try to control it as much as possible. This process of confrontation will last for a very long time, since, indeed, the cryptocurrency has many opportunities to resist such control.
Over time, a certain golden mean should be worked out in this matter, which should generally suit both cryptocurrency owners and the government.

But what form this golden mean will have? What do you think ?

I think that state control over cryptocurrency can be organizational, without interfering with the nature of its functioning. States may well determine the conditions and procedure for the circulation of cryptocurrency in society, determine its legal status, the procedure and amount of taxes on profits when using it. However, the conditions of circulation and the amount of the determined tax may also be different, and here states, if they wish, can abuse their position.

[Streets 2.0]

Nothing has changed on the issue of decentralization. Bitcoin and other cryptocurrencies being legalized is a natural reaction of the government to the fact that it cannot change or control. If they cannot lead this process, all that remains is to join it, become a part of it and thus influence at least to some extent. We see the decline of the existing system of world finance, what its configuration will be in the future, no one will say today. But! What can be said with a high degree of confidence - bitcoin will take its place in this future system of world finance, and perhaps cryptocurrencies will play a key, main role there.

[yhiaali3]

Whenever the power of the hashers gathers in the hands of one central authority or one company, it is certain that we will move towards centralization, for some time there has been a lot of criticism about the Binance platform because it tries to collect all crypto services in its hand and this will turn crypto into centralization, this risk is already possible, but it does not exist at present.
Certainly, governments will try to work to centralize Bitcoin by accepting it and working to regulate it according to its central rules. This risk does exist, but is currently elusive because fans of Bitcoin decentralization will try to keep Bitcoin decentralized.

[cabron]

What will prevent a government to set its own mining farm?

A government has a good amount of money to buy devices to have a good hash rate too to compete with the pools and then spark the idea that all governments will try to do the same. They can build hydro or powerful solar generators for it or even create their own pool as well which is better for the government actually and then process the BTC transactions in their country.

[willoweb]

I am absolutely sure that nothing prevents you from doing this, and the governments of most countries are already mining cryptocurrencies, investing in bitcoin and other alternative cryptocurrencies, including (possibly) investing money from the state budget that were previously invested in gold or other common currencies - in cryptocurrency. This is all doing nothing strange now. Those countries that will not do this will simply lose the opportunity to increase their budgets and improve the lives of citizens as a result.

[a_6apcyk]

The "first robin" is already here  

Marathon Digital Holdings, Inc. (NASDAQ:MARA) (“Marathon" or "Company"), one of the largest enterprise Bitcoin self-mining companies in North America, today announced that the Company will be launching the first Bitcoin mining pool based in North America that is fully compliant with U.S. regulations, including anti-money laundering (AML) and the Office of Foreign Asset Control’s (OFAC’s) standards.

...

To set up its pool, Marathon has exclusively licensed technology from DMG Blockchain that allows the Company to filter transactions. Marathon intends to leverage this technology to ensure that its mining pool adheres to AML regulations and that all transactions are compliant with OFAC’s standards. As such, the pool will refrain from processing transactions from those listed on the U.S. Department of Treasury’s Specially Designated Nationals and Blocked Persons List (SDN). By excluding these transactions, all bitcoin Marathon mines will be compliant with U.S. regulatory standards.

http://www.globenewswire.com/news-release/2021/03/30/2201996/0/en/CORRECTION-Marathon-Digital-Holdings-to-Launch-the-First-North-American-Based-Bitcoin-Mining-Pool-Fully-Compliant-with-U-S-Regulations.html

[zasad@]

Wouldn't these actions trigger the creation of a shadow market for paid transactions?
Some pools will fight and block addresses, while other pools will add transactions from prohibited addresses to their blocks for money.
As long as mining is decentralized, small government mining pools will not be able to block transactions on the bitcoin network.

[a_6apcyk]

Wouldn't these actions trigger the creation of a shadow market for paid transactions?
Some pools will fight and block addresses, while other pools will add transactions from prohibited addresses to their blocks for money.
As long as mining is decentralized, small government mining pools will not be able to block transactions on the bitcoin network.

All written below is just an assumption and it's purpose is discussion!

First of all let's just imagine that rejecting transactions from "black" addresses will become a global trend that have just begun.

Initially big countries (USA, China) will compel  pools that are under their juristdictions  to exclude "black" transactions accordingly their national blacklists. Because of geopolitical reasons big pools of one country will process transactions form addresses prohibited by other country. For example China will not be care about US SDN and OFAC and will process transactions from these addresses. In this case the circulation of bitcoins will not be more complicated in global scale.

But I think no country will want to process stolen bitcoin or terrorist's bitcoin. That's why it is possible that some day will be created some regulatory international organization, whose purpose will be managing international blacklists of addresses.
If this happens all bitcoin will be splitted to really "black" and "white". In this case, I think, there will not be sense to create "shadow market for paid transactions" because if some miners will process "black" bitcoin it whatever stay "black" and no one will need such bitcoin, because if you receive it, you will have great problems to send it or change it to fiat.

[Streets 2.0]

I think the moment has passed on the issue of control. Regulation and strict prohibitive measures can only lead to a negative effect in the cryptocurrency field and, as a consequence, from there such capital somewhere where there are softer laws and clear rules of the game. As for the governments, but more often than not people are sitting there who are far enough from the idea of ​​how it works and how it works, so they often make the wrong sharp steps, instead of detailed comprehension.

[a_6apcyk]

I think the moment has passed on the issue of control. Regulation and strict prohibitive measures can only lead to a negative effect in the cryptocurrency field and, as a consequence, from there such capital somewhere where there are softer laws and clear rules of the game. As for the governments, but more often than not people are sitting there who are far enough from the idea of ​​how it works and how it works, so they often make the wrong sharp steps, instead of detailed comprehension.

In my opinion the level of control of bitcoin ecosystem grows every day and one day it will become almost fully controlled. Moreover it is necessary for Bitcoin to be controlled to become legal everywhere and   to collect its full cost. There are some introductory points I believe in:
1. Nowadays, Bitcoin is first of all money, not technology.  I mean that some when in 2009-2012 it was just technology, later it got its cost, later in 2013-2014 it's cost grew about 100 times and Bitcoin began its movement from world of  "computer geeks" to world of money. Later in 2017-2018 where was one more crucial moment. After that world bank system began to assume Bitcoin as money entity.
2. The fiat monetary system is fully controlled by world bank system and governments. This system is based on Bretton Woods system with USD as main world's currency.
3. These institutions have great (I believe - the greatest in the world) power and they will never allow any uncontrolled money to exist.

From the other hand let's take a closer look at Bitcoin technology.
1. Decentralization (especially for Bitcoin) is myth. Because:
    a) Since 2016-2017, when Antminer S9 was produced, Bitmain became the monopolist in mining chip development. Their chips were built on top of technology and were the most energy effective and as far as I know nothing changed today from point of view mining chip development. We have only one company that produces economic effective mining chips.
    b) Today hashrate is so big that you are unable to launch any significant hashing power if you are not great player with great money. Let's make simple calculations with the most optimistic (cheap) scenario. Today hashrate is about 180 EH/s = 180 000 000 TH/s. The newest Antminer S19 PRO has hasrate 110 TH/s and its price was 2600$ (today it's more than 5000$). And its electrical power is 3250 Watt.  Lets assume that all hashing power is based on this model of ASIC (chip). So the cost of all mining equipment is 180 000 000 / 110 * 2600 = 4 254 543 800$ (4,2 billion USD). Summary electrical power is 180 000 000 / 110 * 3250 = 5318179750 (5.3 GWatt). And it is the most optimistic scenario for energy consumption, and I'm sure not bad scenario by equipment price.
So if you want to launch 10% hashrate farm you'll have to buy  equipment for 420 million USD, and you'll need a power plant with power of 530 MegaWatt.
I know these calculations are not accurate, but they can help us just to estimate the scale of mining process.

2. Anonymity is myth. All transactions can be seen by everybody. All you need is to map addresses to persons. I understand that it is impossible to map 100% addresses, but I'm sure it is not necessary. In statistical terms if you can map for example 30% of addresses it will be enough. And all is going to it:

A federal court in the United States has authorized the Internal Revenue Service (IRS) to serve a "John Doe Summons" on the crypto exchange Kraken, seeking identities of U.S. taxpayers who have used cryptocurrency, the Department of Justice said on Wednesday....
https://www.reuters.com/world/us/us-court-authorizes-irs-seek-identities-taxpayers-who-have-used-cryptocurrency-2021-05-05/

3. There are many systems like crystalblockchain (https://crystalblockchain.com/) are under development. Their purpose - deanonymize addresses

4. Lightning technology makes Bitcoin similar to classic monetary system - there can be "banks" with their lightning channels for inner transactions.

All of these make me believe that today is the beginning of control era. And control is not a bad thing for Bitcoin as money entity. Because without control it can not become "real" money

[Streets 2.0]

I think that the community will be divided into two camps. Some will want to leave everything as it is and not change anything, while others, in order to increase the capitalization of their savings, will readily meet control and fall into the same trap as all services that pay with their principles in exchange for money or privileges. In my opinion, decentralization has long been the salvation of bitcoin from the enslavement of financial centers. If this changes, it is unlikely that it will remain the same popular and trustworthy asset.

[stompix]

Wouldn't these actions trigger the creation of a shadow market for paid transactions?
Some pools will fight and block addresses, while other pools will add transactions from prohibited addresses to their blocks for money.
As long as mining is decentralized, small government mining pools will not be able to block transactions on the bitcoin network.

And how is the shadow market compared to the normal market? More expensive, and it gets targeted every day...
And unlike back market dealers that are mobile persons with distribution chains mining pools are sitting ducks, one letter and the datacenter cuts the pool's servers and that's all. Remember Mega?

Besides, people underestimate the power of a government that wants, and how much they want is the key in all this, to enforce something, what could the network do when a few pools even with 10-20% start this shit? Remember what happened when we went 30% down because of the hashrate drop, it will be the same as those blocks will probably been half-filled or even empty in some cases, as a government will want their pool to confirm only whitelabel addresses. This is one of the weaknesses of a decentralized system, you can't run from the people that play dirty and you have no one to turn to.

1. Decentralization (especially for Bitcoin) is myth. Because:
    a) Since 2016-2017, when Antminer S9 was produced, Bitmain became the monopolist in mining chip development. Their chips were built on top of technology and were the most energy effective and as far as I know nothing changed today from point of view mining chip development. We have only one company that produces economic effective mining chips.

The M30S++ does 112 at 3470, the S19pro 110 at 3250, Bitmain is not that far ahead at the moment, right now if MicroBT would be able to produce 100k miners they would sell them in a matter of hours.

If you want to look at a monopoly there is TSMC.

[oilton16]

I'm not use to think about it in all the countries I have ever lived government was never interested in my crypto, cause I have had relatively small amount, I read in article on medium from ownr wallet where they said US still has a great missout even they are trying to control crypto a lot 

[a_6apcyk]

And how is the shadow market compared to the normal market? More expensive, and it gets targeted every day...
And unlike back market dealers that are mobile persons with distribution chains mining pools are sitting ducks, one letter and the datacenter cuts the pool's servers and that's all. Remember Mega?

One more thing about shadow market. The miner's reward is the sum of differences between output and input values of all transactions included in a block. In this way if all transactions are "black" then all miner's reward is "black" too.
If we imagine that bitcoin will be split to "black" and "white", it's obvious that "black" will be cheaper due to the difficulties to change it to other currency. That's why even if fees in black pools are bigger it will be hard for "black miners" to implement the economic profitability of the process.
Thus, I can't see any conditions for such shadow markets to exist too.