Wolf Overclocked (OP)
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October 11, 2020, 02:42:46 AM |
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When Bitcoin becomes more adopted by countries and companies that use it as a store of value, is it possible for some "mining cartel" to have enough mining power to influence any kind of economic or political decision? I'm not talking about "control the network", but more in a form of economic conjuncture.
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mk4
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October 11, 2020, 02:54:26 AM |
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Theoretically, if an entity would want to have economic or political influence over the network, they probably wouldn't even need mining power. They could at least attempt to do it through social media means, like a smear campaign or some sorts.
The real question is, if they could actually successfully do it or not.
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crwth
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October 11, 2020, 03:10:43 AM |
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When I read your post, I immediately have thought of having the power to manipulate the price. And since the price is proportional to the strength and it is an influence on the economy, probably they can. If they have enough stack of BTC that could potentially pump or dump the market, wouldn't you be considered as vital enough influence on the economy? That's true if they have that kind of stack. Probably like Satoshi
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pooya87
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October 11, 2020, 03:49:14 AM |
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I'm not talking about "control the network", but more in a form of economic conjuncture.
you can only control the "network" not the price by having a lot of hashrate, and that control itself only goes as far as your share of the total hashrate goes which can not be full control. here is another problem with your scenario, the more popular bitcoin gets, the higher its price is going to be which is the incentive for more miners to enter the scene which is already gigantic. that means more decentralization of mining power and a much higher cost of someone having 5% of the total let alone a higher percentage.
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Darker45
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October 11, 2020, 03:52:12 AM |
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I don't think there will be. I am talking about influence of Bitcoin mining cartels on any country's economic or political decision. Well, I can think of relatively smaller decisions which do not significantly affect the economy or politics as a whole.
Let's say the huge mining companies may sway the local decision on the final price of energy blocks they are trying to purchase, or perhaps policies on how they will be taxed, or possibly on whether their license to operate would be extended or not, and so forth. But never on the economy and the politics of the country as a whole. After all, I cannot imagine Bitcoin being adopted and used as a country's default currency.
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Yogee
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October 11, 2020, 04:46:21 AM |
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There's this quote "He who controls the money supply of a nation controls the nation". I think that's true and already happening since all economies are under a centralized financial system.
Some people argue that bitcoin mining is already centralized since there are a few big miners but using it to influence an economic or political decision seems far-fetched. Another group could always compete with an existing big miner at any point in time and that makes bitcoin mining hard to control and leverage.
Interesting thought.
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mk4
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October 11, 2020, 05:31:55 AM |
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Some people argue that bitcoin mining is already centralized since there are a few big miners but using it to influence an economic or political decision seems far-fetched. Another group could always compete with an existing big miner at any point in time and that makes bitcoin mining hard to control and leverage.
Funny thing is, this itself is mostly a bad argument against bitcoin mining. A lot of people take a look at bitcoin mining hashrate distribution charts and see F2Pool taking a huge part of the pie chart and just assume that F2Pool is just one miner from China; not even knowing that mining pools exist whereas miners worldwide can move in and out of.
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Artemis3
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October 11, 2020, 06:19:11 AM |
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There's this quote "He who controls the money supply of a nation controls the nation". I think that's true and already happening since all economies are under a centralized financial system.
Some people argue that bitcoin mining is already centralized since there are a few big miners but using it to influence an economic or political decision seems far-fetched. Another group could always compete with an existing big miner at any point in time and that makes bitcoin mining hard to control and leverage.
Interesting thought.
The money supply is the market. Most bitcoins have already been made, what miners produce is diminishing faster and faster, so their effect is also becoming negligible and prohibitively expensive. Such thing isn't going to happen because the market forces are playing with the intended design. The big miners will leave soon as it becomes unprofitable to mine, at least at those scales. The likes of Square by buying some have a tiny little bit more of influencing power. This is going to become the only way, since mining becomes irrelevant as production grinds down to (nearly) a halt. All in all there is nothing to worry about.
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djcaoile1205
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October 11, 2020, 08:20:59 AM |
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To do 51% is pretty cheap if you are the country like Usa or China. That's i think that btc will never be used as a reserve currency
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Artemis3
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October 11, 2020, 08:49:04 AM Last edit: October 11, 2020, 09:02:38 AM by Artemis3 |
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No, because it would happen the same thing as if you tried to "buy all bitcoins" (or 51% of). No country can pull it off for this reason: it becomes prohibitively expensive.
Just so you get the message clearly: Bitcoin cannot be destroyed.
You can't overcome the market forces with naive theoretical thinking. This is the reason so many politicians fail to understand that the market cannot be decreed or governed (intervened) in any way. Its like a river seeking its path to the sea, it will bypass any obstacles no matter what you do. The market finds its way, just like rivers do.
The same happens when you try to destroy Bitcoin, you just can't unless you unleash the nuclear arsenal to destroy all life.
As you try to buy all bitcoins (presumably by infinite printing) you only make Bitcoin price climb more and more while destroying your fiat. Something like this happens if you attempt to purchase all asics or pour money to manufacture your own. Your (foolish) effort will destroy your economy faster than making a dent to Bitcoin.
This is why regardless of what you are thinking, Bitcoin will remain; with or without support. It exists not thanks to governments, central banks or financial institutions, but in spite of them.
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Shimmiry
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October 11, 2020, 10:20:15 AM |
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When Bitcoin becomes more adopted by countries and companies that use it as a store of value, is it possible for some "mining cartel" to have enough mining power to influence any kind of economic or political decision? I'm not talking about "control the network", but more in a form of economic conjuncture.
Then what would they do with the millions of Bitcoins they could possibly have? Pump its price? Would people even buy it if this would happen? Basically, they can have as much as Bitcoin they like. But it would just be an opportunity to alternate cryptocurrencies to skyrocket. Also, who the hell would buy and make a mining cartel that could cost more than they earn in months? Apparently, crypto mining is for the long term. Hence, regardless of how many BItcoins they might and could have, it still wouldn't affect the vast crypto-space in its economic status.
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Lucius
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October 11, 2020, 10:49:46 AM |
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This is why regardless of what you are thinking, Bitcoin will remain; with or without support. It exists not thanks to governments, central banks or financial institutions, but in spite of them.
I have no doubt that Bitcoin will survive, as long as there are people who see something valuable in it and of course as long as there is the internet that is necessary to be able to do transactions and mining at all. If we have concluded that no one can destroy BTC literally, can we agree that it is possible to cripple it quite a bit if, say, a powerful country like the USA at some point decides to become completely hostile to it? Let’s not forget that the US has the largest crypto exchange, almost 90% (approximately) of all existing crypto ATMs are there, and the companies currently in focus (MicroStrategy & Grayscale) are also US companies. Also say that Bitcoin exists without the blessing of governments and their financial institutions is not a correct assumption, because if it is so why Bitcoin is not accepted at the same or similar level in other countries of the world? It is completely wrong to ignore the power of the governments of the world’s most powerful nations, a single piece of paper on which the world’s most powerful people would put their signature would be far more devastating than any attacks on the web, miners or exchanges.
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hatshepsut93
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October 11, 2020, 02:29:41 PM |
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I think from a point of view of a mining farm owner, it's not that beneficial to join a cartel, you'll have no idea what the leaders of this cartel doing, they could be even doing something against Bitcoin's interests, that would negatively affect the miner in the long run. And what are the benefits? Is this cartel supposed to pay the participants a part of some profit? But it's not even guaranteed to make any.
A cartel like that could have been possible in the early days, if let's say Bitmain decided to mine with all their hardware instead of selling it, but they would also have no benefits from it because Bitcoin wasn't adopted enough.
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JakobFugger
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October 11, 2020, 02:38:54 PM |
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You are missing the point, as long as Bitcoin and cryptos, decentralized, in general, are not imposed by a government by force, you will always have options. And that includes making centralization as difficult as possible. There will always be fork options, changing the code by consensus. And several other options that make centralization difficult for one region or goverment.
Bitcoin is a choice of people, for people.
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Ryker1
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October 11, 2020, 08:19:06 PM |
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Well, this is just my opinion, --there really is a possibility that they might be able to influence and have such power with the prices. Businesspeople tend to have an organization with their fellow business people, and if it happens that they have invested in bitcoin as a store of value. We perhaps consider thinking that they take over and control the prices. However, I don't see that mining will have the power to manipulate the price, still on us as a community of crypto that always based on supply and demand.
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NeuroticFish
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October 11, 2020, 08:45:41 PM |
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is it possible for some "mining cartel" to have enough mining power to influence any kind of economic or political decision? I'm not talking about "control the network", but more in a form of economic conjuncture.
Imho the history shows it's not possible to make decisions only because "mining cartel" wants them. Do some research on SegWit2x. Some pools wanted that, quite powerful group, but after all the majority or the network (meaning also nodes, for example, clearly not only miners/pools) decided otherwise. Bitcoin is about consensus. The majority has to be overwhelming and the network keeps expanding, making such majorities hard (next to impossible) to achieve if the goal is not right.
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Bitcoin_Arena
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October 11, 2020, 11:25:04 PM |
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10 years later this is the current state of Hashrate distribution among the different mining pools in the last 4 days. How is this anywhere near mining cartel centralization? Hashrate distribution over the last 3 years. Notice how Unknown mining pools have been on the rise in 2020 Source: https://www.blockchain.com/pools
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sheenshane
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October 12, 2020, 03:11:04 PM |
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10 years later this is the current state of Hashrate distribution among the different mining pools in the last 4 days. How is this anywhere near mining cartel centralization?
IMO, it depends. It's another way or around. Do you think politicians and economists will let the existing mining cartels(if ever) to take over the power? No. It's either they are already there, have the power to decide, or will take the power against the existing once. Because the fact could be mining would have the influence and the power to the price. But why not? Why would the politicians use it as their advantage? There are too many points of view that we can consider before we can conclude the influence on the miners towards politicians.
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Artemis3
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October 12, 2020, 03:33:41 PM |
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This is why regardless of what you are thinking, Bitcoin will remain; with or without support. It exists not thanks to governments, central banks or financial institutions, but in spite of them.
I have no doubt that Bitcoin will survive, as long as there are people who see something valuable in it and of course as long as there is the internet that is necessary to be able to do transactions and mining at all. If we have concluded that no one can destroy BTC literally, can we agree that it is possible to cripple it quite a bit if, say, a powerful country like the USA at some point decides to become completely hostile to it? Let’s not forget that the US has the largest crypto exchange, almost 90% (approximately) of all existing crypto ATMs are there, and the companies currently in focus (MicroStrategy & Grayscale) are also US companies. Also say that Bitcoin exists without the blessing of governments and their financial institutions is not a correct assumption, because if it is so why Bitcoin is not accepted at the same or similar level in other countries of the world? It is completely wrong to ignore the power of the governments of the world’s most powerful nations, a single piece of paper on which the world’s most powerful people would put their signature would be far more devastating than any attacks on the web, miners or exchanges. Yes it may be crippled but not destroyed. I didn't say they can't harm, just that they can't destroy it. Those are two separate things. At this point i don't think the US would go hostile, but other countries like Russia, China are doing damage. And yet, their population finds their way. China is the largest bitcoin user which is ironic as its semi-banned in there. Main reason is of course that bitcoin lets the "new" rich elite class to bypass the idiotic gov restrictions to the economy, such as moving your wealth around. Now the US would be fools to cripple this freedom enhancing tool. In fact their heavy regulation to it seems to fixate their attitude about it, not bad but not good either. At least they don't throw people into prison for having or using bitcoin, you are supposed to voluntarily surrender your privacy to them. To what amount people will do that? We will never know, but i doubt EVERYONE will ever disclose ALL their funds. I think the gov should stick to taxing sales if you are going to keep an old fashioned State running. You may be able to track every bitcoin, but you can track the inventory of (physical) goods. Govs going hostile to bitcoin can even potentially increase its price, its the scarcity and demand thing all over again. It could even rise its popularity even more by sort of Streisand effect (ie: "if the gov bans it, it must be good") OP is implying that at any time any country can make Bitcoin disappear overnight, this is simply not true, no single gov or even coalition of countries, can pull that. Like the internet, Bitcoin was made to survive under adverse conditions. Current conditions not only are not adverse, but globally in favor. Also, there is an economic weight. Any country that bans bitcoin, is saying "no" to an extra source of wealth. People who want to do business using Bitcoin will simply take their money elsewhere. For example if you have 3 tropical Caribbean islands with similar resorts/services, but only one of them accepts bitcoin, where will you go? Its that simple. Deny Bitcoin, and you deny extra income to your country. Great job politician...
10 years later this is the current state of Hashrate distribution among the different mining pools in the last 4 days. How is this anywhere near mining cartel centralization? Hashrate distribution over the last 3 years. Notice how Unknown mining pools have been on the rise in 2020 Yes but aside from Slush all those pools are Chinese. This is what they mean, based in the currently fashionable American official policy of blaming China for their own mistakes, that at any moment, those Chinese pools may collide and do "something" harmful. There is no need to do anything, as mining becomes more unprofitable, China is also becoming too expensive to mine there, the "problem" is fixing itself. Some large miners are already moving their operations around to cheaper rate lands while others simply shrink or move into another business with the money they made. Of course as the Chinese miners reduce, so will their pools.
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DoublerHunter
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October 12, 2020, 06:03:26 PM |
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^ Cartel or syndicate is never new to the business. Even now, the Mining cartel is already existing. It is just that most of the miners that we have as of the moment are technical people. And they are more concerned with how they can live with their means, they tend not to have an interest in power. As long as they are in front of their computer and have the best burger in town with a coke, that is it for them. Nevertheless, we will see it would be exciting to be one of them anyways.
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