What's to stop this from happening?

[psioniq]

Most of you have probably seen this image:

https://lh4.googleusercontent.com/-mpkhM0HZR0M/Tmo5xpObsvI/AAAAAAAAAME/F0ILT6vuDw8/w800-h800/big-bank-theory-chart-large.jpg
https://lh4.googleusercontent.com/-mpkhM0HZR0M/Tmo5xpObsvI/AAAAAAAAAME/F0ILT6vuDw8/w800-h800/big-bank-theory-chart-large.jpg

Now, replace those names with miners/pools...

Could we be right back where we started, 10-20 years after 'crypto' succeeds?

(I didn't find any similar posts through search, so I'm sorry if this is beating a dead horse :] - in which case I would like to see the 'corpse')

[devphp]

There is a guarantee it will happen. That's why you should diversify into altcoins and generally be dynamic about your investments. No investment is 100% secure.

[psioniq]

Thanks for the input devphp,

Afraid you might be right - even though I wasn't thinking in terms of investments..

In my naivety I had hoped that crypto would release us from the claws of the financial industry - and, if it doesn't - then what is the point? - do we really want these entities to have even greater control than they have today?

[gollum]

Maybe we will end up using multiple bitcoin clones (different block-chains) to prevent monopoly of a few miners?

[Beliathon]

A cryptocurrency is not a bank. It's decentralized and open-source.

This comparison is extremely "apples to oranges".

What is your concern, so we can better understand and better address it?

[psioniq]

@gollum

Not entirely sure how multiple blockchains would work (example?), or how it could solve the 'problem', since I think the 'problem' is an inherited human flaw (greed).

But would love to see suggestions/solutions, as this has become my primary concern about a sucessful crypto.


@Beliathon

No, cryptocurrency is not a bank.. and yes, it is decentralized - for now.. that is my concern.

The image above was an example of how businesses consolidate, where bigger fish eat smaller fish.

It is not so much apples and oranges, if you look a little deeper..

Eventually - mining will become so expensive that no ordinary man will have access to the equipment required to compete. Large mining corps will take over smaller ones, and the consolidation will have started, where, in the end - you might have 1-3 major mining corps, whom will have the exact same power that we loathe about the financial industry today.

[greenlion]

No, cryptocurrency is not a bank.. and yes, it is decentralized - for now.. that is my concern.

The image above was an example of how businesses consolidate, where bigger fish eat smaller fish.

It is not so much apples and oranges, if you look a little deeper..

Eventually - mining will become so expensive that no ordinary man will have access to the equipment required to compete. Large mining corps will take over smaller ones, and the consolidation will have started, where, in the end - you might have 1-3 major mining corps, whom will have the exact same power that we loathe about the financial industry today.

When did this magically become a law of nature?

This is a very specific and definitive claim being made here that needs alot more substance and reasoning than just a sophomoric bush league analogy.

[Beliathon]

Eventually - mining will become so expensive that no ordinary man will have access to the equipment required to compete. Large mining corps will take over smaller ones, and the consolidation will have started, where, in the end - you might have 1-3 major mining corps, whom will have the exact same power that we loathe about the financial industry today.

You are missing one important factor. Long before mining becomes unaffordably expensive, Bitcoin will have skyrocketed in value to the point where anyone who has been mining thus far will have multipled their wealth by a factor of 50 to 100. The next time Bitcoin skyrockets, another subset of the human population will be drawn into the fold, attracted by the gold rush, making mining profitable once more.

This pattern will repeat itself logarithmically many times until fiat is little more than a bad memory.

[Denton]

It depends. I believe regulatory capture is a big factor of cartelization and if we keep regulation out of mining, combined with a global competition we should be fine.

[psioniq]

@greenlion

Thanks for jumping in mid-sentence - and sorry if I stepped on your toes :] - but I did not claim to have any magical powers, nor did I write; that my word is the law. But your expensive words intrigue me.

@Beliathon

Okay, I see what you are getting at - but how does that address the consolidation of mining operations? Yes, some miners/buyers will become very wealthy, some might stay in the game and expand, others might leave - but in the end, I only see one possible outcome - right back where we started :]

[IrishFutbol]

If crypto succeeds, it will not be through BTC.  There's other reasons as well, but no mainstream currency would be publicly mined.

[DannyHamilton]

Eventually - mining will become so expensive that no ordinary man will have access to the equipment required to compete. Large mining corps will take over smaller ones, and the consolidation will have started, where, in the end - you might have 1-3 major mining corps, whom will have the exact same power that we loathe about the financial industry today.

Miners are not banks.  Miners (and mining pools) do not have the power that the financial industry has. Why does it matter if there are 5 pools, or 500 pools?

[vnvizow]

If crypto succeeds, it will not be through BTC.  There's other reasons as well, but no mainstream currency would be publicly mined.

Then what is the point of having a decentralized currency? That's exactly why the majority of people like Bitcoin so if a coin appears that can only be privately mined then it's likely discarded as scam

[IrishFutbol]

Eventually - mining will become so expensive that no ordinary man will have access to the equipment required to compete. Large mining corps will take over smaller ones, and the consolidation will have started, where, in the end - you might have 1-3 major mining corps, whom will have the exact same power that we loathe about the financial industry today.

Miners are not banks.  Miners (and mining pools) do not have the power that the financial industry has. Why does it matter if there are 5 pools, or 500 pools?

The risk is that if a few pools virtually take over all mining, they would control 50% of the processing.  This is one of the two main reasons that if crypto ever becomes the currency of the future, it will not be through some publicly mined code.  The other main reason is that costs of equipment and electricity would make it so virtually all mining would be done in China, as anyone mining in the US or Europe would lose money with the higher expenses.

[IrishFutbol]

If crypto succeeds, it will not be through BTC.  There's other reasons as well, but no mainstream currency would be publicly mined.

Then what is the point of having a decentralized currency? That's exactly why the majority of people like Bitcoin so if a coin appears that can only be privately mined then it's likely discarded as scam

And if it's publicly mined, all new coins created and transaction fees generated will be earned by China.  Not exactly something citizens of the US, Europe, Japan, South Korea, etc. would be thrilled with.

[psioniq]

@Denton

The future 'global competition', or lack thereof, is what concerns me..

@IrishFutbol

That is a little scary to think about..
<tinfoilhat>..feels like I'm contributing towards the centralized one-world currency that the illuminuts have been proposing.</tinfoilhat>

@DannyHamilton

It matters if we end up with a mainstream crypto where +51% of the mining is being done by major corporation - whom, from my life experience, do not have your best interests at heart.

@vnvizow

Exactly my sentiment - I thought we were in it for the species..

[drrussellshane]

@Denton

The future 'global competition', or lack thereof, is what concerns me..

@IrishFutbol

That is a little scary to think about..
<tinfoilhat>..feels like I'm contributing towards the centralized one-world currency that the illuminuts have been proposing.</tinfoilhat>

@DannyHamilton

It matters if we end up with a mainstream crypto where +51% of the mining is being done by major corporation - whom, from my life experience, do not have your best interests at heart.

This has been a concern of mine since day one.

However, whether that is the case or not, it can still be to one's advantage to leverage seignorage.

[psioniq]

@drrussellshane

Same goes for me, but I always brushed the idea off as paranoia - and still might be just that..

I just wanted to bring attention to my concern, and see what you good people have to say about it :]

[IrishFutbol]

@Denton

The future 'global competition', or lack thereof, is what concerns me..

@IrishFutbol

That is a little scary to think about..
<tinfoilhat>..feels like I'm contributing towards the centralized one-world currency that the illuminuts have been proposing.</tinfoilhat>

@DannyHamilton

It matters if we end up with a mainstream crypto where +51% of the mining is being done by major corporation - whom, from my life experience, do not have your best interests at heart.

@vnvizow

Exactly my sentiment - I thought we were in it for the species..

Tin foil hat is the government falls in love with the idea of a crypto currency, pushes it under the guise of ending counterfeit bills / safety / etc., and rolls out a crypto currency that they're in sole control of while also being able to track and trace each coin as it moves from account to account.

[AnonyMint]

Eventually - mining will become so expensive that no ordinary man will have access to the equipment required to compete. Large mining corps will take over smaller ones, and the consolidation will have started, where, in the end - you might have 1-3 major mining corps, whom will have the exact same power that we loathe about the financial industry today.

Miners are not banks.  Miners (and mining pools) do not have the power that the financial industry has. Why does it matter if there are 5 pools, or 500 pools?

The risk is that if a few pools virtually take over all mining, they would control 50% of the processing.  This is one of the two main reasons that if crypto ever becomes the currency of the future, it will not be through some publicly mined code.  The other main reason is that costs of equipment and electricity would make it so virtually all mining would be done in China, as anyone mining in the US or Europe would lose money with the higher expenses.

No. The real risk is the government can regulate those 5 miners and force them to blacklist tainted coins, i.e. coins not associated with paying taxes and other criminal activity.