Are We Being Fucked? The centralization of Bitcoin

[franky1]

yes developers make changes... bitcoin is not AI (self generating code) after all

the issue is not "developers"... its the "centrality of certain developers" forming one sponsored mindset/roadmap in a niche community of a subset of sponsored dev hierarchy that are IN CHARGE of bitcoin commanding development..(central point of failure)

thats what we should be careful of

where they "SHOULD BE" be open to independent peer review and critique and open to being challenged. where there "SHOULD BE" different brands of "reference clients" to spread out the decentralisation of development. where by even other brands can make proposals. and if a proposal solves something the brands support it and the wider node community support it by upgrading their nodes (of whatever brand) and then when majority is ready to support verifying the proposed change of ruleset.. THEN it gets adopted/activated
unlike how things are now where things can be slid in without consensus (requiring nodes to upgrade first to support a change before a change occurs)

the consensus mechanism of upgrades to support change, before the change is a security mechanism to ensure the network supports it.

and also if majority dont like/need or see a change will be detrimental, they can avoid it being slid in by not supporting it thus it not activating..
thus means devs actually have to bother to listen to the needs of the community to appease the community to get things the community want and need to get bitcoin to evolve by community consent

 by solving things the community want in a consensus mechanism (solving the byzantine generals problem) things get activated
yes consensus is consent by census (survey of population)

rather than one commander(brand) that shouts out orders and soldiers just follow politely

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[SovereignSoil]

As believers in Bitcoin, we ought to all be running miners ourselves. Now, if only we all had the time and resources for this. Perhaps it can be less difficult than it seems though..?

I have seen engineers on Twitter creating using bitcoin mining units as water heaters, home heating systems, and much more. Just wait until one of these innovative lads has some venture capital money to create practical, functional products that double as bitcoin miner.

We must breed more creativity.

[Jason Brendon]

right. i think we need to encourage people mining on their own. and mining should make it easier.
Like monero, people can mine monero at home or on a vps.
BTC should be doing that too instead of some specific asics machines.

[dansus021]

No we are not being fucked as far that I know that 51% can only be happened if the miner have one single entity address in this case we have 2 different pool and different company so I things we are not doomed yet. For now hahah

In history mining always changing because people small and medium miner keep changing their pool for different reason

[franky1]

main risks of mining 51% is
half of blocks are "empty blocks"
or
malicious pool tries to get its pool customers to not mine a current block. and instead mine an old(edited) block again. and then try to mine forward to catch up and overtake the good pools current height, to re-org the chain and make the malicious pools coin rewards become visible..

however to go back and mine a old block again and then catch up needs more then  51% to catch up meaning alot of asics noticing their asic is mining an old node and those users not jumping pools

im not concerned, after all why would users of a pool want to mine an old block not earning them any sat rewards for hours, while they waste time trying to catch-up with only a hope to take over to win possible rewards

in most cases if this was to occur pool users would prefer to jump to active height block mining pools.. same also if their asic was hashing empty blocks too often
after all why would a pool customer agree to empty block mine when the pool is actively not putting tx in blocks meaning users cant spend their rewards if the pool is not allowing spends

im not worried about mining pools at all.
im more concentrating on the dev and economic node power houses possibly colluding

[Lucius]

right. i think we need to encourage people mining on their own. and mining should make it easier.
Like monero, people can mine monero at home or on a vps.
BTC should be doing that too instead of some specific asics machines.

You don't know what you are talking about, because how would you encourage people to mine Bitcoin if we know that it is no longer possible without special devices, which are extremely expensive and consume a significant amount of energy, and in addition create a lot of noise. What you are talking about cannot be done as long as Bitcoin uses POW, which is the only logical thing - and once again I tell you that if you have so many doubts about Bitcoin, find another coin that you can mine yourself with your personal computer.

One would think that you understood something after all the posts, but you still live in some illusions that have little to do with reality.

[dkbit98]

so no one here wants a centralized bitcoin.
But what has happened recently? I heard that there are two mining pools that are actually controlling 51% of the global hash rate.

This information is misleading and not entirely true.
You can easily check the state of all mining pools and there are not two mining pools that have more than 51% of hashrate.
FoundryUSA has less then 27% and Antpool has less than 21% that is below 50%, but mining pools are not single entity and they change all the time.
Compared to all other shitcoins and bitcoin forks I would say that Bitcoin certainly has most decentralized mining, but situation can certainly be better.
Anyone who wants to help decentralization should join smaller mining pool, there is nothing complicates about that.

[BitcoinSoloMiner]

i would like to add that pools are not the only issue, also it is the manufacturer of the mining hardware!

[2double0]

If you are trying to evaluate centralization in btc, then why didn't you bring in all the aspects and why put emphasis on mining aspect only? Because you can check and see the numbers available and bring them here, try to criticize btc without any factual evidence?

Let's talk about mining, it looks like it is centralized because pools are the places where people want to draw their hashrate because chances of getting rewarded are far better and bigger than going alone mining, you get it?
Now, who will these miners mine with? Where the pool fee is less and they give a good share to the miners, these pools have been competing for so long but even after holding a considerable percentage in mining hashrate, antpool never gets all the blocks every single time (point: competition) and there are others too who tend to make it when it comes to finding blocks.

About Foundry, you have got a nice explanation already from franky1. It is the miners' decision to choose what they want to do with their purchases (equipment) and where do they want to use it.

Next part, the addresses that hold the most amount of btc, and mind well buddy, they are not miners. You can check the top 100 wallets and will find that they hold a very big percentage of total btc mined till date, and still accumulating. Why didn't you talk about it? Isn't it centralization? Still they are not pulling out their btc at all and holding like legends. Would you consider btc as centralized after knowing this?

Let's go to another part: manipulation
Traders who hold considerable amount of fiat in their exchange accounts, move btc high or low according to their wish but that takes place in a timely manner, else btc won't be less than a pump and dump ponzi. The best example of word of mouth manipulation is Elon Musk. Now, he doesn't have the power to do that because we all have understood his tricks very fantastically.

Next: Exchanges
I won't write an article here and this will be my final point.
There have been a stiff competition between exchanges since I came to know btc, Mt Gox was one of the best exchanges then. Bittrex and poloniex took over later on when Mt Gox was hacked and funds were stolen. Then came Binance into competition after a very long time, and since then, none of the exchanges, namely Kraken, Kucoin, Gate, Huobi, and even Coinbase hold such huge volumes and amount of assets that Binance holds even at the time of writing. Binance was also accused of fraudulent trading to increase the volume of the exchange and show fake volumes, but nothing was proven till date. However, we are aware that Binance holds a huge percentage of overall crypto assets collectively. If it's too centralized, then why didn't Binance run away taking away all those assets worth over $70 bn and why is it the number one exchange as of now?

[Furious 7]

As believers in Bitcoin, we ought to all be running miners ourselves. Now, if only we all had the time and resources for this. Perhaps it can be less difficult than it seems though..?

I have seen engineers on Twitter creating using bitcoin mining units as water heaters, home heating systems, and much more. Just wait until one of these innovative lads has some venture capital money to create practical, functional products that double as bitcoin miner.

We must breed more creativity.

The fact is that mining bitcoins is not as easy as it seems. Apart from needing a lot of money for initial capital, things like this are also a little difficult, especially when we don't have conditions where this is possible. not to mention about the electricity supply which is now increasingly difficult.
On the other hand, for bitcoin 2021, every two weeks there are 2016 blocks that will be rearranged by bitcoin, so of course this will make mining conditions even more difficult.
I think we also have to start realistically. If indeed we can't afford it, I don't think there is a need to force mining as if anyone can do it.

[Beparanf]

Are you being serious? This mining company invested huge amount of money to there mining pool and most of there funds comes to there investors which means they have liability that needs to be paid overtime through mining. Attacking the Bitcoin network which is there main source of income makes no sense at all because they will just destroy there own business unless some mega huge whale will pay them there total investment in exchange for doing it which will not gonna happened because who’s very rich people that willing to burn money just to create temporary chaos on Bitcoin?

[virasog]

so no one here wants a centralized bitcoin.
But what has happened recently? I heard that there are two mining pools that are actually controlling 51% of the global hash rate.
I felt heart-breaking. If btc is going centralized, then i don't know who i can trust.

I wish i was wrong, but look at this:
https://cryptoslate.com/behind-the-two-mining-pools-controlling-51-percent-of-the-global-hash-rate/

Only true replies here.

Just because 51% of the global hash rate is controlled by two mining pools, does not mean that bitcoin is centralized. Also, i don't think it will have any big impact on the centralization or decentralization.

Bitcoin is decentralized and we do not need to think too much that can lead to wrong perception and wrong reality.

[The Cryptovator]

We are not Fucked. Bitcoin will always be decentralized. Miners are centralized, and someone is in charge of that. This does not imply that it will have an impact on Bitcoin because a 51% attack will not harm Bitcoin or decentralization. Bitcoin is hard coded and cannot be changed or edited by anyone. There is no way to achieve centralization. However, you already stated that two companies control 51%, so why are you concerned? It is not produced by the same company.

[Fivestar4everMVP]

Bitcoin mining has always been centralized if you ask me, but the good news is that this centralization is not in the hands of the government, for this would have been a different thing all together.
That majorly two mining pools are controlling 51 percent of bitcoin hash rate is not what's important, i think what's important is knowing who this two pools are, and as long as they are not controlled or affiliated with the government or any central body of the government, then we are good, they are true bitcoin believers.
Sincerely, if i can afford it, i will set up my own mining company, and try all i can to control even a higher hash rate than 51 percent, as long as it means making profit.

[KINVAN e]

Mining bitcoin can be centralized but that does not mean that bitcoin is getting centralized, this one issue with mining bitcoin is the regulation challenges from government since they can present themselves decentralized since they majors their energy source from government supply, if they mine bitcoin doesn't change the fact that it's decentralized since everything occuring is within the blockchain network, the only way you can have your bitcoin centralized is now depending on the source you're acquiring it through and of course the kind of wallet you used, miners have physical location to get them been identified for that purpose and this makes them centralized and not the bitcoin, just as every whales out there will think loud of much accumulation of bitcoin because they have the capacity to do so but that doesn't change anything to bitcoin been centralized.

Yes, Bitcoin is great because of decentralization, because centralization is the gene that is controlled, and many loopholes in the platform are caused by centralization, and people cannot overcome their own selfish desires.

[franky1]

Next: Exchanges
I won't write an article here and this will be my final point.
There have been a stiff competition between exchanges since I came to know btc, Mt Gox was one of the best exchanges then. Bittrex and poloniex took over later on when Mt Gox was hacked and funds were stolen. Then came Binance into competition after a very long time, and since then, none of the exchanges, namely Kraken, Kucoin, Gate, Huobi, and even Coinbase hold such huge volumes and amount of assets that Binance holds even at the time of writing.

you do realise if you look at the portfolio of DCG, that sponsor core devs(#blockstream)
own exchanges like
#circle
#coinbase
#greyscale
#kraken

did you know greyscales trust has ~660k btc .. stored at coinbase

coinbase(as of sept 2022) holds about 1070k btc combined from all customers/service holdings.. compared to binances 575k

i know im goona get the usual onslaught by the same half dozen idiots.. but lets say it anyways

when a large majority of economic nodes and mining does collaborate
https://dcgco.medium.com/bitcoin-scaling-agreement-at-consensus-2017-133521fe9a77
(NYA was created and promoted by as the reference shows DCG)

Digital Currency Group - 2 min read - May 23, 2017
...
    58 companies located in 22 countries
    83.28% of hashing power
    5.1 billion USD monthly on chain transaction volume
    20.5 million bitcoin wallets

to say they were going to run a piece of software that flags for a upgrade to activate,

where by when their flag reached 80% and held for a month their software started to reject native blocks not signalling for the upgrade. to get the signal for upgrade to grow to appear as 100%(unnatural) within a fortnight(2nd half of july). .. then that will trigger the upgrade....... and it did
(they did however have no code to implement their second part of the pledge.. that was just an empty promise to pretend they are compromising to appease the community .. )

notice the natural wiggle upto 35% in june
(only 35% openly voluntarily wanted it from november 2016-june 2017)

notice the natural fear mongered wiggle to 45% first half of july
(only 45% openly feared but voted for it from mid june-mid july 2017)
then the unnatural straight diagonal line to unnatural 100% second half of july
(100% had no choice but vote for it or have block rejected from mid mid july-aug 1st 2017)
to then activate a feature on august

yep just 58 entities collaborating in a NYA caused segwit to 100% false vote activate unnaturally

[Jason Brendon]

Next: Exchanges
I won't write an article here and this will be my final point.
There have been a stiff competition between exchanges since I came to know btc, Mt Gox was one of the best exchanges then. Bittrex and poloniex took over later on when Mt Gox was hacked and funds were stolen. Then came Binance into competition after a very long time, and since then, none of the exchanges, namely Kraken, Kucoin, Gate, Huobi, and even Coinbase hold such huge volumes and amount of assets that Binance holds even at the time of writing.

you do realise if you look at the portfolio of DCG, that sponsor core devs(#blockstream)
own exchanges like
#circle
#coinbase
#greyscale
#kraken

did you know greyscales trust has ~660k btc .. stored at coinbase

coinbase(as of sept 2022) holds about 1070k btc combined from all customers/service holdings.. compared to binances 575k

i know im goona get the usual onslaught by the same half dozen idiots.. but lets say it anyways

it's so into details. yeah but are we getting fucked or not?
seems it is a real threat, isn't it

[franky1]

there are risks..

things can move into being more centralised and just as fast jump out of it. the point is to keep an eye on it

with regards to mining. mining alone can only really do some empty blocks but the rest of the network will flill blocks so not all blocks will be empty(end result some transaction delays/congestion)

a pool if they got over 51% of network could go back and edit a recent block but the further back they go the more expensive it becomes to edit. and odds of catching back up with the good network to overtake it, to re-org the blockchain, become less.. thus the "6 confirm" rule is pretty much a good risk mitigation for large emount spends people might worry might re-org as unreceived.. ..
EG if you are receiving $100k. then 2 confirm is more expensive to re-org
EG if you are receiving $600k. then 3 confirm is more expensive to re-org
EG if you are receiving $1.2m. then 6 confirm is more expensive to re-org

so unless a pool was shifting millions and then decided a hour later to want to double spend. its not worth it

..
the more riskier risks to the network of actually "breaking bitcoin" is in development.. the risk of sliding in a bug into the protocol which is something more on the developers review and central point of failure risk
we should not be slack, and just trust the devs are honourable gods that self review themselves in a clan. where we just "trust in mod"

we should not allow one brand of node, that moderate themselves and moderate out any critiques.  to have absolute control over proposal decisions and be sponsored by one main business that has most of the economic nodes to help push it into action without needing user node votes

so we really need to be critically watching what the devs and economic nodes propose and want to change. we independant users should be moderating the devs. no the other way around.. and really try to get them to think before they act if they did want to push it through(tripple checking its good code that adds a benefit for the wider community outside the sponsored dev clan).

ensuring they dont just go full on rule break on the whole community of hundreds of millions of users indirectly and hundreds of thousands of direct node users.

.. in short mining is no big deal.. but a dev collaboration is a risk
unlike what they want to think.. where they think bitcoin writes itself and devs just are janitors that clean up the code.. that is wrong. bitcoin is not AI, its the devs that write it so its the devs we need to be watching

[dezoel]

Honestly centralization of mining and centralization of bitcoin are two different things and won't be the same. I believe that the best thing to do in this case is to ignore miners. Because, they have tried before and failed. Remember the whole Bitcoin cash period? They wanted to take over bitcoin and they wanted to change it what bitcoin cash was, and they failed so they created their own fork basically.

We all know how stupid that was and they had no chance, same here, they can control however much they want, it will always fail and they will never be able to control it because we have the control, if we ignore then nothing will matter to us.

[wiss19]

I have to say that people are overreacting to it, it requires everyone to agree to use a chain for it to change in any capacity, meaning you could be a single person who would control 90% of it, and if people do not use any changes you want to make, then you wouldn't have it. Everyone acts as if this would be possible but it's not, centralization is not real.

Satoshi thought about everything before he left, he developed it to a point where it would be awesome to handle and wouldn't have these type of problems and that's why we have what we have. If there were any loopholes or issues then someone would have done it long time ago, and it would have been gone already.