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Author Topic: Concerns: The Centralization of a Decentralize Currency  (Read 2743 times)
BTC_Bear
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January 24, 2012, 07:26:49 PM
 #1

   While being a participant in BitCoin for some time now, some concerns have arisen that might be of concern. It seems like power has shifted to miners and to pool OPS. It would seem that if any agency wanted to disable BitCoin or even hurt it; they would go after these operations. It is understood that mining is a necessity and the formation of a pool is a logical next step. However, in order for the growth to the masses, that will be using a compiled client, what happens "if" those assets to the BitCoin community are actively attacked?
   Obviously, since we are dealing with 'money', there is a self awareness to each individuals wants and needs. (Greed, to put it short) There is of course a natural process to be greedy. However, this process needs to be tempered with social and community needs. Yes, make a profit and save some 'coins' but don't let it lead to the 'take over' opportunities that come from being to aggressive. It is suggested that a little moderation would be a good thing.

Lets try to illustrate it:

(1)

For purposes of argument, lets say there are 10 miners, 2 pools, and 100 -qt clients in operation.

 If someone wanted to stop BitCoin, would it be easier to stop 12 nodes or a 100 nodes?


(2)

If all miners and pools were shut down, what would the person, who only knows bitcoin from the -qt app, do to transfer BTC?

  Yes, they could turn on mining with their computer but they wouldn't take the steps necessary to do it.

(3)

Power is being given to those who 'provide' to the system with mining blocks on deciding the direction of the development of BitCoin.
Votes are being taken by those that 'contribute' to the system.
Of course, it is understood that the 'average' person does not 'understand' the development. The problem here is not that they don't understand it but there is very little effort to explain it in layman's terms. P2SH is one example. Pay-to-Script-Hash has fallen down very predictable lines. And votes are pretty much cast with one question in mind: "Does it hurt the operators operations?"

(4)

If BitCoin is to be accepted by the masses, it must be trustworthy AND the 'average' person will need to be accepted into the fold. If that fails to happen, congratulations are in order. The developers have developed a system that is trustworthy, protects the 'high level' operators, and that "No One Uses."

---------------

Intending no disrespect to the developers, there is however a tendency to get locked into ones own interpretation of how things should be without considering the bigger picture. People love to disagree and prove themselves right. Judgements are passed and discussions viewed from often odd perspectives.

Often the 'little people' are overlooked because of their assumed ignorance. This is a failing that often comes back to byte people in the proverbial ass. In short, lets develop the code but lets not leave out the potential 'End Users' from helping to develop it.

Possibly a simple solution would be to utilize a voting 'address' that clients could vote to with a small portion of BTC. Put their money where their mouth is.

And please, put the ability to mine back into the client (-qt) but restrict its hashing capabilities. Just in Case.

/End Rant File

Corporations have been enthroned, An era of corruption in high places will follow and the money power will endeavor to prolong its reign by working on the prejudices of the people until wealth is aggregated in a few hands and the Republic is destroyed. ~Abe Lincoln 1ApJdWUdSWYw8n8HEATYhHXA9EYoRTy7c4
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January 24, 2012, 07:34:29 PM
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I would say no one has to know where the miners or pool ops are.  They can be in any country, spread all over the world.  They could operate through Tor if they had to.  I think attacks on miners and pool ops would result in new infrastructure popping up that resists being found.

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
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January 24, 2012, 07:58:44 PM
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I would say no one has to know where the miners or pool ops are.  They can be in any country, spread all over the world.  They could operate through Tor if they had to.  I think attacks on miners and pool ops would result in new infrastructure popping up that resists being found.


That is re-active not pro-active. Plus, Tor nodes are easily mapped and blocked by many services. Yes, there are ways around it but remember that the End User will be the average bloke on the street. At least, that is what is hoped.



Quote
Support "smart" pools like P2Pool.

https://bitcointalk.org/index.php?topic=60492.0


I have donated to this Pool. It leans in a direction that is favorable. However, it would be nice to allow a client to 'hash' or 'generate coins'. This was in the early compiled clients. It is understood that it was to much for the average users. However, one doesn't need to look at it from, Hash as fast as possible using all available resources of the host computer.

How about, a simple slider or selection to let the End User decide if he wants to 'generate coins' and if so at what capacity.

Corporations have been enthroned, An era of corruption in high places will follow and the money power will endeavor to prolong its reign by working on the prejudices of the people until wealth is aggregated in a few hands and the Republic is destroyed. ~Abe Lincoln 1ApJdWUdSWYw8n8HEATYhHXA9EYoRTy7c4
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January 24, 2012, 08:24:50 PM
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I have donated to this Pool. It leans in a direction that is favorable. However, it would be nice to allow a client to 'hash' or 'generate coins'. This was in the early compiled clients. It is understood that it was to much for the average users. However, one doesn't need to look at it from, Hash as fast as possible using all available resources of the host computer.

How about, a simple slider or selection to let the End User decide if he wants to 'generate coins' and if so at what capacity.


Cgminer has an intensity setting so you don't have to has as fast as possible.

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January 24, 2012, 08:36:37 PM
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I agree with the mining in the client. Put in real gpu mining.
Perhaps it could check the system hashrate and the network hashrate and turn on mining only if the network hashrate "quickly" goes down and or below a certain value. Its needed if only to make investors feel more safe.




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January 24, 2012, 09:13:25 PM
 #6

I would say no one has to know where the miners or pool ops are.  They can be in any country, spread all over the world.  They could operate through Tor if they had to.  I think attacks on miners and pool ops would result in new infrastructure popping up that resists being found.


That is re-active not pro-active. Plus, Tor nodes are easily mapped and blocked by many services. Yes, there are ways around it but remember that the End User will be the average bloke on the street. At least, that is what is hoped.


A mining pool implemented over Tor would take incoming connections - not produce outgoing connections to services, which is the thing you're referring to as being blocked.  Apples and oranges.

I think it's a non-issue.  Imagine if they decided they want to take out everybody seeding illegal torrents - something they are already interested in doing today.  Look how successful they've (not) been.  And that's for something that is undisputedly illegal.  Bitcoin mining is not.

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
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January 24, 2012, 09:35:14 PM
 #7

I think it's a non-issue.  Imagine if they decided they want to take out everybody seeding illegal torrents - something they are already interested in doing today.  Look how successful they've (not) been.  And that's for something that is undisputedly illegal.  Bitcoin mining is not.

I think Bitcoin has the potential to be more disruptive than bittorrent. Also, Bitcoin is currently much more centralized. I think it could survive a "coordinated attack", but it will set it back for a long time. I'd prefer the proactive approach so it's simply no longer vulnerable.


Agreed. BitTorrent hurts an the entertainment industry and the entertainment industry attacks it. BitCoin could hurt world financial markets and their respective governments if not done with great care. I would tend to believe that the pressure brought to bare from those two entities could be a little more effective than the entertainment industries.

Corporations have been enthroned, An era of corruption in high places will follow and the money power will endeavor to prolong its reign by working on the prejudices of the people until wealth is aggregated in a few hands and the Republic is destroyed. ~Abe Lincoln 1ApJdWUdSWYw8n8HEATYhHXA9EYoRTy7c4
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January 24, 2012, 09:36:12 PM
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Actually, I like the idea of bringing back mining in clients, even if it's CPU. If all clients mined by default (including mobile ones), using very low intensity and priority, the electrical costs per person would be negligible, but it would help secure the network as a whole, plus someone once in a while would win a sort of bitcoin lottery just for participating in the system. It would also provide a tiny incentive for people to leave their nodes running, especially if it's promoted to the type of people who don't understand bitcoin and finances in general, and buy lottery tickets (same person really)

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January 24, 2012, 10:44:40 PM
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Excuse my dumb question, but is a protocol imaginable that makes solo-mining as worthwhile as mining today in a pool by rewarding with much smaller blocks?

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January 25, 2012, 05:00:16 AM
 #10

I think it's a non-issue.  Imagine if they decided they want to take out everybody seeding illegal torrents - something they are already interested in doing today.  Look how successful they've (not) been.  And that's for something that is undisputedly illegal.  Bitcoin mining is not.

I think Bitcoin has the potential to be more disruptive than bittorrent. Also, Bitcoin is currently much more centralized. I think it could survive a "coordinated attack", but it will set it back for a long time. I'd prefer the proactive approach so it's simply no longer vulnerable.

Agreed. BitTorrent hurts an the entertainment industry and the entertainment industry attacks it. BitCoin could hurt world financial markets and their respective governments if not done with great care. I would tend to believe that the pressure brought to bare from those two entities could be a little more effective than the entertainment industries.

Bittorrent itself isn't centralized, or even centralizable.  The concepts just don't fit together.  What is centralized is the sharing of torrent files.  The world has exactly one good public torrent site, a bunch of good(semi-)private sites, and a billion spammy/scammy/crappy sites.  That one good public site has stood up to the entire entertainment racket for a long time, armed with nothing but chutzpah.

Bitcoin itself is similarly decentralized by nature, but has a few high profile central services.  The exchanges, for example, are vulnerable to attack, but the bitcoin network wouldn't even blink.

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January 25, 2012, 09:54:10 AM
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Excuse my dumb question, but is a protocol imaginable that makes solo-mining as worthwhile as mining today in a pool by rewarding with much smaller blocks?

the shorter the blocks the more the miner suffers from getting the latest block delayed. i know how users of a service i worked at regularly reported bugs. it turned out that we decided that 1 minute old messages will not be fetched by the clients anymore and deleted them but the ping times in tibet were regularly over 30s with frequent delays of over 60s. now add download time with a slow connection and you will have half the world that would not participate in  mining if the blocks were 1/minute.

but you ask if a system would be imaginable. yes, it would. (proof me wrong Wink )

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January 25, 2012, 02:58:39 PM
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Excuse my dumb question, but is a protocol imaginable that makes solo-mining as worthwhile as mining today in a pool by rewarding with much smaller blocks?

You can't really change the protocol anymore. Rather, it is possible, but any change that radical the miners will very likely vote down. You can augment the protocol with something running alongside it. Having P2Pool built into every miner and bitcoin client is a possibility.

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January 25, 2012, 07:46:10 PM
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Decentralized systems often settle into some kind of "power law distribution."

For example, there's no central authority determining how large cities all over the world should be, and yet if you plot the size of cities you'll see that there are a few REALLY big ones, a bunch of medium sized ones, and a gazillion small ones.

Plot the size of the bitcoin mining pools and I think you'll see the same thing.

If there were no mining pools, then plot the hashing power of individual miners and I bet you'd see the same thing... (ArtForz used to be a significant fraction of mining power all by himself, for example)

I worry a lot more about incentives than I do size; if the "naturally big" players have the right incentives, then they're not bad for the network. So far, I think the incentives are working nicely. For example, people HAVE tried to knock out the big mining pools and exchanges using denial-of-service attacks, and the big mining pools and exchanges have (as far as I can tell) worked to fix that problem themselves.

PS: p2pool built into a bitcoin client is something I'd fully support, I think a lot of people would like a one-button "get a trickle of bit-pennies" option.

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January 25, 2012, 08:10:46 PM
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Could there be other incentives to hack pools?
Not only to attack Bitcoin but also to use the power to break passwords?



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January 25, 2012, 08:16:56 PM
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Could there be other incentives to hack pools?
Not only to attack Bitcoin but also to use the power to break passwords?

No.  Mining isn't like that.

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January 25, 2012, 09:20:42 PM
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For example, there's no central authority determining how large cities all over the world should be, and yet if you plot the size of cities you'll see that there are a few REALLY big ones, a bunch of medium sized ones, and a gazillion small ones.

Obviously this is correct. Let's pretend NYC, LS, SF, Orlando, Chicago, and Dallas are the really big Pools. When a Government attacks, their ICBM will take out those cities. That won't destroy the economy but it will do great damage. However, if 'every' city was a miner/pool, it would be very difficult to take them all out. The economy will suffer a little rather than a lot.

Would it not be beneficial to keep the size of cities to a maximum size. In the above example, I would prefer a 'gazillion medium sized ones."

The p2pool idea is a good one. It is hoped that it could be included at some point.

Investors / New users are weary of the client. From discussion with many, off network, they are weary of Pool Operators. They see them as the FED 2.0    Whether that is correct or incorrect doesn't matter. It is the perception that it is correct.  They see the Pool Operators shaping the currency and its uses towards an end they don't understand.  One might not be able to educate them as to the real purpose or even explain it to them. But one can include them. IF they were to "get a trickle of bit-pennies", then they would not be so worried about the former.

Nodes are shrinking not growing. This needs to turn around. At least give them a chance at making some money by leaving their nodes on and connected.

And to include the masses, it is possible to tell people how a Flip-Flop Oscillator works without telling them the process Doping of the IC chips. ie. Most people know how a car works but could careless about the technicals of it.

Explain BIP 16, 17 to people. All they know is that a change is coming and they can't judge for themselves whether it is good or bad. And that is always bad cause they pull out and do a wait and see scenario.

BTW: For the most part, I do trust the big pools and believe they have the interests of the community at heart (plus a little greed). But, the road to hell is paved with good intentions.

Corporations have been enthroned, An era of corruption in high places will follow and the money power will endeavor to prolong its reign by working on the prejudices of the people until wealth is aggregated in a few hands and the Republic is destroyed. ~Abe Lincoln 1ApJdWUdSWYw8n8HEATYhHXA9EYoRTy7c4
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January 25, 2012, 09:34:56 PM
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After the MegaUpload attack (and the incredible counter attack - 24% of traffic!!!) which was to stop MegaBox (which we will build, on Bitcoin no less) anything can go down for any reason.

Incentives are moot when the FBI sux MPAA cawk that hard.

I think the pro-active option is critical.

I also think we need to understand that bitcoins are tokens. I fully expect local exchanges which offset commodity speculation (price of rice in Thailand versus in the exchange) to prop up where people refuse to trade rice at the same price as the gamblers want.

I like the fact that 1) bitcoins have different values at different exchanges, and 2) the arbitrage opportunities are far and few between allowing localization of prices.

And lastly, we will never hit 21 Million BTC, so any BTC that aren't spent are BTC that do not exist.

Still, maybe the way to avoid disaster is to encourage chain forks at a small rate.

I can outline an idea I had a while ago:
Say the difficulty is 1,000,000.
Say the fork threshold is 5.
The fork difficulty is 5,000,000.
Say your block qualifies for difficulty 10,000,000.
Your block is 2x the fork threshold.
If you choose to fork then your fork would have difficulty 5,000,000 / 2 = 2,500,000 with reward 50 * 2,500,000 / 1,000,000 and 21 Million limit.

So now you could mine harder coins for a bigger reward. On the flipside if you get a block that qualifies for 100,000,000 then:
Your new fork has a difficulty of 5,000,000 / 20  = 250,000 with a reward of 50 * 250,000 / 1,000,000

Ultimately the point of mining is transaction security. However, this becomes a contradiction. If more coins are transacted in mining than being spent then who is being protected? An empty car with a great engine still wastes gas sitting there.

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January 26, 2012, 01:55:38 PM
 #18

To get more trust for pools, I wished the miners would get a copy of what they actually try to sign. Today it would be possible that pool A mines for pool B for the shares never actually mining a block for them essentially only costing B's money. If A would also send a copy of the block to be signed to the miner, the miner could broadcast the block himself to stop such attacks. He could also refuse to mine blocks without transactions etc ...

Why do miners sign stuff they are not allowed to read? You only see what you signed once it shows up in the block chain but if you happened to mine for some alt chain, you will not even be aware you publicly signed something.

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January 26, 2012, 08:10:02 PM
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PS: p2pool built into a bitcoin client is something I'd fully support, I think a lot of people would like a one-button "get a trickle of bit-pennies" option.

+1

I think this would be a great idea, especially if GPU mining was enabled.

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January 26, 2012, 09:08:33 PM
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To get more trust for pools, I wished the miners would get a copy of what they actually try to sign. Today it would be possible that pool A mines for pool B for the shares never actually mining a block for them essentially only costing B's money. If A would also send a copy of the block to be signed to the miner, the miner could broadcast the block himself to stop such attacks. He could also refuse to mine blocks without transactions etc ...

Why do miners sign stuff they are not allowed to read? You only see what you signed once it shows up in the block chain but if you happened to mine for some alt chain, you will not even be aware you publicly signed something.

I've heard somewhere on this forum about a new method of submitting shares to pool. The idea was that the pool would account your share as valid if the reward generation address will match that of the pool. So, you will choose which transactions you plan to include in it, you will choose what nonstandard features you will support and as long as you credit the share to pool, it will be accounted to your score.

Thus, the pool will just become a large accounting server who takes care about share and reward distribution, but cannot influence the mined blocks.

I really love this idea. Does it have any drawbacks? Why aren't there new pools offering it?


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