The more and more I see the difficulty shoot up to ridiculous levels, the more and more I see the major flaw in BTC. In the end there is nothing stopping a Mega Mining operations from doing whatever they want. Here is why I feel this way.
http://hackingdistributed.com/2014/06/16/how-a-mining-monopoly-can-attack-bitcoin/ <-cred and props to these guys for writing this.
A Mega Mining operations says "trust us", their name is Ghash.io(t
his violates the trust-less nature of what BTC is supposed to be)...
They say they will "not do a 51% attack",
although they could at any time."""GHash actually had a fairly sustained 55% last weekend, and there is no reason why it couldn't be, say, 80%. So a 1-confirmation transaction would suddenly take 40 minutes instead of 10."""
Other miners will soon start going out of business (and have been already) and stop mining completely at some point, which will leave Ghash.io or whatever Mega Miners remain to have almost total control.
Now I know a lot of people in these forums always try to play the emotional game(while they try and say it is logical) of "A Mega Miner serves itself better by keeping BTC alive and not doing 51% attacks". That might be true for the time being, but what about years from now? There will be a point where someone gets up to 60% or 70% or even 80% or higher. There will be no room for smaller operations, it will be controlled, therefore changes can be made in their favor. We all know what happens when people get control of something, with great power comes great corruption. There is no law that prevents a Mega Miner from screwing anyone over. In the end it will most likely not be worth it for the Mega Miner to continue, hence where the screwing over comes in. Double spending, not validating transactions, black listing people, big fees if they feel like it(or else your transaction doesn't get processed).
But why doesn't everyone "just choose not to accept those miners". Good question, not everyone knows anything about that and then where do you really go when everything is shut down? The community isn't going to pay hundreds of millions of dollars to hire and create a new Mega Mining operation that could just turn around and screw them over again anyway.
BTC is a very good step forward in the direction of the future of currency. But we all can't sit around and claim BTC is the best when such fatally obvious flaws exist. I don't see any way to fix it, and when quantum computing comes out prepare to really get effed by a Mega Miner. It is not like a Mega Miner needs to screw everyone over royally, it is just that "trusting" them is what BTC is not about.
Extreme Example:
Miner A has 65%
Miner B has 30%
Miner C has 5%
So in this example of the near future or a few years away future,
Miner A is control now. Guess what? Everyone agrees to raise the threshold to 71% besides Miner A, but guess what? Miner A does not accept the change so it does not go through. So you see how it would be harder and harder to update the BTC protocol further into the future...
What happens if Miner B and C accept the change? Chaos.
New Block Chain formed that lots of people go to, but some still at Miner A(the dumb people).
Miner B now has about 85% of total miner power
Miner C now has 15% of total miner power.
Miner B controls the network now instead of Miner A, threshold is again voted to be raised to a 91% attack is now needed to double spend...
See how the problem just keeps going with stupid things like this? It needs to be changed to a higher number NOW before the Miners become a more powerful oligopoly.
Miners don't always have to act in the best interests of anyone... Look at MTGOX and other countless examples. Hacking can easily ruin miners too, why not?
People used to think it was impossible to get into space, the earth was flat, that certain races are dumber, that the everything revolves around the earth, even BTC people say is impossible until someone thought of it... etc...
I wouldn't give up hope on an updated protocol that solves more issues, it isn't impossible to make BTC better, it isn't impossible to change the protocol and add new features/voting system based on "X" where x is a section of code that now also validates "BLAH" and confirms "YADDA YADDA".
Tell me, why is it better that Ghash.io can do everything it wants? Why isn't it better to have a floating variable that determines lets say the top 5 Mining Pools and makes them all confirm something instead? How is having one thing in charge better than 5? A system needs to be put into place where more than one mining pool can agree with the others and validate, and if a pool is abusing its power there should also be something that makes gives them consequences for doing so. The logic can and must be expanded to account for the future.
