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Author Topic: is mining centralization a problem? (in terms of adoption)  (Read 850 times)
bitdraw
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November 01, 2014, 03:07:45 PM
Last edit: November 01, 2014, 03:39:03 PM by bitdraw
 #1

i had a little thought about the long term development of bitcoin, how adoption is going to unfold and where we are ultimately going to end up.

first i have to say: i think bitcoin is a great idea and i love it.

but, i think a major problem we are facing is that mining centralization has a negative influence on bitcoin adoption.
im not talking about things like 51% attacks as i dont see it as a real problem. the big mining companies have the highest interest that the system succeeds and even if they dont act accordingly there are ways to work around the problem.

the effect of mining centralization is that most of the newly generated bitcoin end up in the hands of a small group of people.
from an economic standpoint this is not a problem. when you buy bitcoin with your currency you always get exactly that value in bitcoins so you dont loose purchasing power.

but the thing i worry more about is the psychological implication. who wants to join an economy where the trading token that is used to value wealth, goods and services gets distributed in a way where everything ends up in the hand of a few?

if you think of bitcoin as a global currency not just the payment protocol then why should you switch from a system where you share x% of the global trade tokens to a system where your share is suddenly a lot less?

i simply dont see an incentive for this. higher bitcoin prices are obviously not very helpful either..

ofc it is in everyones self interest to get as much of the pie as possible, but is it benefitial for the bitcoin ecosystem as a whole? (see: tragedy of the commons)

i fear that we might end up using bitcoin purely as a fast in out vehicle for normal currencies to avoid certain unfavourable conditions, e.g. remittance. personally i would love to see bitcoin become something more.

what do you guys think? is this a problem? is it not? are there solutions?

this is only a quick theory so if you find mistakes or unreasonable assuptions correct me please! critisism is highly appreciated =)
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November 01, 2014, 04:04:23 PM
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People will use whatever is popular regardless how shitty the actual system is. Our current system is a scam and most people out there don't even ask themselves what the dollar is (or the euro) and how the actual system works.

So if Bitcoin becomes popular, people will end up using it, even tho it presents the same problems as fiat: A centralized mining cartel printing money, and 1% owning a shit ton of wealth.

As of now, I don't see why 99% of people would need Bitcoin on their daily lifes tho.
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