
Bitcoin Miners Signal Revolt Amid Sluggish Blockchain - mathieutd
https://www.bloomberg.com/news/articles/2017-03-13/bitcoin-miners-signal-revolt-in-push-to-fix-sluggish-blockchain
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ChemicalWarfare
The irony here is that "decentralized p2p-based currency" is very much
centralized with 60-70% of the mining power concentrated in 2-3 mining pools
who get to impose their will on the system.

~~~
hudon
Sorry but you've been misinformed... If you take a look, it takes at least 5
mining pools today to get over 50% of mining power [1]. Some have argued that
this is more than enough decentralization that the network needs to stay
secure [2].

The beauty of it is how easy it is to switch mining pools. Miners come and go
[3] so the large mining pools need to make sure they're keeping both the
miners happy and the network users happy.

[1] [https://blockchain.info/pools](https://blockchain.info/pools)

[2] [https://bitcoinmagazine.com/articles/problems-associated-
wit...](https://bitcoinmagazine.com/articles/problems-associated-with-bitcoin-
mining-centralization-may-be-overstated-1474917259/)

[3] [https://news.bitcoin.com/pools-diversifying-bitcoin-
mining/](https://news.bitcoin.com/pools-diversifying-bitcoin-mining/)

~~~
ChemicalWarfare
These numbers go up and down - because yes it's easy to switch pools - but
even if 5 pools is the "magic 51% number" today, this centralization is
borderline extreme.

This is not about security mind you - this is about imposing the will where it
takes 5-6 individuals or maybe one subpoena order from one government
considering the physical location of these pools to force the rest of the
blockchain to comply with you.

~~~
hudon
You're never forced to comply with the status quo, you can fork. This is what
people in Ethereum realized and this is what the Bitcoin Unlimited movement is
about.

~~~
ChemicalWarfare
Fork and then what? Unless you have formidable percentage of the total hashing
power you're dead in the water. But if you do have it and with this bitcoin
centralization it's not physically hard to control then you can threaten the
rest to fork if they don't comply with your "direction".

~~~
hudon
This is conjecture on my part but to your point: some have suggested that the
minority fork change its proof-of-work algorithm, to prevent attacks from the
majority fork.

I would also point out that miners are heavily incentivized to keep the
network valuable. If 80% of the miners got together and decided that
transactions need a signature from the PBoC or an output to the IRS before
being valid, everyone would sell, the price would plummet, and the miners will
be left with a bunch of inefficient heating equipment and no more revenue.
Miners need to stay engaged with the users if they are to force any kind of
change onto the network, lest the rewards they get from mining turn to dust.

~~~
ChemicalWarfare
sure, there are things that are obviously "bad" for all of the miners. but the
reality isn't as cut-and-dry - there are things that are up for a debate - but
with this centralization there is no debate, or rather the debate is short :)
which is why bitcoin xl didn't happen for example.

not sure what your point is - you saying there's no centralization? it's not
as bad as it seems? something else?

~~~
hudon
I've just been refuting your original statements about how decentralized it is
and about how miners get to "impose their will" arbitrarily. You seem to think
that tomorrow 3 miners can come out and decide to increase the coinbase reward
back to 50 btc and there would be no consequence. I'm saying the system
doesn't work like that and that the level of decentralization is adequate.

~~~
ChemicalWarfare
If these "3 miners" are controlling the majority of the hashing power - which
isn't too far fetched from how the things really are - we're literally talking
like 10 physical individuals here - then yes, they get to tell the others what
to do.

This already happened in the past and looks like Ver and AntPool are trying to
make it happen again. And they know full well that it's not that hard to do:

>>> "Ver says he plans to step up lobbying efforts, especially in China which
is home to the majority of bitcoin mining."

and again this lobbying^^ will only need to be applied to a few concrete
individuals again because of the extreme level of centralization of the
hashing power.

~~~
hudon
I see what you're saying, but you originally said that miners get to "impose
_their_ will". If Bitcoin miners have announced support for Bitcoin Unlimited
and the market price hasn't crashed in response, what does that tell us?

~~~
ChemicalWarfare
you tell me since I don't see how this proves/disproves the "bitcoin is
centralized af" statement...

------
ddebernardy
Much as I read Bitcoin articles from time to time I still don't get why on
earth one would want to use a crypto currency.

I'm like, I vaguely get the "not under control of a .gov" and privacy concerns
and all, but the thing seems literally backed 100% on faith, in contrast with
(if only theoretically) the "we the nation" backing of fiat money.

Any odds an aficionado might be around to enlighten the uninitiated?

~~~
lettergram
For one, all currency is based on faith. We have faith the government can
control the currency and will back the currency.

Take Venezuela, their currency is/has collapsed because the people no longer
have faith that it is valuable.

Typically, people just blindly trust authority, and that's why we believe
green paper made from cotton to be valuable. We all agree it's valuable
(except people who want a gold standard).

Similarly, we all agree Bitcoin is worth X. It's no different, except no one
is telling us it's worth X. The market is saying it's worth X.

It's not really the first time a society agreed to use something arbitrary as
valuable either. There are cultures that used salt, gold, silver, white
stones, etc. as currency. The point is, once we agree something is worth X, we
can trade for other goods at value X.

The advantage to Bitcoin is it's not centrally controlled so it's harder to
mess up (see great depression, federal reserve basically made it 100x worse),
or Germany post WWI. Further, you have an auditable history, some privacy
(better than credit cards), and a truly global currency (similar to gold,
without the need to lug it around).

~~~
Dylan16807
For most currencies, governments act as huge buyers and stabilize the value
over the entire year by calculating taxes in that currency. It's not just
faith in the currency itself. Bitcoin doesn't have any institutional buyers
like that.

> Take Venezuela, their currency is/has collapsed because the people no longer
> have faith that it is valuable.

Almost all the devaluing there is because _they keep making so much_ , not
because of a lack of faith.

~~~
mdpopescu
They make a lot less than the US government.

~~~
Dylan16807
Proportional to how much existed a couple years ago they have created insane
amounts of new currency. US government can't touch that rate.

------
ktta
This is actually one of the most important standoffs ever in Bitcoin and will
rival the well know Ethereum Hard Fork after the DAO fiasco.

To give an idea of what is happening, I'll try to explain what I know, which
isn't lot.

Since last year, there's been an increase in fees that every transaction has
to pay to get confirmation within a reasonable timeframe (the point at which
your transaction is deemed a valid one). The reason for this is that, the
Blocksize is capped at 1MB. Now, the problem is that people are disagreeing
with the direct solution to this problem, which is increase the blocksize.

What that means is that only 1MB worth of transactions (I don't exactly know
how many that is) will fit in a particular block, which is generated once
every 10 minutes (the difficulty of 'mining' is actually adjusted to ensure
this). So since there's been a lot of activity with bitcoin, a lot of people
are having to wait longer to get their transactions confirmed because they
usually have to wait for the second or third block after the transaction is
sent out by the client. This makes confirmations slower.[1]

Now, to make confirmations faster, people have to pay more for the
'transaction fee' which directly goes into the pockets of the miner who
includes the transaction in their block. So transactions which pay lower fees
are pushed out of the block the miner is currently mining because, they
obviously want more money. So the transaction usually occurs in the next
block, if they're lucky.

The way I see it, the blocksize has to be increased, because it is ridiculous
that I have to pay more in fees for sending bitcoin than using paypal. But,
the party opposing it has some interesting arguments too. (The full pro-con
list can be found here[2])

The strongest argument in my opinion is that making the blocksize larger would
lower the transaction fees the client has to pay. Now, that is good for the
client, because they pay less fees. But, bad for the miner because they get
less money for all the work that they put in.

So there was talk about increasing the blocksize to 2MB. That never went
through, because of some other problems with SegWit, which frankly I have not
much knowledge of.

But then came the idea of Bitcoin Unlimited. Now the people behind this say
that the blocksize should be WHATEVER the miner chooses and they want autonomy
over the blocksize. What can happen in this scenario is that the big players
can make a loss temporarily while the smaller players lose money. Eventually
the smaller players (miners) close shop which would make bitcoin more
centralized.

Very interesting arguments on both sides, and this will be much more
interesting to watch than anything in recent history.

I'm actually surprised not many people are talking about this, and that
there's more interest in whether Bitcoin is accepted as an ETF, which was a
terrible idea in the first place.

[1]:[https://blockchain.info/charts/avg-confirmation-
time](https://blockchain.info/charts/avg-confirmation-time)

[2]:[https://en.bitcoin.it/wiki/Block_size_limit_controversy](https://en.bitcoin.it/wiki/Block_size_limit_controversy)

~~~
alexro
"Economic majority" of bitcoin space have already agreed not to follow BU,
that's why not many talk about it.

~~~
ktta
Well, the confirmation time problem and the transaction fees problems aren't
going to go away anytime soon right? They're only going to get worse. So
what's the opinion of people who have agreed not to follow BU? Let the
transaction fees increase till transactions <$10 will be stupid to make?

~~~
TD-Linux
As someone who will never run BU, I'd rather have segwit activate, which will
bump the blocksize to ~2.1MB and also enable a lot of better payment channel
implementations, like lightning, that can lessen the demand.

It seems very clear to me that simply increasing the block size forever to
keep under some arbitrary fee isn't going to work, though the reasons I have
against running BU are mostly to do with its implementation.

~~~
ktta
I'm interested. Why aren't you going to run BU?

~~~
TD-Linux
BU doesn't implement a hard fork but rather potentially infinite hard forks,
depending on two user controlled parameters. If the AD parameter is low (the
default), then it will just be a long orphan chain, with effectively miner
selected block size, but in kind of a gross way (for miners to limit block
size they need to orphan other miners' blocks... but they might all have
different settings, so it's a risky deal). You also don't know when a chain
fork will happen. To avoid this, all users are supposed to coordinate their
'EB' parameter via some side channel, like Reddit. In my opinion this is very
error prone, and maintaining consensus is the job of the software, not the
user. Earlier hard fork proposals like BIP-100, BIP-101, etc which had BIP9
style voting, or even just a flag day that activate on a certain height, are
far safer.

It also doesn't help that BU forked from an old version of Bitcoin Core, which
means it's missing some new features and is slower.

------
anigbrowl
As expected. Turns out seizing the means of production won't necessarily
result in equitable outcomes.

~~~
lumberjack
Only because, you're are grossly misinterpreting the phrase.

The whole idea behind socialism is that the means of production are controlled
and owned in some democratic manner where everyone has almost equal ownership
and control.

Bitcoin is more akin to Rothbard's capitalist utopia, with private ownership
of property but no state.

~~~
eru
About a hundred years ago, some Germans (the `Freiwirtschaftler', a bit
similar to the American Georgists) had an interesting alternative
interpretation of socialism: socialism is when approximately all GDP goes to
labour, and only negligible fractions to capital and land. (And they wanted to
get there in a market based economy.)

------
postscapes1
Seems like it is playing a part in Ethereum and ether blowing up this week
(hit $30 today...)

------
tromp
Roger Ver's quote

“Say you haven’t had any water to drink for a day and a half, and you also
need a haircut. Do you drink some water or go to the barber shop? SegWit is
like going to the barber shop.”

fails to notice that this barber also provides free drinks...

