
Bitcoin isn't decentralized - homakov
https://medium.com/@homakov/stop-calling-bitcoin-decentralized-cb703d69dc27
======
darawk
Stop. Equating. Hashrate. With. Network. Control. Hashrate barely matters. The
influence these Chinese miners have is next to nil. Them having hashrate
doens't mean they get to decide on anything meaningful, it just means they get
to reap the economics benefits of transaction minting.

If they tried to exploit their 'power' in any way, people would just fork the
chain and move on. They have no ability to actually take advantage of their
position in any meaningful way.

~~~
jMyles
> just fork the chain and move on

It's not quite _that_ simple - the chain will need to be forked with a
protocol whose algorithm doesn't allow these miners to continue to dominate.
And achieving consensus on that in the heat of the moment will be non-trivial.

Any fork that continues to use SHA-256 will be a trivial target for attack by
these miners; they won't blindly continue to mine the "defunct" chain.

~~~
darawk
Ya, it'd cause some short term disruption, to be sure. But it's not an
existential threat. And it certainly doesn't make Bitcoin 'centralized'.

~~~
homakov
There are more than 1 variable in the outcome. And from what I see it is very
existential. Just not used yet.

------
Sniffnoy
Huh, was expecting the article to be about different meanings of
centralization and how Bitcoin doesn't meet all of them -- to use Vitalik
Buterin's terminology[1], it's not logically decentralized (being ultimately
based around a single consensus ledger). Instead it's claiming that Bitcoin
isn't politically decentralized like it claims to be.

[1] [https://medium.com/@VitalikButerin/the-meaning-of-
decentrali...](https://medium.com/@VitalikButerin/the-meaning-of-
decentralization-a0c92b76a274)

~~~
placeybordeaux
Yeah bitcoin is distributed, it functions as if it has a ~10m global
semaphore. The actual details are much more complicated, but with the current
design you are not getting around that, current efforts are to build systems
that only settle to the chain when trust is broken.

------
sktrdie
This article is so silly. How can it get front page on HN?

The important point that he's missing is that, even though the pools are
centralized, the individual miners are not! And this is really the main
difference.

As ASIC chips get faster and faster we'll reach a physical point that it won't
be beneficial to keep large rigs running in a central location - because of
the economy of energy distribution.

I'd love it if there was a greener solution for decentralization than energy,
but there isn't, otherwise we'd be using it! It's as simple as that.

~~~
Frogolocalypse
Yes, this is the logical implementation of the game-theory model.

------
colemannugent
The article seems to focus on China's share of the miners, so I'll address
that: I'm not that concerned about the Chinese miners. If they wanted to
disrupt the network they have had plenty of chances to.

The author assumes that all Chinese miners are controlled by the same entity.
Which, while I do believe that the Chinese govt. can shutdown any miner they
want to, I don't believe that 100% of the miners are operated by the Chinese
govt. If you break down the pie chart into the different Chinese entities that
actually operate the miners it begins to look more decentralized.

After reading the paper that was posted here the other week about forking the
network using BGP to effectively create two sepereate Internets, I think that
if a country did go rouge, we could all just set our firewalls to drop all
connections from Chinese nodes and that would be that.

Let them run their own chain where they can manipulate their coins price like
the do the yuan.

~~~
tlrobinson
> we could all just set our firewalls to drop all connections from Chinese
> nodes and that would be that

That's not how it works. All it takes is a _single_ connection bridging the
partition for a chain with more work to replace your chain. That connection
could be through a VPN, Tor, a satellite
([https://blockstream.com/satellite/](https://blockstream.com/satellite/)), or
someone physically carrying a USB drive containing a better chain across the
border and starting up a node.

Honeybadger chain don't give a shit.

~~~
colemannugent
VPN and Tor are still vulnerable to something like this: [https://btc-
hijack.ethz.ch/](https://btc-hijack.ethz.ch/), but satellite, that's pretty
cool!

I guess if a country wanted to they could jam satellite communications, close
their borders and cut all major fiber lines, but that still wouldn't stop the
ham radio folks from running pirate stations broadcasting blockchain updates
lol.

Thanks for the correction!

~~~
tlrobinson
That paper actually specifically mentions VPNs as a countermeasure to BGP
attacks:

 _Increase the diversity of node connections._

 _The more connected an AS is, the harder it is to attack it. We therefore
encourage Bitcoin node owners to ensure they are multi-homed. Observe that
even single-homed Bitcoin nodes could benefit from extra connectivity by using
one or more VPN services through encrypted tunnels so that Bitcoin traffic to
and from the node go through multiple and distinct ASes. Attackers that wish
to deny connectivity through the tunnel would need to either know both
associated IP addresses or, alternatively, disrupt all encrypted traffic to
and from nodes— making the attack highly noticeable._

Ham radio is another great idea. It’s a bit of a gray area, at last in the US
where commercial use and encryption (but not digital signatures) is
prohibited. Transmitting block headers may not strictly be against the letter
of the law. The transactions themselves though probably would be.

I’ve been meaning to set up a service listening on APRS-IS ([http://www.aprs-
is.net/](http://www.aprs-is.net/)) that rebroadcasts transactions _to_ the
Bitcoin network. I don’t think such a service would violate the regulations,
but users who wish to use it would be responsible for ensuring their
transactions did not (if that’s even possible)

------
pmorici
This is such a tired argument. It says more about the author than it does
about Bitcoin. The point isn't to have perfect decentralization. The point is
to have good enough decentralization that the system works. In the case of
Bitcoin "good enough to work" means at least three separate entities mining
with none having greater than 50% share.

~~~
homakov
Thisisfine.jpg is usual in Bitcoin problems

p2p cash! => ok, store of value

decentralized => ok, let's just hope China will be good to us

I hold quite a few BTC, but I prefer to remain realist.

~~~
Frogolocalypse
nodes define decentralization in bitcoin, not miners, because it is nodes that
define and police consensus in bitcoin, not miners.

~~~
pmorici
In the white paper it was intended that all nodes were also miners. Non-mining
nodes don't really contribute much to the network.

~~~
Frogolocalypse
Mining was never even mentioned in the white paper because it is immaterial to
consensus. As has just been demonstrated. Again.

And that argument is getting tired. You need to update your script.

~~~
pmorici
The paper doesn't use the word 'mining' it says the following under section 5
Network step 3...

"Each node works on finding a difficult proof-of-work for its block."

Quite clear that nodes look for the proof-of-work solution (aka: mining).

You can also see there is a whole section in the paper, section 8, that talks
about verifying payments w/o running a node.

[http://nakamotoinstitute.org/bitcoin/](http://nakamotoinstitute.org/bitcoin/)

~~~
Frogolocalypse
Henceforth be thy lesson :

So let's talk about nodes and consensus as defined in the whitepaper and
implemented in nodes.

Let's start with the bitcoin white paper
([https://bitcoin.org/bitcoin.pdf](https://bitcoin.org/bitcoin.pdf)) :

> Satoshi from the Bitcoin white-paper chapter 12 'Conclusion' : The network
> is robust in its unstructured simplicity. __Nodes __work all at once with
> little coordination. They do not need to be identified, since messages are
> not routed to any particular place and only need to be delivered on a best
> effort basis. __Nodes __can leave and rejoin the network at will, accepting
> the proof-of-work chain as proof of what happened while they were gone. They
> vote with their CPU power, expressing their acceptance of valid blocks by
> working on extending them and rejecting invalid blocks by refusing to work
> on them. Any needed rules and incentives can be enforced with this
> __consensus mechanism __.

First, you have to understand what 'consensus' actually means :

>
> [https://en.wikipedia.org/wiki/Consensus_%28computer_science%...](https://en.wikipedia.org/wiki/Consensus_%28computer_science%29)

> A fundamental problem in distributed computing and multi-agent systems is to
> achieve overall system reliability in the presence of a number of faulty
> processes. This often requires processes to agree on some data value that is
> needed during computation. Examples of applications of consensus include
> whether to commit a transaction to a database _(or, for example, committing
> blocks to a blockchain)_ , agreeing on the identity of a leader, state
> machine replication, and atomic broadcasts. The real world applications
> include clock synchronization, PageRank, opinion formation, smart power
> grids, state estimation, control of UAVs, load balancing and others.

What does this mean if you are but an intrepid traveler amongst the erstwhile
numpty-folk?

Nodes are agents in a multi-agent system with an agreed set of consensus rules
([https://www.cryptocompare.com/coins/guides/how-does-a-
bitcoi...](https://www.cryptocompare.com/coins/guides/how-does-a-bitcoin-node-
verify-a-transaction/)), which they and they alone enforce, that ensure that
the system functions. Transactions are propagated through the multi-agent
network based upon the agreed consensus rules by nodes, which are agents in a
multi-agent system. Miners retrieve valid transactions from any of these
nodes, which are agents in a multi-agent system. They then order the
transactions, and perform a hashing function on them until the hashing
function returns a value that is suitable to the nodes, which are agents in a
multi-agent system. They then pass the new block that they've created to the
nodes, which are agents in a multi-agent system. The nodes, which are agents
in a multi-agent system, then validate the block to ensure that each of the
transactions within the block agree with the consensus rules. Then the node,
which is an agent in a multi-agent system, extends the block-chain by
attaching the new block to it. They then pass the new block, if it is valid,
to other nodes, which are agents in a multi-agent system. Then each of these
other nodes, which are agents in a multi-agent system, each do the same
validation on every block.

Nodes accept incoming transactions and validate them. Miners don't. Nodes
replicate transactions to other nodes. Miners don't. Miners take transactions
from nodes, and order them in a block, and perform a hashing function on them
(the only thing they do). Miners pass the new block to the node. The node
validates the transactions in the block. Miners don't. The node validates the
block. Miners don't. The node extends the blockchain. Miners don't. The node
replicates the block to other nodes. Miners don't. It is the validation of the
nodes, and their CPU's, that define and police consensus in bitcoin.

There is only one function that miners do. They take transactions, put them in
a block, and hash them. As soon as a miner produces a block that nodes don't
want, it is rejected. Miners work. Nodes validate. So nodes are the proof in
proof-of-work.

Nodes accept the transactions, validate the transactions (using their CPU),
replicate the transactions, maintain the mempools, validate the blocks (using
their CPU), extend the blockchain (using their CPU), replicate the blocks,
serve the blockchain, and store the blockchain. Nodes even define the PoW
algorithm that miners have to employ. If you can't convince these node owners
that are using their node on a day-to-day basis, to uninstall their node
software and install your new node client, especially when that node client
decreases their node security and decreases the network security, any change
you have is going to go exactly nowhere.

So nodes maintain the protocol, not miners. It is thus. It has always been
thus. If you can't convince all of those node owners running their node
clients to uninstall one client and re-install another, any change you have to
consensus is DOA.

See for yourself. Download it.
([https://bitcoin.org/en/download](https://bitcoin.org/en/download)) It's
currently at 0.15.1

[https://bitcoin.org/en/full-node](https://bitcoin.org/en/full-node)

> A full node is a program that fully validates transactions and blocks.
> Almost all full nodes also help the network by accepting transactions and
> blocks from other full nodes, validating those transactions and blocks, and
> then relaying them to further full nodes.

Ya need to turn off that rbtc tap. It makes ya stoopid.

Thus endeth thy lesson.

~~~
pmorici
You are confusing what the Bitcoin Core software currently does with the
original intention set out in the white paper.

~~~
Frogolocalypse
And you have just had how bitcoin works explained to you, and yet you choose
to remain ignorant.

------
polock
You need to see this discussions

"Decentralized credit rating on the Blockchain"
[https://us.teamblind.com/article/decentralized-credit-
rating...](https://us.teamblind.com/article/decentralized-credit-rating-on-
the-blockchain-bNuPyCXs)

------
JonasJSchreiber
I disagree with the premise of this article. Just because miners are based in
China is not proof of collusion. I agree there is some fishy stuff going on
with Bitmain and Antpool and others, but isn't it in their best interest not
to break faith?

Wouldn't exchanges (who are holding all the money and are not (explicitly NOT)
based in China still have the cash to fund withdrawals? Wouldn't the rest of
the world STILL be free to fork the chain to a good faith ecosystem? Isn't
Bitcoin Core largely made up of non-Chinese?

------
knocte
Any article that refers to mining pools as "miners" is missing the picture and
misleading. First get the naming right, then we can talk.

------
tromp
> no hard-fork to different PoW alg can save you from that, because you will
> start with a much weaker hashrate

Security derives not from hashrate but from energy consumption. E.g. Ethereum
has a many orders of magnitude lower hashrate but its energy consumption is a
significant fraction of bitcoin's.

------
down
If the Chinese act bad and there is a fork, even if the Chinese fork has more
hash power doesn't mean the market will favor their coin, out contrary, no one
will trust their chain, since they acted malicious, who will buy their coins..
it will also be an opportunity for new miners.

------
H99189
So the main point of the article is that China controls > 50% of the mining
pool. Is there any reason what-so-ever that multiple companies would ever want
to collude and fork it, and thus crashing the value to 0?

~~~
maxander
Not as long as they own a lot of the coin itself, no. If any of these miners
sells their stake, freak out immediately since their next step would be to
short bitcoin through some means before causing a value crash. And you’ve also
got to consider market reactions; if any of the miners sells a decent amount
of their stake, freak out immediately- because they’re liable to sell more
soon, causing everyone to freak out and crashing the market. And so on. This
doesn’t sound stable- perhaps the whole thing could be taken down by a miner
deciding he needs a bit of cash to buy a house.

~~~
hossbeast
Your conception of the amount of money involved here is off by several orders
of magnitude

~~~
maxander
Clarify? I can’t say the market capitalization of Bitcoin off the top of my
head, but neither can I tell whether you think I’m making it out to be higher
or lower than it is.

~~~
hossbeast
Much, much lower. Buying a house vs 120B+ market cap.

~~~
maxander
And a bank run can’t occur in a 120B market? Or commodities worth 120B can’t
be shorted? What?

------
spraak
It's still decentralized by design, though, even if not practically.

------
iamthirsty
Stop. Writing. Like. This. Please.

~~~
johnhenry
I have to wonder if comments like these might be better directed at the
article on medium rather than hackernews, just in case the author isn't the
poster.

~~~
iamthirsty
Probably true, but not everyone has a Medium account or would like to make
one.

------
heimatau
Sigh...I disagree. ~17M Bitcoins. ~17M BCH coins. How many splits coming up
soon from the BTC chain? 10k Nodes. Multi-million dollars invested into
'mining'. 0.0001 is at parity/value with the USD Dollar. How many people trade
these cryptocurrency tokens? How many program and develop to aid the security
and value of the entire crypto network? How many businesses/services opt to
accepting these tokens instead of fiat? I don't think people realize the
gravity of what has happened in plain sight.

There is no single one point of failure. None. Why? because this isn't about
'one ring to rule them all' nor 'one token to use'. Look at this entire
ecosystem of crytpocurrencies, as a whole.

Sure the code has had some issues but...those were ironed out many years ago.
Even if multiple people own 1M tokens...guess what? It's
distributed....many....many more times than our current oligarchy system from
central banking and fiat currency. Where the USA prints money and accounts to
no one but themselves.

Anyone could look up how systems create points of failure. The crypto network,
as a whole, has more computational power than numerous supercomputers. They
aren't just 'solving puzzles', as Bitcoin 101 people are saying. These are
built on-chain and off. Online and off. This thing, should be seen as a
biological wonder. This is like a virus, trying to consume us all. I strongly
doubt our, current and imperfect, society can stop this new paradigm shift. We
are entering a phase of our history that will change how we value and interact
with one another.

It's here, it's incentives are ingenious. No war, bombs nor law can stop it.
It is has no weakpoints. Those weakpoints that exist, are mitigated by other
areas of the network being able to offload that risk.

Or after skimming this guys article. It DOES _NOT_ MATTER that 3-4 companies
try to game the 'mining hashpower'. Why? because ~17M tokens already exist.
Many of those earlier adopter CAN and DO shift the entire market, as they
should. This isn't about 'hashpower'. This isn't about thinking about Bitcoin
in a very traditional sense. Think of every aspect as a weakpoint and
stakeholder. With all aspects being attributed a value. Sure, an exploit can
be found, but over time, those exploits decrease exponentially because more
brain, computational, and social dynamics have been 'attacking' the system.
This system grows and evolves and it's adaptable based on the behavior of
humanity. People choose the value and the system adjusts.

P.S. I know I sound weird and maybe esoteric but...I've been watching this
space almost since the beginning. I wish I entered sooner but I just didn't
believe anyone would ever adopt it. The early days of bitcoin, these tokens
were given away, proud and free. Now, 50 of them (one early block) could pay
for most, if not all, 1st world college tuition. Or a home. The cost? Being
socially crazy and weird. Well...things are a bit different now. Why? What is
the math about? What are the social dynamics about? Why are 'splits' so
contentious? What are those social dynamics about? There is SO much going on
here that 90% of people don't know, let alone don't get. 20 years from now,
we'll wonder why we/humanity didn't think of this sooner.

P.P.S. I'm not resting on my own opinion but instead have been challenging my
own throughout this 'bitcoin experiment' and I am open to changing my mind
but...the math is decent, the software is decent...I look forward to when
someone can articulate 'major' flaws that can 0 day the system. Or even 30 day
the system. It's too ironclad but feel free to 'enlighten me'.

------
johnhenry
Distributed?

------
redetedt
From what I understand, the attacks miners can perform can be easily detected
by the actually decentralised full nodes. Once detected, these miners can be
removed. So yeah, this part of bitcoin still requires some human politics, but
it is fairly minimal.

People are trying to figure out how to make mining less centralised. None of
these growing pains are some kind of fundamental flaw that cannot be overcome.

~~~
ironjunkie
It's more complex than that. There needs also to be a consensus to remove a
block of the chain.

Without consensus, the best-case scenario would be that it results in a fork.

~~~
Frogolocalypse
> It's more complex than that.

No it isn't actually.

------
juicyfroot
They should show a piechart of the genders of the people running the miners.

It will show likely 99% male.

~~~
zxcmx
End the blockchain patriarchy! We need more pink hashes.

Red hashes no! Pink hashes yes!

