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Is the Bitcoin network an oligarchy?

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Re: Is the Bitcoin network an oligarchy?

#21

Post by topmonk »

anoncoward111 wrote: post #9
atomical wrote: post #3

How do these users have political control like an oligarch would have?

Any entity that controls more than 51% of network capability (i.e. owns and operates a lot of expensive hardware) can, in theory, begin making fradulent transactions called "double spends". Any common user of the network that is unfortunate enough to get caught up in this scheme would lose their money. And the long term value of the network would most likely plummet, but in 2013 it didn't for some odd reason :)

They can also refuse any transaction, so they could prevent stolen funds from being moved, for example.

Seems much more benign, but is far more insidious, IMO.

Re: Is the Bitcoin network an oligarchy?

#23

Post by sanxchit »

Pardon my ignorance, but how is it possible to track Bitcoin holders? I thought that it was really easy to create multiple Bitcoin addresses, so if a rich miner wanted to hide his holdings he could create a separate address for each transaction and he would in effect be untraceable right?

Re: Is the Bitcoin network an oligarchy?

#24

Post by dangero »

siruncledrew wrote: post #22

Honest question: Is there an etherscan.io for bitcoin to figure out what the largest token holding addresses are? If possible to figure out who the addresses belonged to, then the biggest coin holders could be known.

Bitcoin wallets generally generate multiple addresses so most users have many. The wallet software does the work of displaying all addresses combined as a single balance. This is different than Ethereum where generally most users have 3 or less accounts. The effect of this is that Bitcoin appears less concentrated than it actually is in comparison.

Re: Is the Bitcoin network an oligarchy?

#25

Post by anoncoward111 »

craigc wrote: post #19
anoncoward111 wrote: post #9

Earlier quoted context omitted.

Any entity that controls more than 51% of network capability (i.e. owns and operates a lot of expensive hardware) can, in theory, begin making fradulent transactions called "double spends". Any common user of the network that is unfortunate enough to get caught up in this scheme would lose their money. And the long term value of the network would most likely plummet, but in 2013 it didn't for some odd reason :)

Unless I am missing something, this paper is referring to connections between addresses when it mentions the “Bitcoin network”. Not actual mining nodes. It does not have anything to do with a 51% attack.

Oh, apologies! You are totally correct.

In that case, the select few owners of these coins could dump their holdings to buyers who are otherwise unaware of these large numbers of "hidden" coins. The owners make good money, the buyers overpay.

After that, it would be up to the core developers and the new holders of the coins to make the Bitcoin ecosystem a valuable place to exchange money. If they do that, then the coin will survive all that inflationary volume.

If the oligarchy never dumps, then they've just aided Bitcoin price support.

A coin does not equal a vote in Bitcoin version support, only hashing power does.

But de facto, I suspect wallet size is correlated with hashing power.

Re: Is the Bitcoin network an oligarchy?

#26

Post by dangero »

sanxchit wrote: post #23

Pardon my ignorance, but how is it possible to track Bitcoin holders? I thought that it was really easy to create multiple Bitcoin addresses, so if a rich miner wanted to hide his holdings he could create a separate address for each transaction and he would in effect be untraceable right?

There is lots of other metadata to collect: You can monitor which nodes received the transaction first. Edge nodes can get IP address of sender. Who are the transactions with? Amounts, quantity, and time of day/week/month could all provide correlation.

Re: Is the Bitcoin network an oligarchy?

#27

Post by craigc »

I am well aware that most people on Hacker News hate Bitcoin and cryptocurrencies so a lot of these types of studies and articles that are negative end up making their way to the top.

It is strange that this study was from 2017-2018 and yet they only considered data from 2009-2013. Would be nice if there was an explanation as to why.

One thing I wanted to point out is this seems to be presented to shine a negative light on Bitcoin, but I have a feeling that if you were to plot the owners of any equity you would find the exact same patterns. People who get in early will own a majority of the supply.

For example take a look at Morgan Stanley stock. 86% of the shares are owned by institutional investors and of that chunk, five institutions own 58% of them:

https://www.nasdaq.com/symbol/ms/ownership-summary

I also think these types of patterns with regards to transactions probably exist with other currencies as well, but it is just that the data is not available for the public to analyze.

Re: Is the Bitcoin network an oligarchy?

#28

Post by firsttimeuser »

siruncledrew wrote: post #22

Honest question: Is there an etherscan.io for bitcoin to figure out what the largest token holding addresses are? If possible to figure out who the addresses belonged to, then the biggest coin holders could be known.

https://bitinfocharts.com/top-100-richest-bitcoin-addresses....

Re: Is the Bitcoin network an oligarchy?

#29

Post by wjnqx »

craigc wrote: post #27

I am well aware that most people on Hacker News hate Bitcoin and cryptocurrencies so a lot of these types of studies and articles that are negative end up making their way to the top. It is strange that this study was from 2017-2018 and yet they only considered data from 2009-2013. Would be nice if there was an explanation as to why. One thing I wanted to point out is this seems to be presented to shine a negative li…

To be fair, stock in Morgan Stanley is not marketed as "decentralized."

Re: Is the Bitcoin network an oligarchy?

#30

Post by dane-pgp »

craigc wrote: post #27

I am well aware that most people on Hacker News hate Bitcoin and cryptocurrencies so a lot of these types of studies and articles that are negative end up making their way to the top. It is strange that this study was from 2017-2018 and yet they only considered data from 2009-2013. Would be nice if there was an explanation as to why. One thing I wanted to point out is this seems to be presented to shine a negative li…

And it's not just owners of equities that have this worrying pattern. Consider, for example, the market share trends for SSL certificate authorities:

https://w3techs.com/technologies/history_overview/ssl_certif...

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