The centralization of mining is a known problem for more than 10 years and is exactly the reason that altcoins exist.
Bitcoin is largely controlled by a small group of investors and miners
151–160 of 486 posts
Re: Bitcoin is largely controlled by a small group of investors and miners
#152Earlier quoted context omitted.
If you think the article provides evidence for any of what you are saying, you should read it again. Do you really believe the 1000 top holders of Bitcoin that control together about 15% of the supply somehow conspired together to manipulate the price? Yes, there is a lot of small scale shenanigans with crypto currencies, but Bitcoin has become very hard to manipulate due to the sheer size of the market.
> Do you really believe (...) conspired together to manipulate the price? > Yes, there is a lot of small scale shenanigans with crypto currencies, but (...) . There are no buts. Either the market is manipulated, or it isn't. You already acknowledged it is manipulated, but somehow the degree of difficulty to pull it off is of any relevance? Why do you feel this matters? Meanwhile, here's an interesting read. https://w…
The subject of those two sentences is different. The first is BTC, the second is smaller coins.
Re: Bitcoin is largely controlled by a small group of investors and miners
#153Money is largely controlled by a small group of investors and central banks. [citation needed]
> Money is largely controlled by a small group of investors and central banks. [citation needed] There are an estimated 40 trillion dollars in circulation alone. The US government debt is currently close to 30 trillion dollars. The world's richest person has an estimated value of around 180 billion dollars, less than 1% of the US debt alone. I'm talking about projected value, not cash. In contrast, it was already rep…
So you are saying, that US government controls such staggering amount of money, that even it's debt (denominated in it's own currency) is several orders of magnitude bigger than total worth of the richest person in the world? And that person is also many orders of magnitude richer than a mean citizen?!
Suddenly, Bitcoin does not sound so centralized in comparison...
Re: Bitcoin is largely controlled by a small group of investors and miners
#154what does control mean here? they can print more bitcoins into existence? they can fake a transaction? they can undo a transaction? they can steal from other wallets?
> what does control mean here?
In this particular instance, it means "they have more than me".
Re: Bitcoin is largely controlled by a small group of investors and miners
#155The death-knell in my opinion for true decentralization of the bitcoin network (ignoring mining for a moment) happened when the blockchain became too large for it to be practical for normal users to have the whole blockchain on their machine and operate a real node. I am sure there is some creative solution to this, perhaps an additional mining process by which old records are combined to save space (i.e. transactions older than a week get squashed so that only the resulting balance is stored instead of the individual transactions, perhaps). It might also help to not even store information about a wallet address on the blockchain unless it has a nonzero balance. I have no idea how this is actually implemented so this is all speculation.
Re: Bitcoin is largely controlled by a small group of investors and miners
#156Earlier quoted context omitted.
You're assuming miners are sellers. They could very well be HODLErs buying at a huge discount.
> You're assuming miners are sellers. Actually, I’m not. If a Bitcoin is worth $60,000, then in an efficient market miners will spend just under $60,000 to get it. Will some choose to keep the Bitcoin? Certainly. But, they still have to pay the bills. To do so they have a few options: * Raise money from private investors or on the public markets. RIOT and MARA have done this. They pay their bills by selling shares. *…
> But, they still have to pay the bills.
Not if they have money in the first place and see spending said money as investing in Bitcoin on the cheap.
As to whether mining gets you a Bitcoin at, above or below market price is an interesting question.
Seeing the hashrate leads me to believe that the answer is "below".
Lastly: if you can point to a way to get BTC-collateralized loans without taking a massive risk because of volatility, I'd love to hear about it.
Re: Bitcoin is largely controlled by a small group of investors and miners
#157Earlier quoted context omitted.
Interesting quotes from the first section of the paper: "We first document that 90% of transaction volume on the Bitcoin blockchain is not tied to economically meaningful activities but is the byproduct of the Bitcoin protocol design as well as the preference of many participants for anonymity." "We show that the Bitcoin mining capacity is highly concentrated and has been for the last five years. The top 10% of miner…
The top 1000 investors hold 15% of the supply? That’s not “highly centralized” if you compare to the stock market. For Tesla, one single shareholder holds 17% of the whole company.
Bitcoin is not a company.
Re: Bitcoin is largely controlled by a small group of investors and miners
#158Earlier quoted context omitted.
> Soooo. . . you're saying a tiny fraction of the population controls the vast majority of the resource? You mean just like every other major resource on the planet? :) I understand the need to try to dismiss this problem, specially from those who have a dog in the race, but the dream of having a magical pseudo-currency that solves all problems and unexplainably makes everyone richer and richer just falls out flat if…
> magical pseudo-currency that solves all problems and unexplainably makes everyone richer and richer That's not what's exciting about bitcoin. What's exciting is that it is the first digital, global money that isn't protected by the proof of violence of the state. The US dollar is the world reserve currency because the United States is the best in the world at deploying destructive power, and the British and French…
What's exciting is that it is the first digital, global money that isn't protected by the proof of violence of the state.
I really like the idea of trying to build at least some part of society on top of mathematics instead of the laws of physics, but I am not really convinced that cryptocurrencies are an example or that this is even possible. The entire Bitcoin system is still made up of humans and hardware, there are still a lot of ways in which the laws of physics could overrule mathematics. Being distributed admittedly makes this harder but I think it is far from to point of being really effective.
Re: Bitcoin is largely controlled by a small group of investors and miners
#159> the top 10,000 individual Bitcoin investors control roughly one third of the cryptocurrency in circulation. The relevant comparison here is to other currencies, not to organizations in general, and to the ability and incentive of these controllers to influence the trajectory of the currency. Two points: 1. 10,000 people controlling 33% is dramatically less control and centralization than the Federal Reserve, which…
The federal reserve exists at the pleasure of Congress, and Congress can abolish the fed if it chooses to.
> The federal reserve exists at the pleasure of Congress
That's the theory.
In practice, there's always this aspect to consider (attributed to a Rothschild familly member in the 19th century):
"Permit me to issue and control the money of a nation, and I care not who makes its laws"
Re: Bitcoin is largely controlled by a small group of investors and miners
#160The Techspot article is a summary of this Bloomberg piece: https://www.bloomberg.com/news/articles/2021-10-25/bitcoin-s... which is itself reporting on this paper from the NBER: https://www.nber.org/system/files/working_papers/w29396/w293...
There is a foundational theoretical text in materialist philosophy that predicts exactly this happening. It was written in 1867. When reading articles like this I sometimes feel like the only thing we can learn from history is that we do not learn from history.
Das Kapital?