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Bitcoin is largely controlled by a small group of investors and miners

techspot.com

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Re: Bitcoin is largely controlled by a small group of investors and miners

#261

Post by ThaJay »

leonardp wrote: post #138
jonas21 wrote: post #25

The 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.

I think it's a bit more complicated. We just arrived a little while ago in late-stage capitalism (around 2007 I reckon?), so now looking forward it's either revolution or back to feudalism.

Re: Bitcoin is largely controlled by a small group of investors and miners

#262

Post by toofy »

csomar wrote: post #253
nuerow wrote: post #141

Earlier quoted context omitted.

> For Tesla, one single shareholder holds 17% of the whole company. If said investor abused his leverage to manipulate the stock value to dump his holding on unwitting buyers prior to making it tank, he would be facing a prison sentence. In BTC that would be just another uneventful day.

So what you are basically saying is that the stock market is not really a free market; and has arbitrary restrictions to make everything looks stable and legit. Okay.

I don’t think any serious person has ever implied the stock market has no regulations/protections.

I mean, are you surprised that some things are illegal? Of course not, no one is surprised by this.

Could you imagine what a clusterfuck the market would be with no regulations?

Re: Bitcoin is largely controlled by a small group of investors and miners

#263

Post by Valakas_ »

ildon wrote: post #137
anonporridge wrote: post #108

Earlier quoted context omitted.

> 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…

> The only thing it requires is that you have hash power and internet connectivity. Your argument is a bit naive and this sentence I quoted is the one that shows the reason. Proof of Work is a energy intensive activity, not to mention the specialized tech it requires. Access to energy today is more than ever a sign of the power (including military power) of a nation, so much that energy itself could be regarded as th…

Bitcoin is not governed by spending energy and CPU. In fact all miners on earth could disappear except a guy with a Pentium IV on his basement doing all the BTC mining on the world, and it would still work. The difficulty of the hashing would adjust so that it would be possible for his weak slow guesses to send a block every 10 min.

Re: Bitcoin is largely controlled by a small group of investors and miners

#264

Post by worrycue »

FabHK wrote: post #235
YossarianFrPrez wrote: post #102

Earlier 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…

> just 0.1% (about 50 miners) control close to 50% of mining capacity So, the much-vaunted "mathematical guarantee" that only 21m BTC will ever be mined depends on the benevolence of those 50 miners not to fiddle with the code base. Makes perfect sense to trust those honourable individuals more than the central bankers in control of fiat. /s

Being able to print more would actually be a benefit as it allows for inflation. Central banks typically aim for 1-3% inflation to get people spending money and allowing the economy to function instead of just hoarding it.

Re: Bitcoin is largely controlled by a small group of investors and miners

#265

Post by tinus_hn »

CompuHacker wrote: post #256
tinus_hn wrote: post #247

Earlier quoted context omitted.

How are these miner going to fiddle with the code on your computer? That is not the issue caused by this concentration of mining power.

If those 50 people start playing by different rules, the sum of the value of the two resulting currencies will probably be less than that of BTC as it stands now.

No, if they start to play with different rules their mined blocks will be refused by everyone on the network and be worthless. That’s not what the issue is with concentrated mining power.

Re: Bitcoin is largely controlled by a small group of investors and miners

#266

Post by csomar »

CerealFounder wrote: post #162
anonporridge wrote: post #108

Earlier quoted context omitted.

> 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…

Hah, its all protected by the proof of violence state. When someone is physically trying to take your assets, your going to convert that currency as fast as possible into physical force or protection. The problem is a deep misunderstanding of currency. The structure of currency is a tool humans use to exert and identify power within groups. The idea that a decentralized currency will change human nature or goals to c…

That's a darker picture than what actually it is. Violence is mostly driven by lack of resources. When humans can co-operate for better outcomes, they usually do (or at least the successful societies).

> The problem is a deep misunderstanding of currency. The structure of currency is a tool humans use to exert and identify power within groups. The idea that a decentralized currency will change human nature or goals to control miss the forrest for the trees.

I agree with this. Most people see currency as money or wealth when, in reality, it's a representation of the structure of the system. That's why some countries are experiencing high inflation: It's not the printing of money but rather a symptom of deep internal problems within their economy. See Argentina for example.

Re: Bitcoin is largely controlled by a small group of investors and miners

#267

Post by olalonde »

JumpCrisscross wrote: post #249
olalonde wrote: post #236

That's a pretty misleading headline. Miners and investors do not control Bitcoin regardless of their hash power or amount of BTC owned. 50+ miners is also well enough to prevent any 51% attack. Finally, the ownership estimate is flawed given that it relies on blockchain analysis. The existence and popularity of custodial wallets (e.g. exchanges) makes this sort of analysis extremely unreliable.

> 50+ miners is also well enough to prevent any 51% attack That number sounds trivial for even a very wealthy private individual to get them each in a vulnerable position. For example, how many are in China or the U.S.’s reach? Because that means literally two people, Xi and POTUS, could round them up and effect a change. (Not saying they would. But a damning vulnerability for a libertarian ideal.)

> Not saying they would.

Incentives are actually an important part of the equation. Why would a wealthy individual or government spend billions of dollars to do a 51% attack? There's basically no incentive to do so. The best they could achieve is to censor transactions for a while until the Bitcoin community decides to fork to a slightly different PoW algorithm.

Re: Bitcoin is largely controlled by a small group of investors and miners

#268

Post by Sammi »

olalonde wrote: post #236

That's a pretty misleading headline. Miners and investors do not control Bitcoin regardless of their hash power or amount of BTC owned. 50+ miners is also well enough to prevent any 51% attack. Finally, the ownership estimate is flawed given that it relies on blockchain analysis. The existence and popularity of custodial wallets (e.g. exchanges) makes this sort of analysis extremely unreliable.

The nodes control the network. The nodes decide what happens or does not happen in the bitcoin network.

Bitcoin holders have no say in this. Bitcoin miners have no say in this.

This has been thoroughly proven in the bitcoin block size wars. The miners where in favor of an increase, but this meant nothing as the nodes where not, and a change in the protocol requires the nodes to adopt it.

Re: Bitcoin is largely controlled by a small group of investors and miners

#269

Post by worrycue »

beambot wrote: post #142
Gustomaximus wrote: post #119

Earlier quoted context omitted.

A company is very different from a currency. Apples and oranges comparing those in terms of centralisation.

How does the USD currency compare? I'd wager that the top-10 banks and the various central reserve banks own or control the vast majority of USD.

The Central bank controls the currency, having a monopoly on creation of said currency, and that’s by design.

Re: Bitcoin is largely controlled by a small group of investors and miners

#270

Post by nobody9999 »

JumpCrisscross wrote: post #249
olalonde wrote: post #236

That's a pretty misleading headline. Miners and investors do not control Bitcoin regardless of their hash power or amount of BTC owned. 50+ miners is also well enough to prevent any 51% attack. Finally, the ownership estimate is flawed given that it relies on blockchain analysis. The existence and popularity of custodial wallets (e.g. exchanges) makes this sort of analysis extremely unreliable.

> 50+ miners is also well enough to prevent any 51% attack That number sounds trivial for even a very wealthy private individual to get them each in a vulnerable position. For example, how many are in China or the U.S.’s reach? Because that means literally two people, Xi and POTUS, could round them up and effect a change. (Not saying they would. But a damning vulnerability for a libertarian ideal.)

>For example, how many are in China or the U.S.’s reach? Because that means literally two people, Xi and POTUS, could round them up and effect a change. (Not saying they would. But a damning vulnerability for a libertarian ideal.)

Actually, that's exactly what Xi (or the CCP, if you like) did[0] a month ago.

[0] https://www.reuters.com/world/china/china-central-bank-vows-...

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