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

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

#351

Post by coryfklein »

qeternity wrote: post #241
blatchcorn wrote: post #223

Earlier quoted context omitted.

I am not who you are asking but I want to chime in: the problem is not missing regulation, the problem is the rich decide on regulation and this regulation helps keep them rich. Specific examples: UK capital gains tax is lower than income taxes. This means if you are born in to a wealthy family and given a £1MM index fund, you will pay less yearly tax on your capital gains while chilling at home all day than someone…

> the problem is not missing regulation, the problem is the rich decide on regulation and this regulation helps keep them rich. Ok - so the rich have decided on regulations which are not the ones that are best for everyone. So…missing regulations? By definition, if we have the wrong regulations, then we’re missing the correct ones. Capital gains taxes are lower for a specific reason: the capital that was initially in…

I think we're pretty far beyond "double taxation" at this point. I think my money gets taxed at least 3-5 times in the various stages it passes through my use.

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

#352

Post by coryfklein »

qeternity wrote: post #217
krageon wrote: post #209

Earlier quoted context omitted.

> highly regulated Regulated by them, so in practice not all that regulated

Please elaborate. Which regulations do you think are missing?

The regulations that would make Warren Buffet pay more than an effective 0.1% tax rate are the first that comes to mind.

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

#353

Post by IAmGraydon »

glenvdb wrote: post #305
IAmGraydon wrote: post #273

Earlier quoted context omitted.

Yep. That’s the thing that crypto supporters just seem to ignore: it requires an infrastructure that is owned and controlled by a higher power. Namely, the internet. In the end, the government has the power to easily shut this entire thing down. It only exists because they let it.

You think they're going to shutdown the Internet to kill Bitcoin? Even if they did, once the Internet was back up and running what would stop the Bitcoin network from continuing where it left off? There's thousands of people around the world running their own Bitcoin nodes, many also protected behind Tor [1]. In what realistic way could governments shut it down globally? They could go for centralised custodial busine…

No, I’m not talking about shutting down the internet. I’m talking about filtering its traffic. I also did not say they would do this. I said that they could do it and have the power to do it. My point is that if the US Govt really wants crypto to go away, it will.

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

#354

Post by ur-whale »

Sammi wrote: post #268
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.

>Bitcoin holders have no say in this.

Not entirely true. If holders decide to sell massively and buy into a fork they perceive as "a better bitcoin", this surely has influence.

Because of network effect and inertia, the bar is very high for a contentious fork to take over, but if push comes to shove, holders selling massively to buy into the contentious fork does carry some weight.

Also, spinning up a ton and a half of "nodes" on some random cloud isn't that expensive these days (in terms of what you can gain in gaining the system), yet no one has done it so far.

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

#355

Post by tekproxy »

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

Have fun staying poor.

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

#356

Post by thesz »

jstanley wrote: post #329
danbruc wrote: post #300

Earlier quoted context omitted.

Depending on your definitions this might or might no be true but it also might be totally irrelevant. There is a protocol and system specification. There are implementations of that specifications. There is a distributed system running those implementations. And the distributed system has a state. Each of those can change and each of those or a combination of them could arguably be called Bitcoin. If everyone would r…

The point is you need the economic majority to be on side in order to succeed with a hard fork. Just the top 50 miners switching on their own isn't enough.

Add 50 more - to reduce hash rate even more. Announce hard fork right after difficulty adjustment. And then, suddenly, these who have not forked will be stalled for several weeks. Instead of 10 minutes per block, the time will be 30 minutes and possibly more. And to adjust the difficulty those who have not forked would need... a hard fork?

Yes, these 100 miners are pools. But where pool participants will go then? Will pools who have not forked keep pool participation fees low?

Etc.

The game here is not quite simple. It is much more complex than appears at first sight.

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

#357

Post by fsflover »

FabHK wrote: post #342
mateuszf wrote: post #280

Earlier quoted context omitted.

That would create a fork that nobody would use (because bitcoin holders are incentivised by the halving mechanism).

> a fork that nobody would use Except the "small group controlling 90%" of mining power that introduced that change (in the hypothetical example) would use it. And their chain would grow longer and be the canonical one (though that, of course, is also just a convention encoded in the code). And they could still spend some 20% or so of their hash power to entirely mess up the one true chain, if they so desired.

This group could continue using their version of the blockchain, but nobody else would accept it. New miners would appear on the original blockchain, making this group obsolete.

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

#358

Post by agos »

Gustomaximus wrote: post #119
Hermel wrote: post #109

Earlier quoted context omitted.

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.

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

a company is very different from a currency, unless you are talking about Tether (the cryptocurrency) and Tether Limited (the company)

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

#359

Post by fsflover »

FabHK wrote: post #345
fsflover wrote: post #289

Earlier quoted context omitted.

So with USD, you trust that people care about long term consequences over short-term profit? With bitcoin, you trust math.

> With bitcoin, you trust math. No, you trust the 50 miners that control the majority of the hash power not to mess with the code that embodies your math (or doesn't, as the case may be).

No, you trust the majority of people running the code, not just miners: https://news.ycombinator.com/item?id=29012699.

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

#360

Post by andruby »

FabHK wrote: post #342
mateuszf wrote: post #280

Earlier quoted context omitted.

That would create a fork that nobody would use (because bitcoin holders are incentivised by the halving mechanism).

> a fork that nobody would use Except the "small group controlling 90%" of mining power that introduced that change (in the hypothetical example) would use it. And their chain would grow longer and be the canonical one (though that, of course, is also just a convention encoded in the code). And they could still spend some 20% or so of their hash power to entirely mess up the one true chain, if they so desired.

if the nodes don't upgrade their software to the code version with the commented line, they would reject those new blocks, regardless of it being the longest chain.

You would need to control the majority (of the important) nodes to be able to pull this off. If the nodes are incentivised to keep the limit, they will.

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