Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

techspot.com

Post reply on HN
Print view View original

371–380 of 486 posts

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

#371

Post by adflux »

Hermel wrote: post #109
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…

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.

Bad comparison. Better to compare us dollar and suggest someone would own 15% of all usd in circulatiln

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

#372

Post by AlwaysRock »

qeternity wrote: post #198
robocat wrote: post #161

“The 50 richest Americans now hold almost as much wealth as half of the U.S.” - Bloomberg - https://archive.vn/25Bz4 Is there any reason to think bitcoin is that much different from ownership ratios of other financial assets?

Yes, we know who those 50 are, and the wealth they own is in highly regulated markets. We know what they own, how much they own, when they buy/sell. We also dictate that they cannot trade on insider info and must generally play fair. Say all you want about the efficacy of the above measures, they are absolutely not perfect. But it's completely different to bitcoin where none of the above applies, and often the opposi…

Do you? We know some of the people. Do you actually know who controls the majority of the globes wealth or are you just happy knowing you could probably look it up while with Bitcoin you couldnt? Functionally I don't really see a difference.

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

#373

Post by EVa5I7bHFq9mnYK »

ur-whale wrote: post #166
EVa5I7bHFq9mnYK wrote: post #112

Owners of coins have absolutely no control over bitcoin. They can't "vote" with their coins for any change in the protocol. Miners can, but to a very small degree. The real control lies in the hands of those who hold keys to Bitcoin GitHub repository, bitcoin.org web site and /r/Bitcoin subreddit. They can do whatever they want - increase block size, change mining algorithm, increase Bitcoin supply etc.

> They can do whatever they want - increase block size, change mining algorithm, increase Bitcoin supply etc. I won't deny that they do hold some power, but I don't think it is as complete as you claim. There is in effect counter-powers to the devs: miners and users. Imagine a scenario where the guys who have commit access tot the repo decided to change the block size via a hard fork (much like what happened with bit…

This is where the subreddit part comes along. You just ban all users disagreeing with your intended change and voila - you have 100% popular support for your change.

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

#375

Post by mattwilsonn888 »

There is an obvious misconception in the title; two in fact:

1. If you are saying that investors separate from miners have "control" over Bitcoin, then you are strictly talking about the price and not the protocol. Investors (who are not miners, so no point in mentioning them) have zero influence over the Bitcoin protocol on a technical level. Perhaps you could make a separate argument about manipulating the community.

2. Barring the previous misnomer, miners alone do not control the Bitcoin protocol. Miners in combination with full nodes (running a full node requires a relatively tiny investment compared to mining) control the future of the Bitcoin protocol. Miners may choose to go down a certain protocol or ledger altering fork, but if even a small amount of full nodes go a different direction and users/holders follow the full nodes, then the path the full nodes chose will "win out," or at least survive.

If you want to talk about investors controlling crypto currencies at any scale, then look towards proof of stake. Otherwise you are conflating price control and protocol control.

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

#376

Post by nuerow »

fsflover wrote: post #347
nuerow wrote: post #339

Earlier quoted context omitted.

> As somebody living in Argentina, a country with usual double digit inflation, your argument is complete bullshit. The only bullshit I spot is this idea to use Argentina, or Zimbabwe or Venezuela, as the posterchild of responsible monetary and economic policies, when they are actually the result of gross and perpetual mismanagement. https://www.wsj.com/articles/why-argentina-faces-an-economic... Meanwhile most of th…

And you are sure that the US government will never, ever mismanage anything?

> And you are sure that the US government will never, ever mismanage anything?

The US, unlike Argentina, hasn't spent over a decade experiencing with a >10% inflation rate, and half a decade at >25%.

Most of the world hasn't.

Until it does, any comparison with Argentina, or any country experiencing years of hyperinflation as a result of gross mismanagement, is overwhelmingly positive.

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

#377

Post by tata71 »

gitfan86 wrote: post #346
somethoughts wrote: post #125

Earlier quoted context omitted.

There seem to be a lot of similarities between crypto and growth stocks that are held by founders with > 15% ownership. Similar to early stage investors who have essentially zero cost basis, early BTC holders have zero cost basis when BTC was pennies each versus late stage current investors paying in at $60,000 for each BTC. For early BTC holders its easy to diamond hand. There are a lot of similarities for sure betw…

The big difference between BTC and MSFT/TSLA is that successful companies have cash flow. MSFT has a dividend that it pays out every year. TSLA is eliminating debt and adding cash to its balance sheet. If everyone stopped buying BTC and only held BTC and bought another crypto currency, BTC would go to zero since no one would be putting money in. Similar to a pyramid scheme, once there is no new money it collapses. On…

If every new person being born started using cryptocurrency and refused to use USD, since there is no new money, it collapses.

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

#378

Post by tata71 »

LocalH wrote: post #374

In theory, Bitcoin was decentralized. Then again, in theory, theory always trumps practice.

It still is. Money ebbs and flows with time. It may be a long time, but...

Anyway, we won. The attributes in the title look like the ones that describe a currency to me!

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

#379

Post by Melting_Harps »

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.

> 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.

This is less a criticism towards you @CompuHacker and more about how ill-informed reporters are (especially it's most vocal critics) about Bitcoin's history.

We already went through this during the USAF/Segwit war that went on for far too long if you were there and delayed so many other key features that we are only now catching up to. With the added caveat that Roger Veer (a VERY ignorant whale with influencer status) and Jihan (CEO at the time of Bitmain with a monopoly on ASIC miners and large hashing power on the network) decided to hi-jack Bitcoin for their own ends. There were other whales/high net worth entities, including Coinbase, but lets keep it simple for arguments sake.

In short, it didn't work and no one uses/used their fork (Bcash) because the end result was that Bitcoin's mainchain and it's features was valued far more than what whales and hashing power/devices. Furthermore, upon the fork people arbitraged the coin and dumped it in exchange for Bitcoin and Bcash has never recovered since. Showing that playing by the rules has it's incentives and is rewarded: rewarding consensus is one of Bitcoin's core features, and I wish more people would realize this is the ecosystem is far more conducive toward progress than abject discord.

What's even more amusing is that a core developer of Bitcoin Core decided to help patch some of Bcash's source code, showing that what you fear has actually already played out and proved why Bitcoin has already proven itself and has a the battle scars to prove it.

It's remarkable what has happened in this space in the last 12 years, and in my ideal World I think their would be more time spent on that and what it has taught us via empirical experimentation rather than just the price.

Sidenote: It's why the plot of the 51% attack on the series Silicon Valley only made sense to people who really have no idea how the network attack would actually play out on decentralized networks.

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

#380

Post by nuerow »

argentinian wrote: post #343
nuerow wrote: post #339

Earlier quoted context omitted.

> As somebody living in Argentina, a country with usual double digit inflation, your argument is complete bullshit. The only bullshit I spot is this idea to use Argentina, or Zimbabwe or Venezuela, as the posterchild of responsible monetary and economic policies, when they are actually the result of gross and perpetual mismanagement. https://www.wsj.com/articles/why-argentina-faces-an-economic... Meanwhile most of th…

I agree, the inflation here is the effect of the perpetual and gross mismanagement. What about your idea regarding inflation as a way to avoid concentrations of wealth? (the idea I quoted and I replied to). That one is unsustainable.

> What about your idea regarding inflation as a way to avoid concentrations of wealth? (the idea I quoted and I replied to). That one is unsustainable.

You're free to discuss the facts I've pointed out, instead of going off on a tangent with a non-sequitur regarding Argentina's hyperinflation. It's undeniable that stockpiling cash out of the economy has a deeply negative social, economic, and even fiscal impact on a nation. Inflation provides an incentive to actually put the money to use, and interest rates for the most conservative investments, like risk-free bonds, are then used to provide incentives to couple investments with economic cycles.

Post reply on HN