Live data from Hacker News

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

techspot.com

461–470 of 486 posts

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

#461

Earlier quoted context omitted.

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.

There is a distinction between inflation and hyperinflation. An analogy would be someone saying that a modest reduction in caloric intake is healthy for most people, and you responding that it isn't, anorexics die without enough calories. When inflation is present, but less than 3%, there isn't an incentive to hoard it, because simply sticking it in a bank account means it will be slightly less valuable a year from n…

> For poor people, who are spending most of their money on necessities, it won't mean much (unless their employers don't match incomes with inflation, which IS a problem). But for rich people, it offers a powerful incentive to spend today, or to invest their money with hopes that the returns will offset the inflation.

The way I see this, there's a fallacy there.

The claim, that inflation won't matter much for poor people is wrong. Even if their employers compensate for inflation with accordingly increased salary (which they don't always do) then there's still the fact that poor people are treading their treadmill, unable to advance one bit. In the best case they stay right where they are (relative to others).

Rich people on the other hand have the "burden" of sitting on assets that do not suffer inflation. And any excess money they earn which they don't need to spend on everyday items, they can put into investments that again do not lose value like cash does (under inflationary circumstances).

Quite simple: rich people have opportunities to invest and earn profits, letting them improve their position relative to poor people even further. Poor people don't have these opportunities and they even have to constantly fight for compensation of inflation while having shorter levers to push everywhere in society.

If rich people weren't urged to invest money they have sitting around (by threat of inflation), they'd maybe just hoard bigger proportions of it and sometimes spend some, instead of using it to acquire ever increasing proportions of assets from poorer people who have to sell. I'd say inflation almost directly causes wealth concentration.

In this way, inflation does indeed mean much for poor people. No, it's not totally obvious, kind of counterintuitive even. But it's true.

The current development is like a continuously happending race along a path of steadily increasing availability of pleasant goods and opportunities ... where the rich are moving significantly faster along the path than the poor. Yes, the poor do advance, but the lead of the rich continually grows larger. Since wealth is psychologically very much a relative thing, this is bad, even if the absolute wealth of the poor is indeed increasing over time.

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

#462
post #184

Earlier quoted context omitted.

GPUs are not used for Bitcoin mining

On Ebay I can find around a dozen people just in my local area trying to sell their mining rigs with stuff like 5 x 3070 cards: https://i.imgur.com/nI8GYsG.png Graphics cards were definitely bought in stupid amounts for this purpose. Maybe not for Bitcoin anymore , since there is specialized hardware now, but it doesn't really matter which proof-of- watts-per-hour cryptocurrency we're talking about. They're all shit…

They’re not for Bitcoin. ASICS are used for mining Bitcoin, not GPUs. Notice which cryptocurrency they’re for.

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

#463

Earlier quoted context omitted.

Isn’t it the exact opposite?

Yes. Inflation is a tax.

Inflation is a tax that subsidizes transaction fees. Currently 98% of the miner revenue is paid out by inflation and 2% by the transaction fee.(1)

As the Bitcoin inflation rate falls, transaction fees will rise.

(1) https://www.theblockcrypto.com/data/on-chain-metrics/bitcoin...

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

#464
post #266

Earlier quoted context omitted.

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 t…

Sure, we arent always violent, but there always be people wanting what others have and imbalance otherwise there would be no relative value established.

Great example. I dont think its a bug that crypto is almost fully adopted by people who come from means. People are living in very different systems even in the US currently

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

#465

Earlier quoted context omitted.

You're rewriting history here (ironic, in a discussion on blockchains, isn't it). It was “ likely ”[1] to happen in the long run. And the change wasn't part of the protocol itself, its development and schedule where done behind close doors in a centralized way. And it's not even the biggest example of centralized decision to override what the protocol guaranteed: after the DAO “hack”, they tampered with the blockchai…

What I said is not rewriting history at all. It literally says it in the document you quote: "Note that in the future, it is likely that Ethereum will switch to a proof-of-stake model for security" It doesn't get more clear than that.

If you aren't able to tell the difference between “the goal is X” and “it's likely we do X in the end for security reasons” then there's not much point to have a conversation.

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

#467
post #368

Earlier quoted context omitted.

That's assuming that BTC's aren't infinitely divisible. Currently, you can only chop them up into atoms worth 1e-8 BTC (satoshis), but there isn't much that needs be changed in the code and the protocol to get that to much finer grained. Therefore, it's unlikely that there will ever be zero bitcoins.

> Currently, you can only chop them up into atoms worth 1e-8 BTC (satoshis), but there isn't much that needs be changed in the code and the protocol to get that to much finer grained. Such a change would be a hard fork and, as you know, we don't do that in Bitcoin. But, no worries because we have millisatoshis in Lightning. Because Bitcoin scales in layers, each layer can implement more and more divisibility as requi…

> Such a change would be a hard fork and, as you know, we don't do that in Bitcoin.

True, it'd be a hard fork. However, I don't believe hard forks are impossible if managed properly.

The taproot upgrade (not a hard fork, I know) was rather uncontroversial and accepted rather easily.

I suspect a hard fork allowing for - say - bitcoin amounts encoded in 64 bits would not necessarily generate the kind of upheaval the blocksize wars did.

And, hopefully, even for controversial upgrades, the lessons of said wars will have been learnt and the process of upgrading Bitcoin can be done in a slightly more reasonable / orderly fashion.

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

#468

Earlier quoted context omitted.

> 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.

> This is where the subreddit part comes along.

r/bitcoin is and has been for a very long time an absolute cesspit, even before the censorship plays came about.

No one I know really interested/involved in Bitcoin goes there anymore.

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

#469
post #235

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

> ...the benevolence of those 50 miners...

What mechanisms do those 50 miners have to coordinate amongst each other, starting with how do they identify each other, communicate with each other, then overcome Prisoner's Dilemma in negotiating with each other?

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

#470
post #290
post #148

Earlier quoted context omitted.

That would have been the case if crypto had been used as a currency instead of as any other stock asset You can't use it anywhere as currency! I guess you can buy weed with it online, but that's about it

I pay for my VPS, VPN, and Netflix subscriptions with BTC. I bought my camera, and various other gadgets with BTC at BicCamera in Japan. I sold my VR kit for BTC. I save and spend my RAI anywhere that accepts Visa with an Eidoo debit card.

In that case you should be writing articles, I'd read! :)
Post reply on HN