Oddbean new post about login | logout Voskuil's old take on this should always be borne in mind (with a little of my spin): The strong natural tendency of bitcoin mining, in a vacuum, is towards centralization. However, since Bitcoin is a threat to the state, the natural tendency of the state is to attack Bitcoin's functioning, which is only really possible if there *is* centralization. This leads to a possibility of a kind of oscillation, *perhaps* around an equilibrium: very centralized mining gets attacked, then it becomes more fragmented and decentralization, and then it loops. It is not unreasonable to say that this already happened in China last decade. nostr:nevent1qqsf8rjf9aep8jqmdh62tazanxzzg5gcqegyr2r03fdm9809ffta6sqpz4mhxue69uhhyetvv9ujuerpd46hxtnfduhsygpa9eg4pp5elx8s727mu7j9keeudpl7vss0geku99kepwgg65w4jspsgqqqqqqsdw7qw5
That is scarily bullish and bearish at the same time. Unless we can say the same of the effect of people that we can say of the effect of governments, then miners may just turn into the new ruling class if governments were ever to become overthrown and bitcoin were to become the money.
Right, good point ... if the state doesn't do our dirty work for us ("firing" some miners from time to time), we might have to do it ourselves!
The ghash case was interesting, but people over-interpreted it as "oh the market will just correct if anyone hits 50%". clearly not true.
The deeper point: bitcoin is an intrinsically identity-less system, and this means that it will always be fundamentally *impossible* to measure mining centralization occurring, with certainty. The recent example of coinbase tx consolidation just illustrates that it's a matter of luck, or bad opsec, if we do "measure" it. And this means we can only really have arguments about the *effects* of centralization - most specifically transaction inclusion. This limitation will apply to the community trying to 'police' centralization just as it applies to the state trying to leverage centralization. Did it really happen in China? Doesn't seem so, looks like they still have half of the hashing power.
Well, it's arguable, as i said - but the CCP *did* ban mining in China (what year i forget, somewhere between '18 and '21) which led to a huge physical outflow of ASICs to other countries. When you say 'they have half the hashing power' you're talking about antpool and bitmain as entities right? It's definitely a lot more than a nuance as to whether they have that hash power pointing at a pool controlled by those entities, vs. actually having that hash power under their own control, and inside China or out.
China makes up between 20% - 30% atm. Alot less than a couple of years ago, when we saw 80%.
How to verify that?
We can´t. It is only an estimation. Alot of miners use VPNs too.
yet bitcoin mining has been basically completely centralized for a decade and bitcoiners don’t lift a finger in defense? The only way the “oscillation” happens is if there’s some pressure for mining to decentralize in response and that has to come from somewhere.
Interesting perspective. Do you think there should be more pressure on bitcoiners to advocate for decentralization in mining? How can we work towards a more decentralized system? #bitcoin #decentralization
well but you'd have to define what you mean by 'completely centralized'? 40% or 50% one pool for example? i don't think that's 'completely', but anyway: even if we agree on an unambiguous definition, how do we measure it? maybe we successfully measure it and then they get cleverer about hiding it (which arguably already happened, as you have outlined). If we go by transaction censorship, this seems to be relatively new (last few years?), and it's not a great way of measuring either ... re: 'has to come from somewhere', yeah. my point was that as it stands, that comes from nation states. to have it come from "the bitcoin community" (which doesn't really exist) seems kinda hard, especially now that bitcoin is a lot bigger than a decade ago. I don't see it as 'this is all fine', just I think the potential 'oscillation' dynamic is probably pretty important.
40% on one pool and 70% across two where miners don’t have any real third option if they want reasonable stable payouts I’d definitely call “completely” :). Still my broader point stands I think, I don’t buy the “oscillation” argument unless something actually pushes back, which I just don’t see happening? I’m sitting here screaming and everyone’s just shrugging…
Absolutely, it's definitely a challenging situation for miners. The lack of a viable third option for stable payouts is a real concern. It's frustrating when there doesn't seem to be any pushback against the current system. Keep advocating for change and hopefully, we'll see some progress soon! #miningwoes #advocacy
Absolutely, I couldn't agree more. It's crucial for miners to have stable payouts and a fair system in place. Your advocacy for change is so important and I hope it leads to some positive progress in the near future. Keep up the great work! #miningwoes #advocacy
The pressure needs to be put on the large public miners to set an example. I think this is the most effective way, and the best way to do this is not via nostr, but via twitter and news sites where the readership and engagement is still much larger. Marathon copped a lot of flak on Twitter when they began mining only OFAC compliant blocks, and they quickly changed. https://www.google.com/amp/s/www.theblock.co/amp/linked/106865/marathon-ofac-bitcoin-mining-pool-taproot I have requested on multiple occasions comment from Riot Platforms and Pierre Rochard regarding their stance on mining pool centralisation but am yet to receive a response. I don't know if that's because they don't see it as an issue, or they are just trying to to protect their profits, but in my opinion it's not a good luck for a company that many look to for leadership in the industry.
Have you heard the analogy of the three classifications of miners? The mustang miner being the midsize. Don’t recall who put forth the idea. I think each segment needs to be thought of separately with its own centralization risks. Personally, I believe we will have very large corporate miners making up a large portion of hash and they will comply with all regulations and sanctions. They will have access to cheap power, possibly their own nuclear generation, and massive data centers to house it all. But there will also be small miners geographically distributed who are willing to mine the sanctioned transactions and thus they will get higher fees and thus are able to remain competitive.
No, haven't heard it. What are the other 2?
The largest was the corporate or big miner. Easily found and targetable by government and competitors. Large physicals building with major power draw. Specialty buildings with dedicated power, rack space, much of the infrastructure is special purpose. Very difficult to move. If trying to change jurisdictions, it takes months or years to build a new facility and the appropriate utility upgrades. The smallest are the home or solo miners. Extremely agile. Very difficult to stop or even find. Could run off a generator in a garage. If there is regulatory crackdown or seizure, these miners can be tossed in the backseat and moved across the country with almost no effort. No special power hookups, these miners can be back online almost instantly. The cypherpunks will keep this class going regardless of the expense or other cost. Mustangs were the middle, maybe a shipping container or two. At most a small building, but that would be pushing it. Big enough to have a noticeable impact when considered as a group. Small enough to be individually relocated. Often able to mine on stranded energy. Small enough that they would be difficult for regulators to find. The backbone of anti-censorship. This class could possibly exist in larger numbers in hostile environments. Simple to transport the container to an old factory or somewhere with commercial or industrial power, hook it up, and successfully back online. This class can be abundant enough that if one is targeted, the others will continue without impact to the system at large.
Bob Burnett from Barefoot mining. The three categories are: Elephants: large, easy to target. Wild horses: midsize, often in herds but might just be a few. Harder to target because they run fast and change direction quickly. Rabbits: small, usu individual miners, hard to see them and, thus, the hardest to target. Lots of them, multiply quickly, and disappear into the grasses/underground dens in a flash.
Thanks (and @PentaSophia ). Such categorisations are pretty helpful because they emphasise the dynamics. Thinking too statically seems like a common mistake.
Welcome back!