say it with me: 👏 crpyto 👏 currenency 👏 is 👏 not 👏 decentralized 👏

@sofia @maris 2 biggest BTC mining pools together controlled over 50% of the hashing power:

Developers of ETH deciding to blacklist some wallet addresses after the DAO kerfuffle:

So, it's centralized, just on a different level.

@rysiek @sofia @maris

Just so people know:
The top 2 mining pools produce 31% of bitcoin blocks, which is not over 50%. When pools get big, they get broken up

And the Ethereum fork happened in 2016 when the system was small enough to allow such a thing.

If you want to make arguments against decentralized technologies, please at least do so honestly. #misinformation

If you wanted, you could even offer constructive criticism.

@adam @sofia @maris mining pools might get split when they reach >50%, but that's a decision, not something enforced by the protocol.

That's the difference between "it's IMPOSSIBLE to amass >50% of mining power and screw with the transaction history" and "people who did amass >50% so far always decided to voluntarily split the pools".

Which means someone can make a different decision at some point. That is, amass >50% mining power and NOT split their mining pool. Imagine the chaos!

@adam @sofia @maris regarding ETH DAO fork, sure, "ETH was smaller", but again, it doesn't matter. Again, it's the difference between "this outcome is impossible" vs. "this outcome is not a decision people would make".

The whole *promise* of ETH, BTC, and other cryptocurrencies was that such centralization and central control *is impossible*.

And it is clearly not. We've seen it happen.

@rysiek @adam @sofia @maris BTC never said that amassing >50% is impossible. This was discussed in the whitepaper:
"The incentive may help encourage nodes to stay honest. If a greedy attacker is able to assemble more CPU power than all the honest nodes, he would have to choose between using it to defraud people by stealing back his payments, or using it to generate new coins. He ought to find it more profitable to play by the rules, such rules that favour him with more new coins than everyone else combined, than to undermine the system and the validity of his own wealth."

I also remember something that when the mining-fees would go down, the idea is that businesses (and governements?) would still keep mining because they have stake in keeping the network running (but this is from memory and I'm not gonna read the whole thing again now)

@ilja @maris @sofia @adam okay, fair.

But such nuance needs to get into the mainstream more, because the prevailing message is "such decentralized, many wow". 😉

@rysiek you still seem confused about what pools are. they aren't ethernal monoliths that all listen to one command. miners join pools to get a more steady income, instead of mining alone which would mean they most likely get nothing back, but they may also get a big windfall. miners could even mine for multiple pools at once.

and no technology can be called "decentralized" when you criterion is "it's impossible that all the nodes will be owned by one party somehow".

@ilja @maris @adam

@sofia @ilja @maris @adam how do you join a pool? Do you volunteer your own hardware? Or do you "buy into" a larger pool of specialized hardware running somewhere, and get some fraction of what is mined?

In other words, to you have full physical control of your "part" the mining hardware pool, or does someone have that control instead?

· · Web · 1 · 0 · 0

@rysiek you own the hardware and set up a pool in the options of your mining rig.

i guess there is probably comanies where you can buy mining rigs you don't directly control (somewhere in coldland, probably), but that's not what pools are.

@ilja @maris @adam

@sofia @ilja @maris @adam thanks, I did have a different model of pools in my head.

Still, there is someone who controls the pool, and allocates the spoils after a block is mined, right?

@rysiek @sofia @ilja @maris Yes. The pool hands out the block to be mined, which includes all transactions, including where to send the newly minted coins (the coinbase)

Long ago, before every block was always full, the rewards would go directly to the miners. Almost that long ago, they switched to going to the pool operator to reduce fees (1 transaction instead of N) and pay out periodically based on the users preferences (e.g., @ 0.01 BTC)

Sign in to participate in the conversation

Server run by the main developers of the project 🐘 It is not focused on any particular niche interest - everyone is welcome as long as you follow our code of conduct!