On paper that sounds great, but 51% computing power rapidly becomes a "central/political/technical institution" in the real world.

There is no scenario where (eg) bitcoin's 51% computing power goes to single institution. If one govt jumps in so will the others. In fact you can jump too and vote with your computing power. And note this is not possible in fiat currencies.

The top three mining pools, all in China, have well over 50% of the hash rate.[1]

[1] https://blockchain.info/pools

And how are they single institution ? And if you dont like the distribution you can be a miner as it is required by cryptocurrency. Bitcoin is still being adopted. We should see more fair distribution or see another better cryptocurrency. Anycase cryptocurrency is the future global currency.

That sounds like a strong statement about the ownership of the four or five entities that control most Bitcoin mining. You're quite sure they don't have a great deal of commonality? Remember that this is a completely unregulated market.

In addition to the other comments, why would you start investing computing power (and therefore money) in a 'currency' that is centrally controleld. Just to 'take away said control'? There's no motivation for that.

To make it more decenteralised. Cryptocurrency without enough participents actively voting with their computational power is not a cryptocurrency and will have none of the improvements over fiat currency.

Bitcoin might have 51% dishonest problem but it can be made honest again by increasing total computation. Whether 51% are honest or not is function of total computation power [TCP]. Probablity of 51% being honest goes to 1 as TCP goes to infinity.

Yes, I understood your reasoning.

My point was, only very few people are about something like this.

EDIT: OK lets say some 51% is dishonest. You have the option to become miner and reduce their power/influence share.

51% being honest is fundamental assumption of a cryptocurrency [1]. The assumption gets stronger as total computation power increases.

[1] Its necessery but not sufficient condition to make the whole state dishonest. You would need to have >50% computation work done.

> The assumption gets stronger as total computation power increases.

This assumes that the increases in computing power were not added via a mining pool, in which case the additional computing power is making things worse.

This is one reason that many view mining pools as one of the worst failures of bitcoin / other blockchains.

Mining pool or single gpu its irrelevent. As long as honest people can get more computational power than dishonest ones, cryptocurrency is decentralised and 51%-honest.

Honest centralization is still centralization. You may be assuming that everyone participating in a mining pool will get an independent vote. From my understanding, this is usually not the case. If a small number of mining pools control more than 50℅ of the capacity then just a few people can decide these types of matters, honestly or dishonestly. That's centralization.

It's not total centralization, but it's a far cry from the level of decentralization that would be possible if mining pools did not exist.

Cryptocurrency does not mean it has perfect dicentralised distribution. It only means that its (much) better than fiat currency's.

My point was not that mining pools completely do away with decentralization, just that contrary to your comment, additional network computing power does not necessarily contribute to that decentralization. It can in fact push it in the opposite direction. And the reason for that is mining pools. If it wasn't for mining pools, your statement would always be true.

There is a lot about this topic in the new, free book from Princeton authors titled "Bitcoin and Cryptocurrency Technologies" (a great read)[1]. There is much research being done on the front of finding the best way to eliminate mining pools or at least stop them from potentially centralizing consensus to just a handful of people.

[1]: https://freedom-to-tinker.com/blog/randomwalker/the-princeto...

That's not entirely correct. If 51% of the network is overtaken, and blocks are mined that aren't considered valid, that 51% will have hard-forked the network. The 49% chain will likely maintain its value- since the new blocks won't be accepted by the rest of the network- and the majority fork will die.

This is the whole "longest chain" versus "longest valid chain" distinction. A Sybil attack can censor the Bitcoin blockchain, but 51% doesn't gain full control of the network.

That's what institution means.