decentralized commodity
https://news.earn.com/quantifying-decentralization-e39db233c...
It looks like this is how smaller currencies die, they are vulnerable at any time to 51% attacks thus no one wants to use them. At least in the traditional banking system if you had a lot of money you could manipulate exchange rates, but you couldn't just outright steal when you had extreme market power.
Traditional cloud platform providers are also in a position to impact mining on those. I doubt that any coin could cope with those warehouses of potential mining power.
I'm looking closely at monero on this subject. Despite or because of their hardcore emphasis on privacy, that project has made interesting decisions regarding how to deal with potentially hostile miners.
Disclaimer: Yep, you guessed it, I hold coins, and monero is among them. I'm not saying buy XMR, but definitely take a look at their "politics".
On top of that even if a cryptocurrency manages somehow to completely level the playing field when it comes to mining hardware you still have significant differences when it comes to cost of electricity. Bitmain will stop building ASICs and start building hydroelectric dams instead.
I can't see how you can imagine a future where cryptocurrencies are successful and it's still worthwhile for individuals to mine in their basements. There's always be economies of scale that'll favor the cartels.
Beyond that it might even be possible that PoW algorithms designed to run on general purpose CPUs can end up giving more power to the cartel than an ASIC optimized algorithm because in the latter case the network consensus can decide to hard fork and change the PoW algorithm, hurting immensely the ASIC vendors and their users. That gives leverage. Similarly a new cryptocurrency or minority fork can protect itself from a 51% attack by changing the PoW algorithm, making highly-optimized mining farms unable to attack the coin (Bitcoin Gold should probably have considered that).
Meanwhile if everybody uses general-purpose server farms to mine then they can easily be repurposed to attack any small coin, making sure that the coin they favor remains dominant.
Again with monero because it's pertinent to your point, I would encourage you to read up on its design goals, and the discussions around the recent PoW algo change on github or Reddit.
The math behind it equates to existing capital wealth being used to generate the supply which is amplified by several magnitude for the first users to show up and run the software. Future production costs increase, and the relative newly produced supply decreases.
Old users rely on the gullibility of new users to exchange real world value for these easy to produce database-tokens.
For instance imagine we had a mine that was effectively infinitely large (for the sake of the analogy). If we allowed absolutely anybody with a pickaxe to to come in and mine it, we might call it decentralized. Nobody would own the mine. That one group sent a million miners to go mine it would not suddenly make them owners, even if they happened to receive the largest benefit from the it. By contrast centralization would be when one individual or group forcefully stops, generally with government support, any other individual from mining in "their" mine. In this case they would indeed own the mine. In the case of Bitcoin there is absolutely and literally nothing stopping from somebody from starting up a mass mining farm becoming the new plurality beneficiary.
The tiny block size is arguably an ongoing 51% attack from an oligarchy that is in collusion. Again, depending on what you consider centralization having a tiny group that's in direct communication easily qualifies.
Pas: In your example if the only option is to use picks from one company or your hands because other tools are confiscated at the enterance then it's very centralized.
Rolling with the mine analogy, a 51% attack is equivalent our group that sent in a million miners changing the diamond mine into a 'glass' one. It becomes fake, and loses nearly all of its value and people move to the new 'real' mine. You do nothing except critically hurt yourself.
Forks don't help with 51% attacks as the attacker can continue to use their hardware on the fork. Further, you can use a proxy to hid the origin of a block, so Bitcoin would need to move to a new hash which would take a long time and prevent any obvious successor.
There are numerous different hashes with varying levels of ASIC 'resistance' - yeah it's a cat and mouse game, but hardly a major issue. The 'obvious' successor would be a matter of the unpredictable public as I'm certain numerous entities would vie to become e.g. Bitcoin 2.0. In the end the market would decide which was the winner. The great thing about it all being that the users could actually come out net winners in the end as the successors would likely not only be technical superior, but it would also be able to use the exact same ledger (as with Bitcoin cash for instance) so that you start with the same relative share in it as you did with the original.
In a way it would even be a good thing as Bitcoin itself is increasingly dated technologically, but is dominant because of its market positioning - which makes it difficult to change. If its market positioning was damaged, we could see the rise of an improved successor.
Take a freshly baked pie, and give half of it away for a suggested donation of $1 USD to the first 10 people who show up.
Now split the last half of the pie into smaller chunks and slowly give out bread crumbs to new "miners" with the requirement they spend large amounts of capital on exceedingly inefficient number guessing machines in order to win the lottery of "mining" more crumbs.
Satoshi Nakamoto
Thu Jan 8 14:27:40 EST 2009
I made the proof-of-work difficulty ridiculously easy to
start with, so for a little while in the beginning a
typical PC will be able to generate coins in just a few
hours. It'll get a lot harder when competition makes the
automatic adjustment drive up the difficulty.
first 4 years: 10,500,000 coins
next 4 years: 5,250,000 coins
next 4 years: 2,625,000 coins
next 4 years: 1,312,500 coins
In economics, the Gini coefficient is the standard measure
of how inequitable a society is. This is tricky to
determine for Bitcoin, as it's not quiet a "society" in
the Gini sense, one person may have multiple addresses and
many addresses have been used only once or a few times.
(The commonly-cited figure of 0.88 is based on one small
exchange in 2011.) However, a Citigroup analysis from
early 2014 notes: "47 individuals hold about 30 percent,
another 900 a further 20 percent, the next 10,000 about
25% and another million about 20%"; and distribution
"looks much like the distribution of wealth in North Korea
and makes China's and even the US' wealth distribution
look like that of a workers' paradise
Dorit Ron and Adi Shamir found in a 2012 study that only
22% of then-existing Bitcoins were in circulation at all,
there were a total of 75 active users or businesses with
any kind of volume, one (unidentified) user owned a
quarter of all Bitcoins in existence, and one large owner
was trying to hide their pile by moving it around in
thousands of smaller transactions. (Shamir is one of the
most renowned cryptographers in the world and the "S" in
"RSA encryption")"
Presale ICO / Premine ( max cost $0.50 USD per ETH )
= 72,009,990 ETH
Total Supply today (Feb 23rd 2018)
= 97,800,000 ETH
Source:
https://etherscan.io/stat/supplyI mean I don't understand the cognitive dissonance here. In nearly every action our government carries out we can see the behind the scenes motivations which tend to be appeal to special interests. And here you are straight faced arguing that because quantitative easing is done by government (and financial markets) it's somehow above the notion of quick wins and personal gain. This is illogical.
This doesn't mean any alternative is better, but rather that trying to refute alternatives by appeals to authority is an even worse idea than it usually is. And it's usually already an awful idea!
Not to mention that, businesses going under means people without jobs. Lots of businesses going under at the same time means lots of people without jobs, and fewer companies able to take them on. That's a bad thing, no matter how you slice it.
QE is just another tool for monetary policy designed to combat deflation and increase available capital supply as a stimulus measure. Because QE belongs to the school of thought that the economy is driven by consumer spending as opposed to consumer savings.
Could you please elaborate on what you mean by: > steal money from the public with QE ?
I also believe SV companies are lining up to IPO because of this blank check.
But also: A large percentage of any public companies' value can be decided by monetary policy, in the sense a companies value can be decided by inflation or deflation. Monetary policy is just an official term for central bank decisions to influence the supply of money and credit in an economy.
> When the inflated value leaves the stock market, it has an effect of deflating the value of the USD
If you're trying to argue that QE is bad because inflation is bad and people participate in profit taking, you'll need to get over that. What would you like to do? Ban the sale of stocks by persons over a certain net-worth?
> while creating market manipulation tools to coerce stock-driven companies
What, pray tell, are these tools? You know, besides creating mild inflation and some influence on interest rates?
Additionally, you seem to have forgotten that an explicit goal of QE is to lower interest rates, allowing everyone, not just the rich, easier access to capital in order to stimulate the economy. QE demonstratively does not solely redistribute more wealth to the wealthy.
Furthermore, your entire premise is shaky, considering the most prominent historical example (the US recession) mostly consisted of the Fed purchasing $4.5 trillion of mortgage-backed securities.
It's really not exactly "making money out of thin air" considering the Fed purchased securities pegged to a real good/service, mortgages.
Lastly, SV IPOs weren't exactly popular last year. Nor in 2016 or 2015.
You're absolutely right by the way, libor rates have been rigged for decades and governments simply "fine" companies doing it. A simple google search will bring up sources for this claim.
Is the problem that people may be trying to manipulate the price of decentralized commodity or that people are investing in a decentralized commodity without realizing that there may be people trying to manipulate it? I think there is a place for 'hard regulations' but I think there is also a time when the focus should be more on information than trying to enforce national rules on a global scale. Even more so when those rules are likely to fall subject to all the failings of political systems including graft, corruption, and the like.