http://en.wikipedia.org/wiki/Iron_law_of_oligarchy
It is a pretty dismal assessment of the likelihood that a democratic institution can avoid becoming oligarchic (spoiler: Michels believed it was inevitably impossible as the institution grew in size and complexity, years later he abandoned his anarchist beliefs and became a fascist in Italy)
There are a few historical counter-examples to the Iron Law of Oligarchy, but I don't follow the details of Bitcoin closely enough to know whether it is resistant to the factors Robert Michels described.
You ought to rethink what you define as "enslavement". As far as I am aware, neither Rockefeller, nor JP Morgan, nor Carnegie "enslaved" the US population when they helped transform the by then agrarian nation into the industrial and economic powerhouse it later became. They didn't use force, as far as I am aware, in their dealings and the wealth of their achievements certainly wasn't created at the expense of those who didn't.
Then you're not very aware.
During the Gilded Age there were hundreds of strikes a large minority of which ended with the murder of the organizers and arrest of the leadership, an incomplete list thanks to wikipedia:
http://en.wikipedia.org/wiki/List_of_strikes#1850.E2.80.9318...
Still, have you ever heard the song "Sixteen Tons?"[1] You might recognize the lines "another day older and deeper in debt" and "I owe my soul to the company store." It's about the life of a coal miner in Kentucky. Those lines refer to a system where the company paid its workers in vouchers that they could use to buy food and clothing from the company store. Prices at the company store were higher than the workers could afford on the wages they received, but since they didn't get cash they didn't have the option to buy elsewhere. So they'd buy on credit and gradually build up a debt to the company that they had no way to pay off.
Is that slavery? Perhaps not technically, since the workers weren't owned by the company and couldn't be sold. But they didn't have many choices, either. They were basically stuck doing a fixed amount of work each day in exchange for food and lodging. Sounds an awful lot like slavery in practice.
[1] Obligator wikipedia link - https://en.wikipedia.org/wiki/Sixteen_Tons
Whether you live in a desert island, a small village with no water or electricty, or New York, you will still have to face the practical demands of your survival, of which food and lodging are the primary - in the sense that they are the most immediate,- but not your only, concerns. Whether by hunting and killing your own food, or buy buying it from the supermarket, the facts are the same: you have to work for your survival, it is not guaranteed by nature. And for myself,if I may, I take having to work so I can buy my favorite food and drink at the supermarket every day over having to savagely hunt and kill the food I eat.
It has been a while since I studied this era, but my understanding is that Rockefeller, Frick, JP Morgan, Vanderbilt, Carnegie, Mellon et al. were the "good guys" like in the instance of Carnegie steel which gave back tremendously to the community.
The named figures of this period, who still have visible fortunes today, were generally better than the grand morass that were known as the robber barons.
This cartoon[1] shows "infant" Roosevelt battling the Rockefeller and JP Morgan "serpents". No, they weren't the good guys by any means, despite their philanthropic deeds. They most certainly industrialized the US, but so did Stalin in the USSR (though most would agree that the American robber barons were better than Stalin :)).
[1]: http://newsjournalist.files.wordpress.com/2010/01/the-infant...
However, they also had no morals with regards to child labor, unions, worker rights, and so forth.
By default, subsystems can be put in place to diffuse power back into the realm (or at least attempt to)
https://en.bitcoin.it/wiki/Getblocktemplate
Your post is a poorly argued attempt to inject politics into a technical discussion. It reads like the top comment at /r/politics, not HN.
What I find most fascinating about some of the less ideological BTC discussions is the belief that a neutral technology (a cryptographic algorithm) can replace social contracts. I'm not claiming it necessarily can't, I'm just saying that this belief shows not only disdain for government, but an Aspergerish rejection of social structures. It's like saying, I don't want to put people in charge because I don't trust them, and I don't want even to talk to others in order to resolve disagreement; instead, I choose to take all decision-making agency out the hands of humans and place it in the hands of an algorithm that can provably never be swayed, because that is the only thing I can trust.
Regardless, there is nothing technical about a story of a small group attaining concentrated power over a decentralized currency.
It's not a question of trust, it's a question of choice. With a simple and universal way to transfer money, we no longer have to care about the currency we use, if we can easily do an international transfer with our bank, if our Paypal account is still fine, etc...
The only politic is how governments will be able to tax Bitcoin transaction and I believe it's a big issue but I believe we will be able to fix that when it will become a problem.
I don't really understands what's wrong with: "It's like saying, I don't want to put people in charge because I don't trust them, and I don't want even to talk to others in order to resolve disagreement; instead, I choose to take all decision-making agency out the hands of humans and place it in the hands of an algorithm that can provably never be swayed, because that is the only thing I can trust."
It is completely technical. The incentives and disincentives to centralization are encoded in the protocol.
I am not sure I catch your meaning (about incentives being encoded etc.), but suppose they are. Isn't that a very political statement to design a system that entrusts "the last word" with an abstract algorithm rather than humans? Why is it that way?
And again, whenever engineers build something that they want people to use to change the world, they can no longer hide behind "technical". This isn't a discussion about using one hash function over another. It's a discussion about how quickly concentrated power arose in what was meant to be a system free of concentrated power.
Encryption itself is a highly political technology - the right for two parties to communicate securely and covertly is controversial in many parts of the world, even today.
The economics of centralization are a dependent on the technical choices of the protocol -- PPCoin and scrypt-based crypto-currencies are specifically designed to avoid the scenario that is happening right now, by not relying solely on sha256^2 hashing power. Of course they are not perfect and have their own issues.
So politics is everything concerning the managing of power in a society.
Some technologies are by their nature effectively neutral - the knife can be used to cut food, shave your face, kill your enemy.
In a more recent example, the microprocessor is a neutral technology.
But many technologies are inherently political - the Pill, for example, or ICBMs.
I would argue that Bitcoin may be more of a technology than a currency, but it is an inherently political technology, designed as it is to provide an abstract, somewhat anonymized general ledger technology.
Taking the knife. It's invention was somewhere around the dawn of time for our species so the distinction between political and evolutionary event is blurry. But it's impossible to deny that it empowered the group of our ancestors who could build knifes, their advantage was so overwhelming over those who couldn't that today there isn't any human who isn't a tool user of some sort.
The micro-chip is very much more recent and still clearly political. The societies which can produce them control those who can't utterly. The NSA spying is only the latest in a long string of such events, the use of microchips to cripple weapons used against their creators is another. This technology favors very complex societies that can spend billions of dollars on building fabs, designing chips, training engineers etc.
Now for a thought experiment why a complex society like ours isn't predestined to be the state of humanity. Imagine that tomorrow some scientist somewhere finds out you can create a small stable anti-matter bomb by shaking a tomato on a stick at the sky during a storm. All of the advantages of all weapons since the bronze age are annihilated in a second. Large cities just mean a whole society can be destroyed quicker. Everyone from Amazonian Indians to San Fransisco's tech elite have exactly the same destructive ability, to a very good approximation. In a world like that you'd very quickly end up with a population that lives no closer to each other than the maximum blast radius of said tomato. The majority of technology will more than likely disappear since it gives no immediate advantage to those who posses it and population would plummet since one person can now take on a whole army.
For a further exploration of the impact of technology on the politics of a society see: http://en.wikipedia.org/wiki/The_Road_Not_Taken_%28short_sto...
But his bridges were a political tool to segregate New York City. Since his bridges and tunnels were shorter than certain busses, he made it impossible for African Americans to commute to certain areas of NYC in the early 20th Century.
Politicians can use anything they want as a weapon for their viewpoints.
This doesn't stop an organized attack of someone who has rented lets say half of amazon's cloud infrastructure for a 10 minute attack to take over the transaction history. Something that becomes more and more profitable with the reduction of bitcoin income from mining and increase of the total number and price of bitcoins.
Actually in this particular case, it's not in the hands of the few, it's in the hands of the majority.
As of writing, Ghash.io (which is operated by cex.io) is already down from 45% to 38%.
It's the hands of the miners.
1. They'd have to be aware of the actions of an anonymous pool owner
2. The amount of damage the pool owner can do before people even have the time to start leaving is staggering
> It's the hands of the miners.
You're in denial.
The instant it's known they're abusing their power, it starts to vanish. It's not a long, drawn-out process.
It literally starts within minutes.
That's not possible with the mining pools. The pool operators simply do not have that kind of power, and they will never have it.
Their power derives from people who can leave them by literally clicking a button. Not much room for power to be abused in that situation.
Yes, there could be a window of maybe 20-30 minutes when a pool operator could do something wrong. But that window would come to a swift end.
And that's not what this thread is about anyway.
The same thing happened in the American Gilded Age. In that period of unprecedented (and largely unregulated) growth, much of the US population became quickly enslaved by a few members of an elite group, later called the robber barons (Rockefeller, Frick, JP Morgan, Vanderbilt, Carnegie, Mellon et al.), and it took tremendous efforts by the American press and then by President Roosevelt (the first) to partially dismantle that semi-feudal structure and strengthen the central government, to free the populace from the stranglehold of the robber barons.
While a central power can be abusive, it is almost always better than feudal oligarchy, at least if it is governed more-or-less democratically.
So while BitCoin is an algorithm intended to avoid a single organizing entity, it is no replacement for a social pact, enforced politically by some fair means. Perhaps a better algorithm could somehow prevent any sort of concentrated power, but I doubt it. The desire for power (even with the best of intentions) is so essential to humans, that it probably cannot be circumvented by technology alone.
[1]: http://www.newyorker.com/reporting/2011/12/19/111219fa_fact_...