To be clear I was simplifying the model by ignoring the block having, since that really isn't important. A cartel that can hard fork to double its rewards after a block having can hard fork to double its rewards any other time. This just makes the discussion a bit simpler.


There is no cartel on the Red Button hard forked protocol. Anyone has equal access to the ability to mine. The fact that someone was a cartel previously does not grant any vested status in the future. Deepbit, for example, has no greater ability to show up today and be a mining cartel than you or I do.

I understand you meant cloud computing. So did I. Go back and reread what I wrote.

Cloud computing would be used to mine honestly, at first, and then would be both uncompetitive and not large enough to matter. There is not 75-150 MW of available cloud computing capacity, particularly if an algorithm is readily minable on GPUs, as most would be. GPU cloud mining capacity is extremely limited, CPU capacity is somewhat limited. But are extremely expensive, especially when in high demand.