Not sure i follow.
Right now we could be having a situation where f2pool is spamming the network with TX's paid to itself which raises everyone's fees of which they will mine 21%of the time in proportion to their current hashrate. Yes, they lose 79% of the fees used to do this but overall it might work out in their favor.
From the perspective of a Bitcoin user, every possible thing that can go wrong with Bitcoin can be categorized into one of two failure modes:- A payment you belive to be valid, isn't (double spend)
- You are unable to perform a payment that you want to perform (denial of service)
All a user cares about how certain they can be that their balance is valid, and that they are able to spend their coins.
Before we can talk intelligently about how an attacker might reduce the number of miners and/or the number of nodes, we first need to establish
why the attacker would do this, i.e. the ways in which an attacker can benefit from performing double spending or denial of service attacks.
Take selfish mining as an example. This is not an attack that directly affects Bitcoin users.
It may be possible for an attacker to solve more blocks than their share of the hashing power would initially suggest, but that in and of itself doesn't make your balance invalid or prevent you from spending your coins. It only affects Bitcoin users indirectly, to the extent that double spending or DoS attacks are easier if the attacker successfully reduces its competition.
Exactly, great way to put it.
This is what is being missed in the centralization fear mongering. Because of the way Bitcoin is structured even with further centralization it is still relatively easy for SPV light wallets
to verify for themselves the validity of a payment to an address they control. The two ways to attack this are either 1) block re-orgs which require 51% style attacks or 2) creating false header chains (hard)
plus making sure the SPV wallet can not connect to a single honest node (very hard).
Centralization also does not make denial of service attacks more likely. Even with more pool centralization SPV light nodes can connect to honest miners to include transactions in their blocks.
The 1MB limit will become in itself become a denial of service attack, so far it is the only real threat right now.