Quote from: LucyLovesCrypto on February 08, 2016, 04:05:52 PM

If you could spend more of your time coding...

Agreed I am really trying to wrap it up here in the forum. I think it is important to make it clear about the centralization problem. Thank you. (yes I waste too much time in the forum)

Quote from: TPTB_need_war on February 08, 2016, 05:17:19 PM

Quote from: TPTB_need_war on February 08, 2016, 03:14:27 PM

Quote from: smooth on February 08, 2016, 02:05:26 AM

Quote from: TPTB_need_war on February 08, 2016, 12:27:52 AM

Bitcoin didn't solve BGP either. Nothing does because...

What you keep denying is that there are solutions (all solutions, and provably so in the case of BGP) that solve the problem within a specified range. Generally up to 33%-of-generals in the case of BGP and maybe 50%-of-hash rate for Bitcoin.

... amortization of block chain verification over great income...

Profitable PoW will always centralize, because there is a "selfish mining" attack always ongoing and there is no such thing as a minimum requirement for 25 or 33% of the hashrate, because (a conceptual variant of) "selfish mining" is built into the economics of Bitcoin (e.g. the amortization of verification costs, etc).

I explained upthread the Tragedy of the Commons (not just in the quote above) that the miner with more hashrate wins more of the blocks thus has a greater income yet all miners have to do the same verification (of all transactions). Thus, (and most certainly egregious as the transaction rate scales to Visa scale and block rewards decline to 0 with transaction fees declining to costs in a non-oligarchy free market), the miners possessing greater hashrate will have a much higher profit (regardless whether their mining hardware is more efficient or their electricity is less expensive) because their transaction verification costs are amortized across all their income. Thus Bitcoin is always reducing miners with lower hashrate's relative capital (to purchase more hashrate) relative to those with higher hashrate (all other factors held constant, which is the same stipulation that must be made in the case of the selfish mining attack).

The official selfish mining attack applies when the attacker has 33% of the hashrate (or 25% with better propagation) is one where block solutions are withheld while the attack remains 1 block ahead of the rest of the network and then propagated immediately if the network catches up, thus mathematically/statistically forcing the rest of the network to waste some of their mining hashrate relative to the selfish miner (and do note all miners waste some hashrate due to the natural orphan rate caused by the ratio of propagation to block period but selfish mining is to the advantage of the selfish miner).

So when I wrote that the inequality between block mining income and verification costs (a.k.a. amortization of verification costs Tragedy of the Commons) is another form of "selfish mining", I mean in the sense that miners with more hashrate cause those with less hashrate to be less profitable, which thus drives centralization of mining because less profitable miners can buy less hashrate relative to more profitable miners. And note there is no minimum requirement for 25% or 33% of the hashrate, as this economic attack is implicit in PoW mining. And thus just like selfish mining it will cause mining to trend towards centralized until an oligarchy can form which agrees to share (centralize) verification costs and not selfish mine each other (because the official selfish mining can be a stalemate loss for both if they both have > 25% of the mining hashrate, thus they are forced to form an oligarchy or fight to the end in a "winner take all").

For the curious, I showed the math from the selfish mining white paper with a tweak to pay all orphaned chains block rewards and it fixed the official selfish mining attack (but not the amortization of verification costs centralizing economics problem). But I think later I found a flaw with convergence of consensus but I forget and that detail is some where in my vaporcoin thread (in a discusssion between monsterer and myself).

Edit: one might claim that the ratio of disparity in profit is equivalent to the ratio of the hashrate and ratio of amortized verification costs (since income is proportional to hashrate if variance is not considered), thus proportional hashrate would remain unchanged and thus my claim of trending to centralization would be invalid in this case of amortized verification costs. However that would only be true if the profitability was proportional to the relative hashrate without any verification costs, which is not true due to ASIC, electrical, and other efficiencies. These other efficiencies are the fundamental issue. Then add the variance and propagation cost (wasted hashrate mining an orphan for those with lower hashrate) issues and thus pools with greater hashrate have a disproportionate profitability relative to proportional verification costs.