Post
Topic
Board Bitcoin Discussion
Re: Is it good or bad that Core development is virtually controlled by one company?
by
BitUsher
on 08/02/2016, 21:51:26 UTC
An example of non-mining nodes "deeply constrain[ing] miners," if possible, would also be nice.

Well for one thing , economic Full nodes are what determine what is valid and what is not. The Majority of hashing power and longest chain don't mean much except a very expensive liability unless the nodes accept the coin.

Bitcoin consensus is determined by the longest valid PoW chain determined by economic nodes. This means that not all nodes are equal.... I.E... spinning up 1k full nodes on amazon ec2 has less of a vote than an individual running bitcoin core with 50 btc , which is less valuable than a node on an exchange. Nodes controlled by Payment processors are more valuable than individual nodes but still only represent a fraction of the payment processing (Coinbase/Bitpay constitute ~6% of txs combined by their own statements)

This distinction is very important to understand, and understanding this is critical to understanding the security implications of the Bitcoin network.

1) BTCC recently deployed 100 nodes with altruistic intentions because they didn't understand Bitcoins security model. Since All 100 nodes were controlled by them they are weakening the security of  bitcoin as their nodes can be used as a Sybil attack.

2) All votes are not equal and very large bagholders can quickly bring miners to their knees and force them to switch chains by dumping one of the 2 coins created during a fork on an exchange.