Quote from: anisoptera on June 06, 2011, 02:08:33 AM

Quote from: rainsford on June 06, 2011, 01:03:22 AM

You can trust that people will "do the right thing" and move to smaller pools, or you can trust the pool operators not to abuse their power, but the whole point of Bitcoin was to avoid having to place that kind of trust in individuals.

No, the whole point of Bitcoin was to put the power to choose who to trust, or not, into the hands of individuals, and the way that's done is by voting with hash power. If you trust Tycho and think he's offering a fair deal, you hash for him. If you trust some other pool operator instead, you hash for them. If you want to go it alone, that's an option with its own risks and rewards; one of the rewards might be the ability to selectively prioritize your own transactions, or other such things.

The point is, he doesn't really control that power. The people giving it to him are engaged in an implicit contract that he's offering, and if he violates the terms of that contract, some people will stop trusting him.

Interestingly, most of you are worried about the fact that he might double spend, and instead missing the enormous cashout potential any large pool operator has.

Think about how big a block reward is in terms of USD right now. One block is worth $750 USD. Just cashing out by stealing all the generated reward a pool operator has control of, until everyone wises up and leaves, would be enormous.

You are already trusting that they aren't going to do this to you. Eventually enough people would leave the pool if he did something naughty that he would lose his power. No matter what that naughty thing is.

That's a good point. I was thinking in terms of centralized power, which I was thinking Bitcoin was designed to avoid. But although deepbit has a lot of power, deepbit doesn't really control it, as you pointed out. Anything bad going on, and it's very simple for everyone who mines in the deepbit pool to switch to another pool. It's a democracy of sorts, really, with the amount of control a pool operator has being directly tied to how much trust miners have in them. And given the relatively low cost to switching pools (as long as you cash out fairly often), a lack of trust can translate into a lack of power VERY quickly. Which is in contrast to the central control of most currency.

Thanks for the insight, I really hadn't thought about it that way.