You're saying that's actually false because these "3 or 4 entities" can block whatever they want and the rest of the network is powerless to prevent it?
Yes, by design. They can. They won't mostly.
I think many would argue that 3 or 4 entities making all the decisions was definitely not part of the design. You seem to be advocating that it would be better if miners were in full control of consensus, but clearly most people aren't going to buy into that vision. Any suggestion that implies a central controlling oligarchy is preferable will be met with resistance. Which is precisely why the overwhelming consensus shows that maintaining a large number of non-mining full nodes is still the plan going forward.
I'd concede that having thousands of non-mining nodes clearly wasn't part the original design either. But there was no way to foresee the advent of ASICs and the way mining in general became as centralised as it did, at the rapid pace as it did. So the compromise is the thousands of volunteers validating what has been put into the blocks by the centralised miners. You might claim they aren't needed to keep the miners honest, but that's not something that can be proven empirically unless everyone is prepared to take a risk and start trusting our new supposed overlords, which, again, runs wholly contrary to the ethos and underlying principles of Bitcoin. Ain't happening.
Your expensive non-mining node wouldn't see anything fishy. It simply turns out that the 4 most important mining pools decide not to include transactions from user X or exchange X, and decide not to mine on blocks that do so. That's the consensus by proof of work.
Yeah, I'm not saying it's like you get a popup alert or anything, but people do have eyes. When lots of people notice their withdrawals haven't confirmed and it becomes one of those big issues where everyone piles in with an opinion, as customarily happens on the internet, someone's going to notice and figure it out. The more people who can instantly check and see that the transactions weren't included, the faster the community can react. Hence why more nodes are better than fewer.
Changing algorithm is not evident, because suddenly, there wouldn't be an army of miners, ready to provide enough PoW with the new algorithm. From one day to another, there wouldn't be enough different hardware available. What algorithm ? Etherhash ? Scrypt ? Cryptonight ? ... How to sell this in the bitcoin narrative ? What if different forks appear ?
The *real* reason why this won't happen, is simply the market. This is why strong decentralisation is not very important. Most of these oligarchs are in bitcoin and need the market to appreciate it. So they most probably wouldn't do something that breaks the market entirely.
I'm not suggesting it would be clean, but it's an option. A somewhat nuclear option, granted. But even if there was a period where the network had to suffer with a lack of hashrate, that's what difficulty adjustments are for. And the more nodes who have a full copy of the blockchain, the stronger that nuclear option looks. Hence why more nodes are better than fewer.
In an industrial proof of work system, that blockchain needs to be made first, before you can decide to follow it. For that, you need someone to code it (if it isn't Core, it most probably will not be called "bitcoin") ; if it remains a PoW coin, you still need an industrial amount of mining hardware to mine it ; and you need exchanges to list it.
My point is that if these power structures, which are oligarchies simply because there are only a few deciders in each of them, keep one another in check, that's good enough, and that's what will keep bitcoin running. But it has not much to do with decentralization. And if these entities collude over certain aspects, they will dictate their will. But in the end, they are kept in check by the market, as long as they are looking for gains.
Yes, but the general idea is you don't want to make it
easier for entities to collude and that's what people argue will happen with fewer nodes. The greatest level of transparency, neutrality, trustlessness and permissionlessness is achieved through the blockchain being shared and updated in real time between as many users on the network as possible. Hence why more nodes are better than fewer.
Whoever says miners have all the power is wrong; whoever says users have all the power is wrong; whoever says developers have all the power is wrong. It should be more than self-evident by now that's not how this shit works. It all exists in equilibrium. No one group can act unilaterally if the others don't agree, unless one of them is prepared to fork off or be forked off.
Absolutely. But this is why this talk about decentralisation is bogus. You have a few oligarchies that keep one another in check. Like everywhere else. You have the miners (the industry). They are essentially 3 or 4 to decide. You have Core. They are a handful to decide. You have the important exchanges. They are a few tens to decide. And then you have all the users that gamble on its tokens. They are the market that finance the whole circus. And that's the power structure of bitcoin.
And the
reason most users are prepared to gamble on its tokens is because it is decentralised. If you take that away and 3 or 4 entities can make unilateral decisions without consequence, the vast majority of participants lose faith and the entire experiment fails. I'm not prepared to gamble on Ripple's or Stellar's tokens because I don't think they're decentralised enough, although I do have to say even
they sound more decentralised than your vision for Bitcoin. So the "market" you keep talking about wouldn't be as strong as it is if we didn't believe the mere presence of this ever watchful eye of the thousands of nodes was keeping miners in check. Hence (you guessed it) why more nodes are better than fewer.