Quote from: DoMB on May 30, 2018, 05:55:02 AM

Quote from: audaciousbeing on May 28, 2018, 08:48:51 AM

the moment any of the major miners merge, they can conveniently control the direction of price and nothing anyone would be able to do about it because there wont be any regulator to forestall such move just like the case it would have been in the business world where merging of two firms is likely to cause any form of monopoly of the market they operate.

If only two merged and wanted to create a monopoly, others would also merge and create an oligopoly, in which we would most likely see Bertrand competition. Those two players would undercut eachother resulting in the exact opposite of what you described. The price would drop until one player left the competition resulting in a monopoly. Then the remaining firm would raise the price until the profit was high enough for another firm to enter this market. Because those firms most likely don't trust eachother, they won't merge together.

And this understanding that the risk is greater than the perceived benefits are realised, miners themselves actively remove their own monopolies. When these "centralisations" almost happened (or did happen, depending on how you look at it) in the past, this was how they reacted. BTC Guild in 2013/14 were forced to close/sell, Gigahash more recently in 2016 also pledged never to even own 40% of total hash rate (though likely pressured by miners themselves leaving the pool).

All the major pools now are built the same, with hundreds of miners connected to them. These miners will also actively migrate as soon as they feel centralisation is imminent.

All this has happened before, and all this will happen again.