Quote from: tarmo888 on October 26, 2018, 02:48:36 AM

Quote from: ttookk on October 26, 2018, 12:47:20 AM

Quote from: tonych on October 26, 2018, 12:07:25 AM

You are right about incentives. But there is something else. PoW mining is an economic activity. You have capex, you have opex, almost all your profits are burned in your huge costs, and you have to care about efficiency in order to stay in the game. And in any economic activity, you have economy of scale. As your mining farm gets bigger, it becomes more efficient and stands better against the competition. You get volume discounts for miners, you will be the first in line for the new generation of miners, you can get cheaper electricity when you buy wholesale, it becomes worthwhile to relocate to a more favorable location, and you can hire the best talent in the industry. It doesn't matter if the PoW algorithm is ASICable or not, the economy of scale is universal. It might be not very important in the growing market when everyone, even a smaller and weaker miner, gets a portion of the growing pie, but nothing lasts forever and as the market matures and gets more competitive, the weaker players are darwinized, and the hash power gets concentrated in the hands of a few bigger miners. Miners, not mining pools. This looks like an end-game of any PoW based blockchain, because it has a heavy "hook" into the economy, and the economy favors scale. You can call it emergent centralization. Incidentally, Byteball moves in the opposite direction.

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...Incidentally, Byteball moves in the opposite direction.

Can you explain what you mean by that? I can't see how this statement is accurate.

I understood it as Bitcoin becomes more and more centralized as bigger miners get more powerful. You don't know when it is happening because these few people are decentralizing their mining operations, so it would not be too obvious that they have the most power. Sounds nuts, but hashrate of Bitcoin network is steadily going up. Who are they, we don't know, but I doubt they are Venezuelans or Iranians who don't have enough money even for food, let alone buying ASICs. https://news.8btc.com/bitcoin-hashrate-increases-in-a-bear-market-investors-are-still-optimistic-in-the-long-term
Byteball on the other hand, becomes more decentralized as more witness candidates and better witness candidates will join and since they are public, they can't be the same rich person.

Think of this way, you kind of know who are the rich guys today, but you can't do anything about it, they rule the world and the banks and the real-estate and the companies. You can't even vote them off from lobbying to the government because they will lobby to whoever is currently in parliament. Just check what's happening in EU with upload filters, that's Facebook and Google lobbying result.
With Bitcoin, you don't know who the rich guys are and you don't know how many rich guys are there, there could be 10, but there could also be only 1. And you can't do anything about it, you could fork and make their hardware useless, but you probably don't get the miners because the rich guys are becoming the majority of the miners.
Byteball moves in the opposite direction, eventually there will be so many witness candidates that if they breach your trust, you replace them and if enough people feel the same, better witness gets elected.

If one day, all Byteball current witnesses are replaced then your only hope that Bitcoin is more decentralized is because you think that the big miners are not the same people, but you can't be sure. Also, if some of those people become so powerful that they could pull off 51% attack, your hope is that they will not do it because it will destroy the value of their holdings, but you don't know how much they hold BTC by that time, they could have been planning for exit or fork for very long time.

Hmm, dPOS actually totally makes sense. I am not saying don't invest into BTC, it will still for sure have nice returns, but it will not be nr1 forever.

Ok, so still talking about Bitcoin rather than Byteball. What's up with that?

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Hmm, dPOS actually totally makes sense.

DPoS is one of the most broken consensus mechanisms out there.