Quote from: cbeast on October 15, 2014, 11:25:33 AM

Quote from: teukon on October 15, 2014, 09:29:52 AM

Quote from: cbeast on October 15, 2014, 01:48:21 AM

Elements to make mining competitive are cheap power, good connectivity, cheap heat management, and technology development. Cartels can form that take advantage of either of these elements. As long as all of these elements are not overly abundant in only a few geographical regions, mining can stay decentralized.

A market entity is not restricted to a single geographical location. McDonald's have locations all over the world.

That's not the point. McDonald's is also not a cartel. Geography plays a part in where you can have beef or pork sandwiches as well. My point is that nobody has every competitive edge in everything. Anyone that can gain a competitive edge over certain resources will attempt to exploit them. This merely addresses profitability. If you want to realize an actual profit, you will need customers, and customers need incentives.

Certainly, McDonald's is not a monopoly; it is a single player in a competitive market. I merely wished to highlight that geographical diversity of the factors of production alone is not sufficient to ensure decentralisation of mining.

The point that "nobody has every competitive edge in everything" is what I'm worried about. To be clear, I'm not saying that free-market forces cause an industry to converge to monopoly, far from it. I'm suggesting that comparing Bitcoin mining with a typical industry requires care because the miners have some influence over the very nature of Bitcoin itself.