[Cryptography] Bitcoin is a disaster.
bear at sonic.net
Thu Dec 31 15:17:42 EST 2020
On Tue, 2020-12-29 at 16:36 +0000, Deryk Makgill wrote:
> On Monday, December 28, 2020 7:07 PM, Ray Dillinger <bear at sonic.net>
> > Mining is f***ng broken, and ASICs make it actively work against a
> > significant number of its design goals.
> Didn't Satoshi predict that Bitcoin mining would consolidate into
> server farms? "It would be left more and more to specialists with
> server farms of specialized hardware."
He did predict centralization into specialized businesses. He did not
predict that a "centralization" entailed a race to find the single most
corrupt available country in the world, where electricity could be
cheap because it was stolen.
Emphasis on "single country." The disaster is not centralization
itself; the disaster is that mining is centralized in one country.
Satoshi was expecting mining to be done by specialized businesses, but
businesses located all over the planet, probably as a job that
datacenters ran whenever their servers were otherwise idle, until a new
customer with a new job came along. Because datacenters are all over
the world, no single political regime would control the entire block
As matters stand, if President Xi tells (or pays) the miners to shut
down, or cuts the flow of stolen power suddenly, or seizes all of the
warehouses full of miners, the Bitcoin network will NEVER, EVER, in a
million years, get a single additional block.
Keep in mind, it's also a very inefficient theft. Even on stolen power
they're running on small margins. They make their profit, a few people
get their palms greased to claim they're a "qualifying subsidized
business" which they don't employ nearly enough people or interact with
nearly enough of the rest of China's economy to be, and the rest of the
value goes up in literal smoke at a nearby powerplant.
If the Chinese government goes on another corruption purge, those guys
getting their palms greased could be eliminated, and then somebody has
to ask, with this power plant going full tilt, why are these local
towns not getting the subsidized electricity it's supposed to provide?
Why aren't these enterprise zones developing as, given these subsidies,
they should? Oh look, they're subsidizing business that don't
qualify." And throws the switch.
And at that point the miners have to either recruit a new generation of
corrupt officials, or Bitcoin's network is gone forever.
> You said on BitcoinTalk several years ago that the plan was always to
> raise the blocksize. Is it still your opinion that it should have
> been done? Or do you think that even Satoshi's original plans were
> flawed too?
Yes, the plan was to raise the size of the blocks. And yes, I think it
should have been done. The 1MB limit was considered temporary. We got
the current limit just to prevent people from filling space with dumb
stuff but thought, of course they'll make it bigger when people
actually need the space for legit transactions. But now they can't
make it bigger, because that was a classic case of nerds making a
design mistake by failing to note that we were leaving a decision in
the hands of people with perverse incentives.
The reason that issue became the screaming sewer knife fight it became
is because of toll trolls. Miners have a financial stake in the blocks
continuing to be small, because bidding goes higher for a smaller
amount of block space. So they hired a bunch of trolls to sabotage all
discussion about raising the limit.
All they have to do to kill a raised limit is refuse to mine on larger-
size blocks. But that would mean abandoning all pretense of not being
a cartel. The trolls and screaming you've seen are just symptoms of
their need to keep the user base conflicted and uncertain. That way
they don't have to alienate the community by being tremendously obvious
in a highly visible 51% attack when they participate with each other in
refusing a protocol with bigger blocks.
The current 1MB limit was added to the code at the last minute, because
Hal was concerned about the size of the block chain (and time/cost of
downloading it to set up a new node) growing faster than the Internet
communications bandwidth. Satoshi was confident that it wouldn't grow
beyond the power of a $mumble-priced hard drive to contain as hard
drives got bigger/cheaper, but that's a different thing. Hal saw a
scalability problem w/r/t internet bandwidth because while drive space
was on an exponential curve, internet bandwidth wasn't. And isn't.
My input to the bandwidth discussion didn't go much beyond "well, of
course the bandwidth would be a crippling issue at scale, but you don't
need to worry about this for a small experiment .... wait, are you
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