Since only economic nodes matter, doesn't this sound a little bit like POS?
211 sats \ 8 comments \ @BTC_Commons 12 Aug 2023 bitcoin
I was reading this article, which explains the idea of importance of economic nodes: We need Bitcoin full nodes. Economic ones.
This Wiki article also explains the importance of "Economic Strength"
I was wondering, if any one entity can monopolize a big part of all existing Bitcoin, wouldn't that entity have a much larger say in the enforcement of consensus?
For example, imagine a future where Blackrock's ETF owns 15% of all Bitcoin, and they also find a way to own 51% of Microstrategy's shares, adding another, let's say for the sake of argument, 10% of all Bitcoin for a total of 25%.
And all the other banks and ETF own another 25%.
So now, bankers own 50%+ of the supply. Now their full nodes can enforce a change in consensus even against the protest of the rest of the full nodes, because their economic weight is just overwhelming. Basically this is how UASF won the blocksize wars (in my understanding).
Doesn't this sound a little bit like POS?
Of course, Bitcoin doesn't have any pre-mine, or staking, both of which guarantee a small group of founders maintain absolute centralized power over the chain from the get-go.
But even if BTC is decentralized today, wouldn't wealth inequality/BTC concentration in the hands of a few entities, become just as big a threat to Bitcoin's decentralization as anything else?
That would make all institutional whales, ETFs and even someone like Saylor, potential threats if the manage to accumulate too much BTC.
What do you think?
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46 sats \ 2 replies \ @premitive1 12 Aug 2023
The only thing that matters for consensus are nodes. How much Bitcoin someone owns is completely irrelevant to nakamoto consensus. Please read the white paper again.
The article you post reads,
Propagating transactions and serving blocks to other peers is nice, but the network doesn’t really need additional nodes to do that. In an ad-hoc network like Bitcoin, more nodes do not make it faster or more efficient.
He totally misses the mark here. The network only needs 1 node. More nodes make it more secure. Period. End of story.
If someone tries to change the rules without consensus they hard fork. Read the history of Bitcoin Cash.
There's no such thing as an "economic node," though there are now mining nodes and verification nodes.
If you decide to stick to your guns, please explain the mechanism by which someone owning most of the Bitcoin can force the rest of the network to adopt their interests. It's not possible.
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0 sats \ 1 reply \ @BTC_Commons OP 12 Aug 2023
Well, I am trying to understand if the below scenario, described on that article, makes sense. It sounds valid to me, i.e. only economic nodes have power to enforce consensus.
Dystopia: let’s think it through
Imagine a worst-case scenario, where there are only two big economic nodes, some miners and a hundred idle nodes. What happens if there is business- or miner-driven desire to change the consensus rules, for example to allow bigger blocks? Let’s take a look:
  1. Some big miners decide that it’s time for bigger blocks, because more transactions mean more fees in total.
  2. The two big economic nodes think that this is a good idea, as cheap transactions are good for business.
  3. The idle nodes don’t like that and threaten to not accept bigger blocks.
  4. But the miners don’t care. All they want is to sell their newly minted bitcoins, which will be accepted by the economic nodes. So they start producing bigger blocks.
  5. The economic nodes accept these blocks, bringing them into the Bitcoin ecosystem and giving them value.
  6. The hundred idle nodes reject these blocks and the Bitcoin network silently undergoes a hardfork. Unfortunately for the idle nodes, their side of the fork does not have any economic activity, so nobody even notices.
  7. As the owners of the idle nodes also use the two economic nodes to send and receive Bitcoin, they are forced to accept the new consensus rules.
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42 sats \ 0 replies \ @premitive1 12 Aug 2023
There is no such thing as an economic node. I don't know where this delusion comes from.
All nodes are the same size, the size of the block chain. Someone owning more Bitcoin does not make their node bigger.
All full nodes enforce consensus. No one can force a node to accept a change in rules, as changes require software updates. Nodes who do not change their software to adopt the new rules will reject blocks made with new rules. And this causes a fork
I write again, read the white paper, and read up on the history of Bitcoin Cash. Idle nodes, economic nodes, these are made up nonsense. Just because it makes sense to you doesn't mean you aren't wrong and perpetuating a misunderstanding of how Bitcoin works.
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1 sat \ 0 replies \ @nerd2ninja 12 Aug 2023
So what they're trying to do is quantify how social consensus works. Since people sold off forked off coins and bought and held what we call Bitcoin, this method of the higher price coin wins is one way that they're trying to think about it.
It helps to be the higher price coin. You likely have a larger userbase, you can pay your miners more and therefore have a higher hashrate (and some of that hashrate can attack the opposing chain for funsies sometimes) you keep all the network effects and the forked off coin doesn't.
So if you aren't paying your miners more (because you're an ETF and internal balance transfers don't pay miner fees) and you don't have network effects (at least not grassroots small business person to person network effects) then its pretty risky to sell off the coin you don't agree with, but need to do business.
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0 sats \ 2 replies \ @netstatic 12 Aug 2023
Yikes, this was written by bitbox? I have no idea what he means by 'idle' and 'economic' nodes
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0 sats \ 1 reply \ @BTC_Commons OP 13 Aug 2023
Well, if u think about it, if all nodes are the same, then Bitcoin would be susceptible to Sybil attacks. The fact it isn't, is partly because economic nodes are the ones that really count when it comes down to enforcing consensus
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0 sats \ 0 replies \ @netstatic 13 Aug 2023
With respect to what we call nodes, we do treat them the same. The wiki page you linked tries to group in light clients , which are programs that rely on a 3rd party for blockchain-related information, with nodes.
If everyone is running programs that query information from 3rd parties, regardless if it's from a purported 'full node' or a website, the client can be fooled. Thus I'd rather say Bitcoin is not susceptible to Sybil attacks, but users of applications that pull from bad sources are.
And this excerpt from the linked bitbox article is just wrong:
While the Lightning Network gave a boost to the number of Bitcoin full nodes, many are not used to verify economic transactions and secure the Bitcoin network
Nodes, especially what we consider full nodes, do verify all transactions.
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0 sats \ 0 replies \ @senf 12 Aug 2023
My node won't care.
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