As Bitcoiners we know that Bitcoin is the only thing that is actually decentralized yet also as Bitcoiners we don't trust, we verify and that means battle testing our own system with adversarial thinking. What do you consider as a centraliation risk if there are any in Bitcoin and how do we mitigate those risks?
173 sats \ 4 replies \ @timechain 19 Jun 2022
Too much US miners as a % of total hash(which is hilarious because the worry was about too many Chinese miners until recently.)
Stablecoins built on BTC or LN may throw off game theory.
Bukele and Bitcoin are too linked for my taste.
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0 sats \ 3 replies \ @jp 20 Jun 2022
Can you elaborate on your comment regarding Game Theory?
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0 sats \ 2 replies \ @timechain 23 Jun 2022
Here's my best attempt to explain off the top of my head:
Ok, so imagine there was a hard fork proposed. For whatever reason, the fork seemed to be bad for your average user, but good for larger companies, including ones that issue stablecoins. The stablecoins, once they become widely used on bitcoin, (or any other chain) could end up being a decent chunk of the total value of that network. In the case of a hard fork, a stablecoin issuer (or group of stablecoin issuing companies) may announce they are only backing (honoring the right to redeem for USD) their fork of choice. They would obviously not be able to honor redemptions on both chains, as it would double the supply since their would be an identical copy of all coins or stablecoin tokens on both chains. At the end of the day, it's still every node runner's (user) choice on what chain to follow, but would they be okay with not siding with the people of the developing world by following the fork that would support the stablecoin that the poor rely on to use daily? What if the users running the node have some of their wealth in stablecoins? In addition, every added dollar of stablecoin value can be minted by depositing worthless fiat money, which enough could be printed, to be blockain-minted, to be a decent chunk of BTC's value easily, given that actual USD's marketcap is much larger in purchasing power than bitcoin's current sub $1trillion marketcap.
In conclusion, if a large amount of stablecoin value is on the network, it may cause users to make different choices than they would have normally, (in regards to the bitcoin network) to benefit a company (or cabal of companies.)
Hope I explained that right, I heard Odell explain it better on a RHR once.
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0 sats \ 1 reply \ @jp 23 Jun 2022
Hmmm...
Wouldn't this not matter since node users (w/ Taro/RGB) would not be able to distinguish between stablecoins and bitcoin? If anything, large volumes transacting across the network would make node operators more profitable, increasing individual to open their own nodes (and further decentralizing the network)?
pinging @odell for clarification
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0 sats \ 0 replies \ @timechain 24 Jun 2022
When I said nodes, i meant layer 1 bitcoin nodes that would accept or reject a fork. On the second layer, yeah, if you're routing payments, you can't determine the asset. But USDT, for example, is not only the tokens on the network, they have a website, where you can set up an account and send USDT to it and get regular USD (fiat) that can be withdrawn to your bank account. In the event of a chain split, they can decide to only honor this service on one of the forks, of their choosing. This may sway (L1) node runners to go with the choice of fork that the stablecoin company/ies go with to not lose people's value on the network.
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195 sats \ 4 replies \ @EnormousPony 19 Jun 2022
I think that Exchanges are the biggest centralization risk right now, people are waking up to the fact that id you are not self sovereign you don't actually own you bitcoin
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1 sat \ 1 reply \ @purpurato 19 Jun 2022
Absolutely, this is real threat right now, no need to wonder about elaborate 51% attacks with covert nuclear reactors James Bond vilain style.
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0 sats \ 0 replies \ @EnormousPony 19 Jun 2022
I realized i wrote that post in horrible english lol anyway attack vectors are simpler and more dangerous that people think
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0 sats \ 1 reply \ @Undisciplined 18 Jun
Top comment of the day, two years ago today
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0 sats \ 0 replies \ @Undisciplined 19 Jun
Two days in a row!
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151 sats \ 0 replies \ @Brunswick 19 Jun 2022
Two risks have emerged recently in my mind.
- SHA256 ASIC manufacturing is too centralized and can be secretly dominated by a monied/state interest
- Bitcoin POW power usage is too low, less than 10TW, and can be easily outpaced by a covert state program with a small distributed array of nuclear reactors.
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161 sats \ 3 replies \ @om 19 Jun 2022
Government forcing the businesses to only use bitcoin through licensed providers - looks like EU wants to do just that. They won't ban bitcoin outright. Instead they'll say "in its infinite wisdom and mercy, the Crown allows the plebs to use that p2p thingy they're running around with, but of course not in any p2p manner. See, we're not stifling innovation!".
So the Crown will allow businesses to accept payments in bitcoin but only through a licensed serviced provider. Of course the users will be required to KYC. That is not an empty threat, already for example if you try to pay through BitPay it says "Verification Required: Due to European regulatory requirements, one-time customer verification is now required for all cryptocurrency payments".
And then you might send $1 to some protesters and suddenly you're locked out of BitPay and its ilk for some reason. And the merchants will shrug and tell you to use the CBDC instead or whatever. (Of course you'd be also locked out of CBDCs.)
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12 sats \ 2 replies \ @EnormousPony 20 Jun 2022
That's why I despise who are in this game just to LARP and trying to get rich quick. Bitcoin should be treated as an ongoing protest again the status quo
Bitcoiners should embrace black markets and stop being fearful of the institutions
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0 sats \ 0 replies \ @faithandcredit 21 Jun 2022
Robosats, great market, but not alot of users. Get amongst it :)
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0 sats \ 0 replies \ @om 20 Jun 2022
This is sorta Monero kind of thinking.
I feel that "LARP" is too harsh for simply not sharing the ideology. It's ok for people to come for profit. It is our job then to align incentives in such a way that people will want to use bitcoin instead of whatever gov tells them to use. Coming hyperinflation will make it much easier.
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137 sats \ 2 replies \ @TheBTCManual 19 Jun 2022
I would agree with the other commenter who says exchanges are a centralising force, look at the dumping going on now, this isn't because of plebs theres are big holders who got liquidated, I am not complaining they deserve it, but they add more layers of risk and volatility when there's so much capital with one entity.
To mitigate it I think we need to expand, sadly bleh the stablecoin on bitcoin on ramps be that Liquids stablecoin swaps into Lightning, having Taro create backed stablecoins on lightning, USDT on lightning with Omnibolt, so that people can create their own markets to trade between the two assets and expand the DEFI/P2P trading keeping capital in house, and reducing the KYC/centralized onramp exposure
I also think there is a centralising risk of nodes and node implementation, most normies are running umbrels, but I'd like to see more competition for nodes in the space, like embassy etc. I'd also like to see encouragement for people to run pruned nodes which may be less resource-intensive so we can get more nodes online
I'd say mining also continues to centralise but since it's becoming such a resource intensive industry its more about countries getting involved now
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100 sats \ 1 reply \ @f6287b82CC84bcbd 19 Jun 2022
I'd like to see more people run Citadel nodes too.
It has the same underlying foundations as Umbrel
(source: I built a lot of this, including Umbrel and was involved in a lot of the early development of it from 2018)
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101 sats \ 0 replies \ @TheBTCManual 19 Jun 2022
I have not tried citadel yet, but I've seen a few people promoting it, when I get around to it i will try to set up another node with citadel and see how it goes
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110 sats \ 0 replies \ @criptoluis 20 Jun 2022
I don't think centralization is always a bad thing. I don't see a problem with it as long there are incentives to keep Bitcoin and Lightning network safe. The best way to decentralize is running nodes, offer niche services and being vocal about what you like about Bitcoin. You might not be correct, but you'll make a case for the people to decide by themselves...
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63 sats \ 0 replies \ @siggy47 19 Jun 2022
Bitcoin core developers. So far so good, but I for one must trust them regarding the code, because I don't have the coding skills, knowledge, or intellect to verify what they are doing on my own. No one is to blame. It's just the way it is.
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51 sats \ 0 replies \ @tomlaies 19 Jun 2022
The Bitcoin-core project on Github.
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11 sats \ 5 replies \ @KingZing 19 Jun 2022
If BTC keeps falling against USD, then nodes need to put more and more BTC on chain to route fees. It seems big hubs will only get larger, while small hubs will continue fall out.
I also never quite understood the defense against centralization of mining pool and how it isn't a problem. If it continues to be survival for the fittest then it is build to centralized.
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4 sats \ 1 reply \ @fgiveme 19 Jun 2022 freebie
Mining pool centralized on cheap energy, which by itself is decentralized. Especially when renewable getting more popular, they need to dump that energy somewhere during non-peak hour.
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0 sats \ 0 replies \ @faithandcredit 19 Jun 2022
Depending on how big the security budget is. If you only need 50mw to be 51% of the hashrate then that can be accomplished in a single area :) but if you need 5000mw you may have to spread out a bit
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0 sats \ 2 replies \ @f6287b82CC84bcbd 19 Jun 2022 freebie
True but also, small nodes can also buy more sats per dollar too.
Cheaper sats, means its cheaper to accumulate more and also open more channels.
0 sats \ 0 replies \ @Undisciplined 19 Jun
Congratulations! This was the top post one year ago today.
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0 sats \ 0 replies \ @faithandcredit 21 Jun 2022
Lack of education and decline in IQ. IQ is formed before ppl hit school.
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0 sats \ 0 replies \ @LaserStack 19 Jun 2022
Probably some system like ChainAnchor that aims to turn BTC into a centralized, permissioned system. Note that the ChainAnchor team has stated that they don't plan to actually do this, but it's up to you to decide whether to believe them.
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