RE: Bitcoin’s Innate Problems: Volatility and Mining Centralization
Hi @reverseacid. Firstly, I truly appreciate your work. Keep it up!
In a quick google search, I found a number of recent articles about Craig Wright and Vitalik. I'm not a mathematician, so I won't embarrass myself my trying to address the theory. However, I don't believe Craig Wright coined the term, "selfish mining". My first exposure was in 2015, maybe 2014, but 2015 for sure.
The general premise that many put out against selfish mining is that a miner would not do something that would hurt the network and in effect themselves. This is a naive statement. There are politicos involved here that are not about money and there are factions that would loose money to hurt someone else.
I too was working on a China post that included information on selfish mining. I've gotten sidetrack and hope to get back to it. But this whole POW mining space is very interesting. While not a fan of POW due to the power drain, I must admit to making money on mining and mining stocks.
Thank you so much for taking the time to respond. Looking forward to more of you posts.
If that's the case I apologize for not diving deeper into selfish mining. My first exposure to it was when CS spoke of selfish mining and negative gamma and was refuted from top to bottom by Buterin.
As I mentioned, what keeps selfish mining from happening is the power of developers. Like the empty block mining by AntPool, if something selfish continues for a prolonged period and endangers the network, developers, who by default gather majority consensus, will be able to punish these miners for doing so. Selfish mining in the short run is possible to expose certain faults, but it works in the networks advantage as these weaknesses are identified and can be fixed.
As Andreas Antonopolous said, "with each hack and fault, Bitcoin becomes more resilient".
Thank you for the excellent conversation @guysellars
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Appreciate the conversation @reverseacid. This is a topic I'm very interested in as it will ultimately impact institutional investment.
Another question. You mentioned the following.
Do you have anything specific on how developers would be able to punish offenders? In my mind, this would be a game changer, but I'm not aware of anything.
In my research, I did uncover reference to "dark" pools, in particular in China, that were essentially selfish mining. But no where have I ever seen reference to any repercussions. Just curious if you have something specific.
Again, always appreciate your post @reverseacid.
This is more of a "what-if" scenario considering the fact that no miner would want to get into the networks bad books.
Let's say AntPool decided to just constantly mine empty blocks with just a header and no transactions, allowing the mempool to fill up. We see 2 distinct features here:
This reduces their own financial gain as they ignore all the fee income they could've made.
Developers will start to identify this as a major bottleneck to consensus and implement a soft fork to punish empty block miners and remove their incentive.
Because of this, AntPool won't let the mempool fill up and will only resort to mining empty blocks when no new transactions are coming into the network. In 2015 and maybe even early 2017 this was possible on a select few days, but today, this is virtually impossible.
Given the amount of vigilance in Blockchain communities, things like this will be dealt with quite seriously. Miners will not go against consensus and network health as they rely on the health of the network to make money.
Selfish mining battles itself by killing the short term incentive with more long term benefits. This is essentially how I see it. Hope you've found this insightful @guysellars
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