Rumours are continuing to circulate that China is going to regulate all crypto. The rumours include closing down mining and chopping off Bitcoin itself in the great fire wall (GFW) that controls the in/out pipes for the Internet. However, one letter circulated that claims all this appears to be a fake, but it's scared many nonetheless.
Can they shut down the mining? Probably, and to much larger extent than the other governments. The reasons are twofold - censorship is a normal part of life there, and the regulations are much stricter, so (1) censorship works. If you couple this to the fact that the mining companies are big and consume a lot of resource, then we can see them as obvious - (2) big hash factories are hard to hide. Therefore, it is fairly likely that an instruction to cease & desist will be taken seriously. And voluntarily. And there won't be any mucking around with secret nets or pigeon IP or ham radio.
So, the potential attack on Bitcoin and Ethereum is plausible, notwithstanding the likely fake news status of it right now. The ramifications are that about 80% of the mining hashpower would be sliced off, as well as Bitcoin use being isolated within the country. One could even see a potential for Bitcoin to fork into in-country and ex-country chains, something that would align with PRC interests but maybe not with anyone else.
Curiously, and arguably intentionally, DPOS is more or less immune to this attack. The reasons are simply that (a) DPOS is far more decentralised than mining and (b) DPOS responds to the shock of country regulation quickly and without losing any efficacy.
Mining is more centralised because the forces of centralisation (or economies of scale) on it are much stronger: Bitcoin and Ethereum mining need huge amounts of electricity. As outlined in an old paper (Güring & Grigg 2011), hashing goes to where the electricity is cheapest. Which currently is in places like Inner Mongolia for various reasons that aren't going away. Further, it's not enough to have a few boxes and great net, you have to be a big warehouse. Which means we know where they all are, and they can't move, easily. Lots of electricity, lots of boxes, lots of money, lots of workers: These are highly centralised installations.
In contrast, the resources used in DPOS are much lighter. They aren't as subject to local circumstances, and are much more easily moved. Basically, each block producer needs a few big boxes with good net. Which exists in most countries, there are even hobby/volunteer sites like Funkfueur in Vienna that would fit the bill, and many countries deliver real fast net to the home with fibre which would likely be enough for a year or two.
More, the producers can be re-appointed by the community within the space of a round - approximately a minute. So the moment a large country decides to act, the community can respond as and when it is bothered - by voting to replace the suspect nodes with others ex-country. This can be done on rumour, or we can wait until those nodes drop off, and then repair the network knowing where to repair.
All this with zero change to the effective block production, and the risk to that production, because there is a ready pool of waiting block producers. Whereas a successful China attack will result in an 80% drop in hashrate around the world and thus the potential for a fork.
That’s the theory - how do the numbers stack up? If we choose 75% as a suitable indicator of effective decentralisation, we can eyeball the chart (above) and see that 8 mining pools do 75% of all hashing for Bitcoin. Ethereum (below) is even worse at 5!
Meanwhile, DPOS is mathematical as the blocks are distributed 1 per round across 21 producers, each round, and then shuffled. Then, 75% of 21 producers is … 16, rounded up, as it was with the others.
Hence, DPOS is far more decentralised than either Bitcoin or Ethereum, by a factor of 2 or 3 if the 75% metric is any guide. The fact that there are many thousands of nodes in a Bitcoin or Ethereum blockchain isn't relevant if the chain is dominated by only a small number of pools, and those pools exist in known, accounted-for places vulnerable to a forking attack. Like China. Like 80%.
Does it really matter if BTC loses 80% of all its hash power? Won't we suddenly get new miners appearing because the network will adjust the difficulty and it'll be more profitable to mine elsewhere again? Sure we'll get a defacto fork without all the Chinese miners if they are going alone on the other side of the GFW. But pretty quickly if they are shut down the rest-of-the-world chain will be so far along that the Chinese one will be irrelevant.
However, to be honest, I don't fully understand the details of the BTC protocols - is there actually something that causes the system to break if 80% of the miners drop off the net one day? Or is the impact purely limited to an effective fork without them, which should, as those miners actually get shut down, very quickly become the longest chain of blocks and hence the de-facto BTC and not just a fork.
Happy to be schooled on my errors about BTC here, I'm just asking. No disagreement with your theory about EOS - other than if Ethereum goes to POS it too could be "better than Bitcoin" in this regard. I really do hope that will happen but that too seems to be a huge hurdle for ETH to cross.
Yes it does. The difficulty adjustment mechanism for Bitcoin is based on every 2016 blocks, not dynamic every block, meaning that Bitcoin does not handle large drops in hashpower well at all. In fact it could be catastrophic, especially with a feedback mechanism of dropping prices and long backlogs as a result of the drop.
Thanks, that's a good point. All these numbers can be changed if miners felt like it. But a reduction in block time to 1/10 what it is now doesn't seem like it would be that harmful. Ditto a big reduction in the readjustment time. Reduce the difficulty and block reward appropriately so it's effectively a no-op for miner income and what do they have to worry about?
Sure we mine all the coins a lot sooner and things get squirly at the end sooner (did anyone really think about that?) but in the mean time BTC is a lot more stable and usable. If we lost 90% of the hash power it wouldn't be any worse than it is right now and the network would adjust a lot sooner.
I assume you mean ten times increase. That would reduce effective transaction capacity by 90% for several weeks. I think that would be extremely harmful for users.
Edit: I think I understand what you mean now. Bitcoin doesn't have a "block time" parameter. "Block time" is a function of difficulty, available hashpower and chance. Miners cannot change these at will, it requires consensus across the community (miners, exchanges, wallets, all relevant economic participants).
That would require a hard fork. The history of Bitcoin governance suggests that would be anything but a smooth fix these days.
Yes, you got what I meant second time - I should have been more precise. And I understand the "block time" issue - it's a statistical measure of the effect of hash difficulty and available hash power and difficulty is adjusted every X blocks to approximate to the mean 10 minute block time, right? (I've never read the code but that was my understanding).
And I understand it requires a hard fork vs. soft fork, but for miners why wouldn't they go with it. More stability for the net, no change in revenue, and since it would increase TPS capacity for BTC and decrease mean confirmation time it would make BTC more competitive with ETH as a utilitarian payment system vs. "store of value" not traded often. Although personally, I think all the work on payment channels and off-chain settlement is the way forward there.
I wish that more people would look at the work being done with Tezos where the consensus protocol is part of the blockchain - which makes it easy to change the rules within the system itself. And a "do-over" is possible - again with consensus.
Bitcoin worked fine before china got heavily into Bitcoin, it will work fine without china again, its crazy to think that bitcoin needs the chinese to operate lol
but EOS will be really cool i can't wait for EOS to be $1000 or more man EOS will be the shit! it will be our ethereum, it will be our coin that made us all rich! EOS will be Steemits coin that makes us all wealthy and able to buy more steem!
Upvoting for EOS = 1000 USD :-)
eos up 22%
steem up 14%
making money with crypto must look like this to normies
BTC hashing: I heard somewhere between 80-90 percent of all BTC hashing was in China, as of late Aug this year.
So if those miners are shut down (is ASIC mining really that hot of an electrical power issue?, big assumption in some ways) then BTC would be easier to corner all hash power and be able to control the network.
POS changeover is a huge hurdle for ETH, but they have almost unlimited resources to work with now, so I assume they will do so successfully.
And in fact, it's interesting (!) to read Dan's comments on the ETH spec for POS.
He is the only person I have seen actively criticize it; if you look through his posts you will see it.
I assume it is in his interest, to see ETH last at least until the middle of next year ;-)
Well some magic mining wizard can always turn up and save the day.
I think one of the most immediate issues for BTC would be the hash difficulty would take some time to adjust and block times would blow up almost immediately if 80% of the hash power dropped. We saw how difficulty fluctuations have messed with both BTC and BCC block times during the recent fork while a new equilibrium was found and the hash rate changes were far less severe.
If 80% of the hash power drops off, blocks will suddenly take 5 times longer on Bitcoin Segwit. On Bitcoin Cash they have a new feature called emergency hash adjustment which allows a fast response. So they will be fine.
The other thing to consider is that the capital will be hit hard. A lot is invested in mining rigs. OK, so this is someone else's problem, but the knock-on effects are sometimes hard to predict.
I've never understood why BTC didn't just agree to reduce block time to 1 minute or less like ETH.
Yesteraday i analyze eos bought at $9 next target $20
check my profile for more detail
EOS will break $12 next target $20
Cogently argued. DPOS has remarkable self-healing properties.
is there currently any DPOS system which is working fine? (Steem?)
Many in early stages, bitshares and steem, but also stuff like lisk, ark, and tezos. but just cause its DPOS doesn't mean it will operate the same as EOS, but their "mining" algorithms are derived from dan's DPOS
is Tezos using the "mining" algorithm from dan´s DPOS?
well, how it depends how specific you want to be, will Tezos implement DPOS slightly differently than other DPOS systems? Very likely. But Dan Larimer invented DPOS, so in some sense all DPOS are derived from Dan's work, You can follow this back many levels though. again it's about specificity, for example, the guys at IOTA invented regular POS, so all DPOS could nod their hats to them too. We will see when Tezos comes out what the real differences are, but i will note that Tezos is all about consensus on state, whereas EOS has implied state through their consensus on messages, that is one big difference. The details of DPOS implementation can vary a lot, but as DPOS algorithms, they will have some distinct commonalities.
flag give it to your mother fucker
bad dog
Soon Ethereum will change over to POS of some kind, if I understand the current plan correctly, early next year was the target I heard..
Thus many ETH miners are looking at ETC or other blockchains at that point.
I don`t think ETC is currently the most profitable blockchain after Ethereum (Zcash is it).
Steem and BitShares
Hey dude i like you content hope you like mine too, you can follow me.
That's right! :D
Please upvote my post @fadlie
Great points. You are really blowing my mind with this arguement, but now I have to agree ;-)
Great post! (I thought ASIC mining is not so power hungry, so it might be possible to spread out locations and hide it?)
Suddenly the few advantages I see to mining, are no longer advantages?
Have to consider a reshuffle of my portfolio.
Nice analysis, good job!
Is it okay If I introduce this article to Korean community by translating and posting it in Korean?
Man! Go for it! Please!
I found a sign from the Gods about EOS in a Miley Cyrus Music Video!
After some strange impulse told me to go watch "we can't stop" by mily Cyrus, at 0:27 i see the words EOS right after it shows a guy eating a couple $100 bills ....then EOS...I see this as a sign from the crypto Gods
Look at that!
haha anyway i just HAD to come tell someone about ,y EOS synchronicity!
THE GODS HAVE SPOKEN!
Really excited for EOS as well.
I already have gotten me some
Oh wow then you're already up 20%!
EOS up 22%
and steem is up 11.42%
I am not sure. I have not checked in Ages.
They sit in a wallet that I rarely check these days because all the investments in there a looooooong. I just hold them in check in a year or so.
But, yeah, EOS is bound to be awesome since its developed by Dan.
Bitcoin ignore China
hi do you have any infos about neo please almost lose half of my money in it?
Just hold and you'll be fine.
oh thank you very much im so scared
you want upvote
no you must work hard if you want money
Thank you for tha crypto~tips @iang !
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STOPEOS is resistant to GFW because it hasn't any chinese people among its investors ))
Actually, the largest participation is probably from China. It's a significant support base. Same with Ethereum - very strong support in Chinese market.
Chinese also don't want to be oppressed by their shit government either.
So obviously they invest :D
Or Americans it would seem ;)
THIS is why I like EOS:
Good content in its publication ... I would like to learn also ... greetings ...
Why favour DPOS over any other type of POS ?
So mining difficulty would fall dramatically and my miners will mine more bitcoin then. :) But would also the price of bitcoin fall?
Good post.
EOS to $18.55 by Feb of 2018; here is my analysis:
