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Could we change Bitcoin mining if we wanted to?

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Spengler

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Listening to Episode 127, there were mentioned many ideas on how to change Bitcoin to improve the less than ideal situation with mining.

What if, in the future, there were a most excellent idea for altering the protocol to improve Bitcoin? What would we do to get this change past the miners if it were against their best interests? They would resist a hard fork.

I have heard people say that this would be a problem, but I've not heard about any solutions.

Would we be able to split away from the miners and leave Bitcoin intact? Would there be a way to incentivize or compensate the miners to allow a change? Could it be done in stages, giving the miners advanced warning of gradually diminishing rewards? Would we be able to somehow leverage the fact that the miners have invested in hardware and need Bitcoin to maintain at least some of it's value?

OR

Can we just leave it how it is? As block rewards diminish, or hardware improvements tail off, maybe mining will be less attractive to the huge centralized pools. Perhaps there will be standardized, readily available mining gear widely distributed in the hands of a great many people (using a p2p pool?).

There are so many possibilities that whatever happens in the long run will be interesting to watch.

Posted on July 16, 2014 at 2:16 PM

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• Mike

  

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  This will definitely be a huge problem, if we do ever get to the point that it becomes necessary to promote a change. I can think of many examples where an industry change at the detriment of the industrial players would be impossible, or at least near impossible to do all at once. Industrial miners have both the capital, and the connections to make sure their voices are heard.

  If I were to imagine a scenario where a change is made successfully, it would have to be at a huge subsidy to the miners. That is unless there is a way to alter the system that could remain beneficial to miners, or at least neutral. After the first change, miners could slowly be phased out so that they don't have the opportunity or incentive to just shut down all at once. In order to do that, however, it needs to be subtle enough that the system can run on even if there is a backlash from the mining industry.

  Posted on July 16, 2014 at 2:48 PM
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• adam

  

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  @spengler Listening to Episode 127, there were mentioned many ideas on how to change Bitcoin to improve the less than ideal situation with mining.

  What if, in the future, there were a most excellent idea for altering the protocol to improve Bitcoin? What would we do to get this change past the miners if it were against their best interests? They would resist a hard fork.

  I have heard people say that this would be a problem, but I've not heard about any solutions.

  Would we be able to split away from the miners and leave Bitcoin intact? Would there be a way to incentivize or compensate the miners to allow a change? Could it be done in stages, giving the miners advanced warning of gradually diminishing rewards? Would we be able to somehow leverage the fact that the miners have invested in hardware and need Bitcoin to maintain at least some of it's value?

  OR

  Can we just leave it how it is? As block rewards diminish, or hardware improvements tail off, maybe mining will be less attractive to the huge centralized pools. Perhaps there will be standardized, readily available mining gear widely distributed in the hands of a great many people (using a p2p pool?).

  There are so many possibilities that whatever happens in the long run will be interesting to watch.

  My personal feeling is that power will continue to calcify in bitcoin and eventually we'll be forced to move to another alternative because its become so expensive and time consuming to make even moderate changes to the protocol when its not in a life/death situation.

  Its only a matter of time before the "Bitcoin is Cryptocurrency" bubble pops, and the world is awash with a thousand coins vying for a title that no longer exists.

  Posted on July 16, 2014 at 2:50 PM
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• PTheD

  

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  @adam

  My personal feeling is that power will continue to calcify in bitcoin and eventually we'll be forced to move to another alternative because its become so expensive and time consuming to make even moderate changes to the protocol when its not in a life/death situation.

  Its only a matter of time before the "Bitcoin is Cryptocurrency" bubble pops, and the world is awash with a thousand coins vying for a title that no longer exists.

  Wow!, now that is interesting to hear.

  Posted on July 16, 2014 at 3:21 PM
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• Spengler

  

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  @adam Its only a matter of time before the "Bitcoin is Cryptocurrency" bubble pops, and the world is awash with a thousand coins vying for a title that no longer exists.

  That thought is a little sad after getting so enthusiastic about Bitcoin. However, it mightn't be so bad if it works out this way.

  Pros:

  • Bitcoin's functions could still be replicated.
  • Every "coin" could be perfectly optimized to suit it's niche.
  • There will be plenty of choice to suit people's needs, preferences and beliefs.
  • It would offer opportunities for a lot of innovation.
  • Tools could be built to make interactions between all of the "coins" simple.

  Cons:

  • People relying on Bitcoin to dominate would lose out.
  • It would be difficult to keep track of all of the "coins" (although this could be the case anyway, even if Bitcoin maintains it's footing).
  • Without a clear leader volatility could be a problem (although we currently have many currencies globally and we get by).

  There's plenty to think about on this subject!

  Posted on July 16, 2014 at 3:24 PM
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• Spengler

  

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  @adam

  My personal feeling is that power will continue to calcify in bitcoin and eventually we'll be forced to move to another alternative because its become so expensive and time consuming to make even moderate changes to the protocol when its not in a life/death situation.

  Its only a matter of time before the "Bitcoin is Cryptocurrency" bubble pops, and the world is awash with a thousand coins vying for a title that no longer exists.

  I'd like to add a thought in case people start worrying. If this happens, Bitcoin could still retain a good deal of monetary value, despite it not obtaining a monopoly. It could be a case of Bitcoin losing it's edge.

  Nobody knows what will happen.

  Posted on July 16, 2014 at 3:53 PM
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• zeus

  

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  So you guys also think that Bitcoin will eventually be replaced at some point?

  From my point of view POW and Bitcoin was an amazing concept. But I think that once more people jump on the cryptocurrencies train, POS or even better DPOS will prevail from POW. The whole point is decentralization, transferability of assets instantly within seconds, low fees, profitable models...

  For these reasons I believe a lot in Bitshares and in DACs in general.

  Posted on July 16, 2014 at 4:08 PM
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• adam

  

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  Spengler you're worrying too much, it will be like a decentralized stock split. The bubble will pop, people will realize they have better options but with so many of them and different stakeholders expounding on different values people will gravitate towards the community of value (and its token) that they most identify with.

  You have a pros and cons list, the only relevant fact is that bitcoin is the starting point for all the things that replace it. Nothing will be worse and succeed in a moderate timeframe. That's beautiful, and it's the nature of decentralized systems at work. They do not scale forever the first time, they scale to maturity and then explode as they hit unanticipated failstates for unanticipated reasons.

  Trees grow, they live and then they die and eventually fall usually taking out a few neighbors on their way. Their absence causes a break in the canopy allowing saplings the chance to compete for the gap and for a period of 10+ years you have all players rapidly growing trying to maximize their share of the available resource and outcompete their neighbors. Smaller trees don't die, they just never gain the chance to reach full maturity.

  I'm invested in the forest, and I suggest you all do the same. Trees are risky things, only one trunk no matter how tough and as they get taller they become more prone to breaking under their own weight at extremes.

  Posted on July 16, 2014 at 4:09 PM
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• btc_revel

  

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  To keep it short I still think that this analogy is good:

  Many specialists did not believe TCP/IP would be scalable, but it scaled so much more as people believed it could.

  Bitcoin needs to incorporate big innovations in the field of crypto, but its strongest feature is still its security through big POW & mainly much peer review code thanks to big adoption of protocol by funded start-Ups (and maybe/probably increased testing of new BitcoinCore releases by those startups/companys), but also hughe distribution of coins, and being the first (this is underestimated buy many! All we need is trust that other have trust... and it would be difficult if it had all began with 20 Cryptos from day one, but now it is clear that bitcoin is the leader, and everyone thinking of which to trust comes to pretty much the same answer).

  => It seems to be pretty much accepted that Bitcoin needs and will very probably at least be the "store of value" (because of reasons cited above). If it can be more, like cheapest transfer of value, ... great... but it will just be a (big) bonus. Many useful things will be able to be build on top (like counterparty) or not on top, and then these things will struggle to exist for long (like many companys today), but they do not directly harm Bitcoin (counterparty may harm the success of Mastercoin, but it does not hurt Bitcoin so much). Bitcoin does not need to be everything

  Posted on July 16, 2014 at 4:42 PM
  Last Edited: July 16, 2014 at 4:46 PM
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• Halo

  

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  The amount some people have invested in mining equipment is far too large to drastically change how distributed consensus is achieved. If anything it would have to be a gradual shift towards a new way of mining where miners had incentive to make the shift but not forced.

  Posted on July 16, 2014 at 5:08 PM
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• phantom

  

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  I believe that as the rewards get smaller it will be more likely for miners to accept a different method of securing the network. The main reason being is that as rewards diminish it will be less viable to replace asics and total hash rate will slowly drop. The point where this happens depends on a few things other than rewards per block like total transactions fees per block and the current value of BTC.

  If the value of BTC goes up continually and the amount of transactions increase enough we might not hit the point that this will happen till all coins have been awarded.

  Posted on July 30, 2014 at 7:40 AM
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