Too big to trust?

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Kryptous

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Hello! I have been lurking on this forum for some time and am enjoying the debates and discussion, it has really helped me to learn more about bitcoin and the various issues and controversies facing it.

I've been thinking about the risks associated with increasing centralisation and the parallels with large banking institutions. Some banks are considered so structurally important to the economy that they are 'too big to fail' and the government has a variety of ways of dealing this. In the US you have Dodd-Frank regulations. In the UK, however, we have a bank levy, which is essentially a tax upon the size of the institution. This encourages the banks to reduce in size via market forces (preferable to command-and-control regulation) and, as I understand it, has been relatively effective.

I'm wondering about the technical feasibility of something similar in bitcoin, a way for the protocol to offer diminishing gains to mining pools as they scale above a certain point. We don't want to discourage pooling entirely as they attract the investment needed to provide the huge hashpower required to secure the network, but we don't want any one pool to get too powerful either, let alone 51{88c91daedd271a990a10650c05d769cae2765e0603edf30ca95f18704e5748e8}.

I suspect this isn't technically possible. How could the network know if groups of miners are working together or not? Could the block reward be adjusted? I'm just curious about the possibility of a free market approach to limit miner centralization.

submitted by /u/andybellenie
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Kryptous

Crypto Coins News - Ratings - Reviews

1 News - 247 News - 247 Bitcoin - 1 Search

BTC - BCH - ETH - LITE - XRP

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Ticker

1 BTC = $59483.85 USD  (via Coinbase)
1 ETH = $2130.43 USD  (via Coinbase)
1 LTC = $247.20 USD  (via Coinbase)
Quotes delayed up to 2 minutes.

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