[three_seagrass]

By design, any changes to update the Bitcoin protocol need to be accepted by the miners with the majority of computing power - a.k.a. a hard fork.

For many reasons, such as stealing electricity and having access to chip manufacturers, there are a handful of miners in China who have the majority of the computing power for Bitcoin. They can mine bitcoins at a cost that is less than for everyone else.

This creates problems because there are updates to Bitcoin that are needed, such as allowing the Bitcoin network to process more than 7 transactions a second (for reference, Visa does 40,000 a second). Unfortunately, this small block size rate means people have to pay extra fees to prioritize their bitcoin transactions to happen in the next 20 minutes.

The miners get to keep these additional fees, so they are incentivized to keep the network slow and people paying more. This is why the Chinese miners have rejected any updates to improve Bitcoin transaction rate, meaning bitcoin is slower and more expensive for everyone but the miners extract more money from the network. It's tragedy of the commons.

[Taek]

"By design, any changes to update the Bitcoin protocol need to be accepted by the miners with the majority of computing power - a.k.a. a hard fork."

This is incorrect and a common misunderstanding about Bitcoin. Hard forks require users to update, and it doesn't matter what the miners do. It also doesn't require a majority of users to upgrade, anyone who does upgrade will be on the new network, and anyone who does not upgrade will be on the old network.

Bitcoin (and other blockchains) are structured so that miners have as little power as possible. Pretty much the only thing miners can do in practice is choose to censor transactions, and that would be considered an attack. Networks have recourse like bricking all mining hardware, which typically acts as a sufficient deterrent to such attacks. Miners can also double-spend (a form of creative self-censorship), but the same network recourse applies.

In practice I don't think there are any examples of miners intentionally making a blockchain slower and more expensive. Miners pretty much always fit every possible transaction into every block, and any throughput restrictions are determined at the protocol level by protocol devs, not by miners.

[three_seagrass]

Semantics. Any hard fork that majority of miners do not accept and support becomes it's own branch and a separate crypto.

This is why I reference the bitcoin block size debacle. Bitcoin Cash was created as a hard fork that miners ultimately did not accept and is now just a dwindling alt coin.

[Taek]

It's not semantics, it's an incorrect worldview. Miners follow revenue. If miners had chosen to mine Bitcoin Cash, all that would have happened is they would have lost a ton of money competing with eachother while the miners who stayed on the original chain raked in hundreds of millions in additional profit.

Segwit2x had 80% hashrate support at the time it was proposed. It also had the support of most of the exchanges and major centralized players in the space. And yet, Segwit2x did not succeed.

Miners don't control Bitcoin.

[lifty]

As far as I remember miners favored the block increase while a critical mass of validating users didn’t.

[three_seagrass]

The distribution and difference in hash power speaks otherwise.

[lifty]

That’s not how it works. Miners follow the chain with the most users and highest economic share. Check this article if you want a more accurate depiction of how it went: https://bitcoinmagazine.com/articles/bitcoin-independence-da...

[three_seagrass]

That's over a year ago. Any remaining miners on bitcoin cash have jumped ship: https://bitcoinist.com/miners-abandon-bitcoin-cash-for-bitco...

[DINKDINK]

Producers are subservient to consumer demand. No amount of production can force a consumer who refuses to change their consumption into buying an alternate good. If a town demands exclusively kosher bread, bakers cannot survive by baking non-kosher bread to sell to them.

Block producers (miners) must find buyers for the blocks they produce, if they don't find buyers, they go bankrupt.

>changes to update the Bitcoin protocol need to be accepted by the miners

You've got it backwards, changes to Bitcoin need to be accepted by block consumers (node operators). If they don't demand those changes, blocks with those changes don't get produced.

Demand and supply are fundamental components to economic action. The steal man version of your argument is: "While consumers induce production, some consumers' demands might be flippant -- They signal they will only buy kosher bread but they'll accept an alternate good. Though production switching costs are practically zero in SHA256 PoW, and entry into production is non excludable, an adversary has enough funding to pay premiums to producers to forego market demand, for the good they produce, longer than consumers are willing to refrain from consumption -- inducing a consumer-demand shift."

In game theory and economics its not a dominating strategy which is indicative of the many failed attempts to cartelize SHA256 PoW

[three_seagrass]

>Block producers (miners) must find buyers for the blocks they produce, if they don't find buyers, they go bankrupt.

In a buyers market. With the small block size, bitcoin is a seller's (miner's) market and refusing to upgrade preserves their market power - hence the tragedy of the commons.

>You've got it backwards, changes to Bitcoin need to be accepted by block consumers (node operators).

The number of bitcoin nodes has been dropping for years. The rational actors who are incentivized to support the network are making the decisions right now by choosing which forks to support.

[DINKDINK]

>In a buyers market. With the small block size, bitcoin is a seller's (miner's) market and refusing to upgrade preserves their market power - hence the tragedy of the commons.

The produced good (SHA256 hashes and the transferable UTXO set of bitcoin nodes) is an excludable, rivalrous good. Hence it doesn't suffers from tragedy of the commons problems. This is the foundation of excludability in economics.

https://en.wikipedia.org/wiki/Excludability

"seller's" or "buyer's" "markets" are weak concepts that don't control which goods are produced. If an agent market sells or market buys that doesn't dictate which goods are produced.

Again, no amount of production nor no amount of consumption can get a consumer or producer to shift their consumption or production to a good they do not want.

[ARandumGuy]

This is one of my big issues with Bitcoin, and other cryptocurrencies. It's not a democratic system, it's controlled by whoever has the most investment in the currency (either through mining power, or amount of currency).

This means that the people who get the most decision making power are incentivized to only make changes that help their investment. Any change that would help a majority of users, but harm these top users, is basically a non-starter.

[tromp]

With some crypto currencies, the developers are invested only by development efforts, holding negligible mining power or amount of currency (which they have to buy like anyone else). They work like a meritocracy, with those who contributed most to the design and coding have the most decision making power.

[albroland]

VisaNet actually is a bit faster than that; they claim current capacity for about 75k/s.

[kharak]

I don't follow Bitcoin, but after first hearing abort how it would be a decentralised network, all I could think was "have you ever heard of the power law?".