An active campaign to punish and/or destroy miners would actually increase mining centralization.

The Problem

I was musing on how to encourage miner-decentralization. It seemed that this was among the better technical ideas out there. My weak opinion (which I hope is correct) is that eventually everyone will be using P2Pool and this problem will sort of die out, or that new blockchain structures will decrease the problem’s relevance.


Of course, I really wanted a more econ-based idea. First, I tried to wrap my head around “measuring decentralization” and tried to make a list of the things which increase with decentralization:

  • Redundancy of data-storage-and-generation-processes (if you killed 99.9% of English-speakers, the survivors could still teach it to someone else and then speak with them in English)
  • Authoritative Indifference / Flat Hierarchy (English PhDs can’t really prevent the creation of an ‘internet dialect’ which includes “LOL”)
  • Privacy of Agents (from one single place, it is impossible to know who currently is using English)

It seemed that that only real insight I could draw from this, was a rather dark one: constantly seek out the “most-popular mining-computer” and destroy it! This would encourage miners never to grow so large as to become visible.

Pretty impractical, unfortunately. But, in a small irony, the laws of thermodynamics have taken a small step in this direction, where a mining setup was so large that it produced enough heat to literally self-destruct.

Will we ever see the day when a small Rebel Alliance attacks a gigantic mining facility by compromising its thermal exhaust ports?

Our Active Alternatives

I think that this “active” campaign to find and destroy miners may be the only way to actively increase mining decentralization, assuming you wanted to do such a thing (which I don’t, really… mining decentralization is not Bitcoin decentralization).

After all, fundamentally, the only difference between “a coordinated group” and “an uncoordinated group” is that something (coordination) has been removed. The coordinated group can always do everything the uncoordinated group can do (and more). So how are you going to make life harder for one but not the other?

Passive Decentralization

Passively, the difficulty-adjustment process works to constantly eliminate the least-profitable miners, making the group more and more homogenous over time. However, (as pointed out by many people), geographically dispersed sources of minimal-cost power (provided by hydro / solar in remote areas) will restore some geographic decentralization (which may, or may not, be related to ownership/control).

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