Getting Paid For Home Bitcoin Miner Energy

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Decentralization is a core ethos of Bitcoin. In this article, I will discuss the importance of keeping Bitcoin mining decentralized with widespread, small-scale mines.

The future is competitive.

Large Bitcoin mines have economies-of-scale advantages and are able to be set up in jurisdictions with the lowest power costs. While large-scale mines do play an important role in the scaling of hash power, it is important to have large- and small-scale mines. Currently, the incentive structure favors relative centralization of mining to large mines.

If mining becomes too centralized, there are several risk vectors that come into play.

  • 51% attack: It is easier to coerce 100 large mines to cooperate or shut down, than it is to coerce 1 million small mines to cooperate or shut down.
  • State/government compliance: Large mines become beholden to government policies or political pressure.
  • Anti-fragility: The higher the centralization, the less robust the network. If Bitcoin is to become the base layer of the global monetary system it needs to be able to withstand any potential threat coming in the foreseeable future. Events such as widespread power outages, world war, global economic collapse, coordinated EMP or nuclear attacks could cause denial-of-service or 51% attack opportunities.
  • Non-democratized: Bitcoin is for the people. Miners and nodes work together to protect the blockchain and “vote” on changes to core functionality. Individual control of miners and nodes ensures more people are in control of “voting” for Bitcoin’s future.



Source link Bitcoin Magazine

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