Published on: 2015-08-06T03:14:53+00:00
In a discussion on the bitcoin-dev mailing list, it was highlighted that Miner A has the capability to process 100 million transactions per block, while Miner B can only handle 10 million transactions per block. To bridge this gap, one suggestion put forward was for Miner B to sell ASICs and purchase CPU worth 90 million transactions. Another option proposed was to cap the block size at 10 million transactions, which would require Miner A to sell an equivalent amount of CPU and acquire ASICs. However, even with these solutions, Miner A would still maintain an advantage due to its greater financial resources compared to Miner B. This indicates that the issue of centralization in mining is more closely tied to financial capabilities rather than block size.In an email exchange between Gavin Andresen and Jorge Timón in August 2015, they delved into whether Miner A, with its higher transaction processing capacity, could continue to compete effectively against Miner B. Andresen argued that several variables play into the equation of mining profitability, including access to cheaper electricity, advanced mining hardware, affordable labor, and capital for hardware investments. He also brought up the idea of utilizing excess heat generated from mining for productive purposes, suggesting that if mining devices could be repurposed as heaters, it could potentially alter the dynamics of mining centralization. Andresen emphasized that mining should ideally remain decentralized, while considering the number of fee-paying transactions that can be included in blocks as part of the profitability equation.In another email conversation between Timón and Andresen, the question of whether Miner B can maintain competitiveness against Miner A was further explored. Andresen reiterated that various factors contribute to mining profitability, such as access to cheaper electricity, more advanced mining hardware, the ability to utilize excess heat productively, availability of affordable labor, and capital for hardware investment. Although the number of fee-paying transactions currently holds little significance, it will eventually become part of the equation for mining profitability. The goal is to encourage miners to include a substantial number of transactions in their blocks.Challenging the notion that block propagation times alone determine the usefulness of the maximum block size consensus rule in limiting mining centralization, a thought experiment was presented. This hypothetical scenario envisions the existence of superluminal communication and infinite bandwidth for everyone, eliminating the need for consideration of block propagation times. However, even under these ideal conditions, the consensus block size maximum still serves a purpose in preventing mining centralization. Assuming that miners no longer process transactions with fees below 1 satoshi, physical limitations would favor larger mining players. For instance, if Miner A can handle 100 million transactions per block while Miner B can only handle 10 million, removing the consensus maximum block size would disproportionately benefit Miner A due to its greater block rewards. Ultimately, this would lead to Miner B facing bankruptcy or ceasing mining operations. Hence, the block size maximum will always prove useful in curbing mining centralization, as there will invariably be some physical constraint that favors larger mining participants.
Updated on: 2023-08-01T14:57:53.890040+00:00