Author: Peter Todd 2013-02-18 16:22:35
Published on: 2013-02-18T16:22:35+00:00
The article discusses the risks of centralization and the impact of block sizes on Bitcoin. The author argues that maintaining a capped block size will lead to greater centralization, as Bitcoin would only be useful for high-value transactions made by banks and large corporations. In contrast, if block sizes remain small, transaction fees may increase, but there will still be demand from individuals and small-scale miners. The fixed costs of setting up a small mining operation are lower than at larger industrial scales, making it difficult for banks to control the network. Conversely, with larger blocks, mining solo is unprofitable due to the significant fixed costs required to process blocks, and miners on pools cannot independently verify the blocks they mine. As a result, it would be easy to co-opt the relatively small number of pools and regulate them, leading to centralization.
Updated on: 2023-06-06T10:03:34.541297+00:00