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Author Topic: Centralized pooled mining should not be done.  (Read 9431 times)

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Centralized pooled mining should not be done.
« on: January 12, 2012, 10:26:27 AM »
Quote
This gives the pool owners enormous power over the currency as a whole. Never mind the possibility that they simply turn evil and steals all the coins that are generated, but they are also vulnerable to attack from for example governments that wants to "shut bitcoin down". I realize that they cannot shut it down completely by doing this, but if they gain control over more than 50% of the network they can do some nasty shit that might make the currency unusable.

https://en.bitcoin.it/wiki/Weaknesses#Attacker_has_a_lot_of_computing_power

When there are lots of mining pools around this is scarily easy. Governments can either bribe or buy out the owners of the pools, which they have more than enough money to do. Or if they refuse, they can just arrest and forcibly shut them down or seize the mining operation. I imagine that at least the NDAA in the US could be exploited to allow the governments to do this. Then it's trivial for them to take over the network either using the pools own nodes, or shut them down and making their own supercomputer after the massive drop in mining difficulty.

tl;dr pooled mining effectively cancels out a lot of pros about the decentralization of bitcoin.
I really think the author has a strong point.

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