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We are currently seeing the politicization of Bitcoin mining
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In the golden age of Bitcoin mining, they did it for profit. They didn't really care about the politics of Bitcoin governance and they were happy to go along with the largest consensus and collect the rewards.

As Bitcoin matures, it involves more money and profitable business entities. Those entities have a vested interest in evolving the network to protect and enhance their business. This starts with those entities attempting to control the development process for the network as well as influence for-profit miners via relatively cheap social/traditional media efforts. It eventually transitions into those entities taking more direct action in mining activities. I think we will look back on this time period and realize that a change was inevitable, even if we lament that fact that it happened.

In the near future, mining will no longer be a profitable business venture. All it takes is one entity with a reasonable amount of profit to decide that they want to invest a portion of that profit into mining operations to protect their business via influencing the protocol. Over time, this entity that is willing to run at a break even level or at a small loss will increase the amount of hashpower they control and drive for-profit miners off the network. I believe this process is already starting to play out, and is only going to increase.

So which Bitcoin businesses are actually profitable enough that they can invest money into controlling the protocol? Was this the original design of Bitcoin to be governed in this manner? They are interesting questions, but I think they can explain a lot of what we are seeing today. Entities like Blockstream, Bitmain, Coinbase, etc are being forced to become more political as the protocol debate deepens. I don't think any of them really signed up for this, but I think that this is the end game for "decentralized blockchain governance".

Of course, users have the ultimate veto power on the network protocol. If a protocol change is made that does not suit the users and they can come to a consensus, they can support a minority fork and prevent a protocol change fork from gaining value, thereby forcing miners back onto the more valuable fork. This is tricky business of course and is only a matter of last resort, but it should serve to prevent large investments into protocol upgrades that do not serve users.

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7 years ago