The systematic (POW) doom, the inevitable emergence of a POW monster in the cryptoindustry and Bitcoins doom to become oligarchic

June 7, 2018

 

It is as Karl Marx described it, that in a national economy the big established players all tend to grow in power and size into a monopoly, and it is as we know it from the equally named board game "Monopoly" (picture) the player that owns a big share, of the total size early over time grows automaticallly bigger and bigger, creating ultimately a plutocratic society that creates not as many winners as possible but that seeks to create as many loosers as possible for the benefit and power of monopolistic and plutocratic or oligarchic few. That society might then be vastly influenced by those big players, media, legislation, elections etc. nothing published really matters anymore as the strings are pulled by forces that grew with the system and are now ruling it.

 

Can this also happen for cryptocurrencies or more specific POW systems?

 

Yes it is likely to happen and it is already observable, lets start:

Tendencies to manipulate the media:

We wrote an article about the systematic pump and dump scemes and the "bull calls" that are being issued now in the american cryptomedia but it also reveals of a tendency to create vast and big influencing associations. Thinking that to the end, it is logically to understand that associations regarding hashpower in the worlds total POW system will be created out of interests to achieve certain economic goals, similar like caribbean pirates the worlds pow system might get its miner associations, which could hide their secretive coordinating core somewhere unknown and far away from legislation and police in an offshore sector. Such a secretive hashpower coordinating association will then for their reasons behave like a cancer, trying to feast on the smaller POW coins first, then grow in size so it can attack later the bigger ones. The profits from 51% attacks might even be a secondary goal, that delivers the profit, but the true goal being the destruction of trust which that particular POW system had in the first place. Take Verge as an example which lost a lot of trust and confidence after a 51% attack.

 

What would that mean for the future of the cryptoindustry and the POW concepts like Bitcoin itself?

 

It would mean that a honorable POS system would get a chance to regain popularity again, take for example the new cryptocurrency index: stakingrewards which lists POS token only. it might be a beginning of a trend to drop the pow concept as its becoming like a wild west.

additionaly the mining pools and leaked or even open associations like shown in their various lamo meeting events, might sooner or later be seen like a the same dragon the people saw in the banking cartels, and then supported them, creating the hype price of Bitcoin, that is now demerging.

 

Discussing this issue in Bitcointalk.org, revealed even deeper issues of the systematic

 

We brought and asked for that issue in Bitcointalk, and there we were answered that "Nakamoto proof-of-work MUST become centralized by an oligarchy otherwise it will no longer converge on a longest chain." and

"This research proven game theory and economic fact becomes true as the revenues from transaction fees become much greater than the revenue from the repeated halving of the block reward."

 

Our Fazit: The POW concept will get its huge pool shark that will haunt it, thats unavoidable and Bitcoin marketed as decentral will become central, but a quite low quality unpopular cryptocurrency that will stand for its unpopular ressource waste, caused by its core association of miners, bitcoin isn't made for the longterm, and its even more not made to enrich the collective. It is a zero sum game of its miner cartel against everyone else, using the mass media, and the illusion of decentrality.

 

with thanks to:

anunymint

 

 

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