[AUDIENCE] I would love to hear your thoughts on-
[When] I talk to people about Bitcoin, a lot of them say,
“Well, a majority of your decentralized system…
is now mined almost completely
in China by very few organizations.”
What is the Andreas response to that?
[ANDREAS] The Andreas response is, in order
to understand Bitcoin’s consensus mechanism,
you need to understand that there
are five constituencies of consensus.
None of them has complete control
over the system, all of them must agree.
You have the developers, miners, exchanges,
wallets, and merchant services.
If you as a miner decide to take the chain in a [particular]
direction, and the economic activity doesn’t follow you…
If merchants, exchanges, wallets,
and developers stay on the other side,
you are mining a chain without economic value.
You cannot exchange, sell, or use [the
mined coins] for any products and services.
There is a balance there. One of these significant
points of balance is, the vast majority of…
development, startups, and users are in the
western world, even while mining is in China.
That is a beautiful balance. That means Chinese miners
can’t take it over, and neither can western developers.
It creates a balance of power.
I think that is a good system.
I don’t think it is healthy to have the mining centralized,
and there is a lot of centralization in mining,
but that is an artifact of the very rapid performance
increases over the last four or five years…
from CPU to GPU to FPGA to ASIC,
from forty down to sixteen nanometers.
Now we have hit a wall, with a [doubling]
performance increase every two years.
That changes the system dramatically for everybody.
It slows down. We will see re-decentralization of mining.