- Khadim Shubber's
The bitcoin drugs trade is highly centralised is based on Bitcoin Laundering by Tom Robinson and Yaya Fanusie. Shubber writes:
just three mixers and gambling sites account for 97 per cent of the volume in their categories and 50 per cent of the volume overall.
In short, the illicit bitcoin ecosystem is centered around a small number of services that could be subject to scrutiny, regulation and co-option by law enforcement.
- Nellie Bowles' Everyone Is Getting Hilariously Rich and You’re Not points out that:
The goal may be decentralization, but the money is extremely concentrated. Coinbase has more than 13 million accounts that own cryptocurrencies. Data suggests that about 94 percent of the Bitcoin wealth is held by men, and some estimate that 95 percent of the wealth is held by 4 percent of the owners.Where is the money flowing to the whales coming from? New Survey Reveals Staggering Number Of People Are Buying BitCoin On Their Credit Cards. Poor people's credit cards, that is. Bowles' whole article is very nostalgic for those of us who were in Silicon Valley for the dot-com boom. But this time it's different!
I'm David Rosenthal, and this is a place to discuss the work I'm doing in Digital Preservation.
Tuesday, January 16, 2018
Not Really Decentralized After All
Here are two more examples of the phenomenon that I've been writing about ever since Economies of Scale in Peer-to-Peer Networks more than three years ago, centralized systems built on decentralized infrastructure in ways that nullify the advantages of decentralization:
Labels: bitcoin, distributed web
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"The Chinese government is reportedly planning to block its citizens’ access to centralised crypto trading platforms, via Bloomberg." reports Alexandra Scaggs at Aplhaville (my emphasis).
«In short, the illicit bitcoin ecosystem is centered around a small number of services that could be subject to scrutiny, regulation and co-option by law enforcement.»
This is really funny -- it is not easy to prove that they are not already controlled or infiltrated by one of various "law enforcement" or "security agencies", e.g. chinese or russian or indian or english etc., who have a long history of using corporate fronts.
Even very "official" financial institutions are surveillance mechanisms, for example SWIFT (from Damian McBride "Power Trip", 2013, page 124):
“In all the controversy in June 2013 over the US security services accessing people’s social media interactions through the PRISM system, it’s often forgotten that they had since 9/11 been accessing details of most of our ﬁnancial transactions through the Society for Worldwide Interbank Financial Telecommunication system (SWIFT). [ ... ] But it also raised uncomfortable issues around America’s potential access to the private ﬁnances and spending records of prominent politicians and businesspeople around the world. All that made this a difficult secret for Gordon and the Treasury to be sitting on, even more so when Mervyn King, the Bank of England Governor, was informed. [ ... ] At that precise moment, Mervyn’s conscience told him that he had a duty to blow the gaff on the SWIFT deal, and tell the British people that the CIA had — with the Treasury’s connivance — been secretly accessing that ﬁnancial data.”
"In Tether’s case, the top 200 addresses out of Tether’s nearly 100K active addresses hold over 2B USDT. Yes, the top 0.2% owns over 90% of the token’s total supply. This is more than double BTC’s wealth concentration."
From a fascinating post by Alex Vikati entitled A Closer Look At Tether’s Blockchain. Its worth a visit for the graphs alone.
Nic Carter tweets:
"The Palmer Principle: no matter the consensus mechanism, in practice, 51% of stake/mining power will be owned by at most 3 entities."
Check out the table in the tweet.
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