The Problem of Consolidation

in #decentralization7 years ago (edited)

Most believe that the great promise of blockchain based tech is decentralization. Right now, the bitcoin network collectively manages the global transaction flow without a central authority or company. In principle, I understand the inherent decentralized nature of the technology and how that yields all the attendant virtues like uncensorability, trustlessness, and universal agreement on state. However, we already see consolidation of mining into pools and large operations. Some conspiracy types believe that this consolidation is at the root of the resistance to scaling, in an effort to keep fees high. Personally I think that could be playing a part but is not the primary reason driving the intransigence. I think the majority of parties involved have good reasons for holding their particular point of view and are genuinely doing what they think is best for the future of bitcoin.

Anyway, it's hard for me to see how the trend toward consolidation will not continue nor how it's avoidable. Let's be real, if bitcoin is actually going to reach full scale and support the global financial infrastructure, we aren't going to be depending on people with chains of GPUs in their basement. The incumbent players that currently host the vast majority of the cloud will see the opportunity, and instead of server farms we'll just have mining farms run by those same players. Same same.

What makes people believe that blockchain applications can reach full scale without relying on the same types of organizations that have the resources to actually host the network? Why should we expect that there won't be a Google or AWS type situation in bitcoin? Or that those specific companies won't come to dominate blockchain hosting? They obviously already have the resources and infrastructure to build out full scale blockchain hosting.
We've already seen the emergence of cloud mining pools. Why wouldn't the incumbent cloud hosts just move over and take over the mining game?

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