The message is the medium

Did Satoshi Predict Pooled Mining, Big Farms and ASICs?

There has been a lot of discussion around the question if Satoshi Nakamoto, the creator of Bitcoin, foresaw the development of pooled mining farms. Some notable Bitcoin pundits says he did not (here Luke Dashjr was spreading false info on this point just recently, for instance), and there has been one much-talked-about email from someone pretending to be Satoshi in which someone claims it was not foreseen.

Below are a number of quotes from Satoshi Nakamoto himself, published early on in Bitcoin’s development (via email and on forums) firmly refuting that idea. Satoshi obviously was very well aware of the fact that ASICs would be developed and mining farms would be deployed (that’s also why he developed (as in prepared the code for) SPV clients, i.e. “light” wallets that don’t need to run a full node).

Quotes from Satoshi Nakamoto:

  1. “At first, most users would run network nodes, but as the network grows beyond a certain point, it would be left more and more to specialists with server farms of specialized hardware.”   – 2008. – URL.
  2. “At equilibrium size, many nodes will be server farms with one or two network nodes that feed the rest of the farm over a LAN.” – 2010. – URL.
  3. “The design supports letting users just be users.  The more burden it is to run a node, the fewer nodes there will be.  Those few nodes will be big server farms.  The rest will be client nodes that only do transactions and don’t generate.” – 2010.URL.

Adding to this, Satoshi Nakamoto also foresaw merged-mining, realizing that copies (forks) of Bitcoin would be unsafe, compared to the Bitcoin network. This is another argument that systems like Ethereum should piggyback on the superior network power of Bitcoin:

“It’s hard enough maintaining backward compatibility while upgrading the network without a second version locking things in.  If the second version screwed up, the user experience would reflect badly on both, although it would at least reinforce to users the importance of staying with the official version.  If someone was getting ready to fork a second version, I would have to air a lot of disclaimers about the risks of using a minority version.  This is a design where the majority version wins if there’s any disagreement, and that can be pretty ugly for the minority version and I’d rather not go into it, and I don’t have to as long as there’s only one version.”

And here is another forum thread where Satoshi Nakamoto discusses ASICs in particular, in 2010. The following quote adds to this body of evidence;

“Instead of fragmentation, networks share and augment each other’s total CPU power.  This would solve the problem that if there are multiple networks, they are a danger to each other if the available CPU power gangs up on one.  Instead, all networks in the world would share combined CPU power, increasing the total strength.  It would make it easier for small networks to get started by tapping into a ready base of miners.” – 2010. – URL.

UPDATE: Satoshi was still active when puddinpop presented his idea on how to solve “pooled mining” here. And aquentin has added links to posts where Satoshi is actually commenting on Slush’s pool (expressing no surprise at all, on the contrary adding to the discussion as usual and coming up with suggestions on how to make the pool better), here and here.

Here’s the ensuing comment thread on Reddit.

This reasoning may seem petty, but it’s kind of important in the decentralization debate as commenters, pundits, VC’s, altcoin “founders”, journalists and many more often allude to the “specialized” development going against the “vision of Satoshi”, when in reality almost everything that has happened so far around Bitcoin was foreseen by Satoshi, it is even part of “the plan”. Satoshi was/is a visionary of such magnitude that we mere mortals have a hard time even comprehending. These effects, pooled mining, ASICs, farms etc – aren’t weaknesses in the Bitcoin network – on the contrary, they are strengths, shooting the collective hashrate into stratospheric heights, leaving any competitor or would-be attacker in the dust. Why so many believe they can achieve this amazing feat (trying to copy Bitcoin) without the costs is beyond me.

So, can we please lay this question to rest now?

20 Responses to “Did Satoshi Predict Pooled Mining, Big Farms and ASICs?”

Comments are closed.