Why does a bigger block size infer miner centralisation?

Question

I've read that one of the detriments to increasing bitcoins block size is that it will create a more centralised mining community. How is this so?

Answer 1

Because a key aspect to understand is that transferring a block over the network globally is not completely instant. The bigger the block is, the longer the block propagation statistically takes.

However if you are propagating the block to part of the network that is close, like transferring the block to yourself (which of course means that you won't need to transfer the block at all), the latency disappears. If you find a valid block, this means that you have a slight mining advantage to mine with the new block as the last valid block, while other parts of the network is still mining on the old block as the last valid block, during the time the new block you just mined is propagated to the rest of the network. The larger the new block you just mined, the longer time you have to mine on the new block while other parts of the network are still mining on the old block as the last valid block.

In an industry where even the slightest percentage wise of advantage leads to being able to outcompete your opponents, longer block propagation times should theoretically mean to higher concentration of big parties on the network.