Don't miners control who is allowed to make transactions?

Question

Simple question really, considering theres a very small group of miners controlling the chain ATM.
Whats to stop them from being forced by the goverment to disallow certain transactions or just mining empty blocks to jack up the transaction price?
Or even worse, whats to stop a country like china from just investing massive ammounts of money into unbeatable mining pools and destroying every appearing coin that way?
Don't miners have way to much power in the current system? Especially since crypto is supposed to be decentralized

Answer 1

Simple question really, considering theres a very small group of miners controlling the chain ATM.

Miners are distributed around the world, many of them may join the same mining pool to even out the variance in payouts though. Do not confuse the number of mining pools for the number of miners. Really, it is not possible to know the number of distinct mining entities that exist.

Whats to stop them from being forced by the goverment to disallow certain transactions or just mining empty blocks

Nothing. If a certain govt could reliably regulate any miners within their jurisdiction, then they could perhaps enforce a rule like this.

The good news is, since hashing power is distributed, no one govt can censor the chain in this way. If Govt-A decides to censor transactions, it won't affect any miner that exists outside of Govt-A's control, and so while the transactions in question may take a little longer (on average) to get confirmed, this won't censor them outright.

In fact, the miners existing under Govt-A's rule will now likely become less profitable, as they will be unable to mine the transactions that are sanctioned by Govt-A. This means all other miners will become more profitable for it - the system is self-balancing in this respect.

Or even worse, whats to stop a country like china from just investing massive ammounts of money into unbeatable mining pools and destroying every appearing coin that way?

The majority-attack (51% attack) is a well-known attack that is possible against the network. An attacker with a majority of hashpower could censor transactions indefinitely, but there is a caveat: doing so requires a HUGE investment of capital, and then a HUGE ongoing electricity cost, for the entire length of time the attack is maintained. Further still, once the investment into the specialized computer hardware is made, an entity could mine profitably instead of spending money to attack the network. This is a heavy financial incentive - perhaps some government would be willing to ignore this, but it seems unlikely for an attack to be sustainable (and indeed, we have a decade worth of evidence of a system that works as intended, and has not been attacked in this way).

Answer 2

The stakeholders of bitcoin don't want miners to do that. If miners do that, the stakeholders (the people who are paying for the miners to mine) would change the rules. For example, they'd change the mining algorithm. That would turn the miners expensive ASICs into space heaters (a little faster).

Don't miners have way to much power in the current system? Especially since crypto is supposed to be decentralized

The miners only have power because the people paying for their mining hardware and electricity like the job they're doing. If they don't provide the censorship resistance and forward progress without double spends that the stakeholders want, the rules will change.

Miners know this and such a scenario would cost them a huge amount of money, so they are strongly incentivized not to let it happen.

Answer 3

What you are describing is a majority attack which a miner own more than 51% of the hashing power, it has happened once in 2014 but the miner then decided to lower its power to allow the bitcoin to work as intended, you should also notice that the things a miner owning this power can do is limited, see this answer: https://bitcoin.stackexchange.com/a/662/95422

Now if someone or a government try to do a 51% attack, it will cost a huge amount of resources even for a country like China to being able to own more than 51% of the hashing power, and once they have that they will likely make the trust in the network to zero and the price with it too, rendering the operation quite costly for almost no benefit, whereas they could use that power to play the game with the other and get rewarded for it.

Here is a better summary in video: https://www.youtube.com/watch?v=yWTQgmCuiCw&feature=youtu.be

and a more in depth answer: https://bitcoin.stackexchange.com/a/90309/95422