4

Could miners with enough mining powers (say >95% of all blocks) form a cartel where they demand absurdly high transaction fees? Of course, I still could could hope for a miner not in that cartel to relay my transaction for a lower fee, but in that case I couldn't be sure when my transaction gets paid to the adressee.

Is this a plausible scenario?

4

Cartels are unstable due to members defecting for the economic benefit that comes from doing so.

See the Prisoner's dilemma.

Because miners are anonymous, the cartel would likely see defection immediately.

1
  • Good point that miners are anonymous. I hadn't thought of that. Apr 5 '13 at 23:34
4

Miners have huge investments in hardware that can only be used to mine Bitcoins. They have no incentive to do things that reduce the value and usability of Bitcoins. Any "mining cartel" with the power to get 95% of the hashing power to take collective action in non-emergency circumstances would create enough fears about 51% attacks and the like that it would drastically reduce the value of the Bitcoin system and greatly encourage competitors. So while this is theoretically possible, it's unlikely in the extreme.

-2

The correct answer is yes, they can. And the claims about falling value in that scenario are borderline illiterate. Imagine they rise the fees, and you hold all your savings in BTC. What are you going to do? Sell? And who is going to buy? Some shady people for ridiculously low price to compensate for the risks. You will be locked within your “free” “decentralised” ecosystem with no one to intervene and no one to help. No courts, no government, no police. But of course this won’t happen because miners are saint and will never harm another human being for profit. Right?

Etherium currently has a problem with insanely expensive gas. So? Is the cost falling down? No it isn’t.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.