Hmm, came across an interesting and completely overlooked paper https://scalingbitcoin.org/montreal2015/presentations/Day2/6-Sveinn-Valfellsmining-slides-montreal.pdf
which apparently suggests according to @dgenr8 that bitcoin has powerful inbuilt incentives against miner centralisation as after a certain hash % miners profits grow slower than cost, because each hashing percentage point costs more than the last. This follows directly from the fact that the network devalues your previous investment via difficulty adjustments. The bigger that previous investment, the bigger hit you take when difficulty adjusts.
I find that super interesting so thought to create a thread to discuss it. Of course it would also be helpful if someone could fully flesh out the maths into words so that more people can follow along.
which apparently suggests according to @dgenr8 that bitcoin has powerful inbuilt incentives against miner centralisation as after a certain hash % miners profits grow slower than cost, because each hashing percentage point costs more than the last. This follows directly from the fact that the network devalues your previous investment via difficulty adjustments. The bigger that previous investment, the bigger hit you take when difficulty adjusts.
I find that super interesting so thought to create a thread to discuss it. Of course it would also be helpful if someone could fully flesh out the maths into words so that more people can follow along.
