Satoshi Nakamoto created bitcoin, and took great care to make a system that was completely independent, self sufficient, and self balancing without the requirements of trusted third parties or intermediaries.
The difficulty adjustment is arguably, the most beautiful part of the system as it ensures that block times will be about 10 minutes in all conditions from the onset of the network, and into the future. Put simply bitcoin, can tell time without a clock.
Most people who mine bitcoin no longer solo mine, as the odds of finding a block are astronomical. This has led to the development of mining pools which are operated by third parties, and consolidate hashrate and construct blocks on behalf of individual miners.
This is a benefit to smaller miners as it ensures somewhat predictable payouts so the miner has an opportunity to collect rewards, and if necessary, convert bitcoin into dollars to cover energy and other expenses.
The downside to this set up is that it consolidates a lot of hashrate, into centralized organizations, which themselves are often hosted on other centralized organizations, such as Amazon AWS. This makes mining pools an easy target for censorship and pool operators may not care about this.
A good example of this in action is Foundry’s pool. Foundry is the Bitcoin mining arm of Digital Currency Group which to put it kindly is not a role model for defending bitcoin or open systems. DCG’s crypto lending unit had to file for bankruptcy as a result of the fallout from the collapse of the FTX exchange Ponzi scheme.
At the time of writing, Braiins mining insights estimates Foundry controls 32.2% of the Bitcoin hashrate. This alone is concerning, as in my opinion it’s way too much for one entity to control. The bigger issue, however, is that Foundry was able to grow very fast because it was targeted at institutional miners who are already used to extensive regulation. Foundry pool is invite only and requires KYC/AML for anyone using the pool. They offered 0% pool fees to their customers as another perk.
Foundry has recently announced that it will begin charging fees in late April 2023 to its customers. Their notice states that pool fees will be tiered based on the previous quarter’s average hashrate.
Unfortunately, customers mining at Foundry who don’t like this probably won’t be able to leave the pool as their business structure probably won’t allow them to take their hashrate elsewhere. Hopefully others considering using Foundry will choose more decentralized options going forward.
Centralization exists everywhere on the Internet, not just in bitcoin mining pools. You’re a writer and you want to reach an audience, well you’re going to need a Substack or a Medium account. You’re an artist or creator, and you want people to be able to sponsor you? Well, you’re going to need a Patreon account. You’re a Podcaster and you want to reach Spotify’s audience? Well, you have to be exclusive on Spotify, or they just list you without your permission and inject advertising into your product.
The Internet, as we know it was built on advertising, and because of that strong incentives are in place for companies to centralize, control, and monetize other peoples work.
When you post on Twitter, it’s not your post. It’s Twitter’s post. If they decide they don’t like you, they can shadow ban you or delete you.
The same is true for Substack, Patreon, Medium, Facebook, Instagram, and any other modern platform. They even do it to each other with Twitter recently suppressing Substack and those discussing it because they made a Twitter like experience on their own platform.
There is, however, one place where you truly own your identity and your content and that place is Nostr (Notes and Other Stuff Transmitted by Relays).
Nostr like bitcoin is a protocol not an app. TCP/IP is a protocol and others build their businesses and applications on top of it. A good example is Amazon. TCP/IP is the protocol and Amazon is the application or the product built on top.
For social implementations, Nostr is the protocol and various applications are built on top of it. Most of the current popular implementations are replicating the experience of Twitter and Reddit. I am posting this on another implementation called Habla that offers a blogging type of experience. I also post to my own WordPress site bitcoinalchemy.io.
This alone is powerful as Nostr uses a public/private key system like bitcoin to track identity, and because the protocol is open, no central authority can delete notes posted on to Nostr and the users hold their own keys. Not your keys, not your notes.
The real power, however, is that the bitcoin lightning network is directly integratabtle with Nostr. It is very easy to send “zaps” to people and many client implementation’s offer this directly on the note or post. This offers the ability to have instant monetization of any content that is paid directly to the content creator in a frictionless way, that no central authority can take a cut of or arbitrarily censor.
Bitcoin and Nostr are a match made in heaven. An open and uncensored communications layer, paired with an open and uncensored financial layer. Both systems are relatively new and a little rough around the edges, however, given time, and I don’t believe it will be a very long time; value will flow where it is treated best.
Why are you enriching other companies with your content when you can claim all of the value for your work? Why are you posting to Twitter and allowing an algorithm to decide who sees your work? Why are you spending your time trying to game that algorithm when you can post to another platform that treats everyone equally? Why do you have dollars in a bank that steals from you through inflation? Why not store it in an asset that increases in value over time and incentivizes, saving instead of frivolous spending?
The Internet was designed as an open and decentralized system, and that was stolen from us, because the only viable way to monetize it was through advertising. Now there are other options for monetization, because the Internet now has its own digitally native asset in bitcoin and truly free communication layer in Nostr. We must all do our part to make sure that we get it right this time and promote open and decentralized systems.
Nostr Resources:
Nostr Guide – https://uselessshit.co/resources/nostr/
Get Verified (Like Twitter Blue Check, but better) – https://mainstreetchungus.com/nostr-nip-05-verification/
About me:
Bitcoin only and aspiring sovereign individual, trying my best to homestead in the Ozark Mountains of Missouri and mine bitcoin on stranded energy in the Show Me state.
I’m looking for like-minded individuals to help us build Bitcoin mines owned and operated by plebs.
Website: https://bitcoinalchemy.io
Nostr (GigaBTC): npub1f5qxsvu27hh8nsr9z0024upyjgj8h0m6h55lz9hxu5xptz4k5emsed576p