Hi Steemit !
This is my first ever post on here, so please bear with me. Also, I would like to apologize if anything I will write about is evident to you, but I would like some honest opinions about this subject.
A short introduction about me and how and why have I been involved in crypto the first place.
I have been keeping an eye on the crypto currency space since I first red about Bitcoin around 2009, I'm an ordenary guy, neither a cryptography expert nor a programmer so I didn't really understand the original whitepaper on Bitcoin, but the whole idea about a digital currency backed by a cryptographic system intrigued me. Before Bitcoin, I have heard about eGold, eBullion and Liberty Reserve but somehow those seemed very fishy to me as they were used for questionable purposes only. I am hungarian, I was unbanked at the the time, so my efforts on purchasing Bitcoin were kind of in vain. So, I pretty much missed the very early adoption phase of Bitcoin, but still visited some forums where people were talking about it and kind of witnessed, how it blew up over the following years.
This, what I am going to write about was bugging me ever since I sort of comprehended, how Bitcoin mining works on a bigger scale so here are my toughts on this.
As far as I understand, Bitcoin mining was supposed to be a community effort to build a secure and reliable way to confirm Bitcoin transactions and their authenticity. Of course, the genius of Satoshi Nakamoto included a system, where those, who are willing to put an effort to do such an important task should be rewarded. As I have watched Bitcoin over the years, it became clear to me, that for certain people the community aspect of Bitcoin kind of went in the background and the monetary aspect of mining became more and more important as the price slowly but surely started to rise. Then more people came and it seemed to me that mining for profit was the most important thing to them. Then Bitcoin blew up big time and now, mining is a serious business. The days of CPU or GPU mining are long gone, we now have warehouses with dedicated hardware running full time. Mainstream media of course only focused on how profitable it is to mine, but on the other hand, as far as I have seen, only relatively few people actually used Bitcoin for anything. Mass adoption is still in progress even now in 2017 but we are getting there and the future is very bright and the overall climate now is very positve IMHO.
Chapter 1 : Mining is a cash cow, but where are transactions coming from ?
I began to look at how mining works on an industrial level. Then, it struck me, that Ok, if you want to be profitable on such a large mining operation you need two very important things : First, you have to make sure you have a lot of hash power and also, you need a huge amount of transactions to process. And I began to wonder about how could this system be cheated. Not for my own personal gain, but in general. I want to make clear, that I never planned on actually mine, I was just thinking about this from a scammer's perspective. How on earth could this be, that there are so many transactions being processed every day, every hour, it seems like people are constantly transacting.
Chapter 2 : The scheme
Now, let me explain what I came up with. I am the one running a large mining pool. I have the hash power and I need those transactions. I also have the ability to prioritize or choose which type of transactions I am willing to deal with. I also have some extra Bitcoins lying around. What if I generate some traffic for myself ? Not fake txs, but real ones, let's say I either use real people, like in a click farm type of deal or I automate it somehow with a bot. This way, I will get the tx fees, the block reward and ultimately, I am using my own Bitcoins to send them to myself. Of course it is not this easy, sometimes I will lose the race to someone else, that's the collateral, but long term, I will mostly process my own txs, so my profits are kind of guaranteed.
Chapter 3 : Cash is rolling in big time, but have I gone too far ?
If I do this scheme, over time I have to consider a few important things. The more hashing power there is, the difficulty level will rise, so I will be rewarded less. Fine, i can take it, because Bitcoin's price is soaring, not really a big deal. I also have to watch out for something else, which is called block size limit. Now, this a huge problem because more and more people are using the system legitimately, I can't spam the network like I used to with my txs, people will notice the congestion, start to open their eyes, I'm in trouble now, I am actually doing what I signed up for and I start to bleed money. I know what I am doing is unethical, it's not illegal though, but I can convince the world it's not me who is the problem, it's everyone else and I come up with the idea of ....
Chapter 4 : Bigger Blocks
If I want to continue with my scheme, despite all of this, I still need the two things that I needed in the first place : more hash power : solved, I came up with a brilliant idea, called ASIC Boost. Still need more space for my spam txs, I start to lobby for bigger block size, uh oh, that won't be easy cause some people are smart and don't like what I'm doing so this won't go through. I'm in serious trouble now, cause I'm actually losing money, not making then the only solution is...
Chapter 5 : The Fork
Here is the deal, I'm exposed, I lost, defeated. But I have a solution ! I can fork off ! This way, I can run my scheme like I used to and nobody will interfere with me at all, I do what I want, I have bigger blocks now, so If I convince the public, to use my new chain, I can go indefinietly, difficulty won't be a problem for a while at all, I can have as much spam txs as I want, I can use my equipment still, and I can use the leftover Bitcoins to jack up the price of my own coin and invest in PR campaigns.
Chapter 6 : The End
So, I have tried very hard but I failed miserably. Getting Roger behind my back backfired too, what am I going to do ? I need to somehow go back to the old chain cause my coin is worthless, people see me as a traitor, what's next ? new fork ? capitulation ? sneak back somehow ? retire with what I have left ? New partnerships ? Different blockchain ?
Thank you for reading this long, please let me know what do you think !