https://cointelegraph.com/news/craig-wright-rants-against-bitcoin-decentralization

Unfortunately a solution is not as simple as you portray..

Just being able to observe malfeasance, does not prevent a centralization of Bitcoin from scaling up the on chain bandwidth. Without scaling, eventually transaction fees wil be too high for most people to transact on chain. Centralization also means that eventually a world government can get organized and regulate changes to the protocol, such as forced blacklisting and KYC, i.e. no longer permissioness and back to fiat fraud again with all it deleterious effects which reduce degrees-of-freedom and plunge the world eventually into a Dark Age.

Also note that some malfeasance is not objectively observable in a proof-of-work blockchain. We discussed this in great detail in the Satoshi Did Not Solve the Byzantine Generals Problem thread at Bitcointalk in 2015.

I do have the solution though. And you are correct that the ability to objectively observe malfeasance is a key component of the solution, but it not sufficient without changing the consensus algorithm from proof-of-work to something different (not proof-of-stake).

Note I will be reviewing Craig Wright’s claims and I am not yet ready to comment on whether he is correct or incorrect.

My initial thoughts subject to further review are below when I recover my eyesight (I am highly limited right now due to bacterial infection in my eye and can not review past technical discussions I have been involved on this issue).

1. Craig is correct that scaling is not quadratic in (i.e. not the squared of) the number of nodes. It is linear in that every mining node has to duplicate the bandwidth propagation and validation costs for every block. Thus limiting the number of nodes can limit the total costs of the network to some average cost per node times the number of nodes.

2. But the problem is (as I had explained numerous times before and tried to explain in the Slack with Craig but they banned me when I started pointing these facts out) is that hashrate is not uniformly distributed among nodes. Thus nodes which have greater hashrate get paid for their bandwidth and validation costs more often than the other mining nodes. And they also waste less hashrate mining on old blocks because they less often wait for a new block to propagate since they mined the new blocks more often than the other miners. Thus their costs are lower and profit is higher per unit hashrate. So over time their share of the network hashrate increases and mining becomes entirely centralized. Once mining becomes 50% centralized, miners can constrain blocksize (or refuse lower fees which is the same outcome) in order to extract the maximum fees the market will bear (maximizing fees x volume in a more short-sighted way than lowest fees might do to incentivizes volume long-term). Miners are focused on the short-term because of the limited lifespan of mining equipment due to Moore’s law.

3. Additionally because of #2, miners have an incentive to collude and trust each other’s reputation, so they can mine on block announcement immediately without first propagating and validating all of the transactions.

4. I doubt Craig's insights on selfish mining will change these facts.

Edit: I watched more of Craig’s presentation and he is correct about some aspects.

For example, Craig is correct on this statement, "Risk is not perfect, every system is probabilistic". Even my consensus algorithm blockchain design has that characteristic.

https://youtu.be/YAcOnvOVquo?t=10561

Craig makes a very important point that propagation is 2.3 seconds to 98% of the hashrate. So presuming the network is made only of nodes with powerful hardware, then validation can also be fast perhaps a couple of seconds. So he presumes that nodes with lower hashrate are not losing more than a few seconds out of the average 10 mins to mine a new block, thus he thinks non-uniform hashrate is not a problem. He must set the minimum transaction fee high enough that those who only win a block every 1000 blocks they validate have insignificant costs, unless he wants mining to be highly centralized. And that is one of the Achilles heels that makes my design superior. In my design, the transaction fees can go much lower. There is no way users will want to pay $0.005 every time they make a comment on a blog post for example. So his design for Bitcoin can not compete with the markets I am shooting for, unless he further centralizes it.

Also his analysis fails to refute the fact that only two fabs in the world make ASICs, thus the manufacturers can extract most of the profits and centralize mining. Also there is never a way to know how centralized the control of hashrate is. Mining nodes are a Sybil attack on identity.

Also it impossible for Craig to refute selfish mining in the 50% centralization case. The cartel could be delaying their blocks and taking more than their proportional hashrate share of the profits thus eventually controlling 100% of the network hashrate. All of this can be surreptitiously and can never be detected. So all of his data is useless for this.

I will do a complete demolition of Craig soon …