@Gusti - And what are they paying the company?  How does that help "pay the light bill"?

I get what you are saying but don't clearly see the longer-term business plan -- again seeing this will be a publicly traded company.

We corner the market on ASIC and have first mover advantage, mine lots of blocks, then what...

For a fork 51% has no relevence.

You could fork the blockchain right this second with 0.00001% is you want.

Actually a 51% fork is a worst case scenario and likely means the death of Bitcoin.  Coins will exist and be spendable on both sides of the fork.  People will have wallets, and tx on both sides so merchants may accept BTC1 and some accept BTC2.  Some mining on BTC1, some mining on BTC2.

In a fork you want one side to have overwhelming support of the ecosystem (i.e. installed clients, developers, nodes, exchanges, merchants, etc).  If the original fork has 90%+ support then the new fork dies off.  If the new fork has 90%+ support the old fork will die off.  Having a roughly 50/50 split is going to create massive chaos.

True.  It is also much more about the majority of users and businesses, not the majority of miners.  If the next version of bitcoin set a change date of Jan 1, 2013 (well not really a date, but a block #) past which all blocks would be mined with a different protocol, it would matter more which fork the users and businesses recognized.

After such a fork, people are going to be on the side where the exchanges, businesses and developers are, even if the hash rate was 1/3 of the other side. 

Your not alone.

+1

To anyone complaining, if what Vladimir is doing is so lucrative, you'll have no trouble starting your own ASIC farm and taking a share of the market. If it's not, then what have you got to worry about.

You assume that Vladimir will be the only guy who ever mines on a massive scale. This isn't the banking sector, where GOVERNMENT FORCE prevents competition.

Free market cartels are unsustainable, because there is a great incentive for any participant to break from the cartel and undercut their competitors.

Damn state apologists make me sick!

this whole "the sky is falling" scenario is completely nonsense, multiple asics companies and end user devices will flourish.
currently, 1M investment is only 2% of bitcoin market cap, I bet it will be 0.01% in the near future.
 

This thread is slightly disturbing but I'm not too worried about it. First of all there is only a problem if one entity has over 50%. I would be comfortable if the majority of mining was done by major mining companies, but I would not use Bitcoin ever again if there was a sustained 51%+ presence in the network. It doesn't matter one iota if this entity is presumably "friendly" or not, it takes all credibility away from Bitcoin and what it's supposed to be.

So in conclusion, anyone who thinks they can get over 50% and that would actually benefit them, are entirely out of their minds. People would not be happy about it, not at all. Bitcoin would lose all core support instantly. Not only is mainstream bye bye, it's people like me bye bye. That is exactly the reason why I believe that no one is actually going for that and I'm fairly optimistic. I have no problem with someone starting a 2 thash operation but I would have an issue with someone starting a 15 thash operation (at this point in time).

It's no accident that Deepbit hashing power has never been over 50% sustainably, there are always enough people who care about this issue. A sustained 51%+ would be an absolute catastrophy for Bitcoin, mark my words. I honestly can't believe there would be anyone instead of a couple of complete lunatics or potheads using Bitcoin in that scenario.

Switching pools because you "care" is easy (not too mention profitable when moving from deepbit). Keeping x GH GPUs running just because you care, even though its costing you money, that is quite something else.

DnT has a good point about the 51% too. If 20% is doable, 100% is almost a given, more so because a sudden 20% increase in hashrate and therefore difficulty, will drive out a comparable number of existing miners, increasing your share automatically.

His point is absolute lunacy. It's true that from a linear point of view it is completely doable for a mining operation to attempt near 100% share but anything over 50% would be idiotic. Even if he can somehow hide it, there is a risk of people finding out somehow. That day Bitcoin price would crash to pennies (I'm not kidding about this, I would short with my entire bankroll and so would anyone with any sense). That risk would have to be fairly minimal for him to risk such a massive investment on the possibility of total failure.