# kaal:claim:3782198-024

**Claim.** Bitcoin proved that a decentralized peer to peer network can manage valuable assets without a central authority, but the centralizing force of competition concentrated power anyway, as economies of scale produced large mining farms in place of millions of individual members maintaining the ledger.

**Type.** failure  **Support.** argued

**Holds when.**

- applies to proof of work networks where mining rewards create economies of scale

**Source quote.**

> But the centralizing forces of competition led to concentration of power in the Bitcoin network, as econo- mies of scale led to large computer farms devoted to mining for bitcoins, instead of millions of individual network members maintaining the ledger on their laptops.

**From.** Craig Calcaterra, Wulf A. Kaal, *Contemporary Decentralization* (2021), Blockchains, page 21

**Cite as.** Craig Calcaterra, Wulf A. Kaal, Contemporary Decentralization (2021). SSRN: https://ssrn.com/abstract=3782198

**Verify.** sha256 of source PDF `e7e1378e3eed06cace6534e7792a7307d607d18bc6beb4ac45896476280728e4` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Calcaterra%20and%20Kaal%20-%202021%20-%20Contemporary%20Decentralization.pdf

**Failure mode.** recentralization-through-mining-economies-of-scale  (family: recentralization-drift)

**Topics.** tokenomics, decentralization, economics, consensus-and-security

**Keywords.** bitcoin, mining-centralization, economies-of-scale, proof-of-work, decentralization

**Related claims.**

- restates: https://wulfkaal.github.io/claims/3227933-019
- supersedes: https://wulfkaal.github.io/claims/3405401-027
- restates: https://wulfkaal.github.io/claims/3782193-027
- restates: https://wulfkaal.github.io/claims/3227967-032

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.