> Miner extractable value (MEV) is a measure of the profit a miner can make through their ability to arbitrarily include, exclude, or re-order transactions within the blocks they produce.
Um. Wow.
So... how much of crypto is just "things that are illegal to do with anything that's not crypto"?
There is a meaningful difference between this kind of miner intervention and the kind of intervention that might be problematic in a centralized context.
Provided there is sufficient decentralization within a blockchain network (i.e. enough independent miners participating) no individual miner will be able to pursue a MEV strategy beyond a single block. The next block will be created by a different miner.
In addition, the right to include any transaction or to control the ordering of transactions depends on the miner winning the right to build the block via the consensus process (for instance, by being first to calculate the PoW). In a sufficiently decentralized network, it is unlikely that any one miner will have any certainty at all with regards to when they will actually be able to build a new block. Depending on the level of centralization, it is also the case that a particular miner will get to mine a new block infrequently at best.
So the worst that a particular miner can do will be to delay the inclusion of a transaction, because any other miner can choose to include the same transaction in a subsequent block. Excluding transactions is outright impossible without buying out the entire capacity of the network by paying massive gas fees to other miners.
And because there is no predicting when the power to choose the ordering or inclusion of transactions will be granted to a particular miner, any miner intervention strategy will need to be both opportunistic and somehow viable within the scope of only one block.
Keep in mind as well that Ethereum blocks occur less than once every 15 seconds.
Capex (hardware/space) + Opex (internet/electricity) = ROI
In order to get more consistent payouts, we mine to a mining pool, which pays us for our shares of work. Since a mining pool condenses a lot of hashrate, the frequency is higher. There are various schemes on top of that (pay per share, etc..), but that is the simple explanation.
This is the 'centralization' argument to mining, except that miners can change to another pool near instantly. If a pool starts to misbehave, then miners will dump them immediately. There is precedent for this, ghash.io.
There are a lot of upfront costs (hardware/space), but once you've paid for those and you have cheap enough electricity, then the rest is profit.
Each Bitcoin block pays out more than a quarter of a million dollars to the miner that discovers it. Every day, more than 140 blocks are typically mined. "Infrequent" is relative, but if a miner manages to mine one block once per month (roughly once every 4000 blocks), its revenue will be in excess of $3 million per year.
Many mining companies make much more than that, because Bitcoin is more centralized than it should be.
Centralization is a continuum, not a binary condition. I don't think that Bitcoin is centralized in absolute terms—it's just more centralized than it should be—which is a normative opinion I have, not a statement of fact.
Bitcoin would be less centralized if ordinary people could mine it successfully with their home computers, rather than needing to buy specialized hardware. As it stands, mining activity is performed almost entirely by people and entities able and willing to spend the money to buy mining rigs. Not a bad thing per se, but it results in fewer people mining than I might prefer.
Thanks for the clarification because it sounded like a more definitive statement than a normative opinion.
Join some of the FB mining groups... you'd be surprised at how many 'normal' people have bitcoin miners. They aren't at the scale of the commercial places, but it is happening. Especially once China shut down, the markets were flooded with boxes.
This is also why I prefer GPU based mining. More accessible (gpus are everywhere) and it is actually the older hardware that is more ROI profitable. It isn't a hardware race like it is with bitcoin. The risk is lower too... if you burn out a $100 card, it is a lot less of an impact than a several thousand $ card.
The interesting thing to watch is what what coin (or technology) will pop up next as the top GPU PoW. There can only be one.
Crypto is a ponzi scheme that everyone is in on. Introduce a new coin, sell it for a trillionth of a penny, and hope enough people buy it that you can cash out for a billionth of a penny.
