The fact that a coal mining disaster takes out effectively 53% of the peak SHA-256 mining empirically shows that small blocks do absolutely nothing to promote decentralization.
To have such a significant impact on BTC mining, it clearly indicates these miners were larger scale operations and not a diverse set of independent miners.
The artificial 1MB block limit was/is promoted as a means to preserve decentralization, preventing domination by institutional actors. Small blocks mean the average Joe can run a node on a Raspberry Pi, continuing to participate in a now $1T network. Yet this incident destroys that premise, as we can empirically see over 50% of the prevailing hash power resides in a single region.
An R-Pi is unlikely to be used as a mining node/pool, and mining nodes are the only ones that count. In fact, at scale, smaller non-mining nodes only serves to drain bandwidth, as they can't build on the blockchain.
Therefore, the BTC network, designed with its strict limiter to preserve decentralization through network diversity, has neither throughput nor diversity.
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source https://www.reddit.com/r/btc/comments/mufz37/the_recent_china_syndrome_mining_outage_proves/
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