Over the past day, the total share of three mining pools, F2Pool, AntPool, BTC.com, exceeded 50% of the bitcoin hashrate. Such a redistribution of forces threatens to reduce the level of decentralization in the network.
According to statistics for the last 24 hours, more than half of the bitcoin network hashrate is controlled by three mining pools, F2Pool (22.6%), AntPool (14.2%), and BTC.com (14.2%). It is worth recalling that AntPool and BTC.com are considered structures affiliated with the Chinese mining equipment manufacturer Bitmain. Thus, in one way or another, currently, Bitmain controls more than a quarter of the bitcoin hashrate.
Poolin’s share is 12.3%, with ViaBTC controlling 9.4%. If we summarize the shares of the five largest mining pools in the bitcoin network, then they control almost three-quarters of the bitcoin hashrate.
The concentration of bitcoin hashrate in the hands of a small number of miners indicates that the network is getting more centralized. This carries risks of malicious manipulation, such as 51% attack. “The attacker would have enough mining power to intentionally exclude or modify the ordering of transactions. They could also reverse transactions they made while being in control – leading to a double-spending problem. A successful majority attack would also allow the attacker to prevent some or all transactions from being confirmed (transaction denial of service) or to prevent some or all other miners from mining, resulting in what is known as mining monopoly,” Binance education portal explains.
Such a redistribution of forces on the bitcoin mining market was expected and forecasted. The halving which took place on May 12, 2020 and led to a reduction in the reward for miners for the mined block from 12.5 BTC to 6.25 BTC, pushed small mining enterprises out of the market. But as inefficient machines were switched off, the hashrate fell below 100 EH/s. This will lead to a decrease in the bitcoin mining difficulty, which means that some of the mining machines that were switched off due to their inefficiency will be able to return to the network.