In order to gain a competitive edge, individual miners have formed pools, combining their computing power and sharing the rewards. However, this has led to wealthier and larger pools quickly adopting advanced mining technologies, thereby pushing out smaller competitors. For instance, the Foundry USA pool now accounts for approximately 25% of the Bitcoin network’s hashrate.
The American cryptocurrency exchange Coinbase hosts nine mining pools, including AntPool, F2Pool, Binance Pool, Braiins, btccom, SECPOOL, and Poolin, which collectively contribute to about 50% of the total hashrate of the Bitcoin network.
This concentration of mining power in the hands of organizations like Coinbase raises concerns about their ability to influence the protocol and potentially manipulate transactions and market prices. The analyst, Alex Bergeron, apprehends that such control compromises the trust and decentralization that Bitcoin was originally built upon. The BitMEX Research team also shares these concerns.
“Having such a high level of centralization can have both positive and negative effects. While it may enhance economic efficiency and stability in digital asset mining operations, it also concentrates an enormous amount of power in the hands of a few, thereby undermining the ethos of trust and decentralization that Bitcoin was founded on,” concluded BitMEX Research.
Currently, the Bitcoin network’s hashrate stands at 651.9 EH/s, experiencing an 11% growth compared to the previous period.