The renowned cryptocurrency exchange BitMEX’s analysts warn of increasing centralization in Bitcoin mining, with one entity controlling 47% of the network’s hashrate from nine major pools.
This revelation stems from a user known as Mononaut on X, who highlighted the accumulation of bitcoins from prominent pools like AntPool, F2Pool, Binance Pool, and others by an unnamed custodian, while also controlling entry addresses for ULTIMUSPOOL and 1THash, and receiving rewards from Luxor.
In other words, this one entity holds the keys to at least 47 out of every 100 freshly mined bitcoins. However, no mining pool has a 100% market share, and therefore even large mining pools still have this variance problem.
The implications are significant, with BitMEX researchers indicating that a mining pool needs a substantial reserve (400 BTC for 50% hashrate control) for a high chance of survival over a year. Even for a 5% control, a pool requires 500 BTC.
Alex Bergeron, a crypto analyst, underscored the high degree of mining centralization in Bitcoin’s blockchain. Despite income fluctuations, miners haven’t capitulated after the recent block reward halving, per CryptoQuant CEO Ki Young Ju.
These developments reflect a critical issue in Bitcoin’s decentralization ethos, prompting discussions on mitigating centralization risks in mining operations.
Also Read: BitMEX Former CEO Arthur Hayes Forecasts Bitcoin’s Path to $1 Million
