The cryptocurrency community has been discussing mining centralization after a report was published that disclosed five mining operations command more than 50% of the BTC hashrate. At the time of publication, between F2pool, Poolin, Btc.com, and Antpool, the pools are hashing more than 59% of the BTC network hashrate.
Data-Driven Report Says BTC Hashrate Distribution Is Centralized
On January 31, researchers from the firm Tokenanalyst published a report entitled “Centralisation in Bitcoin Mining: A Data-Driven Investigation” which covers the BTC hashrate distribution in 2020. The latest Tokenanalyst study stresses that BTC is decentralized and a trustless system, but researchers believe hashrate distribution is quite centralized.
“In 2020, bitcoin has also become a highly centralised system that places an increasing amount of trust in a small number of large entities,” the report notes. Not only is the mining landscape “dominated by a small number of entities,” but Tokenanalyst also thinks “a few large crypto exchanges” dominate the industry as well. Tokenanalyst analyzed 276,000 distinct addresses that have received coinbase rewards and they “meticulously” QA’d their metrics and found 148,000 miner addresses “across the whole history of the bitcoin blockchain.” Read More...