Ahmed Ali Recently, Antpool has commanded 26.48% of Bitcoin’s total hashrate, with Foundry USA not far behind at 24.95%. Their combined influence extends to 51.43% of Bitcoin’s total mining power, currently at 502 exahash per second (EH/s). This level of concentration harks back to the early days of Bitcoin mining in 2013, drawing parallels to the dominance once held by Ghash and Btc Guild.
Bitcoin Mining Power Dynamics: A Revival of Dominance by a Select Few
Historically, the centralization of bitcoin (BTC) mining pools was a critical concern among the community, sparking extensive debates. While concerns about miner centralization have somewhat diminished over time, the recent developments have rekindled such discussions.
In a striking resemblance to 2013, Antpool and Viabtc together now account for 51.43% of Bitcoin’s total hashrate. Back in 2013, similar dominance was seen with Ghash and Btc Guild, who together controlled about 55% of the network’s hashrate.
A significant event in March 2013 involved an unintended fork, leading to a majority of the hashrate being employed to revert Bitcoin software to a former version. Btc Guild, which controlled 20-30% of the hashrate, worked with developers to undo this change, thereby forfeiting their proof-of-work due to the blockchain split.
This incident led to considerable discussion within the Bitcoin community. Notable figures like Arvind Narayanan and Ethereum co-founder Vitalik Buterin commented on the incident, with Buterin pointing out the profound implications it had on Bitcoin’s decentralized nature.
The current situation in miner centralization mirrors those early days, albeit without a similar chain-splitting incident. The control exerted by the current leading mining pools is almost identical to the hashrate control by Btc Guild and Ghash. This wasn’t observed in 2016, when the top two pools, Antpool and F2pool, collectively had only 32.25% of the hashrate.
In the following years of 2017, 2018, and 2019, such centralization levels weren’t evident. However, starting from 2020 through 2022, a trend of centralization in bitcoin mining pools reemerged. By June 2022, Foundry USA and Antpool had a combined 38.47% of the total hashrate.
Transaction Filtering as a Growing Concern
Over the recent three-day period, Antpool and Foundry USA’s combined control over 51.43% of the hashrate among more than 40 pools raises significant issues. Notably, an altcoin listed on several centralized exchanges might face suspension of deposits or even delisting due to the risk of substantial blockchain reorganization.
The community’s concerns have evolved from potential 51% attacks to issues of censorship within the hashrate and consensus debates. The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has been actively blacklisting cryptocurrency addresses, and miners now face the choice of which transactions to process.
In May 2021, Marathon, a North American mining company, produced its first OFAC-compliant block, a practice it later discontinued following the introduction of Taproot. It was recently revealed that F2pool had been filtering transactions linked to OFAC-blacklisted addresses, a practice it stopped amid community backlash.
F2pool continues to be the fourth largest mining pool. Additionally, Ocean Pool, endorsed by Jack Dorsey and led by Bitcoin Core developer Luke Dashjr, came under fire for censoring transactions linked to coinjoin privacy methods and Ordinal inscriptions. Despite a decrease in hashrate after criticism, Ocean Pool’s hash power remains above 450 petahash per second (PH/s).
In summary, the evolving dynamics of bitcoin mining, characterized by varying degrees of centralization and rising concerns over transaction censorship, depict a fluid and ever-changing ecosystem. As the debate around Bitcoin’s decentralization ethos persists, it’s imperative for advocates of decentralization to maintain active discussions on the network’s integrity and the future trajectory of bitcoin mining.
What are your thoughts on the similarities between the 2023 mining centralization and the patterns seen in 2013? We welcome your insights and perspectives on this topic in the comments section below.
Table Of Contents
Frequently Asked Questions (FAQs) about Bitcoin Mining Centralization
What is the current state of Bitcoin mining centralization in 2023?
As of 2023, Bitcoin mining centralization has reached significant levels, with Antpool and Foundry USA collectively controlling 51.43% of the total Bitcoin hashrate. This situation mirrors the mining landscape of 2013, when Ghash and Btc Guild dominated the network.
How does the 2023 mining centralization compare to that of 2013?
The 2023 mining centralization is similar to that of 2013, with a few mining pools exerting significant control over the network’s hashrate. In both cases, two mining pools held a combined control of over 50% of the total hashrate, raising concerns about the decentralization of Bitcoin.
The main concern regarding transaction filtering in Bitcoin mining is the potential for censorship. Miners, like those in F2pool and Ocean Pool, have the discretion to select which transactions to process, which can lead to the exclusion of transactions linked to blacklisted addresses or certain privacy methods.
How has the Bitcoin community responded to the issue of mining centralization?
The Bitcoin community has expressed concerns over mining centralization, as it challenges the foundational ethos of decentralization in Bitcoin. Discussions and debates continue within the community, focusing on maintaining the integrity of the network and exploring ways to address centralization challenges.
One notable incident related to Bitcoin mining centralization occurred in March 2013, involving an accidental fork. This led to a majority hashrate being used to revert Bitcoin software to a previous version, highlighting the significant influence of major mining pools on the network.
More about Bitcoin Mining Centralization
- Bitcoin Mining Centralization Concerns
- Antpool and Foundry USA’s Hashrate Dominance
- Comparing 2013 and 2023 Bitcoin Mining Landscapes
- The Risks of Transaction Filtering in Bitcoin Mining
- The Community’s Response to Mining Centralization
- Historical Incidents in Bitcoin Mining Centralization
5 comments
wow, didn’t realize how much Antpool and Foundry are dominating the mining scene these days… kinda worrying if you ask me, what happend to decentralization?
Good read, but the part about transaction filtering seems a bit exaggerated, these things are more complex than it looks
This article is spot on! The mining centralization issue is real and needs more attention, but I think it’s a bit alarmist to compare it directly to 2013.
excellent article, it really highlights the issues we’re facing in the crypto world. It’s like we’re going in circles back to 2013 again.
Not sure I agree with all points here… mining pools are big, but individual miners still have a say, right?