Bitcoin’s Hashrate Control
According to crypto analyst Chris Blec, Bitcoin’s two major mining pools now control over half of the network’s total hashrate. This could result in bitcoin mining following regulatory standards, with all miners required to follow Know Your Customer (KYC) guidelines.
The Nuances of Hashrate Control
Currently, Antpool holds a 30% share of Bitcoin’s total hashrate, followed by Foundry USA with 26%. Together, these pools have a 56% influence over the network’s 468 exahash per second (EH/s) hashrate. Blec voiced his concerns on social media this Wednesday, emphasizing the seriousness of the situation.
Blec explained that the government now has clear identification and control over more than 50% of Bitcoin’s miners due to their regulatory compliance.
A few years ago, archived data showed a more diverse landscape in dominant mining pools. Following Blec’s remarks, there were various responses with differing opinions on the matter.
Hashrate Control Dynamics
There is a debate about the complex nature of hashrate control. Under Stratum mining software version one (v1), pool operators handle the infrastructure and decide on transactions for mining blocks. Individual miners contribute computational power but don’t directly influence how it’s used.
The introduction of Stratum version two (v2) brought change by empowering individual miners to select transactions for their block templates, lessening the pool operator’s influence. However, most pools today use Stratum v1.
Mining Industry Divide
A 2022 Galaxy.com report notes that miners prefer v1 for its ease of adoption while Stratum v2 alternatives are available but still under development. The report highlights a critical industry divide: the differing desires of ASIC manufacturers and developers. “The rigmarole of getting ASIC manufacturers to include Stratum v2 into their firmware highlights an interesting underlying dynamic at play: the mining industry is very divided between what the manufacturers want and what the developers want,” Galaxy’s researchers detail.
The Future of Bitcoin Mining
This division underscores concerns about mining centralization as Stratum v1 “is not designed for the high hashrate levels we experience today.” Critics like Chris Blec argue that current conduct alone is insufficient.
Hot Take
Bitcoin’s hashrate control is a topic of concern within the crypto community. While some believe it could lead to regulatory compliance and industry standards, others worry about its impact on decentralization and game theory within bitcoin mining.
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