Bitcoin Forum

What does this tell you?
https://mempool.space/tx/b1dc9e09a97d0ac8ed57179c276dff19d484c1f74b96cd9af547107af4f18086 (https://mempool.space/tx/b1dc9e09a97d0ac8ed57179c276dff19d484c1f74b96cd9af547107af4f18086)
https://talkimg.com/images/2024/04/18/jj63C.png

It tells me that I'm really glad that Bitcoin is running on PoW rather than PoS, because otherwise it might be really worrying that a lot of miners are using the same custodial service (which according to the Twitter thread, seems to be Cobo [1][2]).

Another interesting observation by one of the users is that the pools started doing this in November to January [3] so it's likely either miners selling bitcoins to prep their post-halving warchests, feeding the ETFs or both.

[1] https://twitter.com/mononautical/status/1777690549161443355
[2] https://support.cobo.com/hc/en-us/articles/4409189104279-Cobo-Asia-Pacific-s-Largest-Crypto-Custody-and-Asset-Management-Platform-Secures-US-40-Million-Series-B-Fundraising-for-DaaS
[3] https://twitter.com/ProfEduStream/status/1778021757149999252

This as well also tells me that bitcoin network is gaining more power and adoption the more, so that all of us will understand and learn the way we can have our digital asset with us in our custody than when on a centralized exchange, not your keys and it simply implies not your coin, once you're making the right application and use of non custodial means, then i don't see a reason why we should fear for any unnecessary demand with what others are doing, they cant centralized bitcoin, this is for sure. 

I like to lean on the fact that it's the reason why miners are doing this, definitely pumping their warchest as you like to call it, there's no way that it's a nonsense thing what they're doing, I mean every actions got meaning right? I don't know about ETFs though, I'm sure they're leaning more towards bitcoin than ETFs. I don't even see what's being pointed by OP in the post, it's PoW not PoS so they're not that easily controlled by Coinbase even if they're all consolidated together, bitcoin is and will always be about freedom, no doubts about it.

A custodial service controls the mining rewards of 9 different pools, that is the point here, it has nothing to do with 'power' and 'adoption', and how exactly does using a custodial service teach people about self custody.

Op, what do you mean by wake up and do the right thing, i know there is a risk of centralization when few pools control most of the hashrate and now their rewards is stored in a custodial service. But i don't see any reason to press the panic button yet, BTC is still decentralized, and the custodial service cannot control the network just because they have a large amount of BTC's. BTC can only be centralized and pro censorship if most pools start blacklisting addresses and censoring utxo's, but i don't think that is likely to happen.

Bitcoin miners had to sell considerable bitcoins before the halving actually are not big miners. They did not do anything wrong because with their financial budget, not deep enough, they must to balance it to keep their mining operations continue after the halving.

In contrast, if a Bitcoin mining farm is big and has good financial budget for their mining operation, they will keep their bitcoins and wait for higher price after the halving. Selling bitcoins like this will not help them to maximize their mining business but nothing is right or wrong, it depends on their business model and finance they have.

After the Bitcoin halving, if price won't rise quickly, small Bitcoin mining farms will have to stop their mining because they will get negative net mining income. The rich will get richer and big Bitcoin mining farms will get richer with halving effects.

Look. There are centralization in many ways, among which the mining centralization is the worst one. And this is where we are exactly heading. Very sad.

These big mining pools are the only ones that becomes centralized they have 47% of the total hash rate meaning it's still not centralized there are 53% of the total hashrate is still on decentralized pools and other miners can still mine on other pools if they don't want to mine on a centralized mining pool. ViaBTC and foundrydigital are not included on the list so they don't have full control of all pools yet you can also mine on your own and deploy your own pool if you have a mining farm.

Two of them have already begun to do so, but if these lists are more widely adopted, such as the lists issued by the US Treasury, the matter will not end well.
These pools can create a hard fork depending on which chain is longer, or at least you need an anonymous mining pool to mine a block and include your transaction.

Nope, the mining pools is still saturated, except in 2013 and before.

Do you also want to say that Bitcoin is already centralized for people who hold their coins in CEX and buy ETFs? those services only hold customers' money, they didn't really own the coins. Even the those services went bankrupt, they might obliged to refund the money to the customers, just like Mt.Gox and FTX (although the refund is not yet started).

https://imgbb.host/images/GRYvn.png
https://explorer.btc.com/btc/insights-pools

These pools are not centralized because they store their block rewards in a custodial service, i know it sounds 'weird' that all 9 of them chose the same custodial service, Cobo, but it is not for this reason that they can be called centralized. If a pool starts 'taking orders' from the government on addresses and utxo's that should be blacklisted, i believe that is when you can call that pool centralized.

I wouldn't even be worried too much if 47% of the hashrate was controlled by one entity, which is not the case here. The whole point of PoW is not that it's impossible to attack it, but that attacking is very expensive and need to be continuously supported. With PoS you pay once for obtaining a large share of supply and then can attack the network for free for the rest of history.

I agree they are doing a big business this year, and do not see the issue as a real threat to BTC.

"If this doesn't wake you up and make you do the RIGHT thing..."
I have the habit of making good choices and this didn't "wake me up" any more than I already am, thanks for trying.  :)

Sure, you got a fair point there in favor of Proof of Work versus Proof of Stake, though, if we keep the approach of an attack on both system realistic, then it would also very expensive for an entity to own most of the stake of a protocol like Ethereum for the sake of ruining the trust on it. Maybe it would be the thing only a big government could afford to do and for the sake of ruining a "decentralized protocol" for political or economical reason. Even so, the protocol can be forked and start from the point before the attack.
It would be the equivalent of buying a lot of shares of a publicly traded company like Amazon or apple and then, using that power to ruin the company on purpose.

I am not saying it is imposible, but it is also very unlikely to happen. Don't you think?

It could be of promoting some of those AltCoins as much as enhancing a team gadgets projected against bitcoin which is an almighty Cryptocoins.
That's is a set of competition in the Crypto industry where most coins envies the unbeatable or bitcoin since its day of existence.

OP, what exactly do you mean by do the right thing? Reviving P2Pool (a decentralized mining pool)[1]? Asking miner to mine on different pool? Anyway, it's hard to understand why would those pool decide to use custodian rather than manage it by themselves.

[1] http://p2pool.in/ (http://p2pool.in/)

Another thing to add is that Coinbase exchange is now custodian for most Bitcoin ETF's, there are only few exceptions Gemini and Bitgo, and only one is held by self-custody.
Anyone who is saying that there is no centralization in bitcoin ecosystem is just ignoring and closing their eyes when they see stuff like this.

Apparently, people in this community don't want to talk about this HARD truth. They either are very optimistic about things that are going bad terribly quickly or they just don't want to talk about this.
In my opinion, centralization in mining is now a very pressing issue.

If we add the hashrate of the pools mentioned in the first post we now well exceed 50%.

To make that transaction a person or computer needs to have the keys to all those addresses.

And you haven't mention what right thing we should do yet.


I somewhat agree, i doubt centralized Bitcoin pool can handle government pressure forever. For example, https://b10c.me/observations/08-missing-sanctioned-transactions/ (https://b10c.me/observations/08-missing-sanctioned-transactions/) state some pool likely to intentionally exclude certain transaction.

Pools are by definition centralized, it's a domain name, a person or a group running it, they make the decision, they make the calls.
What we have here is by no means decentralization, we have 9 businesses having the same custodian, mining directly to their partner, and if this deal was possible one might have to ask what else is going behind the scenes.


You know too well that foundry is a closed pool, you can't just mine there without them approving you as a parent and with minimum hashrate requirements.
So the alternative to those is actually a bit worse ..

This is exactly the point i am trying to make and worries me. Apparently, for those who say it's not or  it won't matter, they are either naive or vicious, or maybe both. If bitcoin is no more decentralized which it is becoming, what's the point of it in existence at all?

I wonder if these transactions have ever been included.

Well, I think another important point that you want to make is that Decentralization is Important and should be a common priority especially for the Bitcoin community which should be kept from causing further concern so as not to weaken the core of BTC's basic philosophy that it runs by many people and for many people.

Yes, since not all pool intentionally exclude certain TX/address. For example, TXID 262025e73812fc68b6514ea366abf463147176c7867e5853f117aded58c30e0e (http://262025e73812fc68b6514ea366abf463147176c7867e5853f117aded58c30e0e) which excluded by ViaBTC on block #808660 included on next block which mined by Foundry USA.

Centralisation of the protocol is primarily measured in how freely people can transact.  What miners choose to do with their block rewards doesn't impact my ability to transact peer-to-peer using Bitcoin.  Pools censoring transactions based on government watchlists and sanctions is a far bigger concern for me than pools using the same custodial service.

---

That’s the thing people still seem to be getting wrong.  Centralised exchanges do have ownership of the BTC they hold.  Just like the commercial bank you use for your fiat is the legal owner of any funds you deposit there.  None of it really belongs to you.  People have been indoctrinated for centuries to believe money in the bank belongs to them.  It doesn't.  You are granting them ownership of (what was) your money.

However, using centralised exchanges only makes things centralised for the people who surrender their funds to such third parties.  For those who control their own keys, Bitcoin is not centralised for them.

ETFs are a separate matter.  Customers of those services never had BTC to begin with.  They're just trading ownership of fiat for ownership of shares.  Despite what they might think, these customers are not Bitcoin users (unless they also happen to hold some actual BTC).

Nothing will stop people not to adopt BTC again, and they have seen many reasons why they will continue to adopt the most popular coin, that is causing people to be comfortable with their hodling because they know that time of earning will come for them to achieve their purpose.

Those that tested decentralized currency before, will never pay attention to centralized currency too much because they have have been with the centralized currency some years but no good results to show but the little opportunity they used to test the decentralized investment, they have achieved good results so far.

Many people have observed so many things from BTC industry that is making them not to be afraid, whenever they have the opportunity to hodl BTC because they know the kind team that is behind the coin to ensure it continue dominating in the industry.