Can the centralization of Bitcoin mining pools be prevented?

[Abiky]

As Bitcoin's mining industry grows, the dominant ASIC company known as Bitmain controls most of the network's hashrate. Major mining pools are under such company's control, putting at risk the entire Bitcoin blockchain against 51% attacks.

Of course, several solutions have been proposed by devs such as PoWx (Optical PoW) and BetterHash. However, such solutions haven't taken off yet, leaving the mining process partially centralized.

Nonetheless, do you think that it's possible to prevent further centralization of mining pools in the future? Or is it too late already?

[Ailmand]

As Bitcoin's mining industry grows, the dominant ASIC company known as Bitmain controls most of the network's hashrate. Major mining pools are under such company's control, putting at risk the entire Bitcoin blockchain against 51% attacks.

Of course, several solutions have been proposed by devs such as PoWx (Optical PoW) and BetterHash. However, such solutions haven't taken off yet, leaving the mining process partially centralized.

Nonetheless, do you think that it's possible to prevent further centralization of mining pools in the future? Or is it too late already?

I totally agree with this, just one attack there's a possibility that the whole minong operation to stop or a big chunk of bitcoin can be stolen due to this, which may lead to drastic drop on price. I think as time goes by, they will notice the problem and make a way to solve this.

[Herbert2020]

i don't think you can actually pull off a 51% attack with multiple pools, i believe that the hashrate must be in one pool and that pool needs to be controlled by by evil entity. so far there are multiple pools each with smaller portion of hashrate and we have nothing more than the social media guesswork about these different pools being controlled by one entity.

as for other solutions so far i have not yet seen anything that is better. they are only different but they also open up other types of attack vectors.

[Steamtyme]

Honestly I think the best safe guard against this at the moment, is their own self interest. Bitmain stands to gain nothing by doing this and would lose everything in the end. Sure they may make some coin in the very short term, but once it came to light that the network suffered a 51% attack, faith in the system would be lost. Adoption would be set back years at a minimum, and with it any sense that people had about stability or projected future growth would be shattered.

Their equipment sales and earning would be the next thing to tank. So it would be very shortsighted for them to participate in anything of the sort.

I do think that they could do it with all the pools under their control especially if they brought over the Hashrate from BCH. It would probably just be easier to spot if it was a coordinated effort across several pools they control.

In regards to the centralization of mining pools. I think we're stuck with it. People are to focused on receiving a daily reward and knowing exactly what they are receiving each day. Some also don't do enough research and are sucked in by a fancy interface, and think that is worth an extra 1.1-3 % of their rewards. Not to mention the miner fees they don't realize they aren't taking in either. Like most problems it's a lack of knowledge, and ignorance to the system.

[okala]

As Bitcoin's mining industry grows, the dominant ASIC company known as Bitmain controls most of the network's hashrate. Major mining pools are under such company's control, putting at risk the entire Bitcoin blockchain against 51% attacks.

Of course, several solutions have been proposed by devs such as PoWx (Optical PoW) and BetterHash. However, such solutions haven't taken off yet, leaving the mining process partially centralized.

Nonetheless, do you think that it's possible to prevent further centralization of mining pools in the future? Or is it too late already?

In my own view I think it too late already considering the fact that nothing can be done to prevent this centralized percentage of bitcoin activities which is mining, Asic is one of the biggest company which control mining and that is some form of centralized operations but have little to do with bitcoin performance and decentralization.

[Teawhalee]

You have made a very good point even though I think for some time the control to come the control will still be centralized. No one can matchup with the capacity of Bitman for now and to see a new platform that will try to do that will take a long time. I feel measures can be taken to avoid any hacking or breakdown that could occur.

[Kakmakr]

They will cut their own face, to spite themselves. You do a 51% attack to execute a double spend and this will be very costly to maintain. Once a double spend was done, people will lose faith and interest in the technology and they will dump their coins. A large dump will destroy the value of the coins being held by Bitmain and also the coins that can be mined in the future.

All the money invested in the development of ASIC's will be rendered useless, because people will stop buying chips. <Destroying their company and future income.>  

[Haunebu]

Honestly I think the best safe guard against this at the moment, is their own self interest. Bitmain stands to gain nothing by doing this and would lose everything in the end. Sure they may make some coin in the very short term, but once it came to light that the network suffered a 51% attack, faith in the system would be lost. Adoption would be set back years at a minimum, and with it any sense that people had about stability or projected future growth would be shattered.

Their equipment sales and earning would be the next thing to tank. So it would be very shortsighted for them to participate in anything of the sort.

I do think that they could do it with all the pools under their control especially if they brought over the Hashrate from BCH. It would probably just be easier to spot if it was a coordinated effort across several pools they control.

In regards to the centralization of mining pools. I think we're stuck with it. People are to focused on receiving a daily reward and knowing exactly what they are receiving each day. Some also don't do enough research and are sucked in by a fancy interface, and think that is worth an extra 1.1-3 % of their rewards. Not to mention the miner fees they don't realize they aren't taking in either. Like most problems it's a lack of knowledge, and ignorance to the system.

I concur. Bitman does have a lot to lose in this regard which is why I am confident that they would not risk destroying their future over short term profits.

Honestly, centralization is present in the decentralized cryptocurrency world to an extent(Price manipulation etc) which is why it is not surprising that the mining pools are centralized to an extent (Not necessarily a bad thing).

[Beerwizzard]

I know nothing about mining but I have to ask it.
What stops miners from switching to another pool? For example if people see that very soon blockchain will be centralized then they can switch to the other pool in order to save their money and investments. The pool consists of ordinary miners that are not controlled by Bitmain.

[Steamtyme]

Complacency, and lack of awareness are my guesses. If you buy a miner from Bitmain it shows up pointing to their pool. It's also likely they've already seen the info about their pools, I think they even come with a pamphlet suggesting you mine with them. They are also large and can boast about daily payouts which a lot of new miners focus on. If you need to cash out your mining rewards everyday without fault, then you are already running to close to going bust.

I can say from experience when I started I mined at a poor choice for a pool. I was unaware of the benefit to miner transaction fees, and they had neat little manipulation techniques to make me think I needed payouts immediately. Then the bonuses went away, and a few months later I realized how much better off I was with a different pool with a payout system that paid all block rewards and transaction fees.

[talkbitcoin]

the risk that we should always try and prevent is the centralization of mining not mining pools because pools don't control the hashrate the miners with actual equipment generating the hashrate and doing the work control everything. and history has proven that whenever they feel like a risk is rising they always change their pools and move to safer places.

it is not that hard to create pools either so to prevent mining pools from having higher hashrates you can start creating more better pools for people to connect to.

[alisafidel58]

Nonetheless, do you think that it's possible to prevent further centralization of mining pools in the future? Or is it too late already?

I think its already way too late since bitmain controls much of the network's hash rate. It would be impossible for them to let go of such control. I don't think that such an attack can happen outside of bitmain but if it were to happen inside bitmain it would be a catastrophy for the network.

[BrewMaster]

it can not be prevented as long as it is not a problem because miners don't yet see any problem (and they might even be right) so they keep connecting to the same pools they are currently connecting and nothing is wrong with that.
but if there was a problem then the same miners would think about a solution and it is not that  complicated either because we are talking about individual miners who have from 1 ASIC to many (as in farms) and they can easily switch their pool to spread the hashrate among different pools.
but as i said they don't currently see any problems so they stick to the current pools with bigger hashrate.

[Ucy]

There is a suggestion about the use of biometrics to avoid centralization. I guess it sounds dumb but it is better than nothing.
 
Another suggestion(this was actually first suggested for Nodes incentiviziation in order to prevent an individual from running multiple nodes with thesame contents &  getting paid) is to allow only those who  make valuable contributions to the Bitcoin ecosystem to mine.  Contributor's usernames can be linked to their miners and the mining activities can be watched from here. When someone breaks any mining rule, he/she gets suspended or banned.

To become a miner you have to make some valuable contributions on  Bitcoin related platforms of your choice for  a certain period of time. It could be a blogging platform, forum, marketplace, gaming platform etc The platforms could have reward system like Bitcointalk "Merit" for rewarding only to meaningful contents.

With this, It would be hard for single miner to maintain multiple accounts with quality contents unless he/she buys/farms accounts with good rewards. Buying would be discouraged.

[kryptqnick]

Nonetheless, do you think that it's possible to prevent further centralization of mining pools in the future? Or is it too late already?

I think that Bitmain is too powerful right now, and smaller mining pools are not motivated to take part in active mining, since the prices are not favourable. If Bitmain decides that the market has been down for too long and that the company cannot bear with the losses anymore (and, as we know, they had a pretty bad year), then there's a chance for true decentralization to occur. Otherwise, I think that if the prices not only stay the same but start climbing up once again, more private miners will join the network and mining will become more decentralized. That being said, I think Bitmain is there to remain as a key player, but since the vast majority of bitcoins was already mined and distributed, I don't think it's a big deal.

[Zadicar]

Bitmain stands to gain nothing by doing this and would lose everything in the end. Sure they may make some coin in the very short term, but once it came to light that the network suffered a 51% attack, faith in the system would be lost. Adoption would be set back years at a minimum, and with it any sense that people had about stability or projected future growth would be shattered.

They wont really gain nothing yet trust/support or hope would really be shattered once the attack have been done.They might benefit on that time but it would really be just on point and there are not other further gains after that.

So,it wont really be that ideal even if they have the capability (we cant still be sure nor conclude atm). Lots of factors would be mainly affected so its much wiser for them to retain on their places as it should be.

[franky1]

As Bitcoin's mining industry grows, the dominant ASIC company known as Bitmain controls most of the network's hashrate. Major mining pools are under such company's control, putting at risk the entire Bitcoin blockchain against 51% attacks.

Of course, several solutions have been proposed by devs such as PoWx (Optical PoW) and BetterHash. However, such solutions haven't taken off yet, leaving the mining process partially centralized.

Nonetheless, do you think that it's possible to prevent further centralization of mining pools in the future? Or is it too late already?

there are ways to prevent it...
but the thing you dont realise is that bitmain do not actually manage the amount of hashpower you think they do.

hres some things you need to know that are not found on reddit/twitters propaganda mathia stream of scripts

1. the ASICS are made by TSMC not bitmain
its like the GPU mining days blaming ASUS motherboards for why ATI GPU are the most popular

2. though the hashpower of antpool is at 15%.. emphasis FIFTEEN PERCENT. that 15% is not a single facility managed by one company. its actually where antpool is a franchise business that has multiple franchisee's that MANAGE their own facilities.

3. to expand upon point 2. if you actually look at the blocks created by "antpool" you will see that there are like half a dozen different blockreward addresses. and each of those blockreard addresses show a pattern that they each have their own managemnt styles.. some are pro segwit, some are anti segwit. some do empty blocks some do most expensive tx's first.

4. continuing on from points 2 and 3. antpool blocks actually compete against each other. did you know that there was a block orphan of one "antpool" by another "antpool" (535510)

5. and most importantly. here is the thing. the only real thing a pool can do these days is just collate transactions. they cannot change the bitcoin rules. but here is the real funny part.
knowing that a transaction is not final until its confirmed and has enough blocks ahead of it to make it a case that its immutable. guess what. LN does not offer that same 'security' so if you want to care about double spend security / trust a payment is final. worry more about LN

anyway.. goodluck with your propaganda if you continue down the path that veryone should distrust mining pools but trust crappy offchain networks that dont require blockchains... as it seems to be a running theme these days that blockchains are broke and the future is managed accounts(the old banking business model of co-authorisation/permissioned funds)

[1Referee]

I know nothing about mining but I have to ask it.
What stops miners from switching to another pool? For example if people see that very soon blockchain will be centralized then they can switch to the other pool in order to save their money and investments.

Nothing stops miners from switching to another pool. Miners don't even care about blockchains being centralized. The far majority of the miners just focus on profitability, and when that's in their favor they'll mine any coin, regardless of its fundamentals or legitimacy.

Miners are so focused profitability that some of them allowed their hashrate to be used by Crack the Scammer Wrong and CoinGeek in an attempt to attack another chain and potentially double spend on exchanges, which just shows how rogue miners can be if the situation presents itself.

[MakeMoneyBtc]

I don't think such a big company like Bitmain would risk everything they built in all this time by performing an attack. They are producing millions of dollars every year and that would all stop if people find out they have even the smallest implication in something suspicious and harmful to bitcoin.

[lyks15]

I think even the centralization cannot prevent mining pools. You know how to work the people to make a mining pools using technology together with their computer softwear knowledge that can apply here in cryptocurrency industry . So I think even the government will prohibit the mining pools they will continue what they are doing as long as they will get coin.