Decentralisation of the Bitcoin mining pools

[bankingbitcoin]

Hi,

Looking at the hashrate distribution I notice the top 2 pools control more than 50% of the network. Does this not concern anyone that Bitcoin has less than 20k nodes and a hashrate hyper concentraded -- considering the narrative has always been censorship money.

It is unlikely but Foundry the biggest mining pool with close to 30% of the network hashrate is based in the US -- there is a scenario in which the US could ban bitcoin, its usage or simply mining.

What would happen in that case ?

Does the concentration between AntPool and Foundry scare anyone?
> Hashrates will be more and more concentrated over time [as the network grows in size and hardware becomes more expensive] does this not threaten the sovereignty of the network -- going fully against the Satoshi ethos ?
How far did Satoshi envision the decentralisation, are there counter mesures at hyper concentration events? What could be done in order to mitigate that?
Does it pose an existential threat to the value proposition of bitcoin ?

I would like to get different views on that and none with the Stock-to-flow answer.

This leads me to my ultimate question: if bitcoin is centralised how good is it ? notably in comparaison to other blockchains like Ethereum, Solana etc ...

Best,
Bankers of Zug

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[FP91G]

A mining pool cannot ban bitcoin mining even if it has more than 51% hashrate. The pool may not take transactions into its own blocks, but then the profit of the miners on this pool will greatly decrease. The miners will go to other pools, and this pool will go bankrupt and lose customers due to the scandal. I don't think that the mining pool will violate the rules of coin mining.

https://mempool.space/graphs/mining/pools

[kano]

To put it simply, either they follow the rules or they fork to a new coin.
If they fork to a new coin, then that wont be Bitcoin and the miners will leave.

As for transaction bias, well as long as you stay away from braiins pool who is actively promoting transaction bias,
for other pools, if the pool itself stops allowing all transactions, then yeah, people will just go to another pool that will give a better return.
Complete lack of transaction bias ensures a maximum return on mining, which is bitcoin by design = allow all transactions, highest fees get confirmed fastest.

[logfiles]

It is unlikely but Foundry the biggest mining pool with close to 30% of the network hashrate is based in the US -- there is a scenario in which the US could ban bitcoin, its usage or simply mining.

What would happen in that case ?

Miners start using other pools.

Does the concentration between AntPool and Foundry scare anyone?

Nope

> Hashrates will be more and more concentrated over time [as the network grows in size and hardware becomes more expensive] does this not threaten the sovereignty of the network -- going fully against the Satoshi ethos ?

I don't think there is any threat. Miners will keep getting in and exiting the network depending on how affordable and profitable it is to them. The Hardware is only expensive because it brings in good profits. So even the mining hardware manufacturers have that in mind. You can't price hardware at $100,000, yet it can't even make $1,000. Who will buy it?

[joniboini]

if bitcoin is centralised how good is it ? notably in comparaison to other blockchains like Ethereum, Solana etc ...

I'd say way better. If you argue that mining centralization is a big issue then other blockchains have other forms of centralization that might affect the network more than some miners mining in one pool IMO. For example, developers belong to one organization that needs to follow regulations where they live, new miners/node need to be approved by some people before they can start participating in the network, and so on. In my opinion, the chance that your transaction is blocked in such a blockchain is way higher than if you use Bitcoin, even if mining power is concentrated on one or two pools. CMIIW.

[FP91G]

if bitcoin is centralised how good is it ? notably in comparaison to other blockchains like Ethereum, Solana etc ...

I'd say way better. If you argue that mining centralization is a big issue then other blockchains have other forms of centralization that might affect the network more than some miners mining in one pool IMO. For example, developers belong to one organization that needs to follow regulations where they live, new miners/node need to be approved by some people before they can start participating in the network, and so on. In my opinion, the chance that your transaction is blocked in such a blockchain is way higher than if you use Bitcoin, even if mining power is concentrated on one or two pools. CMIIW.

If you look at the old information on pool hashrates by country, then China was in the lead before the ban on mining in this country. In POV mining, it is impossible to block transactions because miners want to get the maximum profit from their work. And in POS mining, the owners of most coins can always change the consensus rules.

[neutraLTC]

it is concerning. many are concerned

[DaveF]

it is concerning. many are concerned

Who are these many?

Pools have come close to if not gone over 50% in the past. And large groups of miners left them and went elsewhere. When pooled mining first became a thing there were only a couple of major pools and everyone else was still solo mining. It's not a real concern for people who understand that everything is always going to be in flux with this.

The real major concern, which is still not a real concern, would be who controls the miners that are mining at these pools.
If some government wanted to take over Bitcoin mining they could over a period of years acquire well over 50% of the hash rate. But if they took part of the hash rate and pointed it to one pool another part to another pool and so on, nobody would ever know about it until all the sudden they pointed it at their own pool. But due to the power requirements which are beyond immense and the cost of the hardware which is also beyond immense it's not a real concern for anybody who is not a paranoid nut job.

-Dave

[FP91G]

it is concerning. many are concerned

Who are these many?

Pools have come close to if not gone over 50% in the past. And large groups of miners left them and went elsewhere. When pooled mining first became a thing there were only a couple of major pools and everyone else was still solo mining. It's not a real concern for people who understand that everything is always going to be in flux with this.

The real major concern, which is still not a real concern, would be who controls the miners that are mining at these pools.
If some government wanted to take over Bitcoin mining they could over a period of years acquire well over 50% of the hash rate. But if they took part of the hash rate and pointed it to one pool another part to another pool and so on, nobody would ever know about it until all the sudden they pointed it at their own pool. But due to the power requirements which are beyond immense and the cost of the hardware which is also beyond immense it's not a real concern for anybody who is not a paranoid nut job.

-Dave

I disagree with you, because there are not many countries in the world that can make more than 50% of the miners move to this country. These are the USA, Russia and China.
Kazakhstan also wanted to become a leader in mining, but their energy systems could not withstand such loads. China has no plans to allow bitcoin mining again.

[DaveF]

it is concerning. many are concerned

Who are these many?

Pools have come close to if not gone over 50% in the past. And large groups of miners left them and went elsewhere. When pooled mining first became a thing there were only a couple of major pools and everyone else was still solo mining. It's not a real concern for people who understand that everything is always going to be in flux with this.

The real major concern, which is still not a real concern, would be who controls the miners that are mining at these pools.
If some government wanted to take over Bitcoin mining they could over a period of years acquire well over 50% of the hash rate. But if they took part of the hash rate and pointed it to one pool another part to another pool and so on, nobody would ever know about it until all the sudden they pointed it at their own pool. But due to the power requirements which are beyond immense and the cost of the hardware which is also beyond immense it's not a real concern for anybody who is not a paranoid nut job.

-Dave

I disagree with you, because there are not many countries in the world that can make more than 50% of the miners move to this country. These are the USA, Russia and China.
Kazakhstan also wanted to become a leader in mining, but their energy systems could not withstand such loads. China has no plans to allow bitcoin mining again.

1) Pools are not miners. I am a miner, i am US based, I do not have to mine at a US pool or any particular pool.

2) The commercial miners that have their own large farms know #1. They know that past a certain point their hashrate has to be a bit distributed.
2a) Having nothing to do with going over 50% just as a safety in case something goes wrong with pool #1


3) There are a lot of places that can support the power demands mining easily. If it can be done profitably with the current price of BTC and the other associated costs in that country is a different point.

4) Look through the history of BTC mining. Every time someplace got to big, they had large miners leave and go someplace else. 

-Dave