If this doesn't wake you up and make you do the RIGHT thing...

[Jason Brendon]

What does this tell you?
https://mempool.space/tx/b1dc9e09a97d0ac8ed57179c276dff19d484c1f74b96cd9af547107af4f18086

[HeRetiK]

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

[Dunamisx]

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. 

[Maus0728]

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.

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.

[Z-tight]

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,

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.

[SquirrelJulietGarden]

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.

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.

[Jason Brendon]

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.

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.

[BitMaxz]

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.

[Husires]

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.

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.

[Jawhead999]

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

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.

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://explorer.btc.com/btc/insights-pools

[Z-tight]

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.

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.

[hatshepsut93]

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.

[Happy Bunny]

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. 

[Hispo]

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.

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?

[AVE5]

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.

[ABCbits]

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/

[dkbit98]

What does this tell you?

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.

[Jason Brendon]

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.

[bitcoiner180]

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.

[ABCbits]

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.

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

In my opinion, centralization in mining is now a very pressing issue.

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