“The Impact of Halving on Miner Behavior: Does It Increase the Risk of Centraliz

[burungmalam]

For years, Bitcoin halving has been widely perceived as a bullish event because it reduces the issuance of new supply. However, there is one side effect that I think is not discussed deeply enough: the potential increase in mining centralization after each halving.

After the most recent halving, block rewards were cut by 50% while miners’ operational costs—especially electricity and hardware—remained the same. This situation creates several consequences:

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1. Small miners struggle to survive

Small-scale miners often use older equipment, face higher electricity costs, and lack economies of scale. With the reduced block reward, their profit margins become extremely thin or even negative.

As a result, small miners tend to:
   •   Shut down their operations,
   •   Sell their rigs at low prices,
   •   Or join larger mining pools for more stable income.

This reduces the diversity of independent miners across the network.

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2. Large mining pools gain increasing dominance

Big mining pools have clear advantages:
   •   Access to cheaper electricity (renewable sources, industrial contracts),
   •   Data center infrastructure,
   •   The ability to upgrade ASIC hardware much faster.

Because of this, a large portion of the network’s hashrate gradually shifts to these big players.
The fewer entities controlling significant hashrate, the higher the risk of centralization.

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3. Coordination risks and attacks become more realistic

Mining centralization does not mean Bitcoin becomes insecure overnight, but it introduces several theoretical risks:
   •   A 51% attack becomes easier in principle,
   •   Consensus rules could potentially be influenced by a powerful minority,
   •   Users become increasingly dependent on a handful of entities to secure the network.

This goes against Bitcoin’s original vision as a decentralized and permissionless system.

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4. Are there any solutions?

In my opinion, several approaches might help mitigate this issue:
   •   Cheaper energy innovations (flare gas mining, hydro mining) to support small miners
   •   More energy-efficient ASICs that lower cost per hash
   •   Non-custodial mining pools and Stratum v2 adoption
   •   Diversification of energy sources in developing countries to create fairer competition

But not all of these solutions are easy to implement in the short term.

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Conclusion

Halving is essential for controlling Bitcoin’s inflation, but its impact on the mining ecosystem deserves continuous discussion. I believe mining centralization is a long-term risk that is often underestimated.

What do you think? Will Bitcoin remain secure even as mining becomes more centralized, or is this a serious threat to its long-term integrity?

I would really like to hear perspectives from miners, developers, and other users in this forum.

[Z-tight]

Halving is essential for controlling Bitcoin’s inflation, but its impact on the mining ecosystem deserves continuous discussion. I believe mining centralization is a long-term risk that is often underestimated.

We have discussed a lot about mining centralization and how most of the hash rate is controlled by a few mining pools, it is what it is and i cannot see any quick 'fix' to it. However, the risk in mining centralization is censoring or favoring tx's. As for a 51% attack, i don't see that happening. What are the incentives when two or more large pools pool their resources to attack the network, there is none. If they are successful, they incure huge cost, only to crash the price of BTC and gain nothing. They would rather keep their incentives through block subsidy and tx fees, than planning an attack on the network, which is expensive and would in the end yield nothing if successful.

What do you think? Will Bitcoin remain secure even as mining becomes more centralized, or is this a serious threat to its long-term integrity?

BTC remains secure despite this. Take note that there are also thousands of full nodes scattered around the world enforcing the networks consensus rules. All of which also contributes to the security of the network. The security of the network isn't in the hands of a few.

[Ucy]

There is no such thing as mining centralization in Bitcoin, even if 95% of hashrates are control by  one miner. The non-mining nodes are as powerful as the mining ones, and will have as much say in consensus. If something is not right they won't approve it, and consensus won't be achieved, even if it's imposed by the miner with majority of hashrates. So 51% cannot be executed by miners if the ordinary nodes do not allow it. And the percentage of miners in the node population is really small.

Beside that, mining cannot be considered centralized if it's permissionless with low barrier to entry. This means nothing prevents someone with even the tiniest mining hardware or something way smaller than a laptop to start mining bitcoin except profitability. And actual centralization would mean there is a point of failure, but with Bitcoin, if a single miner who controls the whole network hashrates stops mining immediately, difficult will drop drastically and many more miners will take miner's place almost immediately, to solve puzzle and win bitcoins.

[cr1776]

We have discussed a lot about mining centralization and how most of the hash rate is controlled by a few mining pools, it is what it is and i cannot see any quick 'fix' to it...

The mining pools may have hash power, but it is easy for miners to switch pools if it is an issue.  Remember however many years ago a pool got over 51% and then a lot of miners left?  It has happened before and will no doubt happen again if there is an issue.