Bitcoin News Today: Bitcoin’s Mining Pools Test the Limits of Decentralization

Foundry USA, one of the largest Bitcoin mining pools, recently mined eight consecutive blocks, an event that has intensified discussions around the centralization of Bitcoin’s hashrate. The pool now controls 33.63% of the network’s total hashrate, while AntPool holds 17.94%, together accounting for nearly 52% of the total computing power securing the Bitcoin network. This concentration has raised concerns about the potential for a 51% attack, a scenario in which a single entity or coalition gains majority control of the network and could theoretically manipulate the blockchain [1].

A 51% attack would allow the dominant group to reorganize the blockchain, double-spend transactions, or prevent the processing of certain transactions. Such an attack would fundamentally undermine the security and integrity of the Bitcoin network. However, experts note that while the technical possibility exists, the economic and operational challenges make such an attack highly unlikely. For instance, any attempt to execute such an attack would require coordination between thousands of individual miners within the pools, many of whom are incentivized to remain loyal to the network’s rules [1].

This is not the first time the Bitcoin network has faced a potential centralization risk. In 2014, GHash.io briefly controlled over 51% of the network, prompting widespread backlash from the community, which led to a drop in its hashrate. The same dynamic is expected to apply to Foundry and AntPool: if either pool attempts to act against the interests of the broader network, miners are likely to shift to other pools, reducing their influence [1].

The current hashrate concentration reflects a broader trend in the Bitcoin mining industry, where industrial-scale mining operations dominate the landscape. The barriers to entry for individual and small-scale miners have increased significantly, with only a handful of pools controlling nearly 80% of the global hashrate. This industrial centralization, while not a direct attack on the protocol itself, has raised concerns about the long-term sustainability of Bitcoin’s decentralization principles [2].

Despite the recent hashrate concentration, many analysts argue that the economic incentives for executing a 51% attack remain weak. The cost of acquiring and maintaining the necessary computing power is enormous, and any attempt to manipulate the network would likely result in a drop in Bitcoin’s price and a loss of trust, which would harm the attackers’ own investments. Additionally, there is no historical precedent of a successful 51% attack on the Bitcoin network, further reinforcing the belief that such an event is unlikely [2].

As the hashrate continues to consolidate among a few dominant pools, the debate over Bitcoin’s decentralization is expected to persist. While the protocol itself remains decentralized, the mining industry is becoming increasingly centralized. Whether this trend poses a long-term threat to Bitcoin’s core values remains to be seen, but for now, the network appears resilient against large-scale attacks [2].

Source:

[1] 2 Bitcoin pools now control 51% of the hash power: Is BTC ... (https://www.cryptopolitan.com/2-bitcoin-pools-now-control-51-of-the-hash-power/)

[2] Could Bitcoin Face a 51% Attack? Mining Pools Near 50 ... (https://icobench.com/news/could-bitcoin-face-a-51-attack-mining-pools-near-50-hashrate/)