How P2P Protocols Seek To Solve Bitcoin Mining Centralization
Bitcoin mining pools rely on centralization, but P2Pool and other protocols have sought to reduce the need for trust in third parties.In a previous article, I wrote about the nature of decentralization versus centralization in Bitcoin mining and how to conceptualize that in a mostly qualitative sense. The article broke down the entire mining stack, from pool coordination all the way down to energy production to give a sense of the relationship between different layers of the mining stack and the potential to maximize decentralization, making the point that the further down the stack you go....
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For many, the level of centralization found in the Bitcoin mining ecosystem is the biggest issue for the peer-to-peer digital cash system today. As a technology that relies on decentralization in order to provide a censorship-resistant bearer ecash, any trend towards centralization should be viewed as problematic. In 2014, economist Kevin Dowd claimed the incentives of pooled mining are “totally destructive of the Bitcoin system.” The amount of mining that takes place in China led former Bitcoin developer Mike Hearn to state, “Bitcoin is controlled by the Chinese Government.” Those who....
Bitcoin expert Andreas Antonopoulos explains why faster mining chips and slamming into the Moore’s Law “wall” will be “a very good thing” for decentralization moving forward. Mining Arms Race Slows at 16nm Chips. Speaking at D10E event in San Francisco in July 2016, Andreas Antonopoulos focused on the architecture of power and the trade-offs between....
Bitcoin mining centralization - the concentration of mining power in the hands of a small number of corporate entities - is considered by many people to be the single biggest problem facing the cryptocurrency today. One of the biggest selling points of Bitcoin is, after all, the fact that it is a decentralized network that does not need to rely on users trusting large corporations, such as the 'too big to fail' banks which many would like to see replaced by cryptocurrency. Bitcoin's mining centralization not only contradicts this decentralized ethos, but also potentially puts the network....
Bitcoin mining centralization has been a point of concern in the community for a while now. People are worried that the growing size of mining firms will continue until one of them attains 51% or more of the network’s hashing power. Although a firm holding the majority of the hashing power would notinherently compromise the network, it would certainly centralize the creation of bitcoin and the confirmation of transactions. Such centralization opens the door for a 51% attack, in which a nefarious actor initiates a double spend. This particular attack is highly feared in the Bitcoin....
For many, Bitmain’s recent announcement of the realization of a major data center in northwestern China served as a reminder of the level of mining centralization in Bitcoin. Although the Beijing-based company will not own the entire complex, and the whole facility will not necessarily be dedicated to bitcoin mining, in theory over half of all hash power securing the Bitcoin network could be concentrated in a single data center. For some, this is reason for concern. If bitcoin mining is dominated by one or even several data centers, these could represent a single point of failure —....