Two Mining Pools Now Control 57% of Bitcoin's Hashrate

Concerns are growing in the crypto community about Bitcoin's increasing centralization, which some fear could threaten its core principle of decentralization. Recent data from BTC.com shows that two major mining pools, Foundry USA and AntPool, now control about 57% of Bitcoin's total network hashrate, raising alarms about the future of Bitcoin.

Foundry USA and AntPool have become dominant players in Bitcoin mining. Bitcoin mining pools are groups where miners combine their computing power to increase the chances of successfully mining a block. Rewards from mining are shared among participants based on their contributed power, after deducting maintenance fees.

Mining pools have become popular as they offer more consistent income compared to the uncertain rewards of solo mining. However, the increasing dominance of Foundry and AntPool is causing worries about centralization within the Bitcoin network. According to BTC.com, the total Bitcoin network hashrate is around 651 exahashes per second (EH/s), with Foundry contributing 215.79 EH/s and AntPool providing 153.55 EH/s. Together, these two pools control over half of the network’s hashing power.

This concentration of power in just two pools raises concerns about the risks to Bitcoin's decentralized nature. Experts warn that such centralization could pose serious threats to the security of the Bitcoin network. If one pool were to control over 50% of the network’s hashrate, it could launch a 51% attack, allowing it to reverse transactions and potentially double-spend coins, which would undermine trust in Bitcoin.

While no single pool currently holds more than 50% of the hashrate, the fact that two pools together control such a large share has already led to some issues. Bitcoin developer Luke Dashjr has previously highlighted the dangers of large mining pools. He argues that centralization risks turning Bitcoin into a system controlled by a few entities, contrary to its decentralized design.

Centralization also opens the door to censorship. Some mining pools, under regulatory pressure, have already censored transactions. For example, in 2023, F2Pool, another large mining pool, censored transactions on the Office of Foreign Assets Control (OFAC) list to comply with sanctions. Although F2Pool later reversed this action following criticism, it showed how mining pools could potentially influence the Bitcoin network by choosing which transactions to process.

There are also geopolitical concerns. Foundry USA, owned by Digital Currency Group, aligns with U.S. interests, while AntPool, run by China's Bitmain Technologies, represents Chinese influence. This division could lead to further complications in the global Bitcoin mining landscape. While the competition between Foundry and AntPool might help maintain some balance, their growing influence could worsen the centralization issue, leading to more censorship or even attempts to control the network.

In summary, the increasing concentration of Bitcoin’s hashrate in just two mining pools is raising red flags in the crypto community. The risks to Bitcoin’s decentralization, including potential 51% attacks and transaction censorship, are serious issues that need to be addressed. As Bitcoin continues to develop, it is crucial to find ways to preserve its decentralization and ensure that no single entity or group can dominate the network.