The bitcoin mining pools or groups controlled by China-based Bitmain industry giant now account for more than 40 percent of Bitcoin's total hashrate, raising new concerns about the miners' centralization.
Bitmain Hashrate reaches 51 percent
According to data from CoinDance, bitcoin mining groups BTC.com and Antpool have extracted 25.5 percent and 16.5 percent, respectively, of all bitcoin blocks in the last seven days.
Both mining groups are owned by Bitmain, the world's largest producer of application-specific integrated circuit (ASIC) miners, which means that the company now has influence over at least 42 percent of the bitcoin hashrate index. The two groupings also control a combined 21.3 percent Bitcoin Cash hashrate, which operates with the same algorithm (SHA-256) as Bitcoin.
At this level, Bitmain is dangerously close to controlling 51 percent of Bitcoin's hashrate, a mark that theoretically would allow it to attempt a 51 percent attack against the network. These attacks have recently been successfully implemented against several smaller altcoins, including Litecoin Cash, Bitcoin Gold, Verge and Monacoin.
There is much less financial incentive to attack Bitcoin, but some in the community are concerned that, given the support of CEO Jihan Wu for bitcoin cash and the controversial SegWit2x scaling approach, Bitmain could launch a malicious attack against the network anyway. . It is a very unlikely scenario, but critics argue that the fact that it is a discussion means that bitcoin mining is too centralized.
It is not clear what percentage of the hashrate belongs to the devices physically operated by Bitmain, but that point is quite debatable since the operators of the cluster control the block templates for the whole set. This means that, as long as those devices are targeted to Antpool or BTC.com, Bitmain can decide which transactions the group will process and which, if they do not want to, they will not.
Do not forget, we've been here before. In 2014, the now defunct mining group Ghash briefly crossed the threshold of 51 percent, but in response to the community's concern, it encouraged users to move part of their power to other reserves. However, it does not seem that Bitmain tries to take a similar course.
In fact, Antpool recently started a zero tariff promotion that will continue until mid-September in an attempt to attract even more miners to its platform. While the group supports a variety of cryptocurrency mining algorithms, the promotion explicitly includes bitcoin as one of the currencies that will be exempt from tariffs.
It is important to note the following; Bitmain did not respond immediately to a request for comments, on what was raised.
'BetterHash' aims to decentralize Bitcoin mining
However, a solution to the threat of miners' centralization may be on the horizon.
As reported by CCN, concern over the centralization of hashrate inspired Bitcoin Core developer Matt Corallo to develop "BetterHash", a preliminary proposal designed to decentralize bitcoin mining.
In summary, he advocates the replacement of Stratum, the current bitcoin mining protocol, with two new protocols. This will allow individual miners to build their own block templates or select one from a third party, instead of being forced to use the one chosen by the operator of the mining group to which they direct their hashrate.
In addition to providing miners with more autonomy, the implementation of these new protocols should reduce the ability of a malicious mining group operator to use their position to attack the network.