Today, a popular researcher pointed out some problems with Bitcoin (BTC). The analyst stated that we are “one move away” from the big problem in Bitcoin. Here are the details…
Bitcoin warning from researcher
When Satoshi Nakamoto designed Bitcoin (BTC), he based its security on a consensus mechanism called Proof-Of-Work (PoW). However, given the current state of consensus decentralization, Bitcoin’s security may be in jeopardy. At least, that’s what crypto researcher Chris Blec thinks, according to a post on X on December 14th. Blec used the following statements:
This is not a good chart. 2 mining pools (both forcing KYC on all miners) account for 55% of Bitcoin hashrate. We may be one chess move away from some big problems for Bitcoin. But what’s worse is that no one really wants to talk about it. Where is the urgency?
The chart in question shows that Foundry USA and AntPool each own 27.6% of Bitcoin’s global hashrate. Both Bitcoin mining pools are cooperatives of Bitcoin mining companies that aim to increase block discovery and therefore their profits. Beyond pointing out the worrying dominance of two pools over Bitcoin’s consensus, Chris Blec also calls out the community’s lack of awareness of this issue. So far, several reports have emerged about Bitcoin mining.
Why shouldn’t the mining pool be centralized?
As today, Bitcoin mining pools operate centrally at the pool’s coordinator. It is the coordinator who creates the block template (by adding transactions in the mempool), filters out unwanted transactions, discovers the next block using its miners’ hashrate, broadcasts the mined block to the network, collects the mining reward and distributes it proportionally to miners.
Therefore, it is this single entity that performs relevant actions that directly affect the security of Bitcoin. Recently, we have seen mining pools arbitrarily decide not to pay their miners in certain situations. F2Pool and AntPool in particular – both had 8.8% and 27.6% of the global block discovery rate respectively. In another incident, a newly created Bitcoin mining pool was also accused of deliberately filtering privacy-related BTC transactions.
What do these events indicate?
Essentially, these events prove the importance of having a decentralized pool-based consensus. Moreover, a Bitcoin Core developer explained why BTC transactions must wait two hours before they are considered safe. It is also affected by the current low decentralization situation. All things considered, Bitcoin’s value proposition is directly related to security and decentralization. It is possible that the current state of the network is interfering with the market’s perception of the value of the leading cryptocurrency.
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