Bitcoin (BTC) Network at Risk Due to High Centralization: Report

News
Sat, 02/01/2020 - 12:08
Alex Dovbnya
Bitcoin's (BTC) decentralization remains its main selling point, but, ironically, the coin's network is getting more and more centralized
Cover image via 123rf.com
Contents

A new TokenAnalyst report sheds light on the grim state of the Bitcoin (BTC) network. 

The London-based blockchain analytics startup found out that only five China-based mining pools control a staggering 49.9 percent of the coin's total hashing power. 

Related
Bitcoin (BTC) Mining Starts Attracting Major Institutional Investors

Bitcoin's China problem

The fact that China, the country with a very authoritarian government, holds sway over Bitcoin is nothing new. As of December 2019, it was responsible for 66 percent of the total hashrate after its share increased by about six percent in just six months. 

This is an alarming trend for those who strongly believe that Bitcoin is a decentralized digital currency. 

However, the problem goes deeper than that — if these five entities were to merge into one, they could perform a 51 percent attack, thus forcing reorganization in the Bitcoin blockchain.

Related
Bitcoin Mining Pools Continue to Face Tough Competition: Blockchain Research

Are these concerns overblown? 

While it's hard to argue with statistics, Chinese mining pools might not be that big of a threat to Bitcoin. It is important to note that one shouldn't confuse mining pools with actual miners. If miners decide to wreak havoc with the network, their blocks will be rejected by nodes

On top of that all, trying to attack the Bitcoin network is very expensive. Messari recently estimated that it would cost around $21 mln to attack the Bitcoin network only for one day. 

Subscribe to U.Today on Twitter and get involved in all top daily crypto news, stories and price predictions!

About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.

Top 10 Best Cloud Mining Sites in 2020
TOP 20 Best Bitcoin Trading Bots in 2020

This site uses cookies for different purposes. Please set your preferences in Cookie Settings and visit our Cookie policy for more information on how and why cookies are used on this site. Click here for cookie policy