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Bitcoin’s Decentralization Level Increases: Report

  • Yuri Molchan
    📰 News

    A Canadian firm working in the sphere of finance has conducted new research that states: Bitcoin is getting less centralized compared to its early days


Bitcoin’s Decentralization Level Increases: Report
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Canaccord Genuity Group, a Canada-based financial company, believes that the major cryptocurrency, Bitcoin, has become more decentralized compared to previous years of its existence.

Rivalry among mining gear makers makes BTC less centralized

Recently, Canaccord Genuity Group released a report where it says that the BTC hashrate distribution suggests that Bitcoin is turning its ways towards bigger decentralization. The research says that it is happening thanks to the competition between manufacturers of mining equipment.


Back in 2014, Canaccord writes, around 50 percent of the overall BTC hashrate was in control of the GHash.IO mining pool. This made Bitcoin open to 51-percent attacks, when the majority of the hashing power is managed by criminals who use it for rewriting transactions.

However, in 2019, which has just arrived, the maximum hashrate controlled by one single pool of miners is not more than 20 percent. Just around five pools are presently controlling this 20 percent, whereas other mining companies are dealing with less than 10 percent of the overall BTC hashrate.

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Good news for the whole community

The fact that BTC’s decentralization level has increased is a very good thing, insists the Canadian firm. As per the report, the new state of things was caused by several factors. The most important is mining gear commoditization as the progress in the development of ASICs is slowing down, thus letting the rivalry for BTC mining rewards spread wider.

As an example, the competition between Canaan Creative and Bitmain was suggested, since the former cannot come up with a better change for its Antminer S9. Now Canaan Creative is selling its mining devices to an audience wider than that of Bitmain, so they can compete with Jihan Wu’s mining gear maker.

BTC decentralization index rises

ARK Invest research says that the index of BTC centralization (HHI - Herfindahl-Hirschman Index) has dropped from its value of 3,000 six years ago to the current value of 1,200.

HHI is used by experts to measure market concentration. An index value lower than 1,500 is believed to be a “competitive marketplace”. 1,500-2,500 is “moderately concentrated” and over the 2,500 value stands for the highest market concentration.

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Bitcoin's April 2 Breakout Was Reportedly Orchestrated by One Trader


Bitcoin's April 2 Breakout Was Reportedly Orchestrated by One Trader
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It’s been over two weeks since Bitcoin’s astronomical surge on Apr. 2, but new theories about what might have caused this bullish uptick continue to pop up. According to crypto-oriented analytical firm CoinMetrics, that epic surge was causes by a single trader.

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Mammoth-size trades

CoinMetrics claims that ‘a single committed trader’ concocted a plan to push the BTC price, and he successfully managed to do that by picking the time of the day when the global liquidity is at its lowest level.


(Source: CoinMetrics.io)

(Source: CoinMetrics.io)  

The report also suggests that the trader started to execute his plan on HitBTC (500,000 USDT were traded for Bitcoin prior to the price movement). After that, large trades were observed on Coinbase and Bitfinex.      

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Focusing on the future

Meanwhile, as reported by U.Today, another theory states that the rapid price surge was triggered by the expiration of the CME futures contracts and heavy spot and over-the-counter buying. One expert went as far as claiming that a simple April joke about the Securities Exchange Commission (SEC) could do the trick.

While no one is quite sure about what could have triggered the short-living rally, there is even a bigger disconnect when it comes to Bitcoin price predictions. While some share their bullish predictions for 2019, another report states that it could take 22 years for Bitcoin in order to match its current ATH of $20,000.

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