Decentralization of mining capacity in the Bitcoin network is increasing, Canaccord

report

A new study by the Canadian financial company Canaccord Genuity Group shows that Bitcoin decentralization (BTC) is increasing.

The company noted in a report that in former times, the distribution of the bitcoin of the Bitcoin network was more concentrated. However, over the past few years, increasing competition between manufacturers of ASIC chips has led to a decrease in centralization.

Analysts stressed that in mid-2014, the GHash.io mining pool controlled about half of the total bitcoin hashrate , which made the first cryptocurrency vulnerable to attack 51% (that is, the owners of the pool that accumulates more than half of the network’s hashrate are potentially able to confirm only the transactions they need and carry out "double spending").

But in 2019, representatives of a research company say, not a single mining BTC-pool does not control more than 20% of the bitcoin of the Bitcoin network. At the same time, the five largest pools provide 70% of hashrate (from 10 to 19% each), and the rest do not reach the level of 10%.

The largest player remains Antpool, which, like ViaBTC, belongs to the mining giant Bitmain. But the company experienced a difficult last year, and its share in the mining of Bitcoin has declined markedly.

With reference to the ARK Invest study, the Canaccord report states that bitcoin centralization, as measured by the Herfindahl-Hirschman index (HHI), is steadily declining from about 3000 in 2013 to about 1200 at present.

The HHI index is used to assess the degree of market monopolization. HHI less than 1500 means “competitive market”, an index in the range of 1500–2500 corresponds to a “moderately concentrated market”, and an index of more than 2500 indicates that the market is “highly concentrated,” explained the Canadian firm.

Recall that according to a research by CoinShares, in China, up to 60% of Bitcoin mining capacity is located in China, although some have cited a large figure. Previously, this led Ripple chief Brad Garlinghouse (Brad Garlinghouse) to state that the first cryptocurrency is controlled by the Chinese government.

Publication date 07.02.2019
Share this material on social networks and leave your opinion in the comments below.