Study: Bitcoin is becoming more decentralized

The Bitcoin network is becoming increasingly decentralized across a range of metrics, according to a new study by the Canadian financial firm Canaccord Genuity Group. It is reported by CoinDesk .

According to analysts, at the beginning of its existence, Bitcoin was more centralized from the point of view of distribution of the network hashrate, however, the growing competition among manufacturers of mining chips changed the picture.

So, in the middle of 2014, more than 50% of the hashrate was controlled by the mining pool GHash.io, which made the network vulnerable to attack 51%.

As of the beginning of 2019, however, none of the pools control more than 20% of the hashrate. Thus, the share of five pools accounts for 10 to 20%, the rest of the group controls less than 10% of the computing power of the network.

Growing Bitcoin decentralization, according to analysts, can be considered an extremely positive development of events. One of the most important factors of this was the commoditization of mining chips – as a result of the slowdown in improvements in ASIC technologies, the competition for the miner award became higher.

As an example, Canaccord Genuity Group leads the company Bitmain, which has not yet been able to create a better alternative to its Antminer S9. As a result, the direct competition of Bitmain today is Canaan Creative, which sells its chips to a fairly wide audience.

Also, analysts refer to an earlier report of ARK Invest, stating that the centralization of Bitcoin according to the Herfindahl-Hirschman index has decreased from 3000 in 2013 to 1200 at the moment. The Herfindahl-Hirshman index measures market concentration, and if less than 1500, the market is considered competitive, while more than 2500 indicates a high concentration.

Earlier this month, it was reported that the share of the Bitmain-controlled mining pools of BTC.com and Antpool in the total bitcoin hashrate was about 29% , thus falling to a 16-month low.

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