Understanding Bitcoin’s Centralization Concerns in Mining Pools
Bitcoin, often heralded as the epitome of decentralized cryptocurrency, faces growing concerns over centralization. Recent on-chain data reveals that just two Bitcoin mining pools have been responsible for mining over 51% of all BTC in the past three years. This statistic raises alarms regarding potential centralization within the leading blockchain network.
Insights from Bitcoin’s Mining Pool Data
Data retrieved from mempool.space, a Bitcoin data aggregator and block explorer, sheds light on this matter. This information was collected directly from an observer node, providing a detailed overview of Bitcoin mining pool activities. Over the past three years, starting March 28, 2025, two mining pools have prominently dominated Bitcoin’s mining landscape.
Advertisement Banner
Dominance of Leading Mining Pools
Specifically, Foundry USA mined 46,076 blocks, accounting for 28.72% of total blocks, while AntPool mined 34,365 blocks, representing 21.42%. Collectively, these pools have mined 90,441 blocks, which constitutes 56.37% of the total blocks mined during this period. Such dominance raises questions about the decentralization claim of Bitcoin.
Why Is Centralization in Mining Pools a Concern?
Satoshi Nakamoto’s original vision for Bitcoin emphasized achieving consensus through decentralized mining. This process involves specialized nodes, known as miners, who use computational power to uncover cryptographic hashes and discover new blocks. The miner who uncovers a block earns the right to collect newly created Bitcoin units, known as the coinbase, along with transaction fees.
The Risk of a 51% Attack
A concerning scenario arises if a single entity—or a small group of entities—controls more than 51% of the network’s mining power. This could potentially enable them to perform a 51% attack, allowing for double spending or censoring transactions. Such control undermines the decentralized ethos of Bitcoin.
The Role and Influence of Bitcoin Mining Pools
Bitcoin mining pools are central to the decentralization debate. A mining pool coordinator, a single entity, is responsible for setting and broadcasting blocks to the network. This coordinator also collects rewards and distributes them among participating miners.
Decentralization Metrics and Concerns
Currently, Bitcoin’s Nakamoto Coefficient, a metric for blockchain decentralization, stands at two. This implies that only two independent entities are needed to potentially disrupt the network. This centralization is exacerbated by mining pools rather than individual miners or nodes, who have limited ability to migrate in response to threats.
Recent Controversies in Bitcoin Mining
Instances of centralization issues have surfaced, such as AntPool’s undistributed transaction fees and its influence over other pools. Analyses by pseudonymous researcher b10c suggest that AntPool shares transaction templates with other major mining pools, indicating significant influence and coordination.
The Future of Bitcoin Decentralization
As economies of scale favor larger miners, the potential for increased centralization looms. With more resources at their disposal, dominant mining pools can invest in infrastructure and exert greater control over future block mining, challenging the very decentralization that Bitcoin was designed to uphold.
In conclusion, while Bitcoin remains a pioneer of decentralized digital currency, the current state of mining pool dominance necessitates vigilance. The community must prioritize maintaining decentralization to preserve Bitcoin’s integrity and foundational principles.
