Bitmain Hash Rate Declines And BTC Is Safe And Still Decentralized For Now
Everybody in the crypto world was concerned recently when Bitmain was getting very close to having 51% of the Bitcoin network. The dominant position of the company affected the centralization of the network and was potentially dangerous, but right now, it looks like the dominance of Binance may be smaller than before. According to recent reports, Bitmain’s BTC hash rate has fallen by nearly 10%.
Bitmain owns Antpool and BTC.com, both of which have experienced a collective drop of 9% in their hash rates. They made up 41% of the BTC network’s hashing power by June, but now only 33%, as Antpool has 13.4 and BTC.com, 19.6%.
The main concern was that Bitmain’s dominance might jeopardize Bitcoin’s decentralization as the Chinese company was only 9% away from being able to stage a 51% attack if it wanted to. While Bitcoin was never affected by this type of attack, Verge (XVG) has been hit twice this year by similar attacks.
Something similar to the Bitmain situation happened back in 2016 when GHash, a now defunct mining company, has touched above 50% of the BTC network, but the administrators of the pool quickly asked the miners to switch to other mining pools instead to keep the decentralization of the network.
Bitmain, however, launched a promotional “zero fees” offer for people who joined Antpool after it controlled 42% of the network, so the fears that Bitmain was planning an attack were not unreasonable.
The Decline Of The Bitmain Hash Rate
The decline in the hash power of Bitmain coincides with the efforts of the company of growth in other areas. The company has just recently announced a new $500 million USD blockchain data center overseas which will be made in the town of Rockdale, just north of Austin, Texas.
Jihan Wu, the CEO of the company, is also planning to host an Initial Public Offering (IPO) that will take Bitmain to the Hong Kong Stock Market. The company is currently valued at $12 billion USD after its pre-IPO funding round, which happened in July. All of this might have gotten in the way of the company’s expansion of its BTC hash rate.
It should also be taken into account that ViaBTC, the main rival mining pool (made up of former Tencent employees) has surpassed Antpool as the second largest BTC miner in the world. At the moment, ViaBTC makes for 15.97% of the hash rate, 2% more than Antpool.
While the chances of Bitmain getting an additional 9% in its hash rate seemed very real a month and a half ago, the total Bitcoin hash rate was increased by 4,000 TH/s, meaning that the competitors of Bitmain are trying to compete harder with the Chinese giant. This means that it will be harder for Bitmain now to have51% of the hash rate, as it lacks 18%.