New Canaccord Research Shows Bitcoin’s Decentralization is Happening Within Mining Pools
Despite what some people may think, it looks like Bitcoin is winning the war against centralization, at least that’s our take after seeing a new report made by the Canadian wealth management firm Canaccord, which showed information that proved that decentralization is one the high on Bitcoin.
In the February report of the Canaccord Genuity Group, the company describes Bitcoin as being more decentralized than it is now in its early days but also affirms that the token is walking the right path towards decentralization, as the market is more decentralized now than last year, as well as chip manufacturing companies are facing increased competition.
According to Canaccord, GHash.io controlled about half of the Bitcoin hash rate back in 2014, which rendered the network vulnerable to 51% attacks, which happen when a single actor controls the majority of the network and then uses the hash to steal money by rewriting transactions.
Things are definitely looking better now, though, as no single company controls over 20% of the hash rate, an increase from last year when Bitmain was the king and controlled over 40% of the hash rate.
At the moment, the largest hash producer is Antpool, which, together with ViaBTC, which is more down the rankings, is owned by the giant Bitmain. The company is not so well anymore, however, which means that the company is losing its place as the king of miners.
Decentralization Is Positive
Obviously, Bitcoin being decentralized is a great thing. The token was made to be this way and decentralization is at the heart of the ecosystem and of the technology. It would be a shame if the coin that basically was invented as a way to revolutionize the world with decentralization was so concentrated.
In part, the increase in the decentralization of the network mostly happened because no company is too ahead of the others now and the rewards for mining were diminished as the price of BTC and all the other tokens in the market are considerably down now.
Finally, the report cites that the centralization went down from 3,000 (using the Herfindahl Hirschman Index) in 2013 to only 1,200 at the moment. Any number below 1,500 can be considered a competitive marketplace while numbers until 2,500 are moderately concentrated and above even that is a highly concentrated market.