$BTC Big miners pose a growing existential threat to Bitcoin

As of May, AntPool and Foundry USA controlled more than 50% of Bitcoin's hash rate. That could become a problem for Bitcoin users in the near future.

BTC mining is now in the hands of the few. Well-known mining pools have seized overwhelming power, which poses an existential threat to the world’s first digital asset. It’s the logical outcome of a design flaw by Satoshi Nakamoto.

Unfortunately, Bitcoin mining has always tended towards centralization. Bitcoin miners could once mine blocks with CPUs on personal computers due to fewer miners and therefore a lower overall hash rate. That evolved into GPUs around 2010 and into application-specific integrated circuit (ASIC) miners in 2012. ASICs ultimately gave rise to massive mining companies that filled warehouses with hundreds or thousands of rigs.

Miners who control a greater percentage of Bitcoin’s network hash rate are more likely to mine blocks and collect the Bitcoin block reward — the financial incentive for verifying and adding transactions to the Bitcoin blockchain. That’s why small-scale miners often join a mining pool along with others running their own ASICs. These miners earn in proportion to the amount of computing power they contribute to a mining pool’s network.

AntPool and Foundry USA control more than 50% of Bitcoin’s hash rate

Mining pools constitute a centralizing influence on the Bitcoin network. Big mining pools benefit from economies of scale. Generally, larger pools have more efficient operations. More troublingly, a mining pool that controls more than 50% of the Bitcoin network hash rate could initiate a 51% attack against the network

Nonetheless, mining pools have come to dominate the Bitcoin mining industry. Small and medium sized miners lend their power to a pool to minimize costs and maximize revenue. Over the years, Bitcoin mining pools have become more centralized and prone to censorship. For instance, the top two mining pools, AntPool and Foundry USA, require miners to go through Know Your Customer protoco.