Bitcoin Mining Pool Centralization (Bad News)

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In this video, I discuss the global centralization of Bitcoin hash rate, including Jihan Wu's control over Chinese mining pools.

I also discuss the differences between mining rigs (ASICs, hashers), mining farms, and mining pools.

Fortunately for Bitcoin, there is an eternal Mexican standoff between nodes, miners, and other parts of the Bitcoin ecosystem that makes Bitcoin very difficult to change or to attack.

Not investment advice! Consult a financial advisor.

SHA-256 hash calculator:

Bitcoin Mechanic's article:

Pie chart of Bitcoin mining pools:

Bitmain:

AntPool & Bitmain Acting as 'a Pool of Pools':

Ocean Mining:

Bitcoin Mining Pools Are Critically Centralized:

I am not being paid or otherwise compensated by any company or cryptocurrency project that I mention in my videos. My opinion is not for sale. Please do not contact me with any affiliate or advertising deals.

#Bitcoin
#bitcoinmining

Disclaimer

[Bitcoin_University]

WARNING: There are a number of scammers who are using my image and channel name to try to connect with my viewers on WhatsApp and other platforms to scam them. Just so you know, I will never refer you to "my personal trader" or try to connect with you personally to sell you something. I am trying to ban these scammers as quickly as they pop up. You can always recognize a scammer by clicking on the image and seeing how many videos he has. All of these guys have zero videos, while I have hundreds. I also now have a checkmark next to my name, so that you can distinguish the real Bitcoin University from the imposters. Follow me on Twitter @mattkratter

[POVKnives]

Your decision to keep this channel focused on bitcoin at a detailed, nuanced level, rather than a high level is what keeps me coming back. I appreciate that you stay current on even negative events rather than putting everything through rose colored glasses. Thanks Matt!

[charlielassiter]

I would like to see the video going into the more nuanced details of bitcoin mining like you talked about at 2:20. Thank you for all the hard work Matt!

[rageburst]

I'm using SBI mining pool, which is based in Japan. It has better fees anyway. It think it's important for BTC supporters to keep the mining pools as decentralized as possible by joining the smaller mining pools.

[SteveCox]

@10:25 Having some other miner include your transaction only works because those pools combined are less than 51%. Once they're over 51% then they could potentially ignore the mined block that included your transaction and re-mine a block at that height without your transaction and then mine a second block on top of that to cause a chain re-org tossing your transaction back in the mempool. The possibility of that attack vector has caused miners to flee pools when they get too large in the past but if that hash power is all essentially controlled by BitMain then that may not matter.

[tri-che-chus]

This Usual Bitcoin principle applies to the network, the asset, and the foundations: Bitcoin is constantly under attack, so we must keep alert and updated. Thank you, Matt!

[ExpensivePizza]

The correct way to deal with this is making sure everyone knows what's going on. The sooner people know, the sooner they can react and point their hash rate somewhere else.

[motoric]

This channel is an inexhaustible source of information. Thank You BTC University.

[whatsgood]

I listened to the entire TFTC interview when it came out. I’d highly recommend. Mining centralization is the single greatest threat to Bitcoin right now.

[Tanguylecoutre]

I didn't know about the chinese mafia. Very happy that you shared this I will point the hash that my 15 asics are generating to a different pool now.

[deleonk]

Question about mining: As I understood, every miner in a mining farm/pool is working on the same block template and iterates through the same order of nonces until it finds a valid block. This means that every miner is performing exactly the same hashing and testing, which is an immensely wasted amount of hash power. How then do individual Asics have a independent probabilistic process?

[johnb]

got my miner up and running. pointed to ocean per your suggestion. thank you matthew

[ADL-]

Bitcoin for beginners 2024 reminder 👍🏼

[julieolson]

Excellent video of the big picture, behind-the-scenes technical machinations. Thanks, Matt!

[HalalMoneyShow]

Matt; Rigs pointed to ocean. Thank you

[TheBitcoinGospel]

Wow!!!! I’m so thankful for your faithfulness to Bitcoin and to educating people on the nuances of this space! There really are so many moving parts and we all need to stay vigilant! Thank you Matthew!!!! 🙏🏼💯

[europana]

I tried mining BTC with my cell phone back in early 2015 ... needless to say, all it did was make my phone hot with nothing in return :P

[MikeStillUK]

This video makes me want to start mining

[saltpony]

Hey Matthew, do you think you could run thru running a node? Discussing at building your own with raspPi or buying a umbrelHome?? Why run one? What does it do? How to use it? Thanks Fren!!❤

[chestersnapdragonmcphistic]

Stratum V2, does this reduce centralization? My understanding is that it allows individual ASIC operators in a pool to control the format and content of blocks they mine, rather than leaving that up to the centralized pool management.