This is a question that isn't thought about very often but should be reconsidered in my opinion. While I'm not super technical when it comes to Bitcoin, anyone that has been around Bitcoin for awhile can and will notice disturbing trends in the mining space.
What is the first thing that pops into your head when you think about Bitcoin. For me its the 21 million hard cap and censorship resistant money but what does it mean to be censorship resistant? In essence what censorship resistant means is that your transaction can not be stopped arbitrarily by a third party unlike what they can do in the fiat system. In the fiat system there are tons of choke points that can stop your transaction from going through and conducting business with anyone that you want. Banks stop payments all the time for all kinds of stupid reasons.
This is a form of censorship. The government doesn't like you or your political activism, bam there goes your bank account so no you have no way of even conducting commerce in a efficient way. Don't believe me? Here a a few examples of banks and governments censoring individuals and groups they don't approve of.
Chokepoint 2.0: How Regulator Fight Bitcoin With Financial Censorship
[Nigerian Banks Shut Them Out, so These Activists Are Using Bitcoin to Battle Police Brutality]
There are just two examples of how censorship is being used as a weapon to stop people from using their god given rights as human beings to live their lives as they see fit. We know that the fiat world has the power to censor your transactions but what about in the Bitcoin ecosystem?
As a Bitcoiner you would think that you don't have to worry about stuff like that. Well think again. If you have been watching the Bitcoin mining space lately, you have seen the growth of these large companies with a boat load of ASICs and hashrate. As a Bitcoin pleb its hard to compete with that kind of scale, so less regular joes like us can't mine profitably at home thus reducing the decentralization of hashrate to the large public miners.
In addition to less hashrate being controlled by pleb miners, these large miners point there hashrate to the largest pools out there such as Foundry and Antpool.
https://image.nostr.build/fb547485c8414dab4ef0c2997ae10cda89f7d866d255ce4e97613f5d71bf6ed4.jpg
This image is from the minermag.com. What do you notice about this graph? Lots and lots of centralization going on. Between 2020 and 2024 the top three pools went from 50 percent, mind you which isn't great to begin with and now the top 3 pools control 65 percent of the Bitcoin hashrate is scary as hell and is not a topic that I hear anyone on #Nostr talking about. That's not a diss on anyone, just an issue that needs to be more widely discussed as it has wider implications for all of us.
With this much centralization going on in the mining space how easy will it be for governments to target these large mining pools and tell them to start to censor certain types of transactions.
Governments would have this ability because most miners simply provide hash power and leave the construction of what goes into a #Bitcoin block to the pool operators. To be honest I had no idea that this was the case until recently. So basically Antpool and Foundry get to decide what blocks look like, cool right? Bitcoin isn't looking so decentralized now, is it?
It would be rather trivial for governments to tell these pools to exclude things like ordinals, coinjoins or even opening lightning channels for that matter. When you put a gun to their head and threaten them with excessive fines and jail time, guess what these CEO are going to do. Sellout and cover their assess. It happens every time. This is why it is so incredibly important to decentralize mining pools and promote solo mining as much as we can. There are moves being made in that direction with the Ocean Mining Pool and their radically different approach to operating a mining pool.
Ocean Mining only coordinates the payout split and does not payout simply because you are supplying hashrate to the pool such as with the Pay Per Last N Shares (PPLNS) set up that is popular right now.
There are companies that are trying to turn the tide on mining centralization, the one I like the most and is the most accessible to the average person is the Bitaxe miner. Sure its not very powerful when you compare it to the latest and greatest ASIC but it stays true to the Bitcoin ethos of decentralized mining.
Not long ago a Bitaxe miner found a block! The odds of finding a block with these tiny machines is small but hey why not. You have a chance to find a block and you are living up to the ethos of Bitcoin. That's enough for me to be honest.
I hope that this recent trend of centralization can be reversed before its too late. In the mean time spread the word about Bitcoin and Nostr to all of your friends and family!
#Bitcoin