Mining Centralization Scenarios

Defining Mining Centralization

  1. Manufacturing of mining equipment being mostly in the hands of a single company.
  2. Majority of hash power being controlled by a single company

Manufacturing Centralization

Scenario 1: Backdoor

  1. Force the mining equipment to point to a Bitmain-controlled pool mining whichever coin Bitmain chooses.
  2. Override the block template to give rewards to a Bitmain-controlled address.
  3. Throw away valid proof-of-work unless the miner is pointing to a Bitmain-controlled pool.
  4. Shut down the miner using some predetermined signal. (Kill-switch)

Scenario 2: Manufacturer Defect

Scenario 3: Price Gouging/Buying Restrictions/Shipping Delays

Hash Power Centralization

  1. One company controls pools totaling >50% of network hash power
  2. One company controls machines totaling >50% of network hash power

Scenario 4: Majority-only chain

Time is in minutes

Scenario 5: Turning Off Hash Power

What Majority Hashing Cannot Do

Bitmain

One of many new entrants into the Bitcoin mining game

Conclusion

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Bitcoin Educator, Developer and Entrepreneur. Book: https://amzn.to/2RSlnTb PGP Fingerprint: C1D7 97BE 7D10 5291 228C D70C FAA6 17E3 2679 E455

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Bitcoin Educator, Developer and Entrepreneur. Book: https://amzn.to/2RSlnTb PGP Fingerprint: C1D7 97BE 7D10 5291 228C D70C FAA6 17E3 2679 E455

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