Tuesday, April 23, 2019

Bitcoin Mining Gets More Decentralized According To A Report

According to the report of a Canadian wealth management company, Canaccord on the 6th of February, it indicated that Bitcoin decentralisation has become prominent in recent time. This suggests that the network may not be prone to attacks.

Equality On The Blockchain

Decentralisation of Bitcoin mining is the even distribution of the network hashrate. This means that no individual or firm is more dominant on the bitcoin blockchain. The report which tracks the blockchain and digital currency sectors along with its other financial operations indicates that the last five years have witnessed the distribution of the hashrate on the Bitcoin network evenly. By implication, this makes the top valued cryptocurrency less vulnerable to the 51 percent attack that the proof-of-work algorithm is prone to.

The report by Canaccord in 2014 indicates that the Ghash.io pool controlled about half of the Bitcoin market hash rate as at that time. However, five years afterwards no single pool controls up to 19 percent of the network as of February 2, 2019. This shows an increase of decentralisation and democracy on the blockchain.

The largest share on the Bitcoin network at the moment is owned by Antpool as stated in the report. The firm along with ViaBTC is owned by Bitcoin mining giant, Bitmain and its dominance in the crypto mining space has faced stiff competition which has reduced its influence in the space. Meanwhile, the statistic of Antpool’s dominance varies. Blockchain.com states it is 10.5 percent while Bitmaps states it is about 8.5 percent.

Crypto Network Attack and Proof-of-Stake Algorithm

Crypto networks that utilise the proof-of-work algorithm are prone to 51 percent attack, once an individual or a firm obtains access to the percentage rate. This can only be curbed with proper security and decentralisation of such a network.

The adoption of proof of stake algorithm and its superiority to proof work has become a debate. Ethereum network has been making efforts to see to its implementation with its proposed Constantinople hardfork. Meanwhile, the recent experience of ethereum classic attack further exposed the vulnerability of proof of work algorithm.

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