The long-term security model and decentralized status of bitcoin have recently been questioned by multiple experts, who warned that it could gradually become centralized in PoW. Anonymous analyst b10c's research shows that the centralization level of mining business may be more severe than ever before. Bitmain, headquartered in Beijing, leads multiple mining pool businesses.
(Source: Twitter)
Analysts found that the top 5 bitcoin mining pools may use the same block template as Antpool. Specifically, these pools are BTC.com Pool, Binance Pool, Poolin, EMCD, and Rawpool. They account for more than 31% of bitcoin's hash rate and have discovered blocks in the past six months. Antpool is the second largest single mining pool, accounting for 24.66% of the network share.
(Source: mempool.space)
It is worth noting that Antpool is a subsidiary of Bitmain, the largest ASIC miner manufacturer in bitcoin, headquartered in Beijing, China.
Basically, the block template is a tool that miners use to add transactions to blocks and confirm transactions on the network. Sometimes the template can be similar when the most expensive transaction is included first. However, b10c discovered a pattern and is confident that the first transaction in each block of these pools is manually added after the Coinbase transaction. Coinbase refers to a transaction with block subsidies created and paid to the miner who signed the block.
B10c wrote:"Here, branch0 is the txid of the first transaction in the block after Coinbase. In the Antpool, Binance, BTCcom template, this is a manually prioritized transaction with a payment of 9.03 sat/vbyte. Many other pool do not prioritize transactions and include the highest fee rate transaction paid of 301 sat/vbyte. ViaBTC prioritizes another transaction and has a completely different template."
(Source: mempool.space)
Protos, a cryptocurrency blog, reported on this research on May 2, and some concerned enthusiasts joined the discussion on social platforms. Among them, Casey Rodarmor, founder of the Ordinals protocol, commented on the case, pointing out that the prospect of decentralization of bitcoin mining is "not optimistic."
The article states:"For years, there have been rumors that the largest bitcoin mining machine manufacturer secretly concentrated most of bitcoin's hash power. The basis for this theory is not just a simple observation of the logos printed on most mining machine boxes."
Casey pointed out:"Many large pools previously considered independent now appear to be mere proxies for AntPool, with the same transaction selection strategy."
Mononaut, the owner of mempool.space, also found similar results. He found that these six pools not only share the same block template but also share the same block reward trustee. In addition, two other pools have joined this possible pool hub: Braiins and SECPOOL. This adds 3.34 percentage points of hash rate to the centralized pool group, totaling nearly 35%.
(Source: Twitter)
Typically, the most enthusiastic supporters of bitcoin would think that the centralization of mining pools is not important because miners can move from one pool to another to prevent centralization. However, as these studies have found, it becomes more difficult when major mining pools unite to reach a closed-door agreement.
In addition, mining pool coordinators execute the activities required for bitcoin miners at the protocol level. The pool integrates the work proof of its own or third-party delegate machines; uses the delegate's hash rate to find valid blocks; creates block templates by adding transactions; broadcasts blocks to the network; collects block rewards and distributes payments to its workers.
Some experts believe that the implementation of Stratum V2 will help solve this problem, but the software has not yet been run and will depend on the adoption of these pools and miners, which cannot be guaranteed.
Bitcoin investors are currently paying attention to these developments, which could affect the fundamentals of cryptocurrencies.