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Author: Admin | 2025-04-28
Written By Jim Craig — 10/29/2021Time Magazine recently published an article titled Bitcoin Is Still Concentrated in a Few Hands, Study Finds. In which they describe a small concentration of individual investors controlling most of the coins in circulation, and the majority mining power. Are these points something to worry about? Here we will examine that.First — the concentration of mining power. Time says this in their articleThe concentration of miners is even more profound, data show. NBER found that the top 10% of miners control 90% of the Bitcoin mining capacity, and just 0.1% (about 50 miners) control 50% of mining capacity.Let us quickly put this one to bed by saying that the concentration of mining power was expected by satoshi when designing Bitcoin and that it is not necessarily a cause for concern to the network. Coindesk has an article by Hasu published on February 20, 2020 titled No, Concentration Among Miners Isn’t Going to Break Bitcoin, which directly quotes Satoshi saying in the Bitcoin whitepaperThe incentive may help encourage nodes to stay honest. If a greedy attacker is able to assemble more CPU power than all the honest nodes, he would have to choose between using it to defraud people by stealing back his payments, or using it to generate new coins. He ought to find it more profitable to play by the rules, such rules that favor him with more new coins than everyone else combined, than to undermine the system and the validity of his own wealth.Hasu goes on to say This is the key to bitcoin’s assurances and at the same time the most widely misunderstood aspect of bitcoin’s design.We think with this said, we see the concentration of mining power as not a great risk to the network.Now, let’s examine the concentration of
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