No, Concentration Among Miners Isn’t Going to Break Bitcoin

CoinDesk columnist Hasu is a pseudonymous crypto researcher publishing analysis for Deribit Insights and his personal blog.

A recent TokenAnalyst report claims a single entity could be in control of around 50 percent of bitcoin’s hashrate. The observation is based on the fact that five large mining pools have launched a new cloud mining service as a joint venture.

“In 2020, Bitcoin has […] become a highly centralized system that places an increasing amount of trust in a small number of large entities. Any centralization of Bitcoin network hash power should be of concern as it erodes the trustless model of the network,” TokenAnalyst, a cryptocurrency research firm, says.

Its strong language is consistent with the folk theorem that bitcoin relies on the decentralization of hash power to be secure. But is it also correct?

It is certainly true that one miner with 100 percent of the hash power would have more control over the network than miners with 10…