The Dangers of Mining Pools

“The larger percentage of cryptocurrency enthusiasts that turn to mining pools, all the more dangerous this kind of mining is likely to become. The reason is simple: The potential rewards grow in correspondence with the number of participants and their hash power, and so too does the incentive to profit from it in less-than-legal or acceptable ways for some parties…

Here is what’s scary, though: As of last year,74% of Bitcoin’s hashing power has been distributed across five mining pools located in China. As we all know, China isn’t the freest state on the planet, and the level of governmental involvement in pretty much all spheres of life is quite high there. Despite not being in direct control of this power, the Chinese authorities can absolutely influence the managers of those pools.

So, is China going to perform attacks to spend those coins twice? Not likely. However, it is certainly possible that it could disrupt the functioning of the network, weaken the consensus, and influence economies of other countries that rely on Bitcoin.

Unfortunately, given the relations that China has with the rest of the world — specifically Western powers — such attacks are likely to happen sometime in the future if the situation doesn’t change.”

Master Asked on November 4, 2019 in Bitcoin.
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