Bitcoin the software developed by Satoshi Nakamoto, has been updated several times since its creation, giving rise to different protocols, networks and communities. Among all the variants, three chains have kept the basic designs of the protocol while making minor changes: Bitcoin (BTC), Bitcoin Cash (BCH) and Bitcoin SV (BSV).
Based on the similarities, all three have a circulating supply capped at 21 million which will be reached around 2140, with each of their miners discovering blocks in an interval of around 10 minutes, guaranteed by the mining difficulty adjustment.
In addition to this, BTC, BCH and BSV use SHA-256 as their mining algorithm and can be mine through special ASIC mining machines.
It is in this spirit that Finbold has brought together data Since Mining Pool Statistics understand the state of mining decentralization for the three major chains with the name “Bitcoin”.
Bitcoin SV (BSV) mining centralized in 1 entity
Worryingly, a single entity has mined more than half of the last 1,000 blocks (one week) of the Bitcoin SV network. This entity is the mining pool taal. comwith 50.2% of global block discovery in the last seven days.
Notably, the network’s public hashrate data shows a different result, with a reported hashrate of 18.36 PH/s overall, and GorillaPool is responsible for 88% of this with a reported hashrate of 16.21 PH/s.
For this reason, Finbold considered block discovery as a more reliable measure for understanding the true state of decentralization, because block discovery is proportional to the actual proof of work deployed on the network in order to collect the block reward and dominate the distribution of BSV.
With over 50% of the hashrate contributed, Taal Pool could, in theory, carry out a 51% attack on Bitcoin SV. This threat, although theoretical, could affect the perception of the value of BSV by cryptocurrency market and also have a direct impact on how long users have to wait before considering their transaction as securely confirmed.
For BSV, the recommended wait time should be greater than 340 blocks (3,400 minutes or 56 hours). Meanwhile, the expert developers recommend a wait time of 2 hours for the leader cryptocurrency.
Decentralization Bitcoin (BTC) and Bitcoin Cash (BCH)
Interestingly, the second most centralized chain is Bitcoin (BTC), with a market cap over $583 billion at press time, but with only two entities discovering more than 55% of the last 1,000 blocks in one week.
Finbold has already addressed this situation in a previous report on the state of centralization of Bitcoin. In particular on the domination of Foundry, followed by a relevant AntPool increasing hashrate owned by Bitmain.
Meanwhile, Bitcoin Cash (BCH) leads SHA-256 Bitcoin mining decentralization, despite being more than 100 times smaller than BTC, with a market cap of less than $5 billion.
Speaking of which, four entities have discovered 54.1% of the entire last 1,000 blocks in the last seven days. Mining Dutch is the leader and also one of the main mining pools in the centralized Bitcoin SV network.
However, it is also worth noting that the Bitcoin Cash network has an overall hashrate of around 3.37 EH/s at the time of publication. This is 120 times less than what the Bitcoin network generates, and even the 12th largest BTC mining pool has a higher individual hashrate than the entire BCH network.
This theoretically makes the Bitcoin Cash network vulnerable to a possible takeover in the future, in case an entire Bitcoin mining pool goes malicious against its more decentralized competitor, which would completely change this spectrum.
Nevertheless, the overall hashrate of BCH is much higher than the estimated hashrate of BSV. This contributes to the alarming fact of Bitcoin SV’s centralization compared to other chains.