Do you think Bitcoin is decentralized? I guess 95% of you will say YES but after this little analysis, I think that number will be lower. First of all, I am not hating on Bitcoin, I love BTC because without BTC, market would collapse. However, I was just curious whether Bitcoin is really decentralized? As I said, most of you will say ” Yeah, it is “, I would say so too but after giving it a few hours of thinking I am not sure if it is decentralized or not.
To understand this whole review, first you have to know what mining means. Mining is a process where we use special algorithms to find solution on how to confirm transaction. Without mining, transaction won’t be confirmed, price will slump and all bad stuffs would come. So, without mining, there would be no Bitcoin.
Let’s Suppose If there are 1 million miners, Bitcoin will be decentralized because none of them is able to control Bitcoin. And here is the biggest problem, there are a lot of miners but there are also mining pools. They are huge. For example, AntPool and BTC.com are the biggest at the moment with percentage of 16.9% and 15% respectively and total 31.9%. So only 2 mining pools are almost one third or all mining power. 3rd one is BTC.top with 13.3%, 4th is SlushPool with 12.4%. These 4 pools have total mining % of 57.6 (Dated: 11 December 2017). So, they are mining more Bitcoins than all others together.
Still think that BTC is decentralized?
What would happen if they decide to cooperate and decide to stop mining or something like that? Bitcoin will encounter a HUGE price inflation. These problems wouldn’t be unresolvable but enough to make big correction that would last for few months if not years. What would happen if they decide to make their own version of BTC and stop supporting current BTC? As we have seen Power of Forked Bitcoin Cash and some glimpse recently when it touched ATH of $1758 back in November.
This is a big problem for BTC. Main idea was to create decentralized money but, for me, result is not same as the idea. They are able to manipulate and make huge money and grow every single day.