Following the hard fork of Bitcoin Cash (BCH) last November, concerns were raised that the blockchain was becoming more centralized, governed by only a small handful of individuals that were able to dictate in what direction the cryptocurrency headed. Those concerns have now been shown to be valid, as a single mining pool recently took control of more than half of the entire network. This goes against the very nature of what cryptocurrency is meant to be and shows why Bitcoin SV and its supporters are so adamant about the original design of digital currency, and ensuring it lives on.
According to data from Coin Dance, the BTC.TOP mining pool out of China recently grabbed 50.2% of the entire BCH blockchain. It controlled 679 petahash per second (PH/s), almost triple the amount of the second-place mining pool, BTC.com (257 PH/s). At the same time, ViaBTC had 215 PH/s, AntPool had 125 PH/s, and Roger Ver’s Bitcoin.com had 187 PH/s.
It’s possible that the control occurred simply by variance; however, it still shows that it is possible that a single entity can take over the network. This could lead to a 51% attack that could completely wipe out the blockchain. BCH has already been the target of criticism for its centralization, with some evidence showing that 98% of all of the crypto’s nodes are located on the same server rack.
A centralized network could lead to malicious mining companies combining their hashrate, creating a coalition that controls all transactions on the network. This would give them the ability to deny or reverse transactions, as well as spend the same token twice—in essence, stealing across the blockchain.
One such attack has already occurred. Bitcoin Gold was the target of a 51% attack last year, leading to hackers being able to double-spend tokens across the network for a period of a few days. By the time the attack was stopped, they had gotten away with $18 million worth of tokens.
If BCH is to recover, BTC.TOP will have to reduce some of its hashing power,unless its goal is to take over the network. If the miner continues to control the majority of hashrate, it’s very possible that investors become more concerned with the viability of the network, leading to massive losses as they withdrawal their funds in lieu of other, more stable projects.
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