SELECTED AS THE THIRD CONTENDER OF THE - POST OF THE MONTH - NOVEMBER’s Edition
What do you think it is?
I believe that mining decentralization is a fundamental part of the crypto economy, considering that decentralization is a basis and a basic principle of blockchain technology. In addition, bitcoin appeared as an alternative to the centralized authorities that administer our global monetary system.
Why is so important?
It is very important to ensure that the system is not manipulated by malicious actors and by inappropriate regulatory actions of any particular country or by simple calculation errors.
However, at present, we have a big problem that the ecosystem must solve in the future. The large corporations have the power of Hash, Bitmain being the main actor, Bitmain has a monopoly on the manufacture of ASIC equipment and also has 50% hash power in the BITCOIN network, the most important in the ecosystem, this situation causes a vulnerability in the ecosystem that must be dealt with quickly.
In the case of other networks, we can find another form of centralization through the mining pools where each individual gives its power of hash to the mining pool, which makes it dependent on the system and the way in which this pool distributes the collective rewards. The difficulty of mining in very popular networks such as Ethereum means that individuals must resort to mining pools to obtain short-term rewards.
What else can be done to improve it?
To improve the decentralization of mining, the monopoly on the production of mining equipment must be eliminated, ASIC (BITMAIN) GPU (ENVIDIA, AMD). this can be achieved through the global and geopolitical regulators.
More research must be done to develop new algorithms that allow network consensus, alternatives such as POS already exist.