Unknown Miners In The Bitcoin Network
By Saketh Kalla on ALTCOIN MAGAZINE
In January 2019, Blockchain research unit Diar has published that unknown miners have become the largest group in the mining network.
This caused some concern, due to the possibility of a 51% attack on the blockchain. Several articles were written in response. There were some interesting conspiracy theories as well.
These days, most mining pools use the Coinbase parameter to identify themselves, when a block is mined on the blockchain. This is completely voluntary and miners are under no obligation to tell the truth! There could be a variety of reasons why a miner doesn’t identify, such as for privacy and political reasons.
Various cryptocurrency information sites report Mining Pool data based on this coinbase parameter.
The chart here is made from blockchair.com data. Each point represents a new Difficulty or 2016 blocks.
The dramatic drop in prices of Mining equipment during the second half of 2018 contributed to the significant rise in the Network Hashing power and thus Difficulty. Apparently, Bitmain has purposefully decreased its profit margin to offer its products at low levels to drive its competitors out of business. A few new mining pools appeared to have significantly benefitted from the vast amount of hashing power added during this period.
Poolin.com is a mining pool operation from China that was founded in October 2017. The first coinbase-identified block mined by this pool was on 5th September 2018. They did not identify themselves in the coinbase for the next six weeks. By the time they identified again, they were already mining at 5% of the Network Hashrate. Within months it went from zero to 6 EH/s or about 13% of the total Network Hashrate. Similarly, Huobi is a relatively new mining pool operation. They started mining in April 2018 and within months they were mining up to 5% Network Hashrate.
We searched for “Poolin” and “Huobi” (in Hexadecimal) in the Coinbase parameter of all the blocks mined and updated the chart (below).
Both of these new mining pools were included in the unknown miners' category by most of the crypto web sites. Together, these two mining pools were mining over 13% towards the end of 2018. This resulted in false reporting of unknown miners at over 23%. When, in fact, unknown miners were about only 9% of Network Hashrate at that point. Even this 9% may include other smaller mining pools.
Bottom Line
False Alarm!
