Foundry USA and AntPool currently control over 51% of Bitcoin's global hashrate

There is a growing fear that Bitcoin is at risk of a 51% attack, as two mining pools, Foundary and AntPool, have gained over 51% control of the total network hashrate.

Recent on-chain data shows that Foundry USA currently controls 33.63% of Bitcoin mining hashrate, followed by AntPool, which sits at 17.94%. Together, the two firms hold nearly 52% control of the Bitcoin mining network, which many have deemed a centralization risk.

It becomes even more concerning seeing Foundry USA mine six blocks, and sometimes eight blocks, in a row. 

There has never been a successful 51% attack on Bitcoin. But should you be worried now? Or is this another FUD? Well, the concerns are valid, but overstated.

Is BTC at risk of a 51% attack?

A 51% attack on Bitcoin can only occur when a single entity controls more than half of the network’s hashrate, at least 51%. 

With that dominance, the attacker can reorganize blocks, double-spend their own coins, censor transactions, and even monopolize Bitcoin mining. It’s a direct threat to the Bitcoin network’s integrity, which is why news around a majority control of BTC hashrate usually carries an unsettling concern.

In the case of Foundry and AntPool, the risk is somewhat present, but it is most likely not to happen. It would require a consortium of both pools to successfully pull a 51% attack on the Bitcoin network, but that would the detrimental to their business.

Recall that Foundry and AntPool are not miners themselves. Rather, they are just pools that consolidate the hashpower from thousands of individual miners around the world. They don’t own all that hardware.

So, achieving that perfect collusion of both pools, where thousands of individual miners therein agree to come together to double-spend, is simply far-fetched. 

An attempt would only hurt the businesses, as most of the miners, who are true to the Bitcoin network, would switch to different pools. 

Bitcoin’s first 51% attack scare

This is not the first time Bitcoin has faced a 51% attack concern. The most common scare happened in 2014, when another mining pool dubbed GHash.io briefly gained control of over 51% of the network hashrate.

According to reports, GHash.io’s dominance was the case that proved, in fact, possible for a single entity to gain a majority of the network’s mining power.

The Bitcoin community responded with immense social pressure. Forums like Reddit and BitcoinTalk exploded with calls for miners to leave GHash.io and diversify their hashrate. 

Although GHash.io never attempted to carry out a malicious attack, most of the miners subscribed to the pool voluntarily left the pool amid the social outcry, causing its hashrate to drop back below 50%.

Centralization by industry, not by protocol

The original idea for Bitcoin mining was to decentralize the network, where anyone with a computer could participate in mining. But over time, the difficulty and entry barrier have increased, which has led to the consolidation of these miners for consistent and predictable profits.

Foundry and AntPool gaining over 51% control of the total hashrate isn’t really a case of a de facto centralization of the Bitcoin network. Industrial centralization is a more accurate description of what’s actually happening.

Bitcoin mining, rather than the protocol itself, is becoming centralized, with only five pools controlling nearly 80% of the global hashrate. It’s now more difficult for small and solo miners to compete, which erodes Bitcoin’s decentralization ethos. 

It could get worse from here. As the difficulty and competition toughen, the largest and most profitable pools will continue to attract the most hashrate, causing the hashpower to become even more centralized.