47 Out Of Each 100 Bitcoin Mined Saved By One Custodian: Analyst

On-chain evaluation now reveals {that a} single nameless custodian, believed to be Cobo Custody, performs an important position within the Bitcoin community. In a post on X, one analyst mentioned the custodian controls the Coinbase addresses of a minimum of 9 mining swimming pools, cumulatively contributing a minimum of 47% of the whole hash price. 

Because of this for each 100 freshly mined BTC, 47 BTC are despatched to this custodian. Concentrating management in a single entity raises issues in regards to the potential dangers and the necessity for transparency and decentralization of custodians amongst mining swimming pools.

BTC coinbase addresses | Source: Mempool Space
BTC coinbase addresses | Supply: Mempool Area

Bitcoin Mining Pool Overreliant On One Custodian

The discovering famous that fashionable Bitcoin mining swimming pools like AntPool, F2Pool, Binance Pool, Braiins, btccom, SECPOOL, and Poolin channel their Coinbase to the identical custodian. Moreover, ULTIMUSPOOL and 1THash’s Coinbase addresses are additionally reportedly managed by the identical entity.

Luxor beforehand used the identical custodian however modified its setup after it was famous that in addition they relied on the custodian.

A Coinbase handle is a selected handle related to a mining pool. At any time when a mining pool succeeds in confirming a block of transactions each 10 minutes and is rewarded with 6.25 BTC within the present epoch, it sends these cash to its Coinbase handle.

This consolidation raises issues about centralization in coin storage. Technically, Bitcoin is powered by a decentralized net of miners, none of which management over 50% of the whole hash price. 

The hash price is the measure of computing energy devoted to the community. The upper it’s, the safer the platform turns into towards assaults. In line with YCharts, the Bitcoin community at present has a hash price of 603 EH/s.

Bitcoin hash rate | Source: YCharts
Bitcoin hash price | Supply: YCharts

Safety And Centralization Dangers

Recent research present {that a} single entity controls almost half of all newly minted BTC, which might pose a safety threat. If this custodian is compromised, these mining swimming pools might lose closely, impacting the community’s general safety and sentiment.

Bitcoin price trending sideways on the daily chart | Source: BTCUSDT on Binance, TradingView
Bitcoin worth trending sideways on the each day chart | Supply: BTCUSDT on Binance, TradingView

Apart from counting on one custodian for his or her Coinbase, the research additionally discovered that the 9 swimming pools present a hash price for AntPool’s transaction accelerator service. The custodian is claimed to steadily use AntPool and ViaBTC’s transaction acceleration providers for giant batch withdrawals. 

Often, transaction accelerators are supposed to fast-track the affirmation speeds of sure transactions. Whereas handy, particularly when the community is congested, accelerators can threat centralizing management over transaction processing.

Characteristic picture from Canva, chart from TradingView