47% of Bitcoin hashrate uses same custodian \ stacker news ~bitcoin

47% of Bitcoin hashrate uses same custodian twitter.com/mononautical/status/1777686545715089605

2981 sats \ 27 comments \ @Scoresby 10 Apr bitcoin

In other words, this one entity holds the keys to at least 47 out of every 100 freshly mined bitcoins

What is the reason pools and etfs and things don't hold their own keys? They aren't stupid people, they aren't lazy or scared (reasons that might apply to individuals who don't hold their own keys). Is it just convenience or a regulatory issue?

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0 replies \ @Scoresby OP 11 Apr

Steve Barbour and Rijndael further discuss here:

https://twitter.com/rot13maxi/status/1778228833168101735

@checksum0 Lots of people have demonstrated there is a custody agreement involving Antpool, and possibly F2Pool, for smaller pools (quite a long list).

I'm theorizing Antpool are building blocks for them too (excluding F2Pool), thus controlling all the hashrate for those, by proxy.

@SGBarbour Yes, I thought this was well known.

Bitmain is also backing / financing a significant % of gross market hashrate (hardware + infra). They are also backing / doing sweetheart deals with lots of software infra.

37 sats \ 0 replies \ @BitcoinIsTheFuture 11 Apr

I see this diversifying this cycle with options like ocean and I’m sure many more.

80 sats \ 0 replies \ @DesertDave 10 Apr

This is why I am mining with ocean.xyz now. I think this is important for the Bitcoin future.

69 sats \ 0 replies \ @Arceris 10 Apr

Braiins didn't do that until they went FPPS. I believe it's the result of a big player providing all the FPPS backing, making essentially all FPPS pools just front-ends for that one big backer.

27 sats \ 0 replies \ @BITC0IN 10 Apr

Should have used Ocean pool

17 sats \ 2 replies \ @OT 10 Apr

Who's the custodian? Coinbase?

0 sats \ 1 reply \ @Scoresby OP 10 Apr

I don't know, from the thread it looks like it is unclear. He says in a previous thread it is something called Cobo, but he doesn't sound too certain.

10 sats \ 0 replies \ @OT 10 Apr

Maybe bitgo

17 sats \ 0 replies \ @Bell_curve 10 Apr

it’s probably a low tech version of stratum v2, where they agree to share variance, and have a centralized entity escrow the coins and pay them out pro-rata

17 sats \ 0 replies \ @nym 10 Apr

They aren’t holding a lot, it’s like a hot wallet sum to us.

17 sats \ 4 replies \ @Cje95 10 Apr

I agree with you! This just leads to centralization which is the exact opposite of BTC!

0 sats \ 3 replies \ @Scoresby OP 10 Apr

Yeah, it doesn't seem good.

But I don't think people make stupid decisions in general, so I really want to figure out: what is the motivation here?

We all think that centralization is bad and trusting somebody else to hold your keys is bad, but here are people with a ton of skin in the game doing exactly the opposite of what makes sense.

17 sats \ 2 replies \ @BenAllenG 10 Apr

If they lose it themselves, there is no-one to blame. In the age of tort I would imagine you could try to sue the pants off the custodian if they lose it. I haven't seen any custodian contracts but I imagine that is the thinking. There is no one to sue if you lose it yourself

0 sats \ 1 reply \ @Scoresby OP 10 Apr

Right, so they do it out of convenience, and just count on the courts as their insurance. Still, no one makes a decision and thinks this is a stupid decision. so in their minds, it must make sense somehow.

34 sats \ 0 replies \ @BenAllenG 10 Apr

Considering that miners need to sell/send payouts frequently to keep up with their operating costs and distribute it to the individual miners it probably has a lot to do with convenience. Plus it appears part of the contract give the custodian first dibs on the rare sats as they are skimming them out.

0 sats \ 0 replies \ @Coinsreporter 10 Apr

From these kind of tweets, it feels like Bitcoin's decentralization is under attack.