Satoshi Nakamoto envisioned a bitcoin mining pool whereby anyone, regardless of location or social status, would be able to participate in the process. However, that has not been the case in the recent past, as major players with huge financial backing appear to be calling the shots.
The fact that ASIC mining hardware are expensive has all but raised the bar when it comes to the amount of money one must have, to launch a successful mining campaign. Mining of bitcoin which is the largest digital currency with a market of about $149 billion has now become the domain of the rich.
Bitmain, a Chinese ASIC manufacturer is one such bitcoin miner that appears to have curved a substantial amount of market share in the mining business. Given the financial muscle that the company commands, it has become increasingly impossible for small players to compete against the giant.
There have also been allegations that the company has been setting up secret mining operations in a bid to crowd out profits, as part of an effort that seeks to stifle competition. The fact that the company also manufactures and sells ASIC hardware used for bitcoin mining, allows it to wield too much power on who can become a bitcoin miner.
There has also been growing concerns about the pricing of some of the hardware?s, with some people arguing, the manufacturers are using their market dominant position to demand premium prices.
“Our investigation into the mining equipment strongly suggests to us that the total manufacturing cost of the equipment is less than $1,000. Meaning that anyone who paid $10,000 for it was paying a massive profit premium to the manufacturer, giving them the ability to make 9 more units for themselves,? said Sia Coin Developer David Vorik.
The emergence of the likes of Bitmain, wielding too much power, raises a serious concern as to whether bitcoin mining process will remain decentralized as it ought to be. The only way out of the current dilemma is the introduction of cheaper ASIC mining equipment that would lower the costs of becoming a Bitcoin miner.
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