A recent analysis has revealed that a single anonymous custodian, believed to be Cobo Custody, holds a significant amount of Bitcoin mined by major mining pools.
Concentration of Control
The custodian controls the Coinbase addresses of at least nine mining pools, including AntPool, F2Pool, Binance Pool, and Poolin. This means that for every 100 Bitcoin mined, 47 are sent to this custodian.
Security Concerns
This concentration of control raises concerns about potential security risks. If the custodian is compromised, these mining pools could lose a significant amount of Bitcoin, impacting the network’s overall security.
Centralization of Transaction Processing
The study also found that the custodian is frequently used by the nine pools for transaction acceleration services. While these services can speed up transaction confirmation times, they can also centralize control over transaction processing.
Need for Decentralization
The findings highlight the need for transparency and decentralization of custodians among mining pools. By diversifying the entities that hold mined Bitcoin, the network can reduce the risk of centralization and improve its overall security.
