Mining Centralization

Definition ∞ Mining centralization occurs when a significant portion of a blockchain network’s mining power is controlled by a small number of entities. This concentration of hashing power can pose risks to the network’s security and decentralization, potentially enabling censorship or manipulation. It signifies a deviation from the distributed nature intended for many blockchain systems.
Context ∞ Concerns about mining centralization frequently appear in news related to proof-of-work blockchains, particularly regarding the geographical concentration of mining operations or the dominance of large mining pools. This concentration raises questions about the network’s resilience to attacks and its adherence to decentralized principles. Future developments to monitor include regulatory actions targeting large mining operations and the migration of mining power to different regions or consensus mechanisms.