Does the centralization of hash power weaken Bitcoin's decentralized value?

Hello, regarding this question, I'll share my thoughts, trying to explain it in simple terms.

This is indeed a very core controversy in Bitcoin's development to date. Simply put, yes, the centralization of computing power has, to some extent, weakened the "absolute" decentralization envisioned, but it hasn't completely destroyed it. It's more like a dynamic game and compromise.

Let's break it down:

1. Why does computing power centralize?

Imagine, in the very beginning, everyone used their own computers at home to "mine," like panning for gold in their backyard. Everyone had an equal opportunity, which was the most ideal state of decentralization.

But things changed later:

• Specialized equipment emerged (mining rigs): It's like gold panning evolving from using a small shovel to a large excavator. ASIC miners, specifically designed for mining, have computing efficiency millions of times greater than your home computer. Ordinary people simply couldn't compete, so the first group was eliminated.
• Economies of scale (mining farms): Buying one excavator is very expensive for an individual. But if a big boss builds a "mining rig base," purchases in bulk, and even gets discounts on electricity, the costs are significantly reduced. This is a mining farm. Mining farms concentrate tens of thousands of mining rigs, forming immense computing power.
• Pooling resources (mining pools): Even if you can afford a few mining rigs, working alone, you might not mine a single block in a year (like buying a lottery ticket, the odds are too low). So, people "pool" their computing power together to form a "mining pool" and mine collectively. When a block is found, everyone shares the rewards based on their contributed computing power. This provides stable income, even if each share is smaller. As a result, the computing power of individual miners flowed into a few large mining pools.

So, due to economic principles and technological development, computing power naturally centralized towards more specialized and larger-scale entities. Currently, global computing power is essentially controlled by a few large mining pools.

2. What are the risks of this centralization?

The biggest risk is the legendary "51% attack."

Bitcoin's rule is "the minority defers to the majority," and here, "majority" refers to over 51% of the computing power. If a single entity (an individual, a company, or a country) controls more than half of the network's computing power, theoretically, they could:

• Double-spend attack: Spend already spent bitcoins again. For example, they buy a car, pay with BTC, and once the car is delivered, they use their powerful computing power to forcibly create a "transaction never happened" fake ledger, invalidating the original transaction and getting their BTC back.
• Prevent transaction confirmation: They could deliberately refuse to include certain people's transactions in blocks, enabling transaction censorship.

This sounds terrifying because it directly challenges Bitcoin's core values of "immutability" and "censorship resistance."

3. So why do we still say Bitcoin is decentralized?

Because it's not that simple; the system has several "brakes":

• Extremely high attack cost, and self-defeating: Amassing 51% of the computing power would require astronomical sums of money to purchase mining rigs, build mining farms, and pay for electricity. And once you launch an attack, it would cause a collapse in confidence across the entire Bitcoin market, leading to a sharp drop in price. Your bitcoins and expensive mining rigs would become worthless. This is equivalent to spending 10 billion to buy 51% of a company's shares, and then the first thing you do is set the company on fire, harming yourself in the process. Rational miners are more willing to mine honestly and earn stable block rewards and transaction fees.
• Mining pools are not monolithic: While a mining pool might seem like a giant, its computing power is "contributed" by thousands of individual miners. Miners can switch to other pools at any time. If a mining pool operator tries to act maliciously, miners, upon discovering it, would immediately "vote with their feet," switching their computing power away, and the pool would instantly disintegrate. So, mining pool operators do not have absolute power; they need to serve the interests of all miners.
• Mining nodes ≠ Full nodes: This is the most crucial point. Miners (computing power) are responsible for recording transactions, but the power to verify whether the ledger is legitimate rests with the thousands of "full nodes" distributed globally. Full nodes are computers running the complete Bitcoin client and storing the entire transaction history. Even if a 51% attacker creates a fake ledger (e.g., an invalid transaction), these full nodes worldwide would discover "this does not comply with the rules" during verification and directly reject the fake ledger. Therefore, having significant computing power only determines who gets to record transactions, but not what gets recorded. The rules are collectively maintained by all nodes.

Conclusion

So, returning to your question: Does the centralization of computing power weaken Bitcoin's decentralization value?

Yes, it has moved Bitcoin far from the initial ideal of "one person, one vote" in terms of "computing power distribution," introducing potential centralization risks.

However, due to economic constraints, the internal structure of mining pools, and most importantly—the verification mechanism of full nodes—this concentration of computing power has not completely centralized Bitcoin. Bitcoin's security and decentralization characteristics are maintained by the dynamic interplay and checks and balances among computing power, developers, users, and full nodes.

It can be understood this way: Bitcoin's decentralization has evolved from early "production decentralization" (everyone can mine) to current "verification decentralization" (everyone can run a node to verify rules). While the former has been weakened, the latter remains strong, and this defense line is the ultimate cornerstone of Bitcoin's value.