Recent research by nostr:npub18h0w55nsp839ezxnggf00jd2xc6yl0ht62mf5p8wwllu8s80wdcs83ws8m shows how Bitcoin #mining centralization comes from miners favoring FPPS, transferring risk from miners to pools.

💡 Larger pools benefit from less volatile income but require significant reserves to ensure survival. But how does that work?

Analysis, including a #Python simulation model, reveals key findings:

⛏️ A 95% survival rate over 1 year requires up to 450 BTC reserves, while a 99% rate over 3 years needs nearly 900 BTC. Larger pools face diminishing reserve needs beyond 30% hashrate.

⛏️ Pools with hashrates near 25-30% need the highest reserves. Above this, economies of scale reduce costs, while very small pools require less due to lower payouts.

⛏️ High centralization enhances economies of scale for large pools but poses risks like block orphaning and fee manipulation.

The findings emphasize the financial challenges pools face under FPPS, particularly at threshold hashrates, and the role of reserve management in pool survival.

See the research by Orange Surf 👉 https://orange.surf/pool-reserves/

👀 Rigly provides a new way to price hashrate for miners where an open market of hashrate buyers set the going rate on a TH/s at any given moment.

This is how hashrate buyers (you) and miners both benefit, and how we decentralize the network by aligning incentives! 🤝