36 215 219 222 126 3127 Because transactions on the network are confirmed by

36 215 219 222 126 3127 because transactions on the

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[36] :215, 219– 222 [126] :3 [127] Because transactions on the network are confirmed by miners, decentralization of the network requires that no single miner or mining pool obtains 51% of the hashing power, which would allow them to double-spend coins, prevent certain transactions from being verified and prevent other miners from earning income. [128] As of 2013 just six mining pools controlled 75% of overall bitcoin hashing power. [128] In 2014 mining pool Ghash.io obtained 51% hashing power which raised significant controversies about the safety of the network. The pool has voluntarily capped their hashing power at 39.99% and requested other pools to act responsibly for the benefit of the whole
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network. [129] c. 2017 over 70% of the hashing power and 90% of transactions were operating from China. [130] According to researchers, other parts of the ecosystem are also "controlled by a small set of entities", notably the maintenance of the client software, online wallets and simplified payment verification (SPV) clients. [128] Privacy Bitcoin is pseudonymous , meaning that funds are not tied to real-world entities but rather bitcoin addresses. Owners of bitcoin addresses are not explicitly identified, but all transactions on the blockchain are public. In addition, transactions can be linked to individuals and companies through "idioms of use" (e.g., transactions that spend coins from multiple inputs indicate that the inputs may have a common owner) and corroborating public transaction data with known information on owners of certain addresses. [131] Additionally, bitcoin exchanges, where bitcoins are traded for traditional currencies, may be required by law to collect personal information. [132] To heighten financial privacy, a new bitcoin address can be generated for each transaction. [133] Fungibility Wallets and similar software technically handle all bitcoins as equivalent, establishing the basic level of fungibility . Researchers have pointed out that the history of each bitcoin is registered and publicly available in the blockchain ledger, and that some users may refuse to accept bitcoins coming from controversial transactions, which would harm bitcoin's fungibility. [134] For example, in 2012, Mt. Gox froze accounts of users who deposited bitcoins that were known to have just been stolen. [135] Scalability Main article: Bitcoin scalability problem The blocks in the blockchain were originally limited to 32 megabytes in size. The block size limit of one megabyte was introduced by Satoshi Nakamoto in 2010. Eventually the block size limit of one megabyte created problems for transaction processing, such as increasing transaction fees and delayed processing of transactions. [136] Andreas Antonopoulos has stated Lightning Network is a potential scaling solution and referred to lightning as a second layer routing network.
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